nep-dev New Economics Papers
on Development
Issue of 2019‒02‒04
thirteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Inequality of Opportunity in Education: Accounting for the Contributions of Sibs, Schools and Sorting across East Africa By Anand, Paul; Behrman, Jere R.; Dang, Hai-Anh; Jones, Sam
  2. The unprotecting effects of employment protection: the impact of the 2001 labor reform in Peru By Jaramillo, Miguel
  3. What Drives Female Labor Force Participation? Comparable Micro-Level Evidence from Eight Developing and Emerging Economies By Klasen, Stephan; Pieters, Janneke; Santos Silva, Manuel; Ngoc Tu, Le Thi
  4. Political Representation and the Provision of Public Goods: Theory and Evidence from Ethiopia By Teferi Mergo; Alain-Desire Nimubona; Horatiu Rus
  5. Changes in Open Defecation in Rural North India: 2014-2018 By Gupta, Aashish; Khalid, Nazar; Desphande, Devashish; Hathi, Payal; Kapur, Avani; Srivastav, Nikhil; Vyas, Sangita; Spears, Dean; Coffey, Diane
  6. Enhancing ICT for quality education in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  7. Income cash transfers and intrahousehold decision making By Cecilia Parada
  8. The Shattered “Iron Rice Bowl”— Intergenerational Effects of Economic Insecurity During Chinese State- Owned Enterprise Reform By Nancy Kong; Lars Osberg; Weina Zhou
  9. Tropical Storms and Mortality under Climate Change By Pugatch, Todd
  10. What Stops Poor Girls from Going to College? Skill Development and Access to Higher Education in a Developing Country By Molina, Oswaldo; Santa María, Diego; Yamada, Gustavo
  11. Did conditional cash transfers in the Productive Safety Net Program empower women in Tigray, north-east Ethiopia? By Desalegne Gelagay, Megos; Lecoutere, Els
  12. Regional Migration and Wage Inequality in the West African Economic and Monetary Union By Girsberger, Esther Mirjam; Meango, Romuald; Rapoport, Hillel
  13. Employer and Employee Preferences for Worker Benefits: Evidence from a Matched Survey on the Bangladesh Informal Sector By Kumar, Krishna B.; Mahmud, Minhaj; Nataraj, Shanthi; Cho, Yoon Y.

  1. By: Anand, Paul (The Open University); Behrman, Jere R. (University of Pennsylvania); Dang, Hai-Anh (World Bank); Jones, Sam (UNU-WIDER)
    Abstract: Inequalities in the opportunity to obtain a good education in low-income countries are widely understood to be related to household resources and schooling quality. Yet, to date, most researchers have investigated the contributions of these two factors separately. This paper considers them jointly, paying special attention to their covariation, which indicates whether schools exacerbate or compensate for existing household-based inequalities. The paper develops a new variance decomposition framework and applies it to data on more than one million children in three low-income East African countries. The empirical results show that although household factors account for a significant share of total test score variation, variation in school quality and positive sorting between households and schools are, together, no less important. The analysis also finds evidence of substantial geographical heterogeneity in schooling quality. The paper concludes that promoting equity in education in East Africa requires policies that go beyond raising average school quality and should attend to the distribution of school quality as well as assortative matching between households and schools.
    Keywords: inequality of opportunity, education achievement, decomposition, household, school, sorting, Africa
    JEL: D6 H0 I2 O1
    Date: 2019–01
  2. By: Jaramillo, Miguel
    Abstract: According to the National Household Survey (ENAHO), approximately three out of four employment relationships within the formal sector of the Peruvian economy are based on temporary contracts. This percentage is larger than that of any OECD country and also considerably larger to that of any other country of the Latin American region. This study aims to elucidate the role that the 2001 labor reform played on these results and the effect this has had on variables associated to Peruvian workers’ well-being. To this end, we exploit the information on contract type and start date (identified by the employment duration), which are reported on the household surveys, to analyze the decision between using fixed-term contracts or indefinite-term contracts. The average impact obtained from a differences-in-differences estimation with matching, having workers with contract but with no health insurance as a control group, is a reduction of 41 percent in the probability of having contracts of indefinite duration in the short term (up to five years after the reform), whereas the long-term impact has been a drop by 70 percent. These results are consistent, and similarly large, as those found in a model of simple differences controlling for workers’ characteristics, firms and economic context. The results are robust to placebo tests and estimations by activity sectors and firm size. These results mean that, due to the reform, by 2015 over 900,000 jobs that could have been of indefinite-term were fixed-term contracts instead. Estimates based on Mincer equations suggest that this meant a loss of around 1.5 billion dollars in workers' labor income in 2015. Also, 36,000 workers would have affiliated to a union, had such reform not been implemented. These figures suggest than, instead of increasing workers’ protection, the reform implemented by the Constitutional Court left a large portion of them unprotected.
