nep-dev New Economics Papers
on Development
Issue of 2021‒01‒04
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Increasing the Cost of Informal Workers: Evidence from Mexico By Brenda Samaniego de la Parra; León Fernández Bujanda
  2. Informality and firm performance in Myanmar By Hanna Berkel; Finn Tarp
  3. Structural change and formal sector employment growth in Indonesia By Devanto Shasta Pratomo; Chris Manning
  4. Economic efficiency versus social equity: the productivity challenge for rice production in a `greying' rural Vietnam? By Hoa-Thi-Minh Nguyen; Huong Do; Tom Kompas
  5. The governance of regulators in Latin America: Evidence from the 2018 Indicators on the governance of sector regulators By Alexis Durand; Anna Pietikäinen
  6. Productive Workfare? Evidence from Ethiopia’s Productive Safety Net Program By Jules Gazeaud; Victor Stephane
  7. Commodity Booms, Conflict, and Organized Crime: Logics of Violence in Indonesia's Oil Palm Plantation Economy By Paul D. Kenny; Rashesh Shrestha; Edward Aspinall
  8. Heterogeneous Effects of Forced Migration on Female Labor Supply By Julian Pedrazzi; Leonardo Peñaloza-Pacheco
  9. Agricultural Productivity Growth and Poverty Reduction: Evidence from Thailand By Peter Warr; Waleerat Suphannachart
  10. Role models and migration intentions By Sandrine Mesplé-Somps and; Björn Nilsson
  11. Impact of Weather Factors on Migration Intention using Machine Learning Algorithms By Juhee Bae; John Aoga; Stefanija Veljanoska; Siegfried Nijssen; Pierre Schaus
  12. The Impact of Eliminating Secondary School Fees: Evidence from Tanzania By Kasper Brandt; Beatrice K. Mkenda

  1. By: Brenda Samaniego de la Parra; León Fernández Bujanda
    Abstract: This paper estimates the effects of increasing the cost of informal jobs on formal firms' and workers' outcomes. We create novel datasets combining administrative records and household surveys data, and exploit exogenous variation in this cost generated by over 480,000 random work-site inspections in Mexico. Increasing the cost of informal jobs at formal firms leads to lower employment growth, lower formal job creation, and higher formal and informal job destruction. For informal workers, inspections increase the probability of being formalized at the inspected firm, but also increase the probability of dissolving the informal match. Transitioning to a formal job due to an inspection increases the probability of being poached to a new, formal job.
    JEL: D22 E26 J46
    Date: 2020–12
  2. By: Hanna Berkel; Finn Tarp
    Abstract: Using a novel panel survey of enterprises in Myanmar, we compare the performance of manufacturing firms by three different informality definitions. The first is binary, based on whether firms pay taxes. The second captures five categories of registration with the authorities, and the third definition relates to three groupings of the informality status of a firm's workers. Depending on the informality concept used, formalization has positive, insignificant, and negative performance outcomes.
    Keywords: firms, Informality, Myanmar, Business, business registration, Manufacturing
    Date: 2020
  3. By: Devanto Shasta Pratomo; Chris Manning
    Abstract: The study provides evidence on the transition and growth of the formal sector in the Indonesian economy. It utilizes data from the National Labour Force Survey (SAKERNAS) for tracking the previous work status of workers as formal or informal workers. The study also examines the implication of formalization of employment for the different rates of earnings of formal sector workers, given their human capital characteristics and different industries of employment. The study finds that the growth of employment in the formal sector is mainly the result of entry of younger and better educated new entrants. Although there is some mobility from the informal to the formal sector, the results show that individuals who were previously working in the informal sector are less likely to move into formal sector. In terms of earnings, there is evidence of scarring effects: individuals who are initially in the formal sector earn more than individuals who are initially in the informal sector.
    Keywords: informal sector, job mobility, human capital, earnings differentials
    JEL: J24 J31 J46 J62 O17 O47
    Date: 2020
  4. By: Hoa-Thi-Minh Nguyen; Huong Do; Tom Kompas
    Abstract: Increasing productivity in agriculture is often deemed necessary to enhance rural in come and ultimately narrow the urban-rural disparity in transitional economies. However, the objectives of social equity and economic e?ciency can contradict each other, especially in the context of ?erce competition for resources between agriculture and non-agricultural sectors and given the inherently redundant and unskilled aging rural population that of ten occurs during the economic transition to a market economy. We investigate the case of Vietnam during its high economic growth period (2000-2016), over which the country introduced policies to increase e?ciency in rice production and income for farmers. Con trary to expectations, we ?nd a steadily decreasing trend in the terms of trade for rice, indicating regression in farm income. At the same time, the Malmquist productivity in dex has been falling in most regions due to a decline in technical change, along with little improvement in technical e?ciency. We further examine the causes of ine?ciency using data from two household surveys in 2004 and 2014 (with plot-level information) along with semi-structured interviews with farmers in 2016-2017. The high ratio of aging farm workers who are unable to ?nd alternative employment during the transition emerges as an essential impediment to rice productivity, in addition to previously documented land use related issues. This demographic feature, along with government equity-targeting measures, hinders the farm amalgamation progress, further limiting e?orts to enhance productivity. Thus, the goals of economic e?ciency and social equity appear contradictory features of Vietnam’s rice policies, posing a signi?cant development challenge for the country’s current and likely future development.
