nep-dev New Economics Papers
on Development
Issue of 2017‒06‒25
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Can Land Fragmentation Reduce the Exposure of Rural Households to Weather Variability? By Stefanija Veljanoska
  2. The dynamics of microcredit borrowings in Cambodia By Roth T.M.S Vathana; Abdelkrim Araar; Bopharath Sry; PHANN Dalis
  3. The Effects of Financial Aid and Returns Information in Selective and Less Selective Schools: Experimental Evidence from Chile By Matías Busso; Taryn Dinkelman; Claudia Martínez; Dario Romero
  4. Conditional Cash Transfers and Schooling Decisions: Evidence from Urban Mexico By Maria Heracleous; Mario González; Paul Winters
  5. Evidence of the Impacts of Minimum Wage on Labor Market Outcomes: The Case of Bolivia By Marcelo Nicolas Claure Ramirez Author-Name: Alejandra Leyton Author-Name: Christian Valencia Author-Name: Karenth Vanessa Sanchez Bohrquez Author-Name: Jorge Davalos
  6. An Econometric Analysis of Energy Revenue and Government Expenditure Shocks on Economic Growth in Trinidad and Tobago By Jeetendra Khadan
  7. The Impacts of Roll-On/Roll-Off Transport System in the Philippines By Francisco, Kris A.
  8. Agricultural Transformation in Senegal: Impacts of an integrated program By Abdoulaye Diagne Author-Name: Fran ois J. Cabral
  9. The Impact of Coastal Infrastructure Improvements on Economic Growth: Evidence from Barbados By Leonardo Corral; Maja Schling; Cassandra Rogers; Janice Cumberbatch; Fabian Hinds; Naijun Zhou; Michele H. Lemay
  10. Evolution of Bilateral Capital Flows to Developing Countries at Intensive and Extensive Margins By Juliana Araujo; Povilas Lastauskas; Chris Papageorgiou
  11. Healthy to Work: The Impact of Free Public Healthcare on Health Status and Labor Supply in Jamaica By Diether Beuermann; Camilo Pecha
  12. Microfinance and Vulnerability to Seasonal Famine in a Rural Economy: Evidence from Monga in Bangladesh By Berg, Claudia; Emran, M. Shahe
  13. The impact of oil exploitation on wellbeing in Chad Author-Name: Gadom Djal Gadom Author-Name: Armand Mboutchouang Kountchou By Gbetoton Nad ge Ad le Djossou; Gilles Quentin Kane Author-Name: Abdelkrim Araar
  14. The impact of exports on income inequality in developing countries By Hazama, Yasushi

  1. By: Stefanija Veljanoska (Paris School of Economics, UniversitŽ de Paris 1 PanthŽon-Sorbonne, UniversitŽ Paris-Sud)
    Abstract: Climate change continuously affects African farmers that operate in rain-fed environments. Coping with weather risk through credit and insurance markets is almost inexistent as these markets are imperfect in the African economies. Even though land fragmentation is often considered as a barrier to agricultural productivity, this article aims at analyzing whether land fragmentation, as an insurance alternative, is able to reduce farmers' exposure to weather variability. In order to address this research question, I use the Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) data on Uganda. After dealing with the endogeneity of land fragmentation, I find that higher land fragmentation decreases the loss of crop yield when households experience rain deviations. Therefore, policy makers should be cautious with land consolidation programs.
    Keywords: climate change, land fragmentation, rainfall, yield, insurance
    JEL: Q12 Q15 Q54
    Date: 2017–05
  2. By: Roth T.M.S Vathana; Abdelkrim Araar; Bopharath Sry; PHANN Dalis
    Abstract: We employ 2011–2014 panel data of eleven villages in Cambodia to investigate the impact of microcredit access on paddy quantity and income, expenditure on inputs of paddy production, and self-employment income. The panel data enables us to implement difference-in-differences and triple differences estimators. We find that credit participants observe a 26.1% increase in paddy income, 68.9% in paddy quantity and 26.5% in expenditure on inputs of paddy production. Poorer households benefit more from credit participation. Participants also observe an increased nonland durable assets relative to those of non-participants, particularly agricultural assets. We find week evidence that women participants benefit more from credit programme than male counterparts. Although women are more likely to start selfemployment activities with the loans—mainly in informal sector—the income gains are not statistically different from zero relative to what men earn.
