nep-dev New Economics Papers
on Development
Issue of 2020‒09‒28
fifteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Migration from Developing Countries: Selection, Income Elasticity, and Simpson's Paradox By Clemens, Michael A.; Mendola, Mariapia
  2. Long-Term Effects of Conditional Cash Transfers on Children: The Brazilian Case By Oliveira, Gabriel Lyrio; Chagas, Andre Luis Squarize
  3. The Schooling and Labor Market Effects of Eliminating University Tuition in Ecuador By Molina, Teresa; Rivadeneyra, Ivan
  4. Impact of laser land levelling on food production and farmers’ income: Evidence from drought prone semi-arid tropics in India By Pal, Barun Deb; Kapoor, Shreya; Saroj, Sunil; Jat, M. L.; Kumar, Yogesh; Anantha, K. H.
  5. Stagnant manufacturing growth in India: The role of the informal economy By Djidonou, Gbenoukpo Robert; Foster-McGregor, Neil
  6. Some Children Left Behind: Variation in the Effects of an Educational Intervention By Buhl-Wiggers, Julie; Kerwin, Jason; Muñoz, Juan Sebastián; Smith, Jeffrey A.; Thornton, Rebecca L.
  7. Entrepreneurship Education and Teacher Training in Rwanda By Blimpo, Moussa P.; Pugatch, Todd
  8. Access to Land and Tenancy Practices on Tanah Bengkok: Evidence from Java, Indonesia By Kurosaki, Takashi; Paul, Saumik; Witoelar, Firman
  9. Tracing the Local Impacts of Exports on Poverty and Inequality in Mexico By Rodriguez Castelan, Carlos; Vazquez, Emmanuel; Winkler, Hernan
  10. The Effect of Gender-Targeted Transfers: Experimental Evidence From India By Almås, Ingvild; Somville, Vincent; Vandewalle, Lore
  11. The Effects of Mobile Phone Technology, Knowledge Creation and Diffusion on Inclusive Human Development in Sub-Saharan Africa By Simplice A. Asongu
  12. Building Resilient Health Systems: Experimental Evidence from Sierra Leone and the 2014 Ebola Outbreak By Darin Christensen; Oeindrila Dube; Johannes Haushofer; Bilal Siddiqi; Maarten Voors
  13. Migration and Informal Insurance By Costas Meghir; Ahmed Mushfiq Mobarak; Ahmed Corina Mommaerts; Ahmed Melanie Morten
  14. The Impact of HIV/Aids on Human Capital Investment in Sub-Saharan Africa: New Evidence By Chicoine, Luke; Lyons, Emily; Sahue, Alexia
  15. Distributional impact of the rice tariffication policy in the Philippines By Balié, Jean; Minot, Nicholas; Valera, Harold Glenn

  1. By: Clemens, Michael A. (Center for Global Development); Mendola, Mariapia (University of Milan 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.
    Keywords: international migration, economic development, self-selection
    JEL: F22 J61 O15
    Date: 2020–08
  2. By: Oliveira, Gabriel Lyrio; Chagas, Andre Luis Squarize
    Abstract: In this paper, we present some long-term effects of the largest Conditional Cash Transfers program in the world, and one of the pioneers, the Bolsa Família Program (BFP). We focus on the effects on Schooling attained in early adulthood and Labor Market outcomes of individuals more or less exposed during their childhood. The estimates were enabled by linking identified data from Formal Labor Market, BFP Payment Records, and the Single Registry (SR). In this Natural Experiment, the main identification strategy relies on a rich set of control variables, and on the fact that the release of BFP resources for registered families is automatized and based on municipality poverty parameters estimated by the government. In an alternative identification strategy, we consider an instrumental variable, the observed proxy for the municipality effort to register vulnerable families. These strategies help to solve the potential selection bias of families to the SR, and consequently to the treatment. Nonetheless, since the program selects the most vulnerable families, the threats to the identification suggest that the estimates are lower bounds. Our main results show positive long-term effects on Schooling, and on the Formal Labor Market participation, while mixed results are observed for Earnings. Heterogeneity tests suggest that the effects are stronger for boys, for smaller cities, and for families with never formally employed parents.