    Keywords: greying agriculture, productivity, rice, Vietnam, Data Envelopment
    JEL: O12 O13 Q12 Q15
    Date: 2020
  5. By: Alexis Durand (OECD); Anna Pietikäinen (OECD)
    Abstract: Using data from the 2018 OECD Indicators on the Governance of Sector Regulators, this paper analyses the governance of economic regulators in seven Latin American economies (Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru) and across five critical network sectors (energy, e-communications, rail transport, air transport and water). The indicators allow for direct comparison of thirty economic regulators and provide a snapshot of the governance arrangements designed to preserve independence, practices to promote accountability, and the functions of the regulators. After describing key institutional characteristics of the regulators in the sample, the paper uses the indicators to identify patterns in governance. Evidence from in-depth performance reviews of regulators complements the indicators, shedding light on cost recovery fees, budgetary processes, and the use of advisory bodies in Latin American regulators.
    Keywords: accountability, economic regulators, governance, independence, Latin America, network sectors, regulation, regulatory policy
    JEL: N46 L98 L50 K23 D73
    Date: 2020–12–17
  6. By: Jules Gazeaud (NOVAFRICA, Nova School of Business and Economics, Universidade Nova de Lisboa, Campus de Carcavelos, Rua da Holanda 1, 2775-405 Carcavelos, Portugal); Victor Stephane (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint-Etienne, France)
    Abstract: Despite the popularity of public works programs in developing countries, there is virtually no evidence on the value of the infrastructure they generate. This paper attempts to start filling this gap in the context of the PSNP – a largescale program implemented in Ethiopia since 2005. Under the program, millions of beneficiaries received social transfers conditional on their participation in activities such as land improvements and soil and water conservation measures. We examine the value of these activities using a satellite-based indicator of agricultural productivity and (reweighted) difference-in-differences estimates. Results show that the program is associated with limited changes in agricultural productivity. The upper bound of the main estimate is equivalent to a 3.6 percent increase in agricultural productivity. This contrasts with existing narratives and calls for more research on the productive effects of public works.
    Keywords: Social Protection, Public Works, Transfers, Ethiopia, PSNP
    JEL: I38 O13 O22 Q15
    Date: 2020
  7. By: Paul D. Kenny; Rashesh Shrestha; Edward Aspinall
    Abstract: This paper examines the relationships between agrarian commodity booms and the incidence of group con?ict and criminality in the context of Indonesia’s expanding oil palm sector. It theorizes that commodity boom violence takes two main forms: low level but organized criminal violence involved in the extortion of “rents” produced by a given commodity extraction and production process (extortion); and violent competition among a range of groups, including “ma?as”, youth gangs, landholders, and commercial producers for control of these rents (competition). Extortion and competition violence are associated with distinct temporal distributions consistent with our theory. Criminality–especially theft–is higher in villages with established and productive oil palm plantations (extortion), whereas villages undergoing planation expansion have a higher incidence of group con?ict (competition). Dynamic analyses utilizing panel data at the sub-district level support our causal interpretation, as the relationship between the area under oil palm cultivation and resource con?ict (competition) changes over time and with prevailing commodity prices. Our results are robust to the use of instrumental variable analysis to account for the potential endogeneity of plantation expansion. Our theorized mechanism is given further support by a targeted primary survey of 1,920 respondents in oil palm producing and non-producing villages, which shows that villages experience di?erent rates of extortion and competition violence depending both on if, and when, oil palm production commenced.
    Keywords: political economy; ma?a; organized crime; violence; con?ict; natural resources; oil palm
    JEL: D74 L73 O13 Q33 Q34
    Date: 2020
  8. By: Julian Pedrazzi (CEDLAS-IIE-FCE-UNLP); Leonardo Peñaloza-Pacheco (CEDLAS-IIE-FCE-UNLP)
    Abstract: In this paper we analyze the impact of Venezuelan migration on the female labor supply in Colombia. Using a instrumental variable approach we found significant drops in the female labor supply, mainly on those women with lower qualifications. In contrast, we observe significant increases for high-skilled women with family responsibilities, such as childcare. These results are consistent with a redistribution of time use, where women spend fewer hours on household tasks and more time in the labor market. Our results provide novel evidence of the consequences of forced migration between developing countries on the female labor supply.
