nep-dev New Economics Papers
on Development
Issue of 2021‒09‒27
nine papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Universal Basic Income Programs: How Much Would Taxes Need to Rise? Evidence for Brazil, Chile, India, Russia, and South Africa By Ali Enami; Ugo Gentilini; Patricio Larroulet; Nora Lustig; Emma Monsalve; Siyu Quan; Jamele Rigolini
  2. Are Farmers “Efficient but Poor”? The Impact of Crop Choices on Agricultural Productivity and Poverty in Nigeria By Chisom Ubabukoh; Katsushi S. Imai
  3. Fiscal Policy, Income Redistribution and Poverty Reduction in Argentina By Juan Cruz Lopez Del Valle; Caterina Brest López; Joaquín Campabadal; Julieta Ladronis; Nora Lustig; Valentina Martínez Pabón; Mariano Tommasi
  4. Annualizing Labor Market, Inequality, and Poverty Indicators By Eduardo Lora; Miguel Benítez; Diego Gutiérrez
  5. Transition and persistence in the double burden of malnutrition and obesity : Evidence from South Africa By Théophile Azomahou; Bity Diene; Adrien Gosselin-Pali
  6. Catching the Drivers of Inclusive Growth in Sub-Saharan Africa: An Application of Machine Learning By Isaac K. Ofori
  7. Targetting Effectiveness of Social Transfer Programs in Botswana:Means-tested versus Categorical and Self-selected instruments By Tebogo B. Seleka
  8. Distribution of self-reported health in India: The role of income and geography By Ila Patnaik; Renuka Sane; Ajay Shah; S. V. Subramaniam
  9. Women political empowerment and vulnerability to climate change: evidence from developing countries By Asongu, Simplice; Messono, Omang; Guttemberg, Keyanfe

  1. By: Ali Enami; Ugo Gentilini; Patricio Larroulet; Nora Lustig; Emma Monsalve; Siyu Quan; Jamele Rigolini
    Abstract: Using microsimulations this paper analyzes the poverty and tax implications of replacing current transfers and subsidies by a budget-neutral (no change in the fiscal deficit) universal basic income program (UBI) in Brazil, Chile, India, Russia, and South Africa. We consider three UBI transfers with increasing levels of generosity and identify scenarios in which the poor are no worse off than in the baseline scenario of existing social transfers. We find that for poverty levels not to increase under a UBI reform, the level of spending must increase substantially with respect to the baseline. Accordingly, the required increase in tax burdens is high throughout. In our five countries and scenarios, the least increase in taxes required to avoid poverty to be higher than in the baseline is around 25% (Brazil and Chile). Even at this lower rate, political resistance and efficiency costs could limit the feasibility of a UBI reform.
    Keywords: Universal basic income, microsimulation, inequality, poverty, tax incidence
    JEL: H22 H31 H55 I32 D63
    Date: 2021–09
  2. By: Chisom Ubabukoh (Economics School of Social Science, The University of Manchester, UK and Jindal Global Law School, O. P. Jindal Global University, India); Katsushi S. Imai (Department of Economics, The University of Manchester, UK, Research Institute for Economics and Business Administration, Kobe University, Japan)
    Abstract: This paper aims to test the “efficient-but-poor” hypothesis” by estimating the determinants of smallholders’ crop choices and whether their crop choices affect productivity and poverty using the national household panel data in Nigeria. As crop choices are endogenous in the sense that the farmers’ crop choice is also influenced by resulting revenue from the crop, we carry out stochastic frontier analyses with the Greene (2010) correction for sample selection about farmers’ crop choices and find that smallholders are generally efficient in their resource allocations. However, they are not necessarily rational in making their crop choices - defined in terms of the degree of crop’s exportability or commercialization. This is because, even when some crops are found to be more productive than others, the “less productive” crop is often chosen for production. To figure out why, a treatment effects model is employed to estimate farmers’ selection into the choice of a type of crop in the first stage and the impact of their choices on productivity and poverty outcomes in the second. The results show that farmers’ access to free inputs, non-farm income and the use of seeds from the previous growing season are important determinants of crop choice. The choice of tuber and root crops is found to improve productivity and reduce poverty, while choosing highly commercialised crops reduces poverty but does not improve productivity.
    Keywords: Agricultural productivity; Poverty; Crop choice; Stochastic frontier analysis; Treatment effects model; Nigeria
    JEL: D24 I32 N57 O13 O33
    Date: 2021–09
  3. By: Juan Cruz Lopez Del Valle; Caterina Brest López; Joaquín Campabadal; Julieta Ladronis; Nora Lustig; Valentina Martínez Pabón; Mariano Tommasi
    Abstract: We implement a fiscal incidence analysis for Argentina with data from the 2017 national household survey. We find that Argentina’s fiscal system reduces inequality and poverty more than it is the case in many other comparable countries. This result is driven more by the size of the state (as measured by social spending to GDP) than by the progressivity of the fiscal system. While there are spending items that are quite progressive and even pro-poor, taxes are unequalizing and a number of subsidies benefit disproportionately the rich.
    Keywords: Fiscal policy, inequality, poverty, incidence, public economics
    JEL: E62 D6 H22 H23 I14 I24 I32
    Date: 2021–08
  4. By: Eduardo Lora; Miguel Benítez; Diego Gutiérrez
    Abstract: Widely, 12-month or 4-quarter average labor market, inequality and poverty indicators computed from repeated cross sections of household surveys are interpreted as annual. This is a valid interpretation only when several very specific criteria are met. Annual measures of indicators such as labor participation rates differ from their 12-month- or quarterly averages except when those who participate in a month or quarter also participate the other 11 months or three quarters. The same apply to unemployment rates and poverty rates. We propose several methods to accurately annualize sub-annual data. Some rely on ancillary questions often included in household surveys, others require econometric techniques such as predictive mean matching. Using data for Colombia we present annual measures of labor participation, occupation, unemployment, per capita labor income, average per capita household income, the Gini coefficients of labor income and per-capita household income, and moderate and extreme poverty rates.
