nep-dev New Economics Papers
on Development
Issue of 2021‒09‒13
nineteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Early-life Famine Exposure, Hunger Recall and Later-life Health By Zichen Deng; Maarten Lindeboom
  2. Lower and Upper Bound Estimates of Inequality of Opportunity for Emerging Economies By Hufe, Paul; Peichl, Andreas; Weishaar, Daniel
  3. Agricultural productivity and fertility: Evidence from the oil palm boom in Indonesia By Gehrke, Esther; Kubitza, Christoph
  4. A Bit of Salt, A Trace of Life: Gender Norms and The Impact of a Salt Iodization Program on Human Capital Formation of School Aged Children By Zichen Deng; Maarten Lindeboom
  5. Growing Apart or Moving Together? Synchronization of Informal and Formal Economy Cycles By Ceyhun Elgin; M. Ayhan Kose; Franziska Ohnsorge; Shu Yu
  6. Social Mobility and Economic Development: Evidence from a Panel of Latin American Regions By Guido Neidhöfer; Matías Ciaschi; Leonardo Gasparini; Joaquín Serrano
  7. Water Scarcity and Social Conflict By Unfried, Kerstin; Kis-Katos, Krisztina; Poser, Tilman
  8. Oil extraction and spillover effects into local labour market: Evidence from Ghana By Akwasi Ampofo; Terence C Cheng; Firmin Doko Tchatoka
  9. Climate anomalies and international migration: A disaggregated analysis for West Africa By Martinez Flores, Fernanda; Milusheva, Sveta; Reichert, Arndt R.
  10. Conditional Cash Transfers and Labor Market Conditions By Molina, Teresa; Vidiella-Martin, Joaquim
  11. Lack of Food Access and Double Catastrophe in Early Life: Lessons from the 1974–1975 Bangladesh Famine By Shabnam, Nourin; Guven, Cahit; Ulubasoglu, Mehmet
  12. Early Childhood Human Capital Formation at Scale By Johannes M. Bos; Akib Khan; Saravana Ravindran; Abu S. Shonchoy
  13. Can New Learning Opportunities Reshape Gender Attitudes for Girls?: Field Evidence from Tanzania By So Yoon Ahn; Youjin Hahn; Semee Yoon
  14. Poverty, social networks, and clientelism By Nico Ravanilla; Allen Hicken
  15. Project Aid and Firm Performance By Silvia Marchesi; Tania Masi; Saumik Paul
  16. The Impact of Short-Term Employment for Low-Income Youth: Experimental Evidence from the Philippines By Beam, Emily A.; Quimbo, Stella
  17. A firm level approach on the e¤ects of IMF programs By Silvia Marchesi; Pietro Bomprezzi
  18. The impact of preemptive investment on natural disasters By Jhorland Ayala-García; Sandy Dall?Erba
  19. The Right to Health and the Health Effects of Denials By Bhalotra, Sonia R.; Fernandez Sierra, Manuel

  1. By: Zichen Deng (Norwegian School of Economics); Maarten Lindeboom (Vrije Universiteit Amsterdam)
    Abstract: We use newly collected individual-level hunger recall information from the China Family Panel Survey to estimate the causal effect of undernourishment on later-life health. We develop a Two-Sample Instrumental Variable (TSIV) estimator that can deal with heterogeneous samples. We find a non-linear relationship between mortality rates, a commonly used famine indicator, and the individual hunger experience. The nonlinearity in famine exposure may explain the variation in the famine’s effect on later life health found in previous studies. We also find that exposure to famine-induced hunger early in life leads to worse health among females fifty years later. This effect is much larger than the reduced-form effect found in previous studies. For males, we find no impact.
    Keywords: famine, hunger, developmental origins, two-sample instrumental varia
    JEL: I12 J11 C21 C26
    Date: 2021–09
  2. By: Hufe, Paul (LMU Munich); Peichl, Andreas (Ludwig-Maximilians-Universität München); Weishaar, Daniel (LMU Munich)
    Abstract: Equality of opportunity is an important normative ideal of distributive justice. In spite of its wide acceptance and economic relevance, standard estimation approaches suffer from data limitations that can lead to both downward and upward biased estimates of inequality of opportunity. These shortcomings may be particularly pronounced for emerging economies in which comprehensive household survey data of sufficient sample size is often unavailable. In this paper, we assess the extent of upward and downward bias in inequality of opportunity estimates for a set of twelve emerging economies. Our findings suggest strongly downward biased estimates of inequality of opportunity in these countries. To the contrary, there is little scope for upward bias. By bounding inequality of opportunity from above, we address recent critiques that worry about the prevalence of downward biased estimates and the ensuing possibility to downplay the normative significance of inequality.
