nep-dev New Economics Papers
on Development
Issue of 2022‒04‒25
twenty-two papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. ‘When a Stranger Shall Sojourn with Thee': The Impact of the Venezuelan Exodus on Colombian Labor Markets By Santamaria, J.
  2. Cumulative Climate Shocks and Migratory Flows: Evidence from Sub-Saharan Africa By Salvatore Di Falco; Anna B. Kis; Martina Viarengo
  3. Income diversification and food security:evidence from Burkina Faso By Zoungrana, Amelie
  4. Son Preference and Health Disparities in Developing Countries By Le, Kien; Nguyen, My
  5. Profit shifting by multinational corporations: Evidence from transaction-level data in Nigeria By Bathusi Gabanatlhong; Javier Garcia-Bernardo; Paulinus Iyika; Miroslav Palanský
  6. Birth Weight and Cognitive Development during Childhood: Evidence from India By Kumar, Santosh; Kumar, Kaushalendra; Laxminarayan, Ramanan; Nandi, Arindam
  7. Female representation in school management and school quality By Bharti Nandwani;
  8. Time for Clean Energy? Cleaner Fuels and Women's Time in Home Production By Afridi, Farzana; Debnath, Sisir; Dinkelman, Taryn; Sareen, Komal
  9. Estimating the Employment and GDP Multiplier of Emergency Cash Transfers in Brazil By Ms. Joana Pereira; Mr. Frederik G Toscani; Roberto A. Perrelli; Daniel Cunha
  10. How Specific Resilience Pillars Mitigate the Impact of Drought on Food Security: Evidence from Uganda By Sunday, Nathan; Kahunde, Rehema; Atwine, Blessing; Adelaja, Adesoji; Kappiaruparampil, Justin
  11. Rainfall and Birth Outcome: Evidence from Kyrgyzstan By Le, Kien; Nguyen, My
  12. How impact evaluation methods influence the outcomes of development projects? Evidence from a meta-analysis on decentralized solar nano projects By Fatoumata Nankoto Cissé
  13. Welfare policy and labour market outcomes among persons with disabilities (PwDs) in India: Evidence from the NSS 76th Round By Raj, Harsh; Kumar, Himangshu; Nataraj, Manikantha
  14. Motherhood Penalties: the Effect of Childbirth on Women's Employment Dynamics in a Developing Country By Martina Querejeta; Marisa Bucheli
  15. Gendered Analysis of Food Security Gaps in Rural Nepal By Aryal, Jeetendra Prakash; Rahut, Dil Bahadur; Gartaula, Hom Nath
  16. Early Life Access to Polio Vaccines and Declining Disability Rates in India By Ambade, Mayanka; Menon, Nidhiya; Subramanian, S. V.
  17. The labour share along global value chains Perspectives and evidence from sectoral interdependence By Federico Riccio; Lorenzo Cresti; Maria Enrica Virgillito
  18. Conflict as a Cause of Migration By Crippa, Andrea; d'Agostino, Giorgio; Dunne, Paul; Pieroni, Luca
  19. Getting Teachers Back to School: Teacher Incentives and Student Outcomes By Patricio Araya-Córdova; Dante Contreras; Jorge Rodriguez; Paulina Sepulveda
  20. Foreign Direct Investment, Growth, and Publication Bias in Latin America and the Caribbean By Iorngurum, Tersoo
  21. Labour share in Indian economy: An Exploratory analysis of the role of trade, technology and structural transformation By Anwesha Basu; C. Veeramani
  22. The Financial Performance and Macrofinancial Implications of Large State-Owned Enterprises in Sub-Saharan Africa By Torsten Wezel; Naly Carvalho

