nep-dev New Economics Papers
on Development
Issue of 2017‒11‒12
eleven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Generalization in the Tropics: Development policy, randomized controlled trials, and external validity By Peters, Jörg; Langbein, Jörg; Roberts, Gareth
  2. Nighttime Lights as a Proxy for Human Development at the Local Level By Anna Bruederle; Roland Hodler
  3. Roots of Autocracy By Oded Galor; Marc P. B. Klemp
  4. The Consumption, Income, and Wealth of the Poorest: An Empirical Analysis of Economic Inequality in Rural and Urban Sub-Saharan Africa for Macroeconomists By Leandro Magalhaes; Raül Santaeulàlia-Llopis
  5. When bad trade policy costs human lives: tariffs on mosquito nets By Klau, Arne
  6. The Effect of Oil Spills on Infant Mortality: Evidence from Nigeria By Anna Bruederle; Roland Hodler
  7. Parental Bargaining and Rural-Urban Child Health Differential in Tanzania By Alfred Mukong; Justine Burns
  8. Employment Transitions of Women in India: A Panel Analysis By Sarkar, Sudipa; Sahoo, Soham; Klasen, Stephan
  9. An Empirical Analysis of Livelihood Strategies and Food Insecurity in Turkana County, Kenya By John Kamau Gathiaka; Moses Kinyanjui Muriithi
  10. The Effect of the Minimum Wage on Employment in Brazil By Saltiel, Fernando; Urzúa, Sergio
  11. The Relationship between Status and Happiness: Evidence from the Caste System in Rural India By van Landeghem, Bert; Vandeplas, Anneleen

  1. By: Peters, Jörg; Langbein, Jörg; Roberts, Gareth
    Abstract: When properly implemented, Randomized Controlled Trials (RCT) achieve a high degree of internal validity. Yet, if an RCT is to inform policy, it is critical to establish external validity. This paper systematically reviews all RCTs conducted in developing countries and published in leading economic journals between 2009 and 2014 with respect to how they deal with external validity. Following Duflo, Glennerster, and Kremer (2008), the hazards to external validity we scrutinize are Hawthorne effects, general equilibrium effects, specific sample problems, and special care in treatment provision. Based on a set of objective indicators, we find that the majority of published RCTs does not discuss these hazards and many do not provide the necessary information to assess potential problems. The paper calls for including external validity dimensions in a more systematic reporting on the results of RCTs. This may create incentives to avoid overgeneralizing findings and help policy makers to interpret results appropriately.
    Keywords: policy evaluation,systematic review,internal validity,external validity,randomized controlled trials
    JEL: C83 C93
    Date: 2017
  2. By: Anna Bruederle; Roland Hodler
    Abstract: Nighttime lights are increasingly used by social scientists as a proxy for economic activity and economic development in subnational spatial units. However, so far, our understanding of what nighttime lights capture is limited. We construct local indicators of household wealth, education and health from geo-coded Demographic and Health Surveys (DHS) for 29 African countries. We show that nighttime lights are positively associated with these indicators across DHS cluster locations as well as across grid cells of roughly 50 x 50 km. We conclude that nighttime lights are a good proxy for human development at the local level.
    Keywords: nighttime lights, local development, Africa
    JEL: I15 I25 I32 O15 O55
    Date: 2017
  3. By: Oded Galor; Marc P. B. Klemp
    Abstract: Exploiting a novel geo-referenced data set of population diversity across ethnic groups, this research advances the hypothesis and empirically establishes that variation in population diversity across human societies, as determined in the course of the exodus of human from Africa tens of thousands of years ago, contributed to the di↵erential formation of pre-colonial autocratic institutions within ethnic groups and the emergence of autocratic institutions across countries. Diversity has amplified the importance of institutions in mitigating the adverse e↵ects of non-cohesiveness on productivity, while contributing to the scope for domination, leading to the formation of institutions of the autocratic type.
