nep-dev New Economics Papers
on Development
Issue of 2020‒09‒21
nine papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Revisiting the oil and democracy nexus : New evidence utilizing V-DEM democracy data in a GMM PVAR ‎framework ‎ By Bergougui, B.; Murshed, S.M.
  2. Better roads, better off? Evidence on improving roads in Tanzania By Dumas, Christelle; Játiva, Ximena
  3. Escalation of civil war in Nepal: The role of poverty, inequality and caste polarisation By Sharma, Hari; Gibson, John
  4. Incomplete Information Sharing within the Household: Evidence from Participation in Agricultural Training in Zambia By Ken MIURA; Yoko KIJIMA; Takeshi SAKURAI
  5. Migration from Developing Countries: Selection, Income Elasticity and Simpson's Paradox By Michael A. Clemens; Mariapia Mendola
  6. The Determinants of School Attendance and Attainment in Ghana: A Gender Perspective By Harry A. Sackey
  7. Behavioral Change Promotion, Cash Transfers and Early Childhood Development : Experimental Evidence from a Government Program in a Low-Income Setting By Premand,Patrick; Barry,Oumar
  8. Minimum Wages in Formal and Informal Sectors: Evidence from an Inflation Shock in Colombia By Pérez Pérez Jorge
  9. Earnings and Employment Sector Choice in Kenya By Robert Kivuti Nyaga

  1. By: Bergougui, B.; Murshed, S.M.
    Abstract: This study re-examines the validity of oil-hinders-democracy hypothesis by comparing the long-term effects of oil abundance and oil dependence democracies individually. Based on five novel measures of democracy from V-DEM dataset, we test this hypothesis on data from 95 developing countries over the period 1932–2014. Our analyses show some nuances in the oil-democracy relationship. First, that oil wealth adversely affects democracy across the full sample. Second, once we ‎classified developing countries into five sub-samples, we consistently ‎find that the influence of oil wealth (abundance/dependence) measures on democracy varies across geographical regions‎ as well as small and large-scale oil endowment countries. Third, we find that institutional quality in the form of rule of law plays a crucial role in altering the oil–democracy link. Overall, we provide ample support for ‘Conditionalist view’. In other words, oil has different effects on democracy in the context of oil abundancy, geographic regions, and institutional aspects. More importantly, it seems that oil abundance does not hinder democracy in each of the five sub-samples and in some instances can even be a blessing. Thus, it is worthy to make a distinction between these two types of oil wealth to better understand the oil-democracy relationship.
    Keywords: resource curse, democratic institutions, oil abundance, oil dependence, PVAR
    Date: 2020–04–07
  2. By: Dumas, Christelle; Játiva, Ximena (Faculty of Economics and Social Sciences)
    Abstract: Spatial isolation is considered as one of the main determinants of poverty. Therefore, many transport investments are undertaken with a stated objective of poverty reduction. In our paper, we evaluate a Tanzanian program that rehabilitated 2500km of major roads between 2008 and 2013. We deal with endogenous placement issues with a household fixed-effect strategy combined with a propensity score matching. Contrary to most studies, we find damaging effects of the road on the rural population: the price of the main product (rice) decreases, they reduce rice production and reallocate labor away from farm but opportunities of o_-farm work are scarce. This results in depressed wages and households declare a lower satisfaction. This is consistent with a situation where rural households face an increased competition due to lower transportation costs.
    Keywords: Roads; Poverty; Rural households; Africa
    JEL: O12 O13 J43 O15 O18
    Date: 2020–09–16
  3. By: Sharma, Hari; Gibson, John
    Abstract: A growing literature examines effects of poverty, inequality and polarisation on civil war. Few studies examine effects at very local levels despite considerable spatial heterogeneity in many civil wars. We study Nepal's civil war, which escalated sharply from 2001, using geo-coded data on 15,000 conflict deaths. We also use small-area estimation to form poverty and inequality estimates for almost 4000 localities. Contrary to prior findings, it appears that higher local poverty rates reduced the risk of conflict and the number of deaths. This negative association is explained by the shift in strategy by the rebels, to target richer middle class and urban areas so as to access resources as a way to win the war. We also find that local relative wealth inequality is associated with escalation of the civil conflict, suggesting that relative wellbeing affects decisions about rebellion and conflict. Caste polarisation also raises odds of conflict and the number of deaths, especially where the dominant caste groups were larger. In a society where individual identity and alliances are defined by a discriminatory and unequal caste system, the probability of conflict is likely to be higher.
    Keywords: Civil war, inequality, polarisation, poverty, small-area estimation, Nepal
    JEL: D74 I32 O12
    Date: 2020–06–30
  4. By: Ken MIURA (Kyoto University); Yoko KIJIMA (National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan.); Takeshi SAKURAI (The University of Tokyo)
    Abstract: This study estimates the impact of the gender of informed individuals on agricultural training participation. To do so, we randomly distributed information about a rice planting demonstration to husbands or wives in rural Zambia. The results show that information recipients were much more likely to join the training than the non-recipients from the same household, indicating that information does not flow well among spouses. We present evidence that information sharing is distorted by intra-household differences in management rights over productive lands for rice cultivation.