  1. By: Santamaria, J.
    Abstract: This paper analyzes the effect of open-door immigration policies on local labor markets. Using the sharp and unprecedented surge of Venezuelan refugees into Colombia, I study the impact on wages and employment in a context where work permits were granted at scale. To identify which labor markets immigrants are entering, I overcome limitations in offcial records and generate novel evidence of refugee settlement patterns by tracking the geographical distribution of Internet search terms that Venezuelans but not Colombians use. While offcial records suggest migrants are concentrated in a few cities, the Internet search index shows migrants are located across the country. Using this index, high-frequency labor market data, and a difference-in-differences design, I find precise null effects on employment and wages in the formal and informal sectors. A machine learning approach that compares counterfactual cities with locations most impacted by immigration yields similar results. All in all, the results suggest that open-door policies do not harm labor markets in the host community.
    Keywords: Migration; Employment; Wages; Google searches
    JEL: J61 J68 C81
    Date: 2022–02–07
  2. By: Salvatore Di Falco; Anna B. Kis; Martina Viarengo
    Abstract: We re-examine the effects of negative weather anomalies during the growing season on the decision to migrate in rural households in five sub-Saharan African countries. To this end we combine a multi-country household panel dataset with high-resolution gridded precipitation data. We find that while the effect of recent adverse weather shocks is on average modest, the cumulative effect of a persistent exposure to droughts over several years leads to a significant increase in the probability to migrate. The results show that more frequent adverse shocks can have more significant and long-lasting consequences in challenging economic environments.
    Date: 2021–04–08
  3. By: Zoungrana, Amelie
    Abstract: While food insecurity is a significant public health issue, addressing it is hampered by the fact that there exists substantial variation in food security across households conditional on economic resources. Food insecurity has attracted much attention from policy makers in developing world as well as in Burkina Faso, however it remains a veritable challenge. Accounting for potential endogeneity of income diversification, an IV Probit and IV Poisson models using control function approach explore the relationship of income diversification and food security status of households in Burkina Faso. We also state mean Decomposition to examine the differential of food consumption score by agro-ecological zones. We used nationally representative data from Harmonized Household Living Conditions Survey (HHLCS) over 6,010 households. The findings revealed that about 21% of households are food insecure. We find also that increases in income diversification is positively associated with household food consumption score, household dietary diversity and household food expenditure share meaning that household’s livelihood diversification is considered as household ‘resilience tool and is very relevant to improve the household’s food security status. In addition, the age of the household head, the marital status and education level, the household size, the existence of permanent market, agricultural cooperative and women group in the community are important socio-economic variables in determining food security status in this study. According to findings, there exists differences in food consumption across the agro-ecological zones and between rural and urban households. These results suggest expanding income source opportunities is likely to enhance household diet diversity in Burkina Faso, while making progress towards other social and development goals. However, it is also necessary to push consumption patterns in some zones through climate resilience, infrastructures improvement (roads and transportation costs) and through commodities price control.
    Keywords: Food security, Household’ livelihood sources, Instrumental Variable, Control Function approach, Mean Decomposition, Burkina Faso
    JEL: Q18
    Date: 2022–03–10
  4. By: Le, Kien; Nguyen, My
    Abstract: Recorded history demonstrates the preference for sons in every aspect of life. Today, despite being considered a powerful manifestation of gender inequality and discrimination against women, the preference for sons over daughters is still prevalent worldwide. In this study, we investigate the extent to which son preference influences health disparities between sons and daughters in 66 developing countries. We find that the differences in height-for-age and weight-for-age z-scores between daughters and their peers are 0.135 and 0.098 standard deviation lower compared to the analogous differences between sons and their peers due to son preference. Our heterogeneity analysis further shows that son preference disproportionately affects children of disadvantaged backgrounds such as those living in rural areas, born to lower-educated mothers, and coming from poor families.