    Keywords: autocracy, economic growth, diversity, institutions, out-of-Africa hypothesis of comparative development
    JEL: O10 O43 Z10
    Date: 2017
  4. By: Leandro Magalhaes; Raül Santaeulàlia-Llopis
    Abstract: We provide new empirical insights on the joint distribution of consumption, income, and wealth using cross-sectional and panel data from three of the poorest countries in the world—Malawi, Tanzania, and Uganda—all located in Sub-Saharan Africa (SSA). While income inequality in SSA is similar to that of the United States, consumption and wealth inequality are substantially lower in SSA. This gives rise to our two main findings for SSA: (i) a low transmission from income inequality to wealth inequality related to a low ability to accumulate wealth; and (ii) a low transmission from income inequality to consumption inequality related to a high ability to insure consumption. These results suggest a trade-off between accumulation and consumption insurance for SSA. Our results are more salient in the rural areas than in the urban areas of SSA.
    Keywords: macroeconomy, consumption, income, Wealth, Sub-Saharan Africa, Inequality, cross-sectional data, panel data
    JEL: O10 O55 I32 E21
    Date: 2017–10
  5. By: Klau, Arne
    Abstract: Many developing countries still levy tariffs on mosquito nets, thereby discouraging their use and contributing to the spread of diseases such as malaria and dengue. Focusing on sub-Saharan Africa, the paper shows to which extent such tariffs are in place and, based on existing elasticity figures, calculates the cost of this policy. It is estimated that tariffs on insecticide-treated bed nets have reduced demand by some US$ 7 million between 2011 and 2015, equivalent to around 3.1 million bed nets. This has contributed to some 2.9 million malaria cases and over 5,000 fatalities during this period. The paper discusses various policy implications of this finding, including whether tariff concessions (e.g. for local relief organizations) are more effective than a general zero-tariff policy. It is argued that concessions give rise to a process that is bureaucratic and only partially compensatory for the cost incurred. The introduction of a new six-digit tariff line specifically for mosquito nets with HS 2017 will facilitate a zero-tariff policy on bed nets. By the same token, policy makers should address remaining non-tariff barriers that affect the importation of anti-malarial products.
    Keywords: malaria,tariffs,public health,trade policy,development
    JEL: I15 I18
    Date: 2017
  6. By: Anna Bruederle; Roland Hodler
    Abstract: Oil spills can lead to irreversible environmental degradation and pose hazards to human health. We are the first to study the causal effects of onshore oil spills on neonatal and infant mortality rates. We use spatial data from the Nigerian Oil Spill Monitor and the Demographic and Health Surveys, and rely on the comparison of siblings conceived before and after nearby oil spills. We find that nearby oil spills double the neonatal mortality rate. These effects are fairly uniform across locations and socio-economic backgrounds. We also provide some evidence for negative health effects of nearby oil spills on surviving children.
    Keywords: oil spills, Nigeria, infant mortality, child health
    JEL: I10 I18 J13 Q53
    Date: 2017
  7. By: Alfred Mukong; Justine Burns
    Abstract: This paper extends the empirical analysis of child health by simultaneously considering the effects and contributions of parental bargaining to the rural-urban child health differential in Tanzania, a country where most communities are patriarchal in nature. The study uses the Heckman two-step procedure to correct for possible sample selection bias. The results suggest that domestic violence towards female partners increases the probability of child stunting while cooperation in decision-making between couples and female discretion over household resources reduces the probability of child stunting. The signicance of these effects are mainly observed in rural than in urban communities. Differences in parental bargaining account for 5 percent of the rural-urban gap in child nutrition. Correcting for sample selection bias reduces the contribution to 4 percent. The findings suggest that empowering rural women is essential in reducing the rural-urban child health differentials.
    Keywords: Parental Bargaining, Rurual-Urban Child Healt Differential, Tanzania, Heckman
    Date: 2017–10
  8. By: Sarkar, Sudipa (University of Warwick); Sahoo, Soham (University of Goettingen); Klasen, Stephan (University of Göttingen)
    Abstract: This study analyses employment transitions of working-age women in India. The puzzling issue of low labour force participation despite substantial economic growth, strong fertility decline and expanding female education in India has been studied in the recent literature. However, no study so far has looked into the dynamics of employment in terms of labour force entry and exit in this context. Using a nationally representative panel dataset, we show that women are not only participating less in the labour force, but also dropping out at an alarming rate. We estimate an endogenous switching model that corrects for selection bias due to initial employment and panel attrition, to investigate the determinants of women's entry into and exit from employment. We find that an increase in income of other members of the household leads to lower entry and higher exit probabilities of women. This income effect persists even after controlling for the dynamics of asset holding of the household. Along with the effects of caste and religion, this result reveals the importance of cultural and economic factors in explaining the declining workforce participation of women in India. We also explore other individual and household level determinants of women's employment transitions. Moreover, we find that a large public workfare program significantly reduces women's exit from the labour force.
