nep-dev New Economics Papers
on Development
Issue of 2022‒06‒20
twenty-two papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Immigration, labor markets and discrimination: Evidence from the venezuelan exodus in Perú By Andre Groeger; Gianmarco León-Ciliotta; Steven Stillman
  2. Trends of Educational Mobility Across Three Generations in Latin America By Celhay, Pablo A.; Gallegos, Sebastian
  3. Management and misallocation in Mexico By Nicholas Bloom; Leonardo Iacovone; Mariana Pereira-Lopez; John Van Reenen
  4. When Criminality Begets Crime: The Role of Elected Politicians in India By Prakash, Nishith; Sahoo, Soham; Saraswat, Deepak; Sindhi, Reetika
  5. Residential segregation matters to racial income gaps By Florent Dubois; Christophe Muller
  6. Brazil’s Bolsa Familia: Neighborhood and Racial Group Networks By Marcelo Arbex; Jessica Faciroli; Ricardo da Silva Freguglia; Marcel de Toledo Vieira
  7. Beyond The Haze: Air Pollution and Student Absenteeism - Evidence from India By Singh, Tejendra Pratap
  8. The Global Impacts of Climate Change on Risk Preferences By Wesley Howden; Remy Levin
  9. 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
  10. Land restitution and selective violence: Evidence from Colombia By Lucas Marín Llanes; Mauricio Velásquez; María Alejandra Vélez
  11. Brazil 2020 data update: Methodological adjustments to the World Bank’s poverty and inequality estimates By Gabriel Lara Ibarra; Ricardo Campante Cardoso Vale
  12. What the Mean Measures of Mobility Miss: Learning About Intergenerational Mobility from Conditional Variance By Ahsan, Md. Nazmul; Emran, M. Shahe; Jiang, Hanchen; Shilpi, Forhad
  13. The sustainable practices of multinational banks as drivers of financial inclusion in developing countries By Úbeda, Fernando; Mendez, Alvaro; Forcadell, Francisco Javier
  14. Heterogeneous Returns of Informality: Evidence From Brazil By Andrea Otero-Cortés
  15. Nutrition as a basic need: A new method for utility-consistent and nutritionally adequate food poverty lines By Mahrt, Kristi; Herforth, Anna W.; Robinson, Sherman; Arndt, Channing; Headey, Derek D.
  16. Into the tropics: Temperature, mortality, and access to health care in Colombia By Juliana Helo Sarmiento
  17. Where did they come from, where did they go? Bridging the Gaps in Migration Data By Samuel Standaert; Glenn Rayp
  18. CLIMATE SHOCKS AND RESILIENCE: EVIDENCE FROM RURAL ETHIOPIA By Demissie, Birhan S.; Kasie, Tesfahun A.; Upton, Joanna B.; Blom, Sylvia A.
  19. "Still Biased? A Remaining Classical Selection Problem of RCTs in Education" By Hikaru Kawarazaki; Minhaj Mahmud; Yasuyuki Sawada; Mai Seki; Kazuma Takakura
  20. "Rise and Fall of New Technology: Quasi-experimental Evidence from a Developing Country" By Sachiko Miyata; Yasuyuki Sawada; Kazuma Takakura
  21. Expanding access to finance to boost growth and reduce inequalities in Mexico By Alessandro Maravalle; Alberto González Pandiella
  22. Labor unions and the electoral consequences of trade liberalization By Pedro Molina Ogeda; Emanuel Ornelas; Rodrigo R. Soares

  1. By: Andre Groeger; Gianmarco León-Ciliotta; Steven Stillman
    Abstract: Venezuela is currently experiencing the biggest crisis in its recent history. This has led more than 5.6 million Venezuelans to emigrate, one million of those to Peru, which amounted to an increase of over 2 percent in the Peruvian population. Venezuelan immigrants in Peru are relatively similar in cultural terms, but, on average, more skilled than Peruvians. In this paper, we first examine Venezuelans'perceptions about being discriminated against in Peru. Using an instrumental variable strategy, we document a causal relationship between the level of employment in the informal sector - where most immigrants are employed - and reports of discrimination. We then study the impact of Venezuelan migration on local's labor market outcomes, reported crime rates and attitudes using a variety of data sources. We find that inflows of Venezuelans to particular locations led to increased employment and income among locals, decreased reported crime, and improved reported community quality. We conduct a heterogeneity analysis to identify the mechanisms behind these labor market effects and discuss the implications for Peruvian immigration policy.