    Keywords: employment protection,labor reform,impact evaluation
    JEL: K31 J63 C52
    Date: 2019
  3. By: Klasen, Stephan (University of Göttingen); Pieters, Janneke (Wageningen University); Santos Silva, Manuel (University of Göttingen); Ngoc Tu, Le Thi (University of Göttingen)
    Abstract: We investigate the micro-level determinants of labor force participation of urban married women in eight low- and middle-income economies: Bolivia, Brazil, India, Indonesia, Jordan, South Africa, Tanzania, and Vietnam. In order to understand what drives changes and differences in participation rates since the early 2000s, we build a unified empirical framework that allows for comparative analyses across time and space. We find that the coefficients of women's characteristics differ substantially across countries, and this explains most of the between-country differences in participation rates. In particular, the relationship between a woman's education and her participation in the labor force varies from being positive and linear (Brazil and South Africa) to being U- or J-shaped (India, Jordan, and Indonesia), or a mixture of both (Bolivia, Vietnam, and Tanzania). Overall, the economic, social, and institutional constraints that shape women's labor force participation remain largely country-specific. Nonetheless, rising education levels and declining fertility consistently increased participation rates, while rising household incomes contributed negatively in relatively poorer countries, suggesting that a substantial share of women work out of economic necessity.
    Keywords: female labor force participation, gender, labor markets, development
    JEL: J20 J16 I25 O15
    Date: 2019–01
  4. By: Teferi Mergo (Department of Economics, University of Waterloo); Alain-Desire Nimubona (Department of Economics, University of Waterloo); Horatiu Rus (Department of Economics, University of Waterloo)
    Abstract: While the salience of ethnicity as a factor in ruling coalition formation in African politics has been documented in the literature, less is known about its impact on various ethnic groups' economic outcomes. We construct a simple political economy model to illustrate a way in which investments in public goods in ethnic-based polities may depend on the quality of the ethnic groups' political representation with the federal government. We then exploit a natural experiment that took place in Ethiopia, following the institution of an ethnic federalism in the country in 1995. Using a Difference-in-Difference estimation strategy on repeated cross-sectional data constructed from Censuses and Welfare Monitoring Surveys, we confirm that better political representation improves access to public goods. In Ethiopia's ethnic-based federation, the quality of political representation varies across ethnic regions depending on whether their populations belong or not to the ruling ethnic group at the federal level. Along this line, we found that access to public goods has improved faster in the politically dominant Tigray region than in the other regions. Similarly, the hierarchy of public goods access rates' in different ethnic regions is consistent with the proximity of the political elites from different regions to the center of political power in the country. We also found that the regional disparities in terms of access to public goods are more pronounced in rural areas than in urban areas.
    JEL: H41 P16 O10 O55
    Date: 2019–01
  5. By: Gupta, Aashish (University of Pennsylvania); Khalid, Nazar (rice Institute); Desphande, Devashish (Centre for Policy Research); Hathi, Payal (rice Institute); Kapur, Avani (Centre for Policy Research); Srivastav, Nikhil (University of Texas at Austin); Vyas, Sangita (University of Texas at Austin); Spears, Dean (University of Texas at Austin); Coffey, Diane (University of Texas at Austin)
    Abstract: Since October 2014, the Government of India has worked towards a goal of eliminating open defecation by 2019 through the Swachh Bharat Mission (SBM). In June 2014, we reported the results of a survey of rural sanitation behaviour in north India. Here, we report results from a late 2018 survey that revisited households from the 2014 survey in four states: Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh. Although rural latrine ownership increased considerably over this period, open defecation remains very common in these four states. There is substantial heterogeneity across states in what the SBM did and how. Many survey respondents report that the SBM attempted to coerce latrine construction, including by withholding or threatening to withhold government benefits. ST and SC households were especially likely to face coercion. Variation in SBM coercion is correlated with variation in sanitation outcomes: in villages where more people report coercive SBM activities, more people also reported switching to latrine use. These outcomes suggest the need for transparent, fact-based public dialogue about the SBM: its costs and benefits, its accomplishments and means.