    Keywords: Conditional Cash Transfers; Long-term effects; Human Capital; Labor Market; Bolsa Família
    JEL: I25 I38 J24 O15
    Date: 2020–09–11
  3. By: Molina, Teresa (University of Hawaii at Manoa); Rivadeneyra, Ivan (University of Hawaii at Manoa)
    Abstract: This paper estimates the effects of a 2008 policy that eliminated tuition fees at public universities in Ecuador. We use a difference-in-differences strategy that exploits variation across cohorts differentially exposed to the policy, as well as geographic variation in access to public universities. We find that the tuition fee elimination significantly increased college participation and affected occupation choice, shifting people into higher-skilled jobs. We detect no statistically significant effects on income. Overall, the bulk of the benefits of this fee elimination were enjoyed by individuals of higher socioeconomic status.
    Keywords: higher education, tuition reduction, Ecuador
    JEL: I23 I24 I28 O15
    Date: 2020–08
  4. By: Pal, Barun Deb; Kapoor, Shreya; Saroj, Sunil; Jat, M. L.; Kumar, Yogesh; Anantha, K. H.
    Abstract: Climate change has brought large instabilities in agricultural systems, in terms of both crop yield and net farm income. Climate smart agriculture is one of the innovative methods that tries to build resilience in agricultural systems. A study is conducted in Raichur district of Karnataka state in India to assess the impact of adoption of laser land levelling (LLL), a climate smart agriculture technology, on crop yield and farmers’ income. A primary survey was conducted in 2018 among 604 paddy growing farmers in Raichur district. The study provides results based on both qualitative and quantitative analysis of the data. The study examines farmers’ perceptions about climate change and effectiveness of LLL. Statistically, the results are evaluated using econometric methods like propensity score matching, coarsened exact matching, and endogenous switching regression. Advanced econometric methods are adopted to check for the problem of unobserved endogeneity. Adoption of laser land levelers increased crop yield by 0.5 tonnes/hectare and net farm income by Rs. 5000 per annum. Further, farmers observed drought as the most extreme climatic event which resulted in heavy crop loss to them. Lastly, farmers revealed that adoption of LLL reduced cost of cultivation and limits crop loss due to climate variability.
    Keywords: INDIA; SOUTH ASIA; ASIA; climate change; farming systems; agricultural systems; climate-smart agriculture; innovation; technology; climate change adaptation; impact assessment; sustainable development; econometric models; regression analysis; livelihoods; farm income; farmers; food production; drought; laser land levelling (LLL); innovative technologies; econometric modeling; agricultural technology
    Date: 2020
  5. By: Djidonou, Gbenoukpo Robert (UNU-MERIT, Maastricht University); Foster-McGregor, Neil (UNU-MERIT, Maastricht University)
    Abstract: The growth of the manufacturing sector is important for overall productivity growth. Indeed, the rising importance of the manufacturing sector at early levels of development is considered one of the stylised facts of development. Recently, several developing countries have skipped this step however, with stagnant growth of the manufacturing sector. In this paper, we investigate the role of the informal segment in the stagnant growth of the manufacturing sector in the context of India. To do so, we initially compute the drag imposed by informality on the productivity growth of the manufacturing sector before investigating whether the movement of workers between the formal and informal segments of the manufacturing sector is having an impact on manufacturing productivity growth using a relatively long time series of data for the period 1980-2011. We find that the informal segment is harmful to the growth in productivity of the manufacturing sector. Using a modified shift-share analysis with the introduction of the informal segment, we find that labour reallocation to the informal segment of the manufacturing sector is growth reducing in the Indian manufacturing sector. The main source of this growth reduction is the within sub-sector structural change effect, indicating that workers move on average from productive formal to less productive informal employment within sub-sectors. In terms of movements across sub-sectors, there has been a movement towards more productive informal activities, but this has not been enough to offset the negative within sub-sector effect. Mainly, we have seen limited growth-reducing structural change after the 1994 liberalisation, implying that employment has moved to less productive informal firms after liberalisation.