    Keywords: Son preference; health disparities; developing countries
    JEL: I1 I10 I14 I15
    Date: 2022
  5. By: Bathusi Gabanatlhong; Javier Garcia-Bernardo; Paulinus Iyika; Miroslav Palanský
    Abstract: Research on profit shifting by multinational corporations in developing countries is limited due to a lack of data. In this paper we use, for the first time, novel administrative data on the transactions of multinational corporations operating in Nigeria vis-à-vis related parties in other jurisdictions. The data provides a breakdown of these intra-group transactions into seven categories: (1) tangible goods, (2) services and fees, (3) royalties, (4) interest, (5) dividends, (6) reimbursements, and (7) other.
    Keywords: Tax havens, Multinational firms, Profit shifting
    Date: 2022
  6. By: Kumar, Santosh (Sam Houston State University); Kumar, Kaushalendra (International Institute for Population Sciences); Laxminarayan, Ramanan (CDDEP); Nandi, Arindam (CDDEP)
    Abstract: Health at birth is an important indicator of human capital development over the life course. This paper uses longitudinal data from the Young Lives survey and employs instrumental variable regression models to estimate the effect of birth weight on cognitive development during childhood in India. We find that a 10 percent increase in birth weight increases cognitive test scores by 8.1 percent or 0.11 standard deviations at ages 5-8 years. Low birth weight infants experienced a lower test score compared with normal birth weight infants. The positive effect of birth weight on a cognitive test score is larger for girls, children from rural households, and those with less-educated mothers. Our findings suggest that health policies designed to improve birth weight could improve human capital in resource-poor settings.
    Keywords: children, PPVT, cognition, test score, birth weight, instrumental variable, India
    JEL: I12 I15 I18 J13 J24 O12
    Date: 2022–03
  7. By: Bharti Nandwani (; (International Initiative for Impact Evaluation)
    Abstract: Using administrative data (2012-18) of schools in India, in this paper we construct a large panel comprising of more than 6 million observations to examine the extent to which female representation in school management is associated with improvement in school quality. We exploit the variation in number of female members in committees that govern government funded school activity to study our research question. Using a fixed effects methodology, we show that increased female representation in school management committees is associated with improvement in school quality, measured in terms of number of teachers hired, qualification of teachers, academic resources and student enrollment. The results are robust to including initial school characteristics interacted with year. Besides, using individual level data on learning outcomes for rural India, we provide suggestive evidence of positive association between female representation in schools management committees and learning outcomes of children, particularly for girls.
    Keywords: school management, school quality, female, public schools, local community
    JEL: I2 O1 Z18
    Date: 2022–02
  8. By: Afridi, Farzana (Indian Statistical Institute); Debnath, Sisir (Indian Institute of Technology Delhi); Dinkelman, Taryn (University of Notre Dame); Sareen, Komal (Indian Institute of Technology Delhi)
    Abstract: In much of the developing world, cooking accounts for most of women's time in home production. Does reliance on biomass for cooking drive this time burden? To assess time-savings from shifting towards cleaner fuels, we revisit a clean energy information experiment in rural India. Treatment villages were randomly assigned to receive information about negative health effects of cooking with solid fuels and about public subsidies for cleaner Liquid Petroleum Gas (LPG). Using rich time use data and a propensity score matching approach, we estimate that switching towards cleaner cooking fuels could potentially save 19-20 minutes of home production time per day. Exploiting the randomized information nudge and endline data collected one year after the intervention, our intent-to-treat estimate of actual time saved is 5 minutes per day. We discuss why nudges towards cleaner energy use at home are unlikely to generate transformative shifts in women's home production time.
    Keywords: time use, home production, energy use, India
    JEL: O13 J22
    Date: 2022–02
  9. By: Ms. Joana Pereira; Mr. Frederik G Toscani; Roberto A. Perrelli; Daniel Cunha
    Abstract: We estimate the subnational employment and GDP multiplier of Brazil's 2020 federal cash transfers to vulnerable households. Using two-stage least squares regressions we estimate a formal employment multiplier and then apply an analytical transformation to recover an implied GDP multiplier in the range of 0.5-1.5. The lower bound of this range lies below most estimates in the literature, which may result from the exceptional constraints imposed by the pandemic on supply chains and consumption. Nevertheless, even using the lower end of our range implies that federal cash transfers played an important role in supporting employment and GDP.