    Keywords: annualization, employment, income distribution, income poverty, Gini coefficient, labor income, labor participation, poverty, unemployment
    Date: 2021
  5. By: Théophile Azomahou (AERC - African Economic Research Consortium); Bity Diene (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Adrien Gosselin-Pali (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: Many developing countries are facing an increasing prevalence of obesity and persistent undernutrition often referred to as the double burden of malnutrition (DBM). However, few empirical studies investigate the dynamics of this status over time and particularly when measured at the household level. This paper analyzes transition and persistence patterns of the DBM and obesity using South African household data spanning over 2008-2017. To test whether the DBM (the coexistence of at least one obese and one underweight individual in a household) is either a transitory or a persistent phenomenon, we use a dynamic random-effects probit model with unobserved heterogeneity. Our findings suggest that DBM is a transitory phenomenon as most double burden households over one period do not remain so in the subsequent waves. On the other hand, we find that obesity is a persistent status at the household level. Lastly, DBM households in t − 1 appear to become obese in t. These widespread nutritional issues require appropriate measures such as double-duty actions.
    Keywords: Double burden of malnutrition,Obesity,South Africa
    Date: 2021–09–08
  6. By: Isaac K. Ofori (University of Insubria, Varese, Italy)
    Abstract: A conspicuous lacuna in the literature on Sub-Saharan Africa (SSA) is the lack of clarity on variables key for driving and predicting inclusive growth. To address this, I train the machine learning algorithms for the Standard lasso, the Minimum Schwarz Bayesian Information Criterion (Minimum BIC) lasso, and the Adaptive lasso to study patterns in a dataset comprising 97 covariates of inclusive growth for 43 SSA countries. First, the regularization results show that only 13 variables are key for driving inclusive growth in SSA. Further, the results show that out of the 13, the poverty headcount (US$1.90) matters most. Second, the findings reveal that ‘Minimum BIC lasso’ is best for predicting inclusive growth in SSA. Policy recommendations are provided in line with the region’s green agenda and the coming into force of the African Continental Free Trade Area.
    Keywords: Clean Fuel, Economic Growth, Machine Learning, Lasso, Sub-Saharan Africa, Regularization, Poverty.
    JEL: C01 C14 C51 C52 C55 F43 O4 O55
    Date: 2021–01
  7. By: Tebogo B. Seleka (Botswana Institute for Development Policy Analysis)
    Abstract: Botswana has an extensive social protection system aimed at improving the welfare of poor and vulnerable groups. We evaluate the targeting effectiveness of 15 social transfer programs using targeting performance indicators and Benefit Incidence Analysis (BIA), and the 2015/16 Botswana Multi-Topic Household Survey data. Results on targeting performance indicators reveal that, except for one, programs have low coverage (high under-coverage) and low targeting effectiveness of the poor; hence, high leakages to the non-poor. BIA results indicate that most social assistance and asset transfer programs, and a public works program are progressive and pro-poor. However, while programs aimed at building human capital through financing tertiary education are also progressive, they are not pro-poor, suggesting inequality in access to higher education. Since education is one of the pathways out of poverty, this may contribute to intergenerational transmission of poverty. Further, means-tested programs do not necessarily target the poor better than programs employing categorical and self-selected targeting mechanisms. This may partly be because eligibility criteria may not be strictly enforced during selection of beneficiaries for major means-tested programs, such as the Destitute Persons Program. Therefore, reforms are required to improve the targeting effectiveness of the programs and to minimize leakages to the non-poor.
    Keywords: Benefit Incidence Analysis, Targeting Effectiveness, Social Transfers, Poverty
    JEL: D63 I32 I38
    Date: 2020–03
  8. By: Ila Patnaik (NIPFP); Renuka Sane (NIPFP); Ajay Shah (xKDR Forum); S. V. Subramaniam (Harvard University)
    Abstract: Self-reported health (srh) is an important health outcomes measure. In this paper, we examine a large-scale household survey dataset in India. We establish basic facts about srh and its relationship with household characteristics. We find that location heterogeneity is a major element of the statistical variation of ill-health, apart from age and income. Increased income is correlated with improved health in about half of the country.
    Date: 2021–09
  9. By: Asongu, Simplice; Messono, Omang; Guttemberg, Keyanfe
    Abstract: The objective of this article is to analyze the effect of the political empowerment of women on vulnerability to climate change in 169 countries for the period 1995-2017. The empirical evidence which is based on panel fixed effects regressions shows that: i) the political empowerment of women as well as its components (i.e. civil liberties of women, participation of women in civil society and participation of women in political debates) reduce vulnerability to climate change. ii) The underlying effect is most pronounced in upper middle income, Latin American, small and fragile countries. iii) Public spending on education, the effectiveness of governance and education are the real transmission channels through which vulnerability to climate change is affected by women’s political empowerment. The findings are robust to alternative estimation methods such as the Tobit, the dynamic fixed effects, and the generalized method of moments regressions. Policy implications are discussed, inter alia, the need for sampled countries to encourage women's political empowerment in order to reduce risks linked to climate change.
    Keywords: climate change; vulnerability; political empowerment
    JEL: Q50 Q54 Q58
    Date: 2021–01

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