nep-dev New Economics Papers
on Development
Issue of 2018‒07‒30
thirteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Are remittances good for labor markets in LICs, MICs and Fragile States? By Chami, Ralph.; Ernst, Ekkehard.; Fullenkamp, Connel.; Oeking, Anne.
  2. Private Health Investments under Competing Risks: Evidence from Malaria Control in Senegal By Pauline Rossi; Paola Villar
  3. Fertility, Household Size and Poverty in Nepal By François Libois; Vincent Somville
  4. A community based program promotes sanitation By María Laura Alzúa; Habiba Djebbari; Amy J. Pickering
  5. Impact of Internet Access on Student Learning in Peruvian Schools By Kho, Kevin; Lakdawala, Leah; Nakasone, Eduardo
  6. Understanding the effect of international remittances on undernourishment in Sub-Saharan Africa: A spatial model approach By Hamed Sambo
  7. Urbanization And International Migration From Africa By Giovanni Ferri; Roshan Borsato
  8. The Effects of Political Reservations on Credit Access and Borrowing Composition: New Evidence from India By Ao, Chon-Kit; Chatterjee, Somdeep
  9. Former Communist Party Membership and Bribery in the Post-Socialist Countries By Ivlevs, Artjoms; Hinks, Timothy
  10. Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes By Canavire Bacarreza, Gustavo J; Carvajal-Osorio, Luis C.
  11. Sectoral choice and selectivity By Nirodha Bandara; Simon Appleton; Trudy Owens
  12. Mobile Phones and Financial Access: Evidence from the Finscope Surveys of Selected Asian Countries By Lay, Sok Heng
  13. Effects of Food Prices on Poverty: The Case of Paraguay, a Food Exporter and a Non-Fully Urbanized Country By Santiago Garriga; María Ana Lugo; Jorge Puig

  1. By: Chami, Ralph.; Ernst, Ekkehard.; Fullenkamp, Connel.; Oeking, Anne.
    Abstract: We present cross-country evidence on the impact of remittances on labor market outcomes. Remittances appear to have a strong impact on both labor supply and labor demand in recipient countries. These effects are highly significant and greater in size than those of foreign direct investment or official development aid. On the supply side, remittances reduce labor force participation and increase informality of the labor market. In addition, male and female labor supply show significantly different sensitivities to remittances. On the demand side, remittances reduce overall unemployment but benefit mostly lower-wage, lower-productivity nontradables industries at the expense of high-productivity, high-wage tradables sectors. As a consequence, even though inequality declines as a result of larger remittances, average wage and productivity growth declines, the latter more strongly than the former leading to an increase in the labor income share. In fragile states, in contrast, remittances impose a positive externality, possibly because the tradables sector tends to be underdeveloped. Our findings indicate that reforms to foster inclusive growth need to take into account the role of remittances in order to be successful.
    Date: 2018
  2. By: Pauline Rossi (UvA - University of Amsterdam [Amsterdam]); Paola Villar (INED - Institut national d'études démographiques, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This study exploits the introduction of high subsidies for anti-malaria products in Senegal in 2009 to investigate if malaria prevents parents to invest in child health. Building upon the seminal paper of Dow et al. (1999), we develop a simple model of health investments under competing mortality risks, in which people allocate expenses to equalize lifetime across all causes of death. We predict that private health investments to fight malaria as well as other diseases should increase in response to anti-malaria public interventions. To test this prediction, we use original panel data from a Senegalese household survey combined with geographical information on malaria prevalence. Our strategy is to compare the evolution of child health expenditures before and after anti-malaria interventions, between malarious and non-malarious regions of Senegal. We find that health expenditures in malarious regions catch up with non-malarious regions, at the extensive and intensive margins, and both in level and in composition. The same result holds for parental health-seeking behavior in case of other diseases like diarrhea. We provide evidence that these patterns cannot be explained by differential trends in total income or access to healthcare or child morbidity between malarious and non-malarious regions. Our results suggest that behavioral responses to anti-malaria campaigns magnify their impact on all-cause mortality for children.
    Keywords: Health expenses,Malaria,Africa,Human capital,Competing risks
    Date: 2017–11
  3. By: François Libois (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CRED - Centre de Recherche en Economie du Developpement - Facultés Universitaires Notre Dame de la Paix (FUNDP) - Namur); Vincent Somville (Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration, Chr. Michelsen Institute)
    Abstract: Population control policies keep attracting attention: by increasing the household size, having more children would directly contribute to a household's poverty. Using nationally representative household level data from Nepal, we investigate the links between a household's fertility decisions and variations in their size and composition. We show that the relationship between number of births and household size is positive when the mothers are young, but becomes negative as the mothers grow older. Elderly couples who had fewer children host, on average, more relatives who are outside the immediate family unit. This result sheds light on the heterogeneous relation between the number of children and household size over the life cycle. It also implies that reductions in a household's fertility may have an ambiguous impact on its per capita consumption, which depends on how the household's composition responds to new births and changes over time: in this sample, an old household's per capita consumption is not affected by the number of births. We use the gender of the first-born child to instrument the total number of consecutive children.