    Keywords: Fiscal multipliers, Household cash transfers, Labor informality
    Date: 2022–03–18
  10. By: Sunday, Nathan; Kahunde, Rehema; Atwine, Blessing; Adelaja, Adesoji; Kappiaruparampil, Justin
    Abstract: ABSTRACT Uganda continues to be prone to climate shocks especially drought which has adverse impact on food security. This paper studies household resilience capacities with special focus on how different resilience capacities mitigate the impact of drought on food security. The study follows the TANGO framework and two-step factor analysis to construct resilience capacity indexes. It employs a panel data from the Uganda National Panel Surveys (UNPS) undertaken between 2010/11 and 2018/19, spanning five waves. To minimize the bias arising from subjective self-reported drought shock, we introduce an objective measure of drought from the global SPEI database into the UNPS data. We also control for attrition bias by controlling for attrition hazard estimated from the attrition function. Our analysis reveals that households in Uganda exhibit significantly low and nearly static resilience capacities. This implies majority of households in Uganda remain highly susceptible food insecurity in the event of severe drought. The study shows that building resilience capacities is an effective way of protecting households from such devastating situation. In this regard, adaptive capacity is found to be the most effective in mitigating the effect of drought on food security. Transformative capacity and absorptive capacities possess limited mitigating power. Based on significant components from each of the capacities, we recommend investing in early warning systems and wide dissemination of climate related information to enhance preparedness adaptation, encouraging and supporting formation and sustainability of informal institutions at local levels, enhancing access to communal resources, improved infrastructure and agriculture extension services by the most vulnerable groups.
    Keywords: Agricultural and Food Policy
    Date: 2021–08–02
  11. By: Le, Kien; Nguyen, My
    Abstract: This study evaluates the extent to which fetal exposure to rainfall shocks influences birth weight outcomes in Kyrgyzstan, one of the most climate change vulnerable countries in Central Asia. We detect detrimental impacts of rainfall shocks during the prenatal period on birth weight. Specifically, a 0.1 log point increase in in-utero rainfall relative to the local norm reduces birth weight by 23.4 grams (or 0.84%). Furthermore, children born to poor mothers and mothers residing in rural areas are disproportionately affected. The adverse impacts of prenatal exposure to rainfall shocks could be partly attributed to prenatal care, diseases, and nutrient intakes. Besides, the impacts tend to concentrate in the first trimester of pregnancy.
    Keywords: Birth Weight, Rainfall, Climate Change, Kyrgyzstan
    JEL: I10 I15 I18 Q54
    Date: 2022
  12. By: Fatoumata Nankoto Cissé (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, I&P - Investisseurs et Partenaires)
    Abstract: This study analyzes the effect of impact evaluation methodologies on the positive and negative outcomes of decentralized solar nano projects in developing countries. Data originate from the Collaborative Smart Mapping of Mini-grid Actions (CoSMMA) developed by the Foundation for Studies and Research on International Development (FERDI). This study is based on a total of 727 tested effects from 10 decentralized solar nano projects which have been measured by experimental and quasi-experimental approaches. Using a multinomial-logit regression shown that randomized and non-randomized evaluation methods have a similar probability of generating a proven favorable outcome on the sustainable development of decentralized solar nano projects. By estimating a complementary log-log model, projects are most often evaluated as successful when effects on education are tested. In addition, a discrepancy of impacts is found between randomized control trials and difference-indifference strategies in proven-unfavorable outcomes of projects. This analysis also highlights the convergence of impacts between randomization and matching techniques on projects implemented in Africa. Findings from this paper provide strong evidence for development practitioners to choose the appropriate impact assessment method.
