nep-dev New Economics Papers
on Development
Issue of 2019‒11‒18
eleven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Understanding development and poverty alleviation By Committee, Nobel Prize
  2. Job Loss, Credit and Crime in Colombia By Gaurav Khanna; Carlos Medina; Anant Nyshadham; Christian Posso; Jorge Tamayo
  3. Reevaluating distributional consequences of the transition to market economy in Poland: new results from combined household survey and tax return data By Michał Brzeziński; Michał Myck; Mateusz Najsztub
  4. Index Based Insurance in Developing Countries: Rational Neglect? By Würtenberger, Daniel
  5. The Growth Effects of El Nino and La Nina: Local Weather Conditions Matter By Couharde, C.; Damette, O.; Generoso, R.; Mohaddes, K.
  6. Primary health care coverage in Brazil: Assessment of the Family Health Program impacts on mortality at municipality level By Maria Dolores Montoya Diaz; Adriano Dutra Teixeira, Fernando Antonio Slaibe Postali, Natalia Nunes Ferreira-Batista, Rodrigo Mor
  7. Accumulation by Dispossession and Electoral Democracies : An Analysis of Land Acquisition for Special Economic Zones in India By Kartik Misra
  8. Housing program and social conditions impact: Evidences from Minha Casa Minha Vida program lotteries in Brazil By Andre Luis Squarize Chagas; Guilherme Malvezzi Rocha
  9. The Effect of Mobile Money Usage on Borrowing, Saving, and Receiving Remittances: Evidence from Tanzania By Askar Ismailov; Albert Benson Kimaro; Hisahiro Naito
  10. The impact of wind power on the Brazilian labor market By Solange Goncalves; Thiago Rodrigues, Andre Chagas
  11. The Impact of the Expansion of African Palm Crop on Child Undernutrition in South-West Guatemala By Juliana Yael Milovich Finkelstein

  1. By: Committee, Nobel Prize (Nobel Prize Committee)
    Abstract: Despite massive progress in the past few decades, global poverty — in all its different dimensions — remains a broad and entrenched problem. For example, today, more than 700 million people subsist on extremely low incomes. Every year, five million children under five die of diseases that often could have been prevented or treated by a handful of proven interventions. Today, a large majority of children in low- and middle-income countries attend primary school, but many of them leave school lacking proficiency in reading, writing and mathematics. How to effectively reduce global poverty remains one of humankind’s most pressing questions. It is also one of the biggest questions facing the discipline of economics since its very inception.
    Keywords: poverty; field experiments
    JEL: C90 I30
    Date: 2019–10–14
  2. By: Gaurav Khanna; Carlos Medina (Banco de la República de Colombia); Anant Nyshadham; Christian Posso; Jorge Tamayo
    Abstract: We investigate the effects of job displacement, as a result of mass-layoffs, on criminal arrests using a novel matched employer-employee-crime dataset in Medellín, Colombia. Job displacement leads to immediate earnings losses, and an increased likelihood of being arrested for both the displaced worker and for other youth in the family. We leverage variation in opportunities for legitimate reemployment and access to consumption credit to investigate the mechanisms underlying this job loss-crime relationship. Workers in booming sectors with more opportunities for legitimate reemployment exhibit lower increases in arrests after job losses. Greater exposure to an expansion in consumption credit also lowers the increase in arrests after employment shocks. **** RESUMEN: Se estiman los efectos de la pérdida del empleo como resultado de un despido masivo, sobre la probabilidad de ser arrestado, utilizando una novedosa base que parea datos de empleados, empleadores y arrestos en Medellín, Colombia. La pérdida del empleo genera una reducción inmediata en los ingresos, y un incremento en la probabilidad de ser arrestado tanto para el empleado despedido, como para otros familiares jóvenes. Nosotros explotamos la variación en las oportunidades de re-emplearse formalmente y en el acceso a crédito formal de consumo, para estudiar los mecanismos detrás de la relación entre la pérdida del empleo y el crimen. Los trabajadores en sectores en auge, con mayores oportunidades de re-emplearse, ven menos afectada su probabilidad de ser arrestados. Una mayor exposición a una expansión en la oferta de crédito de consumo también debilita la respuesta de los arrestos al choque en el mercado laboral.
    Keywords: Job displacements, crime, Medellín, Pérdida del empleo, crimen, Medellín
    JEL: K42 J63 J65
    Date: 2019–11
  3. By: Michał Brzeziński (Faculty of Economic Sciences, University of Warsaw); Michał Myck (Centre for Economic Analysis); Mateusz Najsztub (Centre for Economic Analysis)
    Abstract: We use Pareto imputation, survey reweighting, and microsimulation methods applied to combined household survey and tax return data to reevaluate distributional consequences of the post-socialist transition in Poland. Our approach results in the first estimates of top-corrected inequality trends for real equivalized disposable incomes over the years 1994-2015. We find that the top-corrected Gini coefficient grew by 14-26% more compared to the unadjusted survey-based estimates. This implies that over the last three decades Poland has become one of the most unequal European countries among those for which top-corrected inequality estimates exist. The highest-income earners benefited the most during the post-socialist transformation: the annual rate of in-come growth for the top 5% of the population exceeded 3.5%, while the median income grew by about 2.5%.