    JEL: C11 G21 O1 Q11
    Date: 2017
  3. By: Matías Busso; Taryn Dinkelman; Claudia Martínez; Dario Romero
    Abstract: Schools that provide higher education often belong to either a merit-based selective system or an open-access less selective system. This paper presents the results of a field experiment that provided Grade 12 students in Chile with tailored information about financial aid and average earnings and employment probabilities for schools and careers in both types of schools. No effect is found on the extensive margins of enrollment in the selective or in the less selective sector. Treated students change their intensive margin decisions: they choose careers and schools with lower expected wages and lower employment probabilities, but with higher quality relative to their baseline preferences.
    Keywords: Higher Education, Vocational Education and Training, School Choice, School Enrollment, School Attendance, High School, Human Capital Investment, Test scores, Student Loans, Scholarships, school choice, government loans, scholarships
    JEL: I22 I23 D83
    Date: 2016–11
  4. By: Maria Heracleous; Mario González; Paul Winters
    Abstract: Using administrative data from the urban Mexican Oportunidades program, this paper analyzes why poor households choose less education for their children, even when offered financial compensation for school attendance. Each school year, half of recipients forgo income for which they are eligible by failing to send children to school. Using a random effects probit and fractional response model, the analysis provides strong evidence that the poorest households, those with more dependents and high school students, recipients with limited education, and those living in large urban areas are less likely to have their children attend school and thus receive partial payments.
    Keywords: Conditional cash transfers, School Attendance, School Enrollment, Program evaluation, Human Capital Investment, school enrollment, schooling decisions
    JEL: I21 I32 J24
    Date: 2016–08
  5. By: Marcelo Nicolas Claure Ramirez Author-Name: Alejandra Leyton Author-Name: Christian Valencia Author-Name: Karenth Vanessa Sanchez Bohrquez Author-Name: Jorge Davalos
    Abstract: Economic theory suggests that minimum wages may lead to unemployment; nevertheless, empirical evidence in developed economies stays ambiguous. Evidence from developing countries is even more heterogenous due to the low law enforcement and weaker labor market institutions. Thus, our aim is to assess the impact of minimum wage increases on labor market outcomes in Bolivia, a country characterized by weak law compliance and high informality. Our identification strategy exploits differences in exposure to minimum wage increases across subsets of population for the period 2006-2013. Our results show positive and significant effects over real wages for men with no effects on employment, informalization or hours worked. Furthermore, we find evidence of gender discrimination since women are prone to suffer unemployment and informalization while not benefiting from higher real wages as men do.
    Keywords: Minimum wage, unemployment, informal employment
    JEL: J3 J4
    Date: 2017
  6. By: Jeetendra Khadan
    Abstract: Energy revenues represent roughly 45 percent of Trinidad and Tobago's GDP and are highly volatile since they are correlated with the price of oil and gas. Hence, sharp changes in energy prices, whether temporary or sustained, can have important consequences for economic growth and overall macroeconomic performance. After the 2014 crash in oil prices, a key challenge that emerged for policymakers in hydrocarbon-exporting countries is how to manage fiscal retrenchment in an environment of subdued growth. Using structural vector autoregression, this article examines three questions related to this challenge by focusing on Trinidad and Tobago: (1) what is the asymmetric effect of energy revenue shocks on macroeconomic performance, (2) what is the asymmetric effect of energy revenue shocks on government expenditure (disaggregated by categories), and (3) what is the effect of government expenditure shocks (disaggregated by categories) on economic growth. The results suggest that although positive energy revenue shock increases growth almost immediately, it is not sustained. A negative energy revenue shock is found to have a greater adverse effect on primary expenditure than a positive shock and this largely occurs through a reduction in capital expenditure. Transfers and subsidies, and goods and services are the most sensitive components of current expenditure to positive energy shocks. With respect to the effect of expenditure on growth, transfers and subsidies significantly reduce growth in the short run, whereas other categories of expenditure are found to have a largely positive effect on growth. These findings suggest three important implications for policymakers: the first is to reduce and or reorient public expenditure away from transfers and subsidies and towards more growth-enhancing areas; the second is the need for clear fiscal rules, and to more effectively balance the role of fiscal policy as a growth stimulus while also performing other social functions; and thirdly, these results bring into sharp focus the effectiveness of the rules of the country's stabilization fund to manage windfall energy revenues.