    Keywords: knowledge diffusion, intra-household bargaining, sub-Saharan Africa
    Date: 2020–09
  5. By: Michael A. Clemens (Center for Global Development); Mariapia Mendola (Università degli Studi di Milano Bicocca)
    Abstract: How does immigration affect incomes in the countries migrants go to, and how do rising incomes shape emigration from the countries they leave? The answers depend on whether people who migrate have higher or lower productivity than people who do not migrate. Theory on this subject has long exceeded evidence. We present estimates of emigrant selection on both observed and unobserved determinants of income, from across the developing world. We use nationally representative survey data on 7,013 people making active, costly preparations to emigrate from 99 developing countries during 2010–2015. We model the relationship between these measures of selection and the income elasticity of migration. In low-income countries, people actively preparing to emigrate have 30 percent higher incomes than others overall, 14 percent higher incomes explained by observable traits such as schooling, and 12 percent higher incomes explained by unobservable traits. Within low-income countries the income elasticity of emigration demand is 0.23. The world’s poor collectively treat migration not as an inferior good, but as a normal good. Any negative effect of higher income on emigration within subpopulations can reverse in the aggregate, because the composition of subpopulations shifts as incomes rise—an instance of Simpson’s paradox.
    Date: 2020–09–07
  6. By: Harry A. Sackey (Malaspina University-College Nanaimo, Canada)
    Abstract: This study examines the determinants of school attendance and attainment in Ghana with a view to deriving implications for policy direction. Using micro-level data from the Ghana living standards surveys, our gender disaggregated probit models on current school attendance and attainment show that parental education and household resources are significant determinants of schooling. The effect of household resources on current school attendance is higher for daughters than it is for sons. It appears that for male and female children the impact of household resources on school attendance has reduced, statisticallyspeaking. Father’s schooling effects on the education of female children decreased between 1992 and 1999. Mother’s schooling effects on school attendance of daughters in 1992 were not significantly different from those realized in 1999. However, the effects of mother’s schooling levels on school attendance of male children appear to have reduced. Other significant determinants of children’s schooling are the age of children, school infrastructure, religion and urban residency. The paper concludes that education matters and has an intergenerational impact. Arguably, sustainable poverty reduction approaches cannot ignore the role of education and implications for employment, earnings and social development. Hence, gender sensitive policies to ensure educational equity are vital.
  7. By: Premand,Patrick; Barry,Oumar
    Abstract: Signs of development delays and malnutrition are widespread among young children in low-income settings. Social protection programs such as cash transfers are increasingly combined with behavioral change promotion or parenting interventions to improve early childhood development. This paper disentangles the effects of behavioral change promotion from cash transfers to poor households through an experiment embedded in a government program in Niger. The study is also designed to identify within-community spillovers from the behavioral change intervention. The findings show that behavioral change promotion affects a range of practices related to nutrition, health, stimulation, and child protection. Local spillovers on parenting practices are also found. Moderate gains in children's socio-emotional development are observed, but there are no improvements in anthropometrics or cognitive development. Cash transfers alone do not alter parenting practices or improve early childhood development. Cash transfers improve welfare and food security at the household level, and the behavioral intervention induces intra-household reallocations toward children.
    Keywords: Disability,Services&Transfers to Poor,Access of Poor to Social Services,Economic Assistance,Health Care Services Industry,Social Protections&Assistance,Early Childhood Development,Reproductive Health,Nutrition,Early Child and Children's Health
    Date: 2020–08–26
  8. By: Pérez Pérez Jorge
    Abstract: I estimate the effect of a real minimum wage increase on formal and informal wages, and employment in Colombia. For identification, I take advantage of an unexpected increase in the real minimum wage during 1999, and I compare cities and industries with different incidence of the minimum wage increase. I measure incidence as the percentage of workers whose real minimum wage is between the old and the new real minimum wage before the increase. I find evidence of positive wage responses for wages close to the minimum wage. The results show that wages increase more in the formal than in the informal sector. I do not find that informal wages are reacting to the minimum wage indirectly, through the linkages between formal and informal markets. I show that employers in both sectors use the minimum wage as reference, although they set some wages below it. These results may not be generalizable to other countries or contexts, or to larger minimum wage increases.
    Keywords: Minimum wage;wage distribution;informal labor markets
    JEL: J31 J38 J46
    Date: 2019–09
  9. By: Robert Kivuti Nyaga (Kenya Institute for Public Policy Research and Analysis)
    Abstract: The level of participation in employment and wages paid in the labour market can be assessed by comparing relative sectoral labour compensation amounts, participation rates and skill distribution of the workforce. In addition, the level of participation in employment and differences in wages paid in any given sector are affected by both individual factors and sector-specific factors. The study estimates a multinomial logit model and selection-corrected earnings models to determine participation and earnings in various employment sectors. This study finds clear differences in the formal private and public employment sectors relative to the vast informal sector. Regression results confirm that education is the key determinant of both participation and wage earnings. Attainment of higher levels of education is related to a greater likelihood of working in private and public sectors and earning higher wages in these sectors, relative to working in the informal sector. Gender disaggregated participation and earnings models show that in contrast to men, university education has a considerable effect on women’s participation and earnings in the formal sectors. Education attainment however, a primary factor in participation and earnings determination, weakly explains participation in the typically low-wage informal sector whose stable employment growth coincides with the stagnation in the public and private sectors. Even with its characteristic low wages, to many job seekers the informal sector is where jobs can still be found.

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