    Keywords: equality of opportunity, inequality, emerging economies
    JEL: D31 D63 I32
    Date: 2021–08
  3. By: Gehrke, Esther; Kubitza, Christoph (International Rice Research Institute)
    Abstract: We analyze the link between agricultural productivity growth and fertility, using the oil palm boom in Indonesia as empirical setting. During the time period 1996 to 2016, we find consistently negative effects of the oil palm expansion on fertility. We explain this finding with rising farm profits, that led to consumption growth, the expansion of the non-agricultural sector, increasing returns to education and to higher school nrollment. Together these findings suggest that agricultural productivity growth can play an important role in accelerating the fertility transition, as long as the economic benefits are large enough to translate into local economic development.
    Date: 2021–04–20
  4. By: Zichen Deng (Norwegian School of Economics); Maarten Lindeboom (Vrije Universiteit Amsterdam)
    Abstract: This paper examines the effects of a massive salt iodization program on human capital formation of school-aged children in China. Exploiting province and time variation, we find a strong positive impact on cognition for girls and no effects for boys. For non-cognitive skills, we find the opposite. We show in a simple model of parental investment that gender preferences can explain our findings. Analyses exploiting within the province, village-level variation in gender attitudes confirm the importance of parental gender preferences. Consequently, large scale programs can have positive (and possibly) unintended effects on gender equality in societies with son preference.
    Keywords: Iodine, parental investments, gender attitudes, cognitive skills, non-cognitive skills
    JEL: I15 J16 J24 O15
    Date: 2021–09
  5. By: Ceyhun Elgin (Columbia University and Bogazici University); M. Ayhan Kose (World Bank, Prospects Group; Brookings Institution; CEPR; and CAMA); Franziska Ohnsorge (World Bank, Prospects Group; CEPR; and CAMA); Shu Yu (World Bank)
    Abstract: We study the degree of synchronization between formal- and informal-economy business cycles. Using a comprehensive database of informal activity that covers a wide range of informality measures from almost 160 countries over the 1990-2018 period, we report two major results. First, fluctuations in informal-sector output are strongly positively correlated with those in formal-sector output. In contrast, fluctuations in informal employment are largely uncorrelated with those in formal-sector output. Second, movements in the formal economy tend to spillover to the informal economy. Using a novel set of instrumental variables, we show that fluctuations in formal-sector output “cause” movements in informal-sector output.
    Keywords: Informal economy, self-employment, business cycle.
    JEL: E26 E32 J46 O17
    Date: 2021–09
  6. By: Guido Neidhöfer (ZEW Mannheim); Matías Ciaschi (CEDLAS-IIE-FCE-UNLP & CONICET); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET); Joaquín Serrano (UCLA & CEDLAS-IIE-FCE-UNLP)
    Abstract: We explore the role of social mobility as a driver of economic development by constructing a panel data set that includes measures of intergenerational mobility of education at the sub-national level in Latin America. First, we map the geography of educational mobility for 52 Latin American regions, as well as its evolution over time. Then, through a novel weighting procedure that considers the participation of cohorts to the economy in each year, we estimate the effect of changes in mobility on economic indicators, such as income per capita, poverty, child mortality, and luminosity. Hereby, we control for several covariates, including migration, educational expansions, initial conditions, and unobserved cross-regional heterogeneity. Our findings show that increasing social mobility had a significant and robust impact on the development of Latin American regions.