    Keywords: Manufacturing, stagnation, formal economy, informal economy, productivity, worker's movement, India
    JEL: E26 L16 L60 O14 O17 O47 O53
    Date: 2020–09–08
  6. By: Buhl-Wiggers, Julie (Copenhagen Business School); Kerwin, Jason (University of Minnesota); Muñoz, Juan Sebastián (IÉSEG School of Management); Smith, Jeffrey A. (University of Wisconsin-Madison); Thornton, Rebecca L. (University of Illinois)
    Abstract: We document substantial variation in the effects of a highly-effective literacy program in northern Uganda. The program increases test scores by 1.4 SDs on average, but standard statistical bounds show that the impact standard deviation exceeds 1.0 SD. This implies that the variation in effects across our students is wider than the spread of mean effects across all randomized evaluations of developing country education interventions in the literature. This very effective program does indeed leave some students behind. At the same time, we do not learn much from our analyses that attempt to determine which students benefit more or less from the program. We reject rank preservation, and the weaker assumption of stochastic increasingness leaves wide bounds on quantile-specific average treatment effects. Neither conventional nor machine-learning approaches to estimating systematic heterogeneity capture more than a small fraction of the variation in impacts given our available candidate moderators.
    Keywords: essential heterogeneity, heterogeneous treatment effects, education
    JEL: I25 I26
    Date: 2020–08
  7. By: Blimpo, Moussa P. (University of Oklahoma); Pugatch, Todd (Oregon State University)
    Abstract: We assess, via an experiment across 207 secondary schools, how a comprehensive teacher training program affects the delivery of a major entrepreneurship curriculum reform in Rwanda. The reform introduced interactive pedagogy and a focus on business skills in the country's required upper secondary entrepreneurship course. In addition to the government's standard training, a random sample of schools received intensive training organized by an NGO for two years. The training consisted of (i) six training sessions during school breaks, ii) exchange visits each term where teachers provided feedback to their peers, and (iii) outreach and support from NGO staff at least twice per year. The program increased teachers' use of active instruction, consistent with the reform's features. These effects on pedagogy did not translate into improvements in student academic outcomes or skills. Treated students increased their participation in businesses by 5 percentage points, or 17% of the control mean, with a commensurate decrease in wage employment, and no effect on overall income. These results suggest substitution between entrepreneurship and employment among students in treated schools.
    Keywords: entrepreneurship education, teacher training, secondary school, pedagogy, randomized control trials, Rwanda
    JEL: I25 I26 I28 J24 O12 O15
    Date: 2020–08
  8. By: Kurosaki, Takashi (Hitotsubashi University); Paul, Saumik (Newcastle University); Witoelar, Firman (Australian National University)
    Abstract: Tanah bengkok (bengkok land) in Java, Indonesia boasts a unique institution where elected village leaders receive usufruct rights to a parcel of land owned by the village, in lieu of salary. Despite its relevance to the political economy of land distribution in Java, unavailability of systematic data has so far constrained in-depth empirical research on bengkok land. In 2018, we conducted a survey covering 130 villages and more than 1,800 households in Java. We found substantial heterogeneity in the incidence and use patterns of bengkok land across villages. Fixed rental tenancy appeared more prevalent than sharecropping on bengkok land and bengkok landlords seldom got involved in tenants' farming decisions, which made bengkok land management look more 'business-like'. Finally, evidence is consistent with political cycles as the village heads with reelection motives offered sharecropping contracts to non-relatives to garner a larger pool of supporters.