    Keywords: Fertility,Nepal,Household size,Household composition,Poverty
    Date: 2017–12
  4. By: María Laura Alzúa (CEDLAS-FCE-UNLP, CONICET.); Habiba Djebbari (Aix Marseille University (Aix Marseille School of Economics) EHESS & CNRS.); Amy J. Pickering (Civil and Environmental Engineering, Tufts University.)
    Abstract: Basic sanitation facilities are still lacking in large parts of the developing world, engendering serious environmental health risks. Interventions commonly deliver in-kind or cash subsidies to promote private toilet ownership. In this paper, we assess an intervention that provides information and behavioral incentives to encourage villagers in rural Mali to build and use basic latrines. Using an experimental research design and carefully measured indicators of use, we find a sizeable impact from this intervention: latrine ownership and use almost doubled in intervention villages, and open defecation was reduced by half. Our results partially attribute these effects to increased knowledge about cheap and locally available sanitation solutions. They are also associated with shifts in the social norm governing sanitation. Taken together, our findings, unlike previous evidence from other contexts, suggest that a progressive approach that starts with ending open defecation and targets whole communities at a time can help meet the new Sustainable Development Goal of ending open defecation.
    JEL: I12
    Date: 2018–05
  5. By: Kho, Kevin (Michigan State University, Department of Economics); Lakdawala, Leah (Michigan State University, Department of Economics); Nakasone, Eduardo (Michigan State University and International Food Policy Research Institute)
    Abstract: We investigate the impacts of school-based internet access on pupil achievement in Peru, using a large panel of 5,903 public primary schools that gained internet connections during 2007-2014. We employ an event study approach and a trend break analysis that exploit variation in the timing of internet roll-out up to 5 years after installation. We find that internet access has a moderate, positive short-run impact on school-average standardized math scores, but importantly that this effect grows over time. We provide evidence that schools require time to adapt to internet access by hiring teachers with computer training and that this process is not immediate. These dynamics highlight the need for complementary investments to fully exploit new technological inputs and underscores the importance of using an extended evaluation window to allow the effects of school-based internet on learning to materialize.
    Keywords: Education; Internet; ICT; Schooling
    JEL: I25 O12 O15 O30
    Date: 2018–04–01
  6. By: Hamed Sambo (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates the impact of remittances on undernourishment in Sub-Saharan Africa using panel data from 35 countries spanning the years 2001-2011. The panel Spatial Error Model (SEM) was used after taking into account the spatial interaction between countries. We find that remittances contribute to the reduction of undernourishment in Sub-Saharan African. However, the elasticity of calorie consumption to remittances is narrow. Moreover, the impact of remittances is more pronounced in intermediate income deciles countries than in the countries in lower income deciles and higher income deciles. Abstract This paper investigates the impact of remittances on undernourishment in Sub-Saharan Africa using panel data from 35 countries spanning the years 2001-2011. The panel Spatial Error Model (SEM) was used after taking into account the spatial interaction between countries. We find that remittances contribute to the reduction of undernourishment in Sub-Saharan African. However, the elasticity of calorie consumption to remittances is narrow. Moreover, the impact of remittances is more pronounced in intermediate income deciles countries than in the countries in lower income deciles and higher income deciles.
    Keywords: Remittances, Undernourishment, Spatial Error Model, Sub-Saharan Africa
    Date: 2018–01–24
  7. By: Giovanni Ferri (LUMSA University); Roshan Borsato (LUMSA University)
    Abstract: Climate change exacerbates desertification forcing millions of rural people to urbanize, especially in developing countries. Our quantitative analysis across African countries highlights migrants’ two typical sequential moves: i) people escape from villages to cities; ii) through cities’ enabling settings, some of them emigrate to developed countries. We find that: i) previous lower fresh water availability – our climate-related proxy – and drops in GDP’s agricultural share in Sub-Sahara seem to boost subsequent urbanization: ii) previously heightened urbanization subsequently inflates emigration rates. Thus, policies to combat land impoverishment/desertification would help both the environment and easing the stress that migration casts on societies’ balance.
    Keywords: Desertification, Climate change, Urbanization, International migration.
    JEL: F22 O15 O18 O55 Q54 R14 R23
    Date: 2018–07
  8. By: Ao, Chon-Kit; Chatterjee, Somdeep
    Abstract: We estimate the impacts of mandated political reservation for minorities on household credit access and borrowing behavior. To identify causal effects, we exploit the exogenous state-time variation in the allocation of constituencies (electoral districts) to the two reserved minority groups in Indian states. Using a household level panel data with observations before and after the redistricting, we find that the effect is concentrated on the disadvantaged population groups. Political reservation for Scheduled Tribes (STs) increases household probability of getting a loan by 3.7 percentage points, while political reservation for Scheduled Castes (SCs) has no effect on the likelihood of getting a loan. However, conditional on having a loan, reservation for SCs does lead to fewer but larger loans. We also find considerable changes in household borrowing composition.