    JEL: F22 J22 J16
    Date: 2021–01
  9. By: Peter Warr; Waleerat Suphannachart
    Abstract: Raising agricultural productivity in developing countries is often said to reduce poverty, though the empirical evidence is more nuanced. Productivity growth generates additional income and must benefit someone, though not necessarily the poor. It is conceivable that most, or even all of the benefits go to others. Using region-level data from Thailand, we study the relationship between agricultural productivity growth and rural poverty incidence. Our dependent variable is the annual rate of change in rural poverty incidence at the regional level between the years for which poverty data are available. Agricultural productivity is measured as the annual rate of change in regional agricultural productivity, covering the same time intervals as the poverty observations, but lagged one calendar year. Other control variables include regional nonagricultural incomes and the real price of food. The estimated coefficient on the change in agricultural productivity is negative and highly significant, implying that agricultural productivity growth does reduce rural poverty, holding other variables constant. Nevertheless, the poverty-reducing contribution of recent productivity growth is small. The poverty-reducing effects of long-term drivers of agricultural productivity growth are also studied using simulations based on the estimated model.
    Keywords: Agricultural productivity, Poverty incidence, Thailand
    JEL: I32 O13 O15 Q01 Q18
    Date: 2020
  10. By: Sandrine Mesplé-Somps and; Björn Nilsson
    Abstract: Role models—those individuals who resemble us but have achieved more than us— are thought to impact our aspirations. In this paper, we study the impact of role models on intentions to migrate. Specifically, we implement a randomized controlled trial to show documentaries in rural villages of Mali (Kayes region). These documentaries focus on economic opportunities and show either negative or positive portraits of migrants, or portraits of local people who have successfully set up flourishing businesses without ever considering migration. This paper adds to the larger debate about the efficiency of information provision. We find very few significant impacts, none of which hold when attrition is controlled for using nonparametric Lee bounds. We also implement a treatment heterogeneity analysis using a causal forest algorithm, which aside from confirming our average treatment effects suggests the presence of heterogeneity. It appears that individuals with living conditions that could facilitate migration are less likely to be significantly impacted. The high aspirations to improve living conditions, coupled with a strong feeling of lack of control over the future may help explaining the fact that confrontations with real life experiences do not significantly modify average aspirations to migrate.
    Keywords: Mali
    JEL: Q
    Date: 2020–12–17
  11. By: Juhee Bae (University of Skovde, Sweden); John Aoga (University of Abomey-Calavi, Bénin); Stefanija Veljanoska (Université de Rennes 1, France); Siegfried Nijssen (ICTEAM, Université catholique de Louvain); Pierre Schaus (ICTEAM, Université catholique de Louvain)
    Abstract: A growing attention in the empirical literature has been paid on the incidence of climate shocks and change on migration decisions. Previous literature leads to different results and uses a multitude of traditional empirical approach. This paper proposes a tree-based Machine Learning (ML) approach to analyze the role of the weather shocks towards an individual’s intention to migrate in the six agriculture-dependent economy countries such as Burkina Faso, Ivory Coast, Mali, Mauritania, Niger, and Senegal. We perform several tree-based algorithms (e.g., XGB, Random Forest) using the train-validation test workflow to build robust and noise-resistant approaches. Then we determine the important features showing in which direction they are influencing the migration intention. This ML based estimation accounts for features such as weather shocks captured by the Standardized Precipitation-Evapotranspiration Index (SPEI) for different timescales and various socioeconomic features/covariates. We find that (i) weather features improve the prediction performance although socioeconomic characteristics have more influence on migration intentions, (ii) country-specific model is necessary, and (iii) international move is influenced more by the longer timescales of SPEIs while general move (which includes internal move) by that of shorter timescales.
    Keywords: Migration, Weather shocks, Machine learning, Tree-based algorithms
    Date: 2020–11–02
  12. By: Kasper Brandt (DERG, Department of Economics, University of Copenhagen); Beatrice K. Mkenda (Department of Economics, University of Dar es Salaam)
    Abstract: In January 2016, Tanzania implemented a fee-free secondary school reform. Using variation in district and cohort exposure to the reform, we employ a difference-indifferences strategy to estimate the short-term impacts of the reform. Despite a relatively small drop in user costs, the reform substantially increased enrolment into secondary education. While these enrolment effects were predominantly driven by an increase in public school enrolment, there was also a delayed positive effect on private school enrolment. Districts most exposed to the reform experienced a significant drop in exam scores relative to less-exposed districts, which cannot be explained by academic abilities of new students. These findings are in line with a theoretical school choice model, where fee elimination loosens enrolment constraints, and increased enrolment harms the quality of public education.
    Keywords: school fee elimination, learning, secondary School, Tanzania
    JEL: I21 I24 I28
    Date: 2020–12–14

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