nep-dev New Economics Papers
on Development
Issue of 2021‒02‒01
eighteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Electrification and Welfare for the Marginalized: Evidence from India By Kumar Sedai, A.; Jamasb, T.; Nepal, R.; Miller, R.
  2. Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda By Amare, Mulubrhan; Shiferaw, Bekele; Takeshima, Hiroyuki; Mavrotas, George
  3. Price Transmission in Conflict-Affected States: Evidence from Cereal Markets of Somalia By Hastings, Justin V.; Phillips, Sarah; Ubilava, David; Vasnev, Andrey
  4. Temporary International Migration, Shocks and Informal Insurance: Analysis using panel data By Chakraborty, Tanika; Pandey, Manish
  5. Did railways affect literacy? Evidence from India By Chaudhary, Latika; Fenske, James
  6. Earning structure and heterogeneity of the labor market: Evidence from DR Congo By Douglas Amuli Ibale
  7. Estimating the Impact of Weather on Agriculture By Jeffrey D. Michler; Anna Josephson; Talip Kilic; Siobhan Murray
  8. Is Son Preference Disappearing from Bangladesh? By M Niaz Asadullah; Nazia Mansoor; Teresa Randazzo; Zaki Wahhaj
  9. Crop insurance and crop productivity: Evidence from rice farmers in eastern India By Kumar, Anjani; Saroj, Sunil; Mishra, Ashok K.
  10. Effects on Fertility of The Brazilian Cash Transfer Program: Evidence from a Regression Discontinuity Approach By Superti, Luiz Henrique
  11. Migration and Informal Insurance By Costas Meghir; Ahmed Mushfiq Mobarak; Ahmed Corina Mommaerts; Ahmed Melanie Morten
  12. Informality, labour transitions, and the livelihoods of workers in Latin America By Roxana Maurizio; Ana Paula Monsalvo
  13. Can technology improve the classroom experience in primary education? An African experiment on a worldwide program By Joana Cardim; Teresa Molina-Millán; Pedro C. Vicente
  14. Listen to Your Wife When It Comes to Saving Decision: Women’s Bargaining Power and Household’s Saving Outcome in Indonesia By Sulistiadi Dono Iskandar; Faradina Alifia Maizar
  15. Do High Aspirations Lead to Better Outcomes? Evidence from a Longitudinal Survey of Adolescents in Peru By Carol Graham; Julia Ruiz Pozuelo
  16. Are we measuring natural resource wealth correctly?: A reconceptualization of natural resource value in the era of climate change By Amir Lebdioui
  17. The Impact of Tourism on Poverty Alleviation and Income Distribution: Evidence from Indonesia By Riyanto; Natanael W. G. Massie; Djoni Hartono; Mohamad D. Revindo; Usman; Setya A. Riyadi; Nanda Puspita; Uka Wikarya
  18. Informality and Aggregate Productivity: The Case of Mexico By Jorge Alvarez; Cian Ruane

  1. By: Kumar Sedai, A.; Jamasb, T.; Nepal, R.; Miller, R.
    Abstract: Uneven electrication can be a source of welfare disparity. Given the recent progress of electrication in India, we analyze the differences in access and reliability of electricity, and its impact on household welfare for marginalized and dominant social groups by caste and religion. We carry out longitudinal analysis from a national survey, 2005-2012, using OLS, fixed effects, and panel instrumental variable regressions. Our analysis shows that marginalized groups (Hindu Schedule Caste/Schedule Tribe and Muslims) had higher likelihood of electricity access compared to the dominant groups (Hindu forward castes and Other Backward Caste). In terms of electricity reliability, marginalized groups lost less electricity hours in a day as compared to dominant groups. Results showed that electrification enabled marginalized households to increase their consumption, assets and move out of poverty; the effects were more pronounced in rural areas. The findings are robust to alternative ways of measuring consumption, and use of more recent data set, 2015-2018. We posit that electri_cation improved the livelihoods of marginalized groups. However, it did not reduce absolute disparities among social groups.
    Keywords: Electricity access, Electricity reliability, Instrumental variables, Marginalized groups, Welfare
    JEL: D12 D31 E12 I32
    Date: 2101–01–19
  2. By: Amare, Mulubrhan; Shiferaw, Bekele; Takeshima, Hiroyuki; Mavrotas, George
    Abstract: This paper uses multiple rounds of household survey panel data to assess the distributional implications of variability in agricultural productivity in Nigeria and Uganda. It uses both a conventional decomposition and a regression-based inequality decomposition to estimate the impact of climate-induced variability in agricultural productivity. To mitigate the endogeneity associated with unobserved time-invariant and time-variant household fixed effects, we use rainfall shocks as a proxy for estimating the exogenous variability in agricultural productivity that affects consumption. Results suggest that a 10 percent increase in the variability of agricultural productivity tends to decrease household consumption by 38 and 52 percent on average for Nigeria and Uganda, respectively. Controlling for other factors, variability in agricultural productivity contributed to between 25 and 43 percent of consumption inequality between 2010 and 2015 for Nigeria; and 16 and 31 percent of consumption inequality between 2009 and 2011 for Uganda. We also show that variability in agricultural productivity increases changes in consumption inequality over time.