    Keywords: immigration, forced migration, discrimination, labor markets, Peru, Venezuela
    JEL: F22 J15 O15 R23
    Date: 2022–05
  2. By: Celhay, Pablo A.; Gallegos, Sebastian
    Abstract: This paper provides new evidence on long term intergenerational mobility in developing countries. We gather data linking schooling outcomes across three generations for six Latin American countries. Our work complements recent evidence going beyond two generations in more mobile, developed nations. Our main findings indicate that (i) the empirical multi-generational persistence is higher than what seminal theoretical models predict, with a much larger upward bias for Latin America than for developed countries; (ii) absolute mobility has increased but relative mobility remains constant over fifty years, and (iii) compulsory schooling laws plausibly contribute to explaining these mobility patterns, because they increased education levels but also reduced the dispersion of schooling. Overall, this paper contributes to our understanding of long run intergenerational mobility with novel evidence for the highly immobile Latin American region, where family background effects tend to be comparatively longer-lasting.
    Keywords: Desarrollo, Educación, Investigación socioeconómica, Políticas públicas, Sector académico,
    Date: 2022
  3. By: Nicholas Bloom; Leonardo Iacovone; Mariana Pereira-Lopez; John Van Reenen
    Abstract: We argue that greater misallocation is a key driver of the worse management practices in Mexico compared to the US. These management practices are strongly associated with higher productivity, growth, trade, and innovation. One indicator of greater misallocation in Mexico is the weaker size-management relationship compared to the US, particularly in the highly distorted Mexican service sector. Second, the size-management relationship is weaker in smaller markets, measured by distance to the US for manufacturing firms and population density for service firms. Third, municipalities with weaker institutions, measured by contract enforcement, crime, and corruption, have a weaker size-management relation. These results are consistent with frictions lowering aggregate management quality and productivity.
    Keywords: misallocation, management, performance, services, manufacturing, Mexico
    Date: 2022–12
  4. By: Prakash, Nishith (University of Connecticut); Sahoo, Soham (Indian Institute of Management Bangalore); Saraswat, Deepak (University of Connecticut); Sindhi, Reetika (University of California, Santa Barbara)
    Abstract: This paper estimates the causal impact of electing criminally accused politicians and their nature of criminality on crime in India. We exploit the quasi-random variation in the outcome of close elections between candidates with and without criminal accusations to instrument the share of constituencies in the district won by criminally accused leaders. We find that a standard deviation increase in the share of criminally accused leaders in institutionally weaker states leads to a 4.3 percent increase in crime in districts, including crimes against women. The effect is more pronounced when the leaders are accused of serious crimes, indicating that seriously accused leaders have a detrimental impact on society.
    Keywords: close elections, elected leaders, criminal accusations, crime, India
    JEL: D72 D73 K42 O17
    Date: 2022–04
  5. By: Florent Dubois (UOR - University of Reading, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Christophe Muller (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université)
    Abstract: We contend that residential segregation should be an essential component of the analyses of socio-ethnic income gaps. Focusing on the contemporary White/African gap in South Africa, we complete Mincer wage equations with an Isolation index that reflects the level of segregation in the local area where individuals dwell. We decompose the income gap distribution into detailed composition and structure components. Segregation is found to be the main contributor of the structure effect, ahead of education and experience, and to make a sizable contribution to the composition effect. Moreover, segregation is found to be harmful at the bottom of the African income distribution, notably in relation to local informal job-search networks, while it is beneficial at the top of the White income distribution. Specific subpopulations are identified that suffer and benefit most from segregation, including for the former, little educated workers in agriculture and mining, often female, confined in their personal networks. Finally, minimum wage policies are found likely to attenuate most segregation's noxious mechanisms, while a variety of policy lessons are drawn from the decomposition analysis by distinguishing not only compositional from structural effects, but also distinct group-specific social positions.