    Keywords: income inequality, Gini index, top income shares, tax record, survey data, Pareto distribution, Poland
    JEL: D31 D63 C46 P36
    Date: 2019
  4. By: Würtenberger, Daniel
    Abstract: Microinsurance adoption in developing countries is low, despite its potential to foster economic growth. Recent research is not able to explain the low demand within the neoclassical framework. I contribute to this stream of research by proposing rational as well as boundedly rational explanations for the low attractiveness of microinsurance within a stochastic framework. More precisely, I analyze weather index insurance. My model makes separate predictions for close farmers, whose location is near a weather station, and distant farmers. Results show that the latter ask for less than 50% insurance coverage even under perfect rationality. I extend the model by integrating incorrect beliefs. I can show that a lack of trust reduces insurance demand most for close farmers, while a lack of knowledge about the insurance negatively affects the demand of distant farmers. Moreover, subsidies are more effective for close than for distant farmers.
    Keywords: index insurance,basis risk,microinsurance,developing countries,understanding of insurance products,trust in insurer
    JEL: G22 D91 Q12 O13 O16
    Date: 2019
  5. By: Couharde, C.; Damette, O.; Generoso, R.; Mohaddes, K.
    Abstract: This paper contributes to the climate-economy literature by analysing the role of weather patterns in influencing the transmission of global climate cycles to economic growth. More specifically, we focus on El Nino Southern Oscillation (ENSO) events and their interactions with local weather conditions, taking into account the heterogeneous and cumulative effects of weather patterns on economic growth and the asymmetry and nonlinearity in the global influence of ENSO on economic activity. Using data on 75 countries over the period 1975-2014, we provide evidence for the negative growth effects of ENSO events and show that there are substantial differences between its warm (El Nino) and cold (La Nina) phases and between climate zones. These differences are due to the heterogeneity in weather responses to ENSO events, known as teleconnections, which has so far not been taken into account by economists, and which will become more important in the climate-economy relationship given that climate change may substantially strengthen long-distance relationships between weather patterns around the world. We also show that the negative growth effects associated with these teleconnections are robust to the definition of ENSO events and more important over shorter meteorological onsets.
    Keywords: Economic growth, ENSO events, weather shocks, climate change
    JEL: C33 O40 Q54
    Date: 2019–11–11
  6. By: Maria Dolores Montoya Diaz; Adriano Dutra Teixeira, Fernando Antonio Slaibe Postali, Natalia Nunes Ferreira-Batista, Rodrigo Mor
    Abstract: The main purpose of this paper is to analyse the direct impacts of Family Health Strategy / Program (PSF) on mortality related to diseases / conditions for which access to effective primary care can reduce the likelihood of more severe outcomes and quality of vital information (Chap 18 of ICD 10). The measure of coverage is the number of teams deployed by population. We worked with individual data from the Brazilian Ministry of Health (Datasus) aggregated to municipal level. To address the endogeneity of the coverage, we estimated a fixed effect model with instrumental variables. The instruments employed are dummies that capture the political alignment between majors and the state governor, between majors and the president, and between state governor and the president. Our results show no significant effects for stroke, asthma, other diseases from respiratory tract and kidney diseases. On the other hand, there are significant effects for conditions related to Brazilian list of avoidable hospital admissions, hypertension and diabetes, coronary disease, cardiac insufficiency, diabetes complications and bacterial pneumonia, indicating that PSF is effective in reducing avoidable mortality for that causes. The results obtained for some metropolitan region municipalities suggest that it seems that heterogeneities may exist.
    Keywords: Family Health Program (PSF); Mortality; Datasus databases; Impact Evaluation; Fixed Effects Instrumental Variables; Dose-Response Model
    JEL: I18 C23 C26
    Date: 2019–11–01
  7. By: Kartik Misra (Department of Economics, University of Massachusetts Amherst)
    Abstract: Forcible acquisition of agricultural land to facilitate accumulation by dispossession attempts like setting up of Special Economic Zones (SEZ) is fiercely resisted by farmers in India. These agitations may determine the political viability of governments. The ability if the state to enact and implement policies favoring accumulation by dispossession is determined by the political conflict between, on the one side, the elite and the state, and, on the other side, dispossessed farmers and landless agricultural workers. The outcome of this conflict is determined by the distribution of power in society and the success of different groups in mobilizing and enforcing their class interests. Using a simple model of the political conflict over land acquisition and new data-set on SEZs that failed to acquire land from farmers, this paper shows that factors like inequality in land ownership (class) and hierarchies of caste and gender hinder the ability of small and marginal farmers from protecting their class interests even though they have de jure political rights and majority in the voting process. Further, excessive political competition along caste and ethnic lines weakens the political power of farmers and reduces the probability of success of farmer movements. Finally, the promise of formal employment and higher wages does not convince marginalized communities or educated farmers to support SEZs.