    Keywords: Matching,Difference-in-difference,Quasi-experimental methods,Randomized control trials,Experimental methods,Meta-analysis,Impact evaluation,Decentralized electrification,Sustainable development
    Date: 2022–03
  13. By: Raj, Harsh; Kumar, Himangshu; Nataraj, Manikantha
    Abstract: India is the host of one of the largest population of persons with disabilities (PwDs) in the world. However, a large section of this population has been unable to access opportunities for economic and social progress, despite the enactment of the RPWD Act, 2016, the country’s most ambitious disability rights legislation to date. This study attempts to analyse the impact of the Indian government’s two primary welfare policies – the disability certificate and a cash transfer (the pension) - on employment outcomes for PwDs. Logistic regression results show that having a certificate with percentage of disability less than 60%, raises the probability of employment by 17%. As the extent of disability rises above 60%, the probability of being employed declines. However, the largest effect size is seen for a narrow set of registered salaried jobs. The effect of the pension is analyzed through a propensity score matching technique for each state, keeping out of pocket (OOP) disability expenses as the outcome, and pension as the treatment. The results reveal negative and significant treatment effects (ATT) of the pension on OOP disability expenses. Interpreting OOP expenses as an indicator of the ‘conversion handicap’ faced by PwDs (Sen, 2004), we argue that cash transfers can also indirectly reduce the barriers to employment.
    Keywords: disability, cash transfer, welfare, pension, employment, affirmative action, reservation, India
    JEL: I1 I38 J0 J7 O17
    Date: 2022–01
  14. By: Martina Querejeta; Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The economic literature has pointed to motherhood as an explanation for the persistence of labor gender gaps. The arrival of children intensifies the traditional gender roles that affect gaps in paid and unpaid work. However, the evidence is mostly for developed countries, and little is known about these dynamics in developing contexts. We estimated the impact of motherhood on women’s formal employment and wages for Uruguay, one of the Latin American countries with the highest female labor force participation rates. Through an event-study approach, we used administrative records on labor histories for the period 1996-2015 and found an important motherhood penalty: monthly wages reduce by 19% a year after childbirth, and this drop continues to increase, reaching 36% after 10 years. This is explained by a reduction in formal employment and, to a lesser extent, also a reduction in hourly wages. We also showed that low-wage women face unquestionable higher penalties.
    Keywords: gender inequality, motherhood, formal employment, event-study, Uruguay
    JEL: J13 J16 J22 J31
    Date: 2021–01
  15. By: Aryal, Jeetendra Prakash (Asian Development Bank Institute); Rahut, Dil Bahadur (Asian Development Bank Institute); Gartaula, Hom Nath (Asian Development Bank Institute)
    Abstract: Gender studies on food security have often focused on the differences between male-headed households (MHHs) and female-headed households (FHHs). Hence, they have mostly ignored the possibility of food security gaps between the different types of FHHs, treating them as homogeneous. Therefore, using nationally representative data from Nepal and applying exogenous switching treatment effect regression models, we investigated whether food security differences exist between de facto FHHs (i.e., households managed by a woman whose husband is physically not present at home owing to work outside) and de jure FHHs (i.e., households managed by a single, widowed, or divorced woman). Contrary to the general hypothesis, we did not find any significant difference in the food security status between MHHs and FHHs. Nevertheless, we found that food security is significantly lower among de jure FHHs than among MHHs. More surprising, considering the common belief, is that the food security difference between de facto FHHs and de jure FHHs is larger than the difference between de jure FHHs and MHHs. It is possible to explain these gaps between MHHs and de jure FHHs by unobserved heterogeneity effects but not by treatment effects, while both treatment effects (i.e., differences in returns to their assets, such as participation in off-farm income) and unobserved heterogeneity effects explain the differences between de facto and de jure FHHs. The results have important policy implications, primarily because they reject the general notion that FHHs are less food secure, and strongly recommend a deeper investigation into the heterogeneity among FHHs. This has a crucial implication for designing government policy related to two important Sustainable Development Goals—gender equality and food security.