    Keywords: Tanah bengkok, land tenancy, village administration, political cycle, Java, Indonesia
    JEL: H77 H83 O13 P14 O53 Q15
    Date: 2020–08
  9. By: Rodriguez Castelan, Carlos (World Bank); Vazquez, Emmanuel (Universidad Nacional de la Plata); Winkler, Hernan (World Bank)
    Abstract: Evidence about the effect of exports on welfare at the local level is scarce. Using a unique dataset of international trade and poverty maps for almost 2,000 Mexican municipalities between 2004 and 2014, the study presented in this paper provides new evidence on the impact of a significant rise in exports on poverty and inequality at the local level. The analysis implements an instrumental variable approach that combines the initial structure of exports across municipalities with global trends in exports from developing to developed countries by sector. The results show that a 10 percent increase in the ratio of exports to workers reduces income inequality measured by the Gini coefficient by 0.17 points (using a 0 to 100 scale), but no significant effects on poverty reduction or average household incomes are identified. The lack of impacts on average incomes is driven by a rise in the supply of labor at the local level because municipalities with higher export growth experienced an increase in labor force participation and attracted more net migration, particularly of unskilled workers. Therefore, while total labor incomes grew in response to an increase in exports, average labor incomes per worker did not change. Declining remittances also blunted the effect of growing exports on household incomes.
    Keywords: international trade, exports, poverty, labor markets, migration
    JEL: F14 F16 I3 D3 J61
    Date: 2020–08
  10. By: Almås, Ingvild (Dept. of Economics, Norwegian School of Economics and Business Administration); Somville, Vincent (Dept. of Economics, Norwegian School of Economics and Business Administration); Vandewalle, Lore (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Women are the primary recipients of many welfare programs around the world. Despite frequent claims that targeting women induces beneficial consumption shifting and gender equality, the empirical evidence on the effect of targeting is relatively scarce. We report on a highly powered intervention that randomly allocates weekly transfers to a man or woman within the household. We use detailed financial diaries to look at the impact of the recipient's gender on expenditure, income, saving, nutrition and measures of decision-making. Our results show little evidence for consumption shifting at the household level but indicate that targeted transfers empower female recipients.
    Keywords: Households; Consumption; Development; Gender Inequality
    JEL: D13 I14 O10
    Date: 2020–09–04
  11. By: Simplice A. Asongu (Yaounde, Cameroon)
    Abstract: This paper examines the joint effects of mobile phone technology, knowledge creation and diffusion on inclusive human development in 49 sub-Saharan African (SSA) countries. The empirical evidence is based on Tobit regressions for the period 2000-2012. The net effects of interactions between the mobile phone, knowledge creation and diffusion variables are positive indicating that the combined effects of these variables improve inclusive human development in SSA countries. Further analysis dividing the dataset into a number of fundamental characteristics based on economic, legal, religion and political stability associated with African economies show that mobile phone penetration and associated innovation in SSA improve inclusive human development irrespective of the country’s level of income, legal origins, religious orientation and the state of the nation. The pupil-teacher ratio exerts a negative influence on the outcome variable which is favourable for inclusive human development because higher ratios denote lower education quality since more pupils are accommodated by fewer teachers. The study contributes to innovation diffusion theory and economic development literature.
    Keywords: Mobile phones; Innovation, Knowledge diffusion; Inclusive human development; Africa
    JEL: G20 I10 I32 O40 O55
    Date: 2020–01
  12. By: Darin Christensen (Luskin School of Public Affairs, UCLA); Oeindrila Dube (Harris School of Public Policy, University of Chicago and NBER); Johannes Haushofer (Princeton University and NBER); Bilal Siddiqi (Center for Effective Global Action, UC Berkeley); Maarten Voors (Wageningen University)
    Abstract: Developing countries are characterized by high rates of mortality and morbidity. A potential contributing factor is the low utilization of health systems, stemming from the low perceived quality of care delivered by health personnel. This factor may be especially critical during crises, when individuals choose whether to cooperate with response efforts and frontline health personnel. We experimentally examine efforts aimed at improving health worker performance in the context of the 2014Ð15 West African Ebola crisis. Roughly two years before the outbreak in Sierra Leone, we randomly assigned two accountability interventions to government-run health clinics Ñ one focused on community monitoring and the other gave status awards to clinic staff. We find that over the medium run, prior to the Ebola crisis, both interventions led to improvements in utilization of clinics and patient satisfaction with the health system. In addition, child health outcomes improved substantially in the catchment areas of community monitoring clinics. During the crisis, the interventions also led to higher reported Ebola cases, as well as lower mortality from Ebola Ñ particularly in areas with community monitoring clinics. We explore three potential mechanisms: the interventions (1) increased the likelihood that patients reported Ebola symptoms and sought care; (2) unintentionally increased Ebola incidence; or (3) improved surveillance efforts. We find evidence consistent with the first: by building trust and confidence in health workers, and improving the perceived quality of care provided by clinics prior to the outbreak, the interventions encouraged patients to report and receive treatment. Our results suggest that accountability interventions not only have the power to improve health systems during normal times, but can additionally make health systems resilient to crises that may emerge over the longer run.