    Keywords: NIGERIA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; UGANDA; EAST AFRICA; agricultural productivity; household consumption; rural areas; climate; shock; consumption; equality; inequality
    Date: 2020
  3. By: Hastings, Justin V.; Phillips, Sarah; Ubilava, David; Vasnev, Andrey
    Abstract: How integrated are agricultural markets in conflict-affected states? We answer this question by examining the dynamics of monthly price series of rice, maize, and sorghum across eleven cities (markets) of Somalia. Using conflict as a source of transaction costs between spatially connected markets, we examine its role in price transmission between the markets in a panel smooth transition regression framework. We find that in the case of rice—an imported cereal grain—conflict tends to mitigate the speed of price transmission between markets. By contrast, we find no evidence of conflict-related transaction costs in the case of maize and sorghum—commodities that are locally produced, particularly in the central and southern parts of Somalia. In all instances, we find that there is some degree of spatial integration among cereal markets around the country, perhaps partly due to informal institutions that can bridge the divides created by conflict, distance, and internal political fragmentation. These findings add crucial detail to the literature concerned with the role of commodity prices on poverty and food security in conflict-affected states.
    Keywords: cereal prices, market integration; panel smooth transition regression; price transmission; Somalia
    Date: 2020–12
  4. By: Chakraborty, Tanika; Pandey, Manish
    Abstract: We use panel data for rural Kyrgyzstan to examine households' international migration response when faced with shocks. Using a household fixed effects regression model, we find that while a drought shock increases the likelihood of migration, winter and earthquake shocks reduce the likelihood of migration. We use a simple theoretical framework to illustrate the trade-off between two effects of a shock for a household: loss of income and increase in the need of labor services. We show that migration increases when the former effect of a shock dominates, it reduces when the latter effect dominates. We explore these mechanisms by examining how the migration-response to shocks changes in the presence of alternate coping mechanisms and by evaluating the effect of shocks on a household's decision to send and recall a migrant member. We find that when households have easier access to informal finance the migration-response is muted only for shocks for which the adverse income effect dominates. Our findings also suggest that while shocks for which the loss of income effect dominates have a greater effect on the decision to send a migrant, shocks for which the need of labor services effect dominates only affect the decision to recall a migrant. These findings provide evidence in favor of the proposed mechanisms through which shocks affect temporary migration.
    Keywords: Temporary migration,shocks,insurance,informal finance,Asia,Kyrgyzstan
    JEL: J61 O15 O16
    Date: 2021
  5. By: Chaudhary, Latika (Graduate School of Defense Management, Naval Postgraduate School); Fenske, James (Department of Economics, University of Warwick)
    Abstract: We study the effect of railroads, the single largest public investment in colonial India, on human capital. Using district-level data on literacy, we find railroads had positive effects on literacy, in particular on male and English literacy. We employ two identification strategies. First, we exploit synthetic panel variation contained in cohort-specific literacy rates due to differences in the timing of railroad exposure of different cohorts within the same district and census year. We find a one standard deviation increase in railroad exposure raises literacy by 0.29 standard deviations. Second, we use distance from an early railway plan as an instrument for district railway exposure in the cross section and find results of similar magnitude. We show that railroads increased literacy by raising secondary, rather than primary, schooling. Our mediation analysis suggests that non-agricultural income and opportunities for skilled employment are important mechanisms, while agricultural income is not.
    Keywords: Colonialism ; Railways ; Literacy JEL codes: N75 ; N35 ; R40
    Date: 2020
  6. By: Douglas Amuli Ibale (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Using a unique broad individual, household and expenditure survey data on the DRC, initial descriptive statistics highlight five different sectors on the labor market with two "higher-paid" that are completely formal and two "lower-paid" that are largely informal. Based on a linear regression result, we report a significant heterogeneity across them when it comes to earnings. With an unconditional quantile regression methodology corrected for selectivity bias we show that, though the effect of education on earnings provides a clear support to the human capital theory, basic education has no significant impact on earnings in higher-paid sectors. Likewise, tertiary education matters for earnings in lower-paid sectors as well. We then decompose the earning gap across sectors and show that workers of the lower-paid sectors earn less not only because they are less skill endowed but also because they earn lower returns on such skills. However, when higher-paid and lower paid sectors are concerned, the coefficient effect at the upper end of the distribution is negative. Implying that the labor market provides an "informal employment earning premium" to some workers of the lower-paid sectors whose, given their characteristics, wouldn't do better in the higher-paid sectors.