    Keywords: sanitation, open defecation, India, development, environmental health, behaviour, Swachh Bharat Mission
    JEL: O15 I15
    Date: 2019–01
  6. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This research assesses the relevance of information and communication technology (ICT) in primary education quality in a panel of 49 Sub-Saharan African countries for the period 2000-2012. The empirical evidence is based on Two Stage Least Squares (2SLS) and Instrumental Quantile regressions (IQR). From the 2SLS: (i) mobile phone and internet penetration rates reduce poor quality education and enhancing internet penetration has a net negative effect of greater magnitude. From the IQR: (i) with the exception of the highest quantile for mobile phone penetration and top quantiles for internet penetration, ICT consistently has a negative effect on poor education quality with a non-monotonic pattern. (ii) Net negative effects are exclusively apparent in the median and top quantiles of internet-related regressions. It follows that enhancing internet penetration will benefit countries with above-median levels of poor education quality while enhancing internet penetration is not immediately relevant to reducing poor education quality in countries with below-median levels of poor education quality.
    Keywords: ICT; Primary school education; Development; Sub-Saharan Africa
    Date: 2019–01
  7. By: Cecilia Parada (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: Changes in the individual income affect many dimensions within the households mainly through the variation of the bargaining power. In this paper, we estimate the impact of an income cash transfer to low-income households in Uruguay (PANES) on the probability of couples separation, changes in the families´structure, distribution of domestic tasks and the likelihood women be household head. Exploiting the discontinuity in the eligibility indicator to the program and the fact that only one of the household members receive the cash transfer, our results suggest that PANES rise the probability of being in the same marital status as in the baseline and introduce stability in the number of family members. These results show, also persistence in the short term once they stop perceiving the benefit. There are no changes in the performance in households task among the members that receive the cash transfer, but there heterogenous effects if we consider the receiptor's sex. Finally, although there are near 80% of female receivers, we do not find any change in the probability of being the household head.
    Keywords: intrahousehold decisions making, cash transfers
    JEL: D13 J12
    Date: 2018–12
  8. By: Nancy Kong; Lars Osberg; Weina Zhou (Department of Economics, Dalhousie University)
    Abstract: Reform of the Chinese state-owned enterprise (SOE) sector in the late 1990s produced massive layoffs (34 million employees) and marked the end of the “iron rice bowl” guarantee of employment security. An expanding international literature has documented the adverse health impacts of economic insecurity on adults but has usually neglected children. This paper uses the natural experiment of SOE reform in China to explore the causal relationship between increased parental economic insecurity and children’s BMI Z-score. Using provincial and year-level layoff rates and income loss from the layoffs, we estimate a generalized differences-in-differences model with individual fixed effects and year fixed effects. For a medium-built 10-year-old boy, a 10%-point increase in expected parental economic loss from layoff (largest treatment effect) implies a gain of 4 kg. The counterfactual analysis suggests a 4.5%-point increase in overweight rate due to the reform. The weight gain persists for boys whose parents kept their jobs, indicating the importance of anxiety about potential losses, as well as the experience of actual loss. Quantile regressions suggest that boys who were relatively overweight were more severely affected by parental economic insecurity. Girls are not significantly affected. Accounting for intergenerational effects therefore increases the estimated public health costs of greater economic insecurity.
    Date: 2018–01–01
  9. By: Pugatch, Todd
    Abstract: Extreme weather induced by climate change can have major consequences for human health. In this study, I quantify the effect of tropical storm frequency and severity on mortality using objective meteorological data and the universe of vital statistics records from a large developing country, Mexico. Using a measure of storm exposure that accounts for both windspeed dispersion and population density along the storm track, I project changes in past storm-related mortality under various scenarios of continued climate change, while holding population and income at current levels. I find that storm-related deaths would have risen under most climate change scenarios considered, with increases of as much as 52% or declines of as much as 10%, depending on the interplay between increasing storm severity and decreased frequency.
    Keywords: tropical storms,tropical cyclones,hurricanes,natural disasters,human mortality,human health,climate change,developing countries,Latin America,Mexico
    JEL: I15 J10 O13
    Date: 2019
  10. By: Molina, Oswaldo (Universidad del Pacifico); Santa María, Diego (Universidad del Pacifico); Yamada, Gustavo (Universidad del Pacifico)
    Abstract: Although recent evidence suggests that the aggregate gender gap in access to Higher Education in Peru has been closed, differences in enrollment between the poor and the rich are still notably larger among girls. This paper explores the factors behind these gender differences in access to Higher Education. Specifically, we assess whether larger socioeconomic disparities among females can be explained by long-run factors crystalized in Higher Education preparedness (i.e., cognitive and non-cognitive skills), rather than by short-term economic constraints. We employ a rich longitudinal data set that allows for the estimation of a structural model of skill formation from early childhood. Our results show that cognitive abilities are strong predictors of enrollment for both genders, whereas non-cognitive skills are only determinant among boys. We also provide strong evidence of gender-specific short-term barriers in access to post-secondary schooling: while differences in skills are the major determinants of the wealth gradient for males, the female gap remains large even after accounting for these factors. Further analysis reveals that access to Higher Education among girls is overly sensitive to marginal costs of enrollment, suggesting that at least part of this gradient might be explained by lower expected returns rather than credit constraints. Overall, these findings illustrate the importance of early human capital investments on educational attainment, but also point to the prevalence of short-term restrictions that disproportionately affect females in disadvantaged households.