    Keywords: Residential segregation,Post-Apartheid South Africa,Distribution analysis,Generalized decompositions
    Date: 2022–03
  6. By: Marcelo Arbex (Department of Economics, University of Windsor); Jessica Faciroli (Department of Economics, Federal University of Juiz de Fora, Brazil); Ricardo da Silva Freguglia (Department of Economics, Federal University of Juiz de Fora, Brazil); Marcel de Toledo Vieira (Department of Statistics, Federal University of Juiz de Fora, Brazil)
    Abstract: Are families that live in the same neighborhood and share similar characteristics more likely to participate in welfare programs? Using a unique administrative data set, we study beneficiaries of the Bolsa Familia - the Brazilian cash transfer program - from 2013 to 2015. We analyze data containing information on the living conditions of the most vulnerable families, such as income, household characteristics, schooling, and disability. An eight-digit zip code defines a neighborhood. Families form a network if they live in the same neighborhood and belong to the same racial group. We provide evidence that place of residence and racial group networks are important determinants of the family participation in the program. Individuals in a neighborhood-racial group network are 6.5% more likely to participate in the Bolsa Familia. We conduct several robustness checks - controlling for family unobserved characteristics, network density and coverage (percentiles) distributions - to further qualify our results.
    Keywords: Social Program Participation, Social Network, Neighborhood, Race Composition, Bolsa Familia Program, Brazil.
    JEL: I38 H53
    Date: 2022–06
  7. By: Singh, Tejendra Pratap
    Abstract: Air pollution remains one of the most challenging environmental phenomena. Despite its importance in impacting various facets of everyday life, there is a paucity of well-identified air pollution estimates on short-term outcomes for developing countries. Using novel data, I provide detailed empirical evidence on the direct effect of air pollution on student absenteeism in India by linking local exposure to fine particulate matter (PM2.5) to school attendance. I find a large negative effect of increased air pollution on school attendance. My results are robust to a host of specifications and a battery of robustness checks. Consistent with other works, I find that the effect is more pronounced for younger students and find evidence for differential impacts of air pollution on absenteeism by gender. Exploring the mechanisms behind increased absenteeism, I show that reduced school attendance might be resulting from increased incidence of respiratory ailments in the students exposed to air pollution.
    Date: 2022–05–11
  8. By: Wesley Howden (University of Arizona); Remy Levin (University of Connecticut)
    Abstract: We study the direct impacts that long-run experiences of climate change have on individual risk preferences. Using panel surveys from Indonesia and Mexico (total N = 25,000), we link within-person changes in elicited risk preferences to state-level, lifetime experiences of climate change. In line with the predictions of a Bayesian model of learning over background climate risk, we find that in both settings increases in the experienced means of temperature and precipitation cause significant decreases in measured risk aversion, while increases in the experienced variance of temperature in Indonesia and the variance of precipitation in Mexico lead to significant increases in measured risk aversion. We replicate this analysis globally using a survey with a representative sample from 75 countries (N = 75,000) containing an elicited measure of risk preference which we link to country-level, lifetime climate experiences. We find significant results for both the means and variances of both climate variables that are consistent with our panel analyses. Across all settings, experiences of climate variance have first-order effects, with coefficient magnitudes of the standard deviation of climate 0.6-2.6 times that of the climate mean. We develop a novel method for estimating the welfare effects of observed risk preference changes using panel data, and find that the climate-induced changes in risk preferences we observe increased welfare in both Indonesia and Mexico by approximately 1%.