    Keywords: Government Revenue, GDP Growth, Oil Prices, Exchange rates, Commodity Prices, Wages, Macroeconomics, Economic Impact Analysis, economic growth, oil prices
    JEL: Q33 E37 E32
    Date: 2016–12
  7. By: Francisco, Kris A.
    Abstract: It is well recognized in the literature that a country's transport system plays a central role in its development. This paper shows the economic impacts of improvements in the transport system by studying the experience of the Philippines with the roll-on/roll-off (Ro-Ro) policy that promotes the use of Ro-Ro ferry terminal system. Using difference-in-difference strategies in analyzing agricultural household income and children's education, the study finds that the operation of Ro-Ro ports largely benefited the households living near the Ro-Ro ports. More specifically, estimates suggest that agricultural households gained higher income from the operation of these ports because both agriculture- and nonagriculture-related activities were stimulated. Results also imply the boost in nonagriculture-related activities in the islands where the Ro-Ro ports are located. Meanwhile, analysis on children's education reveals an increase in school attendance of males and females in municipalities near the Ro-Ro ports. The study also confirms that there was an increase in family income in these areas, thereby suggesting the increased capacity of households to send children to school. As a whole, the study demonstrates some examples of short- and long-run impacts of improving a country's transport system. Likewise, it highlights the importance of an efficient and affordable transport system in an archipelagic country like the Philippines.
    Keywords: Philippines, education, agriculture, transport system, roll-on/roll-off policy, Ro-Ro
    Date: 2017
  8. By: Abdoulaye Diagne Author-Name: Fran ois J. Cabral
    Abstract: This paper evaluates the impact of an agriculture transformation program on poverty, migration, food security and agricultural revenue. We used Inverse Propensity Score Matching (IPSM) techniques, to correct the selection bias arising from the non-randomness of the allocation of farmers to the treatment. The results find that ANIDA farms are better equipped with irrigation technologies, and so, appear more resilient to climatic events such as droughts. They spent $2,905 USD per hectare on inputs and produced 10,526 kg per worker more than traditional farmers. The intention to migrate, the depth and severity of poverty are significantly below those of beneficiariesÕ households. The ANIDA program is a model that should be promoted in all municipalities of the country, in order to modernize the agricultural sector. The analysis is limited by the fact that the non-compliance rate of the program is high and needs more investigation to better understand the underlying factors.
    Keywords: Agricultural Economics, Impact Evaluation, Agriculture policy, Inverse propensity Score Matching.
    JEL: Q12 Q16 Q18
    Date: 2017
  9. By: Leonardo Corral; Maja Schling; Cassandra Rogers; Janice Cumberbatch; Fabian Hinds; Naijun Zhou; Michele H. Lemay
    Abstract: This paper presents the first rigorous impact evaluation of a shoreline stabilization program in Barbados and attempts to assess whether shoreline stabilization investments indeed have beneficial effects on medium-term economic growth in Small Island Developing States through stimulating tourism demand and real estate development. The analysis relies on a carefully designed geographic information systems (GIS) dataset, which comprises extensive panel data from Barbados' touristic West and South Coasts on key infrastructure, beach characteristics, and real estate activity, as well as remotely-sensed luminosity data as a proxy of economic growth. The synthetic control method is employed to construct a counterfactual from a combination of all control beach sites and subsequently estimate program impact on per capita luminosity as a proxy for GDP p.c.. Results indicate that even in the first three years after treatment, economic effects are positive and indicate a strong positive trend. This suggests that shoreline stabilization works may not only help preserve fragile ecological conditions, but further lead to sustainable growth in the local economy.
    Keywords: Coastal Infrastructure, Infrastructure Investment, Local Economic Development, Environmental protection, Climate change adaptation, Economic Growth, Coastal areas, Impact evaluation, Tourism, Sustainable development, Tourism Infrastructure, Environmental impacts, Sustainable Growth, coastal infrastructure, coastal zone management, local economic growth
    JEL: N56 D04 Q54 O44
    Date: 2016–09
  10. By: Juliana Araujo (International Monetary Fund); Povilas Lastauskas (Bank of Lithuania); Chris Papageorgiou (International Monetary Fund)
    Abstract: Motivated by the rise in capital flows to low-income countries (LICs), we examine the nature of these flows and the factors affecting foreign investors’ decision. Recognizing the presence of fixed investment costs, we analyze capital flows at both intensive and extensive margins. To fix ideas, we resort to the gravity literature for the estimating relationships which we embed into a two-tier econometric framework with cross-sectional dependence. Our main finding is that market entry costs are statistically and economically very detrimental to LICs. We also obtain the gravity-type relationship for the destination income unconditionally but not after conditioning on relevant variables, as well as establish labor productivity as a robust attractor of capital inflows.