    Keywords: Earning, Labor market, Heterogeneity, Earning decomposition
    JEL: E26 J21 J31 J4 J7 J82
    Date: 2020–12–28
  7. By: Jeffrey D. Michler; Anna Josephson; Talip Kilic; Siobhan Murray
    Abstract: We quantify the significance and magnitude of the effect of measurement error in satellite weather data on modeling agricultural production, agricultural productivity, and resilience outcomes. In order to provide rigor to our approach, we combine geospatial weather data from a variety of satellite sources with the geo-referenced household survey data from four sub-Saharan African countries that are part of the World Bank Living Standards Measurement Study - Integrated Surveys on Agriculture (LSMS-ISA) initiative. Our goal is to provide systematic evidence on which weather metrics have strong predictive power over a large set of crops and countries and which metrics are only useful in highly specific settings.
    Date: 2020–12
  8. By: M Niaz Asadullah (Faculty of Economics and Administration, University of Malaya); Nazia Mansoor (INTO City, University of London); Teresa Randazzo (Department of Economics, University Of Venice Cà Foscari); Zaki Wahhaj (School of Economics, University of Kent)
    Abstract: Historically, son preference has been widely prevalent in South Asia, manifested in the form of skewed sex ratios, gender differentials in child mortality, and worse educational investments in daughters versus sons. In the present study, we show, using data from a purposefully designed nationally representative survey for Bangladesh that, among women of childbearing age, son bias in stated fertility preferences has weakened and there is an emerging preference for gender balance. We examine a number of different hypotheses for the decline in son preference, including the increasing availability of female employment in the manufacturing sector, increased female education, and the decline of joint family living. Using survival analysis, we show that, in contrast to stated fertility preferences, actual fertility decisions are still shaped by son preference.
    Keywords: Fertility, gender bias, birth spacing, female employment, Bangladesh
    JEL: J11 J13 J16 O12
    Date: 2020
  9. By: Kumar, Anjani; Saroj, Sunil; Mishra, Ashok K.
    Abstract: The paper explores the spread of crop insurance in India and analyzes the factors affecting the demand for crop insurance. The study also assesses the impact of crop insurance on the rice yields of smallholder rice producers. Using data from a large farm-level survey from eastern India, the study tests for robustness of the findings after controlling for other covariates and endogeneity, using propensity score matching, coarsened exact matching, and endogenous switching regression models. Results indicate a positive and significant impact of crop insurance on rice yields.
    Keywords: INDIA; SOUTH ASIA; ASIA; crops; farmers; crop insurance; insurance; farm size; rice; food security; treatment effects; rice yield
    Date: 2021
  10. By: Superti, Luiz Henrique
    Abstract: The program Bolsa Família is a pillar of Brazil's welfare system. However, it is possible that the program encouraged beneficiaries to have more children. Using federal data and the eligibility rule, we propose a regression discontinuity to verify the program's effect on fertility outcomes. Problems associated with the data such as manipulation and attrition are solved by using novel procedures found in the literature. We found an effect on birth spacing but not on fertility rates. This study complements the literature in regard to cash transfers and fertility outcomes, and empirical evidence for the quantity-quality trade-off in fertility decisions.
    Keywords: Bolsa Família, Fertility, Birth Spacing, Cash Transfer
    JEL: I38 J13 J18 O12
    Date: 2019–12
  11. 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: We document that an experimental intervention o?ering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the e?ect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable pro?table migration. We estimate the model and ?nd that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing.
    Keywords: Informal Insurance, Migration, Bangladesh, RCT
    JEL: D12 D91 D52 O12 R23
    Date: 2019–07
  12. By: Roxana Maurizio; Ana Paula Monsalvo
    Abstract: This paper studies the incidence and heterogeneity of labour informality in six Latin American countries?Argentina, Brazil, Ecuador, Mexico, Paraguay, and Peru. We divide workers into five work statuses: formal wage-employed, formal self-employed, upper-tier informal wage-employed, lower-tier informal wage-employed, and informal self-employed. We evaluate the patterns of the occupational turnover between these work statuses and assess their impact on wage dynamics. In all the countries, wages are highest for formal workers and lowest for lower-tier informal jobs.
    Keywords: Informality, Occupational turnover, Education, Wages, Latin America, Occupations, Occupational mobility, Occupational choice
    Date: 2021
  13. By: Joana Cardim; Teresa Molina-Millán; Pedro C. Vicente
    Abstract: Primary school coverage has been increasing in most developing countries. Yet, it has not been accompanied by significant improvements in learning indicators. We implemented a randomized experiment in Angola around the introduction of ProFuturo, a worldwide educational program. The program includes a Computer-assisted Learning (CAL) software directed at improving the regular classroom experience. One year after the program started, we find higher familiarity with technology. Teachers miss fewer days of classes and implement better teaching practices. Students become more interested in learning and pro-social. Finally, the program improves students’ test scores in the most popular subject in the CAL platform.