    Keywords: Risk preferences, climate change, experience effects, volatility, welfare
    JEL: D14 D81 D83 I31 O12 Q54
    Date: 2022–06
  9. By: Sunday, Nathan; Kahunde, Rehema; Atwine, Blessing; Adelaja, Adesoji; Kappiaruparampil, Justin
    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, Environmental Economics and Policy
    Date: 2021–08–02
  10. By: Lucas Marín Llanes; Mauricio Velásquez; María Alejandra Vélez
    Abstract: Designing victims' reparation policies and solving agrarian disputes are fundamental aspects to build peace after a civil conflict. In 2014, a ceasefire with the oldest Latin-American guerrilla took place in Colombia and a peace agreement was signed in 2016. The Land Restitution Policy (LRP) oriented to restore property rights of forcibly displaced victims was one of the peacebuilding and victims' reparation policies. In this paper, we explored the effect of the LRP on violence against social leaders. These actors represent the interests of their communities, oppose the expansion of illicit activities in their territories and are guarantors of informal property rights in most of Colombian rural areas. In this article we determined whether or not a comprehensive intervention, such as the LRP, had community spillover effects in social leaders' exposure to violence. We showed that the LRP significantly reduced the killing of social leaders. Yet, the effect depends on both the intensity of the policy's implementation and its interaction with improved territorial security conditions. Our results suggested a reduced rate of killing of social leaders in municipalities in which LRP was more intense (measured by the number of active processes registered in the program) after the ceasefire with the FARC. In absence of the LRP, after the ceasefire with FARC, the rate of killing of social leaders would have been 1.8 times higher. We explained our findings by an improvement of socioeconomic conditions, an increase in trust within beneficiaries' communities, and the design of a security intelligence mechanism implemented within the policy.
    Keywords: Land restitution, victims, armed conflict, peace agreement, selective violence
    JEL: D74 H50 I38 Q15
    Date: 2022–05–27
  11. By: Gabriel Lara Ibarra; Ricardo Campante Cardoso Vale
    Abstract: The Continuous National Household Sample Survey (PNADC in Portuguese) is the main source of information for poverty monitoring in Brazil. The PNADC 2020 annual release was published in November 2021. The 2020 survey underwent methodological changes compared to earlier years. Most changes do not affect comparability with previous years. However, there is evidence of significant under-coverage of the “Auxilio Emergencial†(AE) program. While administrative records indicate over 68 million AE recipients, only about 20 million are observed in the survey. This paper describes an approach to impute AE beneficiary status as a way to complement the observed AE status as reported in the survey and to better capture the evolution of income and poverty in Brazil during COVID-19. Incorporating eligibility criteria from the AE (demographic, employment, and income), the method results in 42.2 million AE recipients in the survey – leading to a more reasonable undercoverage rate. Sensitivity analyses find similar results. The adjustments described in this paper are included in the World Bank’s poverty and inequality estimates for Brazil 2020 (published in April 2022). The poverty estimates in 2020 are 13.1 percent at the US$5.50 poverty line and 1.7 percent at the US$1.90 line. The Gini coefficient is estimated at 0.488.
    Date: 2022–04
  12. By: Ahsan, Md. Nazmul; Emran, M. Shahe; Jiang, Hanchen; Shilpi, Forhad
    Abstract: A large literature on intergenerational mobility focuses on the conditional mean of children's economic outcomes to understand the role of family background, but ignores the information contained in conditional variance. Using exceptionally rich data free of coresidency bias, we provide evidence on three large developing countries (China, India, and Indonesia) that suggests a strong influence of father's education on conditional variance of children's schooling. We find substantial heterogeneity across countries, gender, and geography (rural/ urban). Cohort based estimates suggest that the effects of father's education on the conditional variance has changed qualitatively, in some cases a positive effect in the 1950s cohort turning into a substantial negative effect in the 1980s cohort. We develop a methodology to incorporate the effects of family background on the conditional variance along with the standard conditional mean effects. We derive risk adjusted measures of relative and absolute mobility by accounting for an estimate of the risk premium for the conditional variance faced by a child. The estimates of risk adjusted relative and absolute mobility for China, India and Indonesia suggest that the standard measures substantially underestimate the effects of family background on children's educational opportunities, and may give a false impression of high educational mobility. The downward bias is specially large for the children born into the most disadvantaged households where fathers have no schooling, while the bias is negligible for the children of college educated fathers. The standard (but partial) measures may lead to incorrect ranking of regions and groups in terms of relative mobility. Compared to the risk adjusted measures, the standard measures are