    JEL: D63 I24 J62 O15
    Date: 2021–09
  7. By: Unfried, Kerstin (University of Göttingen); Kis-Katos, Krisztina (University of Goettingen); Poser, Tilman (University of Göttingen)
    Abstract: Climate change and the increasing demand of water intensify the global water cycle, altering the distribution of water in space and time. This is expected to result in wet areas getting wetter and dry areas getting drier (Pan et al., 2015). As water is key to life, water scarcity is likely to provoke conflict. Using grid-cell data for Africa and central America over the years of 2002 to 2017, we establish a causal empirical link between the likelihood of local conflict and water mass declines. We measure water mass anomalies based on changes in Earth's gravity field recorded by GRACE and link them to social conflict events recorded in the SCAD data. To account for potential endogeneity in the demand for water, we instrument water mass change by the interaction of the number of drought months per year with yearly global average temperature changes. Our results show that a one standard deviation decrease in local water mass that follows from droughts and an intensifying water cycle more than triple the local likelihood of social conflict. Access to groundwater and surface water helps to mitigate these effects substantially. Water demand factors contribute to a quicker depletion of water mass in case of drought shocks, but do not intensify the link between water decline and conflict itself.
    Keywords: social conflict, water scarcity, climate change
    JEL: D74 Q25 Q54
    Date: 2021–09
  8. By: Akwasi Ampofo (University of Adelaide College); Terence C Cheng (School of Public Health, Harvard University); Firmin Doko Tchatoka (School of Economics & Public Policy, The University of Adelaide)
    Abstract: This paper investigates the effects of oil extraction on local labour market outcomes. Using household-level data from the Ghana Living Standard Survey, we employ a difference-in-differences approach to show that oil extraction has negative spillover effects on employment but no significant effect on average income. However, the effects vary by migration status, gender and employment sector. Specifically, we observe that migrants, men and agricultural workers experienced significant income spillovers from the oil boom than locals, women and workers in other sectors. In addition, the oil boom resulted in a negative welfare impact as it widened inequality for individuals close to the extraction areas.
    Keywords: Oil extraction; Spillover effects; Employment; Resource booms; Migration; DID estimation
    Date: 2021–08
  9. By: Martinez Flores, Fernanda; Milusheva, Sveta; Reichert, Arndt R.
    Abstract: Migration is one of the channels West African populations can use to adjust to the negative impacts of climate change. Using novel geo-referenced and high-frequency data, this study investigates the extent to which soil moisture anomalies drive international migration decisions within the region and toward Europe. The findings show that drier soil conditions decrease (rather than increase) the probability to migrate. A standard deviation decrease in soil moisture leads to a 2 percentage point drop in the probability to migrate, equivalent to a 25 percent decrease in the number of migrants. This effect is concentrated during the crop-growing season, and likely driven by financial constraints. The effect is only seen for areas that are in the middle of the income distribution, with no impact on the poorest or richest areas of a country, suggesting that the former were constrained to start and the latter can address those financial constraints.
    Keywords: West Africa,climate change,migration,agriculture
    JEL: F22 O13 O15 Q54
    Date: 2021
  10. By: Molina, Teresa (University of Hawaii at Manoa); Vidiella-Martin, Joaquim (University of Oxford)
    Abstract: Do local labor markets influence the effectiveness of educational policies? To answer this question, we focus on Mexico's conditional cash transfer program, PROGRESA, documented to have increased educational attainment. We show that PROGRESA's impact on schooling was smaller in areas with more export-oriented manufacturing jobs and argue this is because these jobs generate more convex opportunity costs of schooling. Consistent with this, the heterogeneity we document is strongest among those old enough to be working in factory jobs. In addition, this heterogeneity is primarily driven by jobs that directly influence schooling opportunity costs: low-wage jobs and jobs for school-aged workers.
    Keywords: conditional cash transfers, export manufacturing, Mexico, opportunity costs
    JEL: I28 F16 I38 O14
    Date: 2021–08
  11. By: Shabnam, Nourin; Guven, Cahit; Ulubasoglu, Mehmet
    Abstract: We study the education outcomes of the 1974–1975 Bangladesh famine on early-life survivors using the 1991 Bangladesh microcensus data. We find that famine adversely affected the survivor children in areas that experienced higher rice prices relative to labour wage. In addition, children living in wealthy households in famine-stricken areas had better education outcomes than children with no famine exposure at all. We also find that, surprisingly, exposure to double catastrophe (i.e., concurrent famine and flood) in early life had weaker effects than exposure to single catastrophe. We show that disaster-alleviation mechanisms worked better in districts affected by double disasters.