    Keywords: Bilateral capital flows, foreign direct investment, portfolio flows, low-income countries, extensive and intensive margins, cross-sectional dependence
    JEL: C33 C34 F21 F62 O16
    Date: 2016–12–01
  11. By: Diether Beuermann; Camilo Pecha
    Abstract: This study examines whether Jamaica's free public healthcare policy affected health status and labor supply of adult individuals. It compares outcomes of adults without health insurance versus their insured counterparts, before and after policy implementation. The study finds that the policy reduced both the likelihood of suffering illnesses with associated lost work days and the number of lost days due to illnesses by 28.6 percent and 34 percent, respectively. Consistent with the absence of "employment lock", no effects are found on employment at the extensive margin. However, consistent with a reduced number of days lost due to illnesses, there is a positive effect of 2.15 additional weekly labor hours. This is primarily a labor supply effect as the study shows that both reported and imputed hourly wages decreased by 0.15 and 0.06 log-points respectively. Back-of-the-envelope calculations suggest that the policy added a yearly average of US$PPP 26.6 million worth of net real production to the economy during the period 2008-12.
    Keywords: Health Policy, Health Insurance, Labor supply, Health Insurance Coverage, health Care Services, Public Health System, Healthcare Access, Labor Market Outcomes, health insurance, health policy
    JEL: O54 O12 J22 I1 H51
    Date: 2016–11
  12. By: Berg, Claudia; Emran, M. Shahe
    Abstract: This paper takes advantage of a unique data set on 143,000 poor households from northern Bangladesh to analyze the effects of microfinance membership on a household’s ability to cope with seasonal famine known as Monga. We develop an instrumental variables strategy that exploits a jump and a kink at the 10 decimal (0.1 acre) land ownership threshold driven by MFI screening process to ensure repayment by excluding the ultra-poor. Evidence from the local 2SLS estimator (Dong, 2017) shows that microfinance membership improves food security during the hungry season, especially for the poorest households who struggle to survive at the margin of 1 and 2 meals a day. Microfinance membership also reduces the probability of short-term migration for work during Monga, but is ineffective in reducing the incidence of advance sale of labor at low wages. These conclusions are also supported by estimates from minimum-biased IPW estimator of Millimet and Tchernis (2013) that reduces bias without imposing exclusion restrictions.
    Keywords: Microfinance, Ultra-Poor, Aggregate Anticipated Shock, Seasonal Famine, Monga, Coping Mechanisms, Food Security, Distress Sale of Labor, Short-term Migration, Local 2SLS.
    JEL: I3 O1
    Date: 2017–06–20
  13. By: Gbetoton Nad ge Ad le Djossou; Gilles Quentin Kane Author-Name: Abdelkrim Araar
    Abstract: This study assesses the impact of oil revenues on wellbeing in Chad using data from the two last Chad Household Consumption and Informal Sector Surveys (ECOSIT 2 & 3), conducted in 2003 and 2011, respectively, by the National Institute of Statistics for Economics and Demographic Studies (INSEED) and, from the College for Control and monitoring of Oil Revenues (CCSRP). To achieve the research objective, we first estimate a synthetic index of multidimensional wellbeing (MDW) based on a large set of welfare indicators. Then, the Difference-in-Difference (DID) approach is used to assess the impact of oil revenues on the average MDW at departmental level. We find evidence that departments receiving intense oil transfers increased their MDW about 35% more than those disadvantaged by the oil revenues redistribution policy. Moreover, the further a department is from the capital city NÕDjamena, the lower its average MDW. We conclude that to better promote economic inclusion in Chad, the government should implement a specific policy to better direct the oil revenue investment in the poorest departments.
    JEL: I32 D63 O13 O15
    Date: 2017
  14. By: Hazama, Yasushi
    Abstract: Trade exhibits two contrasting effects on income inequality in developing countries (DCs). On the one hand, trade openness benefits unskilled labor in preference to skilled labor and capital (the Stolper–Samuelson effect). On the other hand, trade openness increases the demand for skilled (rather than unskilled) labor inputs (the skill premium effect). Recent studies that provide stronger support for the skill premium model have focused on wage inequality or have chosen higher-income DCs. We test the effect of export growth on income inequality for 70 lower income DCs and 36 higher-income DCs, using an unbalanced panel dataset for the 1971–2012 period. The results show that the export/GDP ratio has a negative effect on income inequality for lower-income DCs, but no significant effect was found for higher-income DCs.
    Keywords: Exports,Income,International trade,Labor market,Human resources,Income inequality,Skill premium,Stolper–Samuelson theorem
    JEL: F16 J46 O15
    Date: 2017–03

This nep-dev issue is ©2017 by Jacob A. Jordaan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.