    Keywords: Primary education, computer-assisted learning, CAL, field experiment, RCT, Africa, Angola
    JEL: O12 I21
    Date: 2021
  14. By: Sulistiadi Dono Iskandar (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Faradina Alifia Maizar (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))
    Abstract: Despite many advantages of women’s higher role in literature, GoI seems to lack commitment in addressing women empowerment issues as their priority agenda. Having more empowered women in our society becomes more salient as several studies suggest that it will lead to better financial outcomes such as saving in the household. In the era of the COVID-19 pandemic, where one could lose their source of income easily due to social restriction, having a society with a higher saving level is essential. By exploiting three waves (2000, 2007, 2014) of Indonesian Family Life Survey (IFLS) data and employing Fixed-Effect panel data analysis, this study found that a limited increase in the role of a wife in the household’s financial decision-making process will lead to a higher level of saving outcome, thus provide more resilience society toward the pandemic situation.
    Keywords: household savings — women’s bargaining power — intra-household decision-making — COVID-19 — Indonesia
    JEL: D13 D14 J16 C70
    Date: 2020
  15. By: Carol Graham (The Brookings Institution); Julia Ruiz Pozuelo (University of Oxford)
    Abstract: Using a novel panel survey of relatively poor urban Peruvian adolescents, we explore the link between three type of aspirations (educational, occupational, and aspirations to migrate) and individual’s propensity to invest in the future. We found remarkably high education aspirations, even among relatively poor individuals and adolescents that were exposed to negative shocks in the past, suggesting high levels of resilience among our sample. We also find that aspirations are quite stable over time, and positively associated with personality traits such as self-efficacy, life satisfaction, and locus of control, which helps explain their persistence over time. Finally, we find that high aspirations are strongly associated with positive future outcomes such as higher investments in education and less engagement in risky behaviors such as unsafe sex and binge drinking.
    Keywords: adolescents, aspirations, human capital outcomes, risky behavior, Peru
    JEL: I24 I20 J24
    Date: 2021–01
  16. By: Amir Lebdioui
    Abstract: Underlying the management of revenues from natural resource extraction is a set of assumptions about how abundant and how valuable these resources are. Nevertheless, existing approaches to measuring the value of extractive resources are seriously flawed. This paper proposes two avenues for improving them. It explains how a multidimensional approach to measuring resource wealth can be used to identify the policy challenges that a country might face as it sets out its strategy for managing extractive revenues.
    Keywords: Natural resources, Valuation, environmental impact, Extractives, Climate change, Environmental impact assessments
    Date: 2021
  17. By: Riyanto (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia); Natanael W. G. Massie (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia); Djoni Hartono (Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia); Mohamad D. Revindo (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia, Graduate School of Global and Strategic Studies, Universitas Indonesia, Jakarta, Indonesia); Usman (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia); Setya A. Riyadi (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia); Nanda Puspita (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia); Uka Wikarya (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia)
    Abstract: Tourism has important contribution towards Indonesia’s economy and the role tends to increase thorugh time. However, this study aims to delve deeper into how tourism can impact on poverty reduction and equal income distribution. The study employs Miyazawa’s input-output, econometrics, and micro simulation models. The results of the simulation show that without tourism activity, Indonesia’s poverty rate in 2014, 2015, and 2016 is expected to be 4% higher than the actuality. Tourism also contributes to reducing the depth of poverty from 2.04 to 1.21, as well as lessening the severity of poverty from 0.37 to 0.29 in 2016. This result is supported by econometric analysis showing that regions with tourism as a main economic activity have 1.5% to 3.4% lower poverty rate than those without. Further, domestic tourism activity offers a bigger contribution towards the lower income group when compared to their international counterparts. The implication of the findings towards policy making and tourism businesses is discussed.
    Keywords: Tourism — Poverty Alleviation — Income Distribution — Indonesia
    JEL: D63 I32 L83 R11
    Date: 2020
  18. By: Jorge Alvarez; Cian Ruane
    Abstract: We assess the aggregate productivity impact of distortions arising from labor regulations in Mexico and how they interact with informality. Using employment surveys and a firm-level economic census, we document a number of novel features about informal firms in Mexico. We then construct and estimate a model of heterogeneous firms and endogenous informality to study the micro and macro impacts from various policy reforms. Some reforms may have large impacts on informal employment but small impacts on aggregate productivity.
    Keywords: Informal employment;Productivity;Labor;Wages;Public expenditure review;WP,informal firm,size distribution,profit function,firm's idiosyncratic productivity,incumbent firm
    Date: 2019–11–27

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