    Date: 2020
  13. By: Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University); Ahmed Corina Mommaerts (University of Wisconsin – Madison); Ahmed Melanie Morten (Stanford University and NBER)
    Abstract: Do new migration opportunities for rural households change the nature and extent of informal risk sharing? We experimentally document that randomly offering poor rural households subsidies to migrate leads to a 40% improvement in risk sharing in their villages. Our model of endogenous migration and risk sharing shows that risky and temporary migration opportunities can induce an improvement in risk sharing enabling pro?table migration. Accounting for improved risk sharing, the migration experiment increased welfare by 12.9%. However, permanent declines in migration costs improve outside options for households and can lead to reductions in risk sharing. The short-run experimental results for migration subsidies can differ from the longer-run impacts of a policy that permanently subsidizes migration.
    Keywords: Informal Insurance, Migration, Bangladesh, RCT
    JEL: D12 D91 D52 O12 R23
    Date: 2019–07
  14. By: Chicoine, Luke (Bates College); Lyons, Emily (Bates College); Sahue, Alexia (Bates College)
    Abstract: The risk of AIDS-related mortality increased dramatically throughout the 1990s. This paper updates previous work by Fortson (2011) to examine the impact of mortality risk on human capital investment during the deadliest period of the pandemic. We combine Demographic Health Survey data from 30 countries, across 60 survey waves, to generate a sample of over 1,300,000 observations. Cohort-specific analysis using the updated sample yields new evidence that the negative relationship between HIV prevalence and schooling steepened as mortality risk increased. The reduction in schooling is largest for women, and along the extensive margin of the schooling decision. The findings indicate that the decline in human capital investment associated with the HIV/AIDS pandemic prior to the availability of treatment was larger in magnitude than previously understood, but may be reversing rapidly as access to treatment is expanded.
    Keywords: HIV/AIDS, mortality risk, schooling
    JEL: I15 I25 O55
    Date: 2020–08
  15. By: Balié, Jean; Minot, Nicholas; Valera, Harold Glenn
    Abstract: In March 2019, the government of the Philippines promulgated a bill called the Rice Tariffication Law (RTL). It has dramatically changed the policy landscape in the rice sector and generated heated debates on how it would affect food security and poverty. This study explores the welfare effects of this reform across different types of households. We rely on the IRRI Global Rice Model to simulate the domestic price effects of the reform (Balié and Valera, 2020) and the Family Income and Expenditure Survey (FIES) to study the welfare impact of these price changes. Our results show that the RTL reduces consumer and producer rice prices, which affects households on the production and the consumption sides. Because a large majority of households are net buyers of rice and the policy reform reduces rice prices, most households benefit from the reform. Overall, the effects of the reform on poverty are beneficial. The poorest quintiles are positively affected, while the richest quintiles are unaffected or slightly worse-off. Spatially, the poorest regions also benefit the most. However, the rice growers who are net sellers are negatively impacted. The government should seek to mitigate the negative effects on non-competitive rice growers. Investments in public goods and services are a promising option to ease the emergence of on-farm and off-farm businesses as more profitable alternatives to rice production.
    Keywords: PHILIPPINES; SOUTH EAST ASIA; ASIA; welfare; rice; policies; food prices; agricultural policies; poverty; food security; governance; households; tariffs; Rice Tariffication Law (RTL); rice price; price change; regional analysis; welfare effects; rice policy; rice tariffication
    Date: 2020

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