    Date: 2019
  8. By: Andre Luis Squarize Chagas; Guilherme Malvezzi Rocha
    Abstract: Housing policies to improve the quality of life of the poorest have been employed for a long time. In developing countries urbanization has increased the number of slums, supporting the creation of housing programs, like Minha Casa Minha Vida (MCMV) program, launched in 2009 in Brazil. The program intend to provide better housing conditions to poor family. To reduce the construction cost the houses are built in surround area of the cities, far from business center. In this paper, we took advantage of a randomly selection of families in Rio de Janeiro (one of the most important cities in Brazil) and São José do Rio Preto cities (a big city in the countryside of São Paulo state, Brazil) to evaluate the it impact on social conditions, mainly related to the employment and income. By combining two administrative databases we were able to measure the changes in the labor market for both groups, drawn and not drawn. The first conclusion is even with a random selection criteria, as the lottery, the program badly selected the beneficiary families, benefiting only one least linked to the labor market. Individuals with better job conditions choose remains the current house, independently of it structural condition or the neighborhood. To the beneficiary, the program negatively affects the labor supply, reducing the likelihood that the beneficiary will be formally employed. Also, the program increased the proportion of families receiving the cash income transfer. This work is one of the first articles to analyze microdata from MCMV, providing an important measure of the program’s impact.
    Keywords: housing policy; labor market; Minha Casa Minha Vida
    JEL: R21 R31 I38
    Date: 2019–11–04
  9. By: Askar Ismailov; Albert Benson Kimaro; Hisahiro Naito
    Abstract: This study examines the effect of the use of mobile money services on financial behavior using data from Tanzania. We estimate the causal effect of the use of mobile money on borrowing, receiving remittances, and saving by applying a two-stage least squares estimation using the shortest distance to the border of areas with multiple mobile phone networks, which is a proxy of accessibility to a mobile network, as an instrumental variable. We find that when a household experiences a negative shock, non-users of mobile money increase borrowing, while mobile money users do not. Further, the use of mobile money increases the probability of saving in mobile money savings accounts and of receiving remittances, while it decreases the probability of saving in less liquid assets such as livestock. In contrast, we find that the effect of the use of mobile money on receiving remittances is the same for those who experience a negative shock and those who do not. These evidences suggest that the use of mobile money increases the receipt of remittances regardless of negative shocks and changes the saving portfolio, so a household can prepare for negative shocks. Hence, a household that uses mobile money does not need to increase borrowing in the face of a negative shock. Consistent with this interpretation, the negative shock does not decrease the livelihood of the mobile money users while it decreases the livelihood of non-users.
    Date: 2019–11
  10. By: Solange Goncalves; Thiago Rodrigues, Andre Chagas
    Abstract: Wind power is an important source of renewable energy. Beyond the environmental dimension, the wind energy may contribute to the local development. Due to its weather conditions, Brazil emerges as one of the leading countries in the generation of wind power. This study estimates the impact of wind farms on the Brazilian labor market, through the exploration of the staggered nature of the sequential process of wind farm implantation between 2004 and 2016. We estimate the treatment effect parameters using a Difference--in--Differences (DiD) approach with: i) multiple time periods, ii) variation in treatment timing, and iii) dynamic treatment effects, through an event study design. We aggregate information from several data sources into a panel and we analyze the impact on employment and wages, by considering economic sectors, educational levels, and firm sizes. Our findings suggest that wind farms increase employment in the industry, agriculture and construction, and increase the wages in all economic sectors. Additionally, we find positive effects on the employment and wages of less--educated workers, and of small and medium--sized firms. The impact of this intervention can last for up to two years. Our results suggest that wind power may generate significant social impacts through the labor market, by contributing to local development and increasing social welfare in developing economies.
    Keywords: Wind power; staggered difference-in-differences; event study; employment; wages; labor market
    JEL: Q42 C23 R58
    Date: 2019–10–31
  11. By: Juliana Yael Milovich Finkelstein
    Abstract: The struggle for water and land use in Guatemala has intensiffed in the last decade due to the accelerated expansion of the agro-export sector. Particularly, in the south-west region, the recent expansion of african palm crop has taken place at the expense of illegal dredging of rivers, the improper use of water resources and the purchase and forced dispossession of communal and family lands of the indigenous population. Thissituation not only represents a destructuring of the established order within families and within indigenous communities, but also compromises the nutritional health of the most vulnerable members, such as children and women. This study provides evidence on how the rapid development of this agro-export crop has contributed to increase the probability of children suffering from chronic malnutrition in the region, and particularly those from indigenous mothers, living in urban areas and in households where the head of the family is a man.
    Keywords: Child Undernutrition, African Palm, Impact Evaluation
    JEL: J13 O12 I15 Q53
    Date: 2019

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