    Keywords: gender; food security; gender inequality; exogenous switching treatment regression; rural Nepal
    JEL: D10 I31 Q18 R20
    Date: 2022–04–01
  16. By: Ambade, Mayanka (Brandeis University); Menon, Nidhiya (Brandeis University); Subramanian, S. V. (Brandeis University)
    Abstract: We evaluate the impact of oral polio vaccines on the incidence of disabilities in India, focusing on polio-related disability. Polio was hyperendemic in India even as recently as the early 1990s but the country was declared wild polio virus-free in 2014. Average treatment effects on the treated from difference-in-differences with multiple time period models that condition on time-invariant demographic and socio-economic characteristics reveal that with access to oral polio vaccines in the year of birth, the incidence of any disability, locomotor disability and polio-related disability declined by 61.4%, 57.3% and 55.9%, respectively. We test for pre-trends and estimate alternate specifications that offer support for these results. Heterogeneity analyses show that in general, access to oral vaccines in the year of birth lowers the incidence of disabilities across gender, rural/urban and education stratifications. An exception is low-caste groups where there is some evidence that post-period average ATT rose. The eradication of polio saved a significant number of lives and brought measurable health and economic benefits to the country.
    Keywords: polio, locomotor, disability, acute flaccid paralysis, oral polio vaccines, early childhood, difference-in-differences with multiple time period models
    JEL: I15 I12 I18 O12 J13 J14
    Date: 2022–02
  17. By: Federico Riccio; Lorenzo Cresti; Maria Enrica Virgillito
    Abstract: This article proposes a novel framework to investigate how globalisation affects workers' share of value added. We explore functional income distribution by looking at industrial interdependence and thus identifying GVCs as the unit of analysis; we then track inputs composition and their labour share evolution along the value chains. First, we find widespread heterogeneous patterns across value chains components, accounting for the direct, domestic and foreign requirements of the chains, inside an overall declining trend. Second, we study the evolution of the vertical labour share along development stages. Finally, by means of a shift-share analysis, we investigate what drives such decline in the vertical labour share: albeit country-sector idiosyncratic factors accounted by the within-input component contribute the most, between-input reallocation - GVCs restructuring - matters particularly to detect the role played by foreign contributions. In essence, we provide evidence of a recombination of inputs toward emerging economies and service-based activities. Such recombination negatively impacts upon the overall labour share dynamics. Overall, our methodology contributes to better understanding the process of fragmentation of production and international division of labour by developing a series of novel and fine-grained indicators; in addition, it allows to study the ensuing implication for functional income distribution.
    Keywords: Structural Change; Global Value Chains; Labour Share.
    Date: 2022–04–19
  18. By: Crippa, Andrea; d'Agostino, Giorgio; Dunne, Paul; Pieroni, Luca
    Abstract: Much of the literature on the determinants of migration considers push and pull and while conflict is considered a push factor it has received surprisingly little empirical scrutiny. When it has the focus is on the most visible result, refugee flows. While political oppression, economic adversities and environmental degradation are important determinants of migration, conflict and wars account for the bulk of low income country refugees and migrants. This paper considers the role that conflict plays in migration, beyond refugee flows, across a range of countries for which data is available. It estimates the impact of conflict on migration allowing for other important factors and different measures of conflict. A large effect of conflict on net migration is found for low income countries.
    Keywords: Migration, internal conflict, income, panel data
    JEL: C33 D74 F22 O5
    Date: 2022
  19. By: Patricio Araya-Córdova; Dante Contreras; Jorge Rodriguez; Paulina Sepulveda
    Abstract: Rewarding teachers on the basis of student performance is a growing trend in educational policy. This paper estimates the effects of a policy that ties payments with teachers’ pedagogical skills instead. We study a large-scale reform in Chile that introduced financial incentives tied to a teacher evaluation system. Using a unique administrative data set of over 500,000 student-teacher-year matches, we estimate the effect of the policy on student performance exploiting the program’s gradual roll-out through a differences-in-differences analysis. We document precise, null effects of the policy on student math and language standardized test scores. Estimating a structural model of teacher skills and student performance, we show that by making incentives more homogeneous across the distribution of teacher characteristics policymakers can improve the policy’s effects on student performance and overall welfare.