    Keywords: Affirmative action,Political reservation,Credit access,Borrowing composition
    JEL: D78 J15 J78 O12
    Date: 2018
  9. By: Ivlevs, Artjoms (University of the West of England, Bristol); Hinks, Timothy (University of the West of England, Bristol)
    Abstract: We study the effect of former Communist party membership on paying bribes to public officials and motivations for bribery, 25 years after the fall of communist rule. Data come from a large representative survey, conducted in post-socialist countries in 2015/16. To deal with endogeneity, we instrument party membership with information on whether family members were affected by the Second World War. Instrumental variable results suggest that links to the former Communist party increase the likelihood of paying bribes today; this result applies to the former party members as well as their children and relatives. Among bribe payers, people with the party links are more likely to offer bribes as well as think that bribe payments are expected. Overall, our findings suggest that the proclivity to corruption of the former Communist party members has been transmitted through family and thus sustained over time, contributing to corruption decades after the demise of the Socialist bloc.
    Keywords: corruption, Communist party, political elite, post-socialist countries, path dependency
    JEL: D73 P37
    Date: 2018–06
  10. By: Canavire Bacarreza, Gustavo J (Inter-American Development Bank); Carvajal-Osorio, Luis C. (Universidad EAFIT)
    Abstract: This article explores the variation in the wage distributions of two Latin American countries, Bolivia and Colombia, which have had different political and economic strategies in recent years. Using data from household surveys, a decomposition of the wage distribution in each country using functional principal component analysis is conducted. The results suggest that Bolivia, which has implemented left-wing economic policies, has experienced a general increase in wages, especially benefiting the least skilled workers and the informal sector. On the other hand, the wage distribution in Colombia, whose economic policy has focused on free-market principles, has become more concentrated around the median wage, mainly due to changes in formal sector wages.
    Keywords: wage dynamics, functional principal component analysis, wage distributions, Latin America, Bolivia, Colombia
    JEL: J31 J38 C14
    Date: 2018–06
  11. By: Nirodha Bandara; Simon Appleton; Trudy Owens
    Abstract: This paper attempts to examine the labour force participation decisions and earnings across employment sectors and how it varies by gender in Sri Lanka. The labour market is disaggregated into 5 sectors –public, formal private, informal private, self-employed and agriculture. Using the Labour Force Survey 2013, this paper adds to existing literature in two ways. Firstly, the paper deals with two forms of potential biases which have not been simultaneously explored for the case of Sri Lanka – sample selectivity and endogeneity of education in earnings. Secondly, it adds to the literature by including the self-employed in the analysis. The determinants of sector choice are analysed using a multinomial logit. The findings of this paper suggest that individuals with the highest levels of education get into the public and formal private sectors, whereas the least educated are likely to join the informal and agricultural sectors. The earnings functions suggest that the returns to education vary greatly across the sectors. The differences across sectors confirm the importance of disaggregating the sectors of employment to examine choices of labour force participation.
    Keywords: sample selectivity, endogeneity, multinomial logit, control function, Sri Lanka
    Date: 2018
  12. By: Lay, Sok Heng
    Abstract: This paper assesses the impact of mobile phones on the use of formal banking services in some Asian countries. Using the FinScope Surveys of Cambodia, Laos, Myanmar, Nepal, and Thailand conducted between 2012 and 2015, the paper applies a probit model to both cross-sectional and pooled data set. The results consistently suggest that having a mobile phone increases the probability of having access to financial services. The findings also highlight the importance of education which increases the likelihood of being formally banked, while distance or time to banking infrastructure is likely to remain a significant barrier for people to access to financial services for all countries. Other factors associated with the likelihood of changes in the levels of access to financial services vary widely from country to country.
    Keywords: financial access, probit model, mobile financial service, financial institutions
    JEL: C35 G20 O16 O30
    Date: 2018–05–30
  13. By: Santiago Garriga (Paris School of Economics); María Ana Lugo (World Bank); Jorge Puig (CEDLAS-FCE-UNLP)
    Abstract: A vast proportion of households in developing countries like Paraguay are both consumers and producers of food, and thus the effects of food price fluctuations on welfare are not obvious. Historically, the agricultural sector in Paraguay has played a key role in economic development and has contributed significantly, and increasingly, to economic growth. In recent years, sharp movements in commodity prices have been added to the inherent volatility of the sector linked to climate conditions. In this work, we use the 2011/12 expenditure and income survey, as well as monthly price data for 127 food items for the period 2007/15, to simulate the effect of a potential hike in food prices on welfare. Our main results suggest that the expenditure effect is negative and regressive everywhere, but larger in rural than urban areas. The income effect is positive and progressive in rural areas and negligible in urban ones. Therefore, we find that the potential overall impact of an unexpected increase in food prices in Paraguay is a very flat U-shaped curve. We conclude with a simple exercise where we simulate a policy response in order to help those affected by the initial increase in food prices.
    JEL: D31 I38 Q12
    Date: 2018–07

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