    Keywords: The 1974–1975 Bangladesh Famine; Food Access; Early Life Malnutrition; Education Outcomes; Double Catastrophe
    JEL: I15 I25 J13 J24
    Date: 2021–08–04
  12. By: Johannes M. Bos (American Institutes for Research, USA); Akib Khan (Uppsala University, Sweden); Saravana Ravindran (Lee Kuan Yew School of Public Policy, National University of Singapore); Abu S. Shonchoy (Department of Economics, Florida International University)
    Abstract: Can governments leverage existing service-delivery platforms to scale early childhood development (ECD) programs? We experimentally study a large-scale home-visiting intervention providing materials and counseling -integrated into Bangladesh's national nutrition program without extra financial incentives for the service providers (SPs). We find SPs partially substituted away from nutritional to ECD counseling. Intent-to-treat estimates show the program improved child's cognitive (0.17 SD), language (0.23 SD), and socio-emotional developments (0.12-0.14 SD). Wasting and underweight rates also declined. Improved maternal agency, complementary parental investments, and higher take-up of the pre-existing nutrition program were important mechanisms. We estimate a sizeable internal rate-of-return of 19.6%.
    Keywords: Early childhood development, Human capital formation, Bangladesh
    JEL: J13 J24 I25 H11
    Date: 2021–09
  13. By: So Yoon Ahn (University of Illinois at Chicago); Youjin Hahn (Yonsei University); Semee Yoon (Yonsei University)
    Abstract: We study how educational opportunities change adolescents' gender attitudes in Tanzania, using an experiential education program focused on STEM subjects. After the intervention, girls' gender attitudes became more progressive by 0.29 standard deviations, but boys' gender attitudes did not change. Perceived improvement in the labor market opportunities appears to be an important channel to explain the result. The intervention also increased girls' weekly study hours and boosted their interests in STEM-related subjects and occupations. Our results show that providing STEM-related educational opportunities to girls in developing countries can be an effective way of improving their gender attitudes.
    Keywords: STEM, labor market outcomes, developing countries
    JEL: I25 J13 J16
    Date: 2021–09
  14. By: Nico Ravanilla; Allen Hicken
    Abstract: Why are the poor susceptible to clientelism, and what factors shield them from the influence of vote buying? We explore the role of both formal and informal social networks in shaping the likelihood of being targeted with private inducements. We argue that when the poor lack access to formal social networks, they become increasingly reliant on vote buying channelled through informal networks. To test our theory, we build the informal, family-based network linkages between voters and local politicians spanning a city in the Philippines.
    Keywords: Social networks, Poor, vote-buying, Clientelism, Voting behaviour, Philippines
    Date: 2021
  15. By: Silvia Marchesi; Tania Masi; Saumik Paul
    Abstract: This paper evaluates the effect of development project aid from the World Bank and China on firms' Â’sales growth, using a large dataset of 110864 firms, spanning 121 countries between 2001 and 2016. We find that, contrary to the World Bank, Chinese ODA projects increase, on average, firm sales and, compared to sector-specific, Chinese region-speciÂ…c aid positively affect firm performance. Finally, we show that the positive effect of Chinese aid is stronger for firms lacking transport infrastructure (and with better electricity provision), suggesting that aid may improve firm performance by releasing their infrastructure constraints.
    Keywords: Aid effectiveness, World Bank projects, Chinese projects, Geo-coding, Firm growth.
    JEL: F35 O19 E24 E25
    Date: 2021–09
  16. By: Beam, Emily A. (University of Vermont); Quimbo, Stella (University of the Philippines, Quezon City)
    Abstract: We use a randomized field experiment to test the causal impact of short-term work experience on employment and school enrollment among disadvantaged, in-school youth in the Philippines. This experience leads to a 4.4 percentage point (79-percent) increase in employment 8 to 12 months later. While we find no aggregate increase in enrollment, we also do not find that the employment gains push youth out of school. Our results are most consistent with work experience serving as a signal of unobservable applicant quality, and these findings highlight the role of temporary work as a stepping- stone to employment for low-income youth.