    Date: 2021–04
  20. By: Iorngurum, Tersoo
    Abstract: Economic literature contains conflicting empirical results and explanations concerning the growth effect of foreign direct investment (FDI). In this study, several numerical estimates of FDI’s growth effect in Latin America and the Caribbean were drawn from 33 empirical studies and analysed with meta-analytic techniques. The results show that the true growth effect of FDI is near zero and statistically insignificant at all conventional levels. Tests of publication bias performed on the estimates reveal evidence of publication bias in peer-reviewed journal publications authored by PhD holders, but reveal no evidence of publication bias in the empirical literature as a whole. Furthermore, multivariate meta-regression analysis and Bayesian model averaging both show that publication bias is dependent on type of publication outlet and sample size. More precisely, publishing in peer-reviewed journals leads to publication bias, while sample size enlargement reduces publication bias.
    Keywords: Foreign Direct Investment, Economic Growth, Publication Bias, Meta-Analysis, Latin America and the Caribbean.
    JEL: C83 F21 O47
    Date: 2022–02–23
  21. By: Anwesha Basu (Indira Gandhi Institute of Development Research); C. Veeramani (Indira Gandhi Institute of Development Research)
    Abstract: This study analyses the trends, patterns and determinants of the labour share in India. While most of the literature on this topic covers only the organized manufacturing sector, this paper provides a detailed analysis of the labour share at the sectoral level, covering both formal and informal sectors of the entire economy. Using KLEMS data, we find that the aggregate economy-wide labour share declined from 54 in 1980 to 49 in 2016. Shift-share decomposition exercise reveals that both within and between sectoral factors played a role in determining the trends in the aggregate labour share. However, analysis at the disaggregated level reveals that the within sector decline in labour share is neither driven by technological progress, nor by exposure to international trade. Instead, it is mainly driven by two sectors: real estate and construction, neither of which is susceptible to the effects of technological change or trade. The between sector component, on the other hand, is driven by the idiosyncratic nature of the economy's structural transformation, which has favored the high skilled service sector and bypassed manufacturing completely. Within the organized manufacturing sector as well we find that the value-added share of capital-intensive sectors, with the lowest level of labour share, has increased steadily, while that of unskilled manufacturing has declined; leading to a decline in the labour share within the formal manufacturing sector. Sectoral level regression analysis reveals that, controlling for other factors like trade openness and capital intensity, a growth in the share of capital intensive and high skilled sectors leads to a decline in the sectoral wage share. We conclude that the apprehension regarding automation and globalization eating up labour's share of the income might be pre-mature in the context of India. The nature of reallocation of economic activity between sectors has an important role to play.
    Keywords: labour share, structural transformation, trade, technological progress
    JEL: D33 E25 F66
    Date: 2021–12
  22. By: Torsten Wezel; Naly Carvalho
    Abstract: Using a newly-compiled dataset of state-owned enterprises in Sub-Saharan Africa, we present aggregate information about profitability, liquidity and leverage. We find that 40 percent of the close to 300 surveyed SOEs are unprofitable, while larger firms also tend to be illiquid and overleveraged. In cross-sectional regressions we find that SOE debt stock sustainability is impacted by firms’ profitability and liquidity, while macroeconomic factors cannot be shown to matter, expect for some governance variables. Based on these findings and citing country examples, we also illustrate that weak SOE performance may have a macrofinancial impact affecting bank soundness through delinquent loan exposures.
    Keywords: Firm Performance, State-Owned Enterprises, Sub-Saharan Africa
    Date: 2022–03–18

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