    Keywords: female labour force participation, employment transition, panel data, sample selection, attrition, India
    JEL: J21 J16 O15
    Date: 2017–10
  9. By: John Kamau Gathiaka; Moses Kinyanjui Muriithi
    Abstract: The pastoral communities of Turkana in northern Kenya have for ages satisfied their economic, social and cultural needs through nomadic pastoralism. But due to increasing frequency of drought and market shocks, the ability of age-old strategies to shield these pastoralists from poverty and food insecurity has declined. With only livestock and social capital as the main assets in a communal property regime, it is not clear which of the various livelihood strategies that these pastoralists pursue can shield households from drought and market shocks and guarantee their food security. This study investigates the livelihood strategies as pursued by pastoralists in Turkana County with a view to identify strategies that can effectively shield households from shocks. Data for the study is sourced from the Kenya Integrated Household Budget Survey (KIHBS) 2005/06. Available literature is used to identify livelihood strategies in Turkana, while the KIHBS data is used to establish the population of people pursuing each strategy. Anova and Bonferroni tests give evidence of the existence of four livelihood strategies using food expenditure ratio as the categorizing variable. Probit regression is used to estimate the determinants of food insecurity in Turkana, while multinomial logit regression is used to do further analysis on the determinants of livelihood strategies. The findings suggest correlation between food insecurity and livelihood strategies. Policies that target livelihood strategies may have implications on food security in Turkana. However, further analysis is required to confirm the reverse causality between livelihood strategies and food insecurity.
    Date: 2017–09
  10. By: Saltiel, Fernando; Urzúa, Sergio
    Abstract: During the economic boom of the early 2000s, most Latin American countries increased their minimum wages. In Brazil, the real minimum wage increased by upwards of 60 percent from 2003 through 2012. In this paper, we take advantage of administrative data to explore whether the minimum wage resulted in negative employment impacts in Brazil's formal sector. We explore different measures of the incidence of the minimum wage across states and examine various empirical specifications, yet find no significant disemployment impacts associated with this policy. On the other hand, we find significant negative impacts in microregions which were less exposed to the commodities boom. Since empirical strategies relying on incidence measures are inherently limited, we additionally exploit the introduction of a 2000 law which allowed states to implement regional wage floors. While these floors vary in scope and size, we find that the five states which implemented this policy included provisions directly targeting workers in the accommodation and restaurant sector. As a result, we adapt Dube, Lester and Reich's (2010) empirical strategy to Brazil and estimate the impact of these floors on employment in this sector by exploiting variation in microregions straddling state borders. As in our initial estimates, we find no significant negative employment impacts arising from the wage floors, indicating that during the early 2000s, the minimum wage did not result in negative employment impacts in Brazil's formal sector. Nonetheless, we caution that this result may not hold in a recessionary context, as shown in our commodity boom-incidence results.
    Keywords: Economía, Investigación socioeconómica, Productividad, Trabajo y protección social,
    Date: 2017
  11. By: van Landeghem, Bert (University of Sheffield); Vandeplas, Anneleen (European Commission, Directorate Employment, Social Affairs and Inclusion)
    Abstract: A large number of empirical studies have investigated the link between social status and happiness, yet in observational data identification challenges remain severe. This study exploits the fact that in India people are assigned a caste from birth. Two identical surveys of household heads (each with N=1000) in rural Punjab and Andhra Pradesh show an increasing pattern in economic welfare across the hierarchy of castes. This illustrates that at least in rural regions, one's caste is still an important determinant for opportunities in life. Subsequently, we find that the castes at the top are clearly more satisfied than the lower and middle castes. This result, which is in line with predictions of all major social comparison theories, is robust across the two case studies. The pattern across low and middle castes, however, is less clear, reflecting the complex theoretical relationship between being of middle rank on the one hand, and behaviour, aspirations and well-being on the other hand. In the Punjab sample, we even find a significant U-shape, the middle castes being the least happy. Interestingly, these patterns resemble those found for Olympic Medalists (first documented by Medvec et al. 1995).
    Keywords: subjective well-being, happiness, social status, social comparison
    JEL: I31 C1 O12
    Date: 2017–10

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