    Keywords: short-term employment, work experience, ALMP, experiment
    JEL: J24 J08 O15
    Date: 2021–08
  17. By: Silvia Marchesi; Pietro Bomprezzi
    Abstract: This paper evaluates the effects of IMF programs at the firm level, using a panel of about 130,000 firms, over the period 2003-2018. We consider the different dimensions of a Fund program, namely participation, loan size and number and scope of conditions, and we look at their effects on growth of firm sales, as well as on income redistribution within the firm. Our identiÂ…cation strategy exploits the differential effect of changes in IMF liquidity on program participation (Lang 2016). We find a positive impact of IMF programs on firms' Â’sales growth, and the effect is persistent through time. What is more, we find that performance is improved through the alleviation of the firm financing constraint. More severe conditionality seems to worsen firm performance in the short run, but then turns beneficial over the years. Finally, we find that participating to an IMF program reduces the labor income share in the short term, but employment increases in the long run, suggesting that the increased income is reinvested into the firm.
    Keywords: IMF conditionality, IMF, Firm growth, Labor Income Share.
    JEL: F33 O19 E24
    Date: 2021–08
  18. By: Jhorland Ayala-García; Sandy Dall?Erba
    Abstract: Extreme rainfall events are expected to become more frequent and more intense in the future. Because their mitigation is a challenge and their cost to human life is large, this paper studies the impact of preemptive investment against natural disasters on the future occurrence of landslides and the losses associated with it. Based on a panel of 746 Colombian municipalities with medium and high risk of landslides and an instrumental variable approach, we find that preemptive public investment can reduce the number of landslides, the number of people who die, are injured, or disappear after a landslide, as well as the number of people affected. However, we do not find any effect on the number of houses destroyed. The results reveal that local governments focus their preventive measures on saving the lives and the physical integrity of their citizens, but they pay less attention to the direct market losses of natural disasters. These results are relevant in the presence of imperfect private insurance markets and increased informal settlements. **** RESUMEN: Se espera que los eventos de lluvias extremas sean más frecuentes e intensos en el futuro. Debido a que su mitigación es un desafío y su costo para la vida humana es alto, este documento estudia el impacto de la inversión en prevención contra desastres naturales en la ocurrencia futura de deslizamientos de tierra y las pérdidas asociadas a los mismos. Con base en un panel de 746 municipios colombianos con riesgo medio y alto de deslizamientos de tierra y un enfoque de variable instrumental, encontramos que la inversión pública en prevención puede reducir la frecuencia de los deslizamientos de tierra, la cantidad de personas que mueren, resultan heridas o desaparecen después de un deslizamiento de tierra, así como el número de personas afectadas. Sin embargo, no encontramos ningún efecto sobre el número de viviendas destruidas. Los resultados revelan que los gobiernos locales enfocan sus medidas preventivas en salvar la vida y la integridad física de sus ciudadanos, pero prestan menos atención a las pérdidas de activos como consecuencia de los desastres naturales. Estos resultados son relevantes en presencia de mercados de seguros privados imperfectos y un aumento de asentamientos informales.
    Keywords: Landslides, preemptive investment, disaster risk reduction, natural disasters, deslizamientos de tierra, inversión en prevención, reducción del riesgo de desastres naturales, desastres naturales
    JEL: H1 H4 H5 C26 D6
    Date: 2021–09–06
  19. By: Bhalotra, Sonia R. (University of Warwick); Fernandez Sierra, Manuel (Universidad de los Andes)
    Abstract: We estimate the health costs of supply-side barriers to accessing medical care. The setting is Colombia, where citizens have a constitutional right to health care, but insurance companies that manage delivery impose restrictions on access. We use administrative data on judicial claims for health as a proxy for unmet demand. We validate this using the register recording all health service utilization, estimating that a one standard deviation increase in judicial claims is associated with pervasive decreases in utilization rates of between 0.25 and 0.71 standard deviations, including in medical consultations, procedures, hospitalizations and emergency care. These restrictions on access manifest in population health outcomes. We estimate that a one standard deviation increase in judicial claims increases the all-cause mortality rate by between 0.10 and 0.23 standard deviations. Increases in mortality are pervasive across causes, with the largest increase in deaths from certain cancers. They are also pervasive across the age and sex distribution but larger among individuals over the age of fifty and (weakly) among women and the low-income population.
    Keywords: health care, health insurance, mortality, right-to-health, litigation, universal-health-coverage, Colombia
    JEL: I11 I13 I18 K4
    Date: 2021–08

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