    Keywords: higher education, gender, skills
    JEL: I23 J16 J24
    Date: 2018–12
  11. By: Desalegne Gelagay, Megos; Lecoutere, Els
    Abstract: Conditional Cash Transfers (CCT), policy instruments for social protection, also have potential to economically empower women. The assessment of the impact of the CCT component in the Productive Safety Net Program in Tigray, Ethiopia, on women’s economic empowerment generates important insights for policy and future CCT programs in similar contexts. Not only does it demonstrate a differential impact on diverse aspects of women’s economic empowerment, it also shows a heterogeneity in the effects in man- and woman-headed households. Women’s access and decision-making power over credit is positively impacted in both types of households, yet, the effect seems larger among woman-headed households, suggesting CCT affect married women differently in this regard. Negative effects are observed as well and call for particular policy attention. Among woman-headed households, CCT reduced women’s decision-making power over agricultural production and asset transfers. If this means women received help in agricultural production and safeguarding their assets as part of the program, this might actually be positive, provided women themselves also appreciate sharing decision-making power. Among man-headed households, there is a negative effect on women’s time available for leisure, which corroborates other findings of increased work burdens due to conditionalities; but here, this only affects married women.
    Keywords: social protection, conditional cash transfers; economic empowerment of women; heterogeneous impact; Ethiopia
    Date: 2019–01
  12. By: Girsberger, Esther Mirjam (University of Technology, Sydney); Meango, Romuald (Max Planck Institute for Social Law and Social Policy); Rapoport, Hillel (Paris School of Economics)
    Abstract: We investigate the impact of regional migration on average wages and on wage inequality in the West African Economic and Monetary Union (UEMOA). We exploit unique data from a unified labour force household survey which covers natives and migrants in the seven economic capitals of the region. We first estimate the counterfactual wage distributions of UEMOA migrants in absence of migration to evaluate the effect of regional migration when the effect of migration is purely compositional (i.e., when wages are treated as exogenous). We find that regional migration increases average wages by 1.8% and entails a decrease in inequality that ranges between -1.5% (for the Gini index) and -4.5% (for the interquartile ratio). This is essentially driven by a reduction in inequality between countries, while the effect of migration on within-country inequality is heterogeneous across countries and remains small overall. Second, when accounting for possible general equilibrium effects of migration on stayers' wages, we find similar to stronger effects on inequality, albeit with a smaller increase in average wages. The later result is due primarily to the fact that we now account for the predominant pattern of migrants' negative to intermediate self-selection, which tends to depress natives' wages at destination while only mildly affecting wages at home. The former result is due to the fact that regional migration in the UEMOA takes place mostly from low-wage to high-wage countries, which in combination with the general equilibrium effects described above, leads to a larger decrease in between-country inequality than in a setting with exogenous wages.
    Keywords: migration, inequality, Gini Index, West Africa
    JEL: F22 J61 O15
    Date: 2018–12
  13. By: Kumar, Krishna B. (RAND); Mahmud, Minhaj (Bangladesh Institute of Development Studies (BIDS)); Nataraj, Shanthi (RAND); Cho, Yoon Y. (World Bank)
    Abstract: Informality is ubiquitous in the labor markets of developing countries, and requiring that firms formally register, pay taxes, and provide employee benefits stipulated in labor regulations to reduce such informality is challenging. However, a matched survey on employer-employee preferences suggests that mutually beneficial job benefits exist, and that encouraging their adoption might be feasible. Carefully designed discrete choice experiments on combinations of benefits related to compensation, leave and termination policies, working conditions, and accident insurance, along with incentives for employers, reveal the relative values that workers and employers attach to each benefit. The results show that workers tend to value advance notice for job termination and accident insurance, and that employers are not averse to providing these benefits. In contrast, workers find long working hours without overtime compensation to be highly undesirable, whereas many employers are generally unwilling to provide shorter hours or overtime pay unless they face the threat of fines or are offered substantial incentives for doing so. Our findings therefore suggest that encouraging the provision of termination notice and accident insurance may be relatively easy, but that increasing compliance with legal limits on working hours and overtime compensation is likely to require increased enforcement or substantial incentives.
    Keywords: informality, worker benefits, discrete choice experiments
    JEL: J32 J81
    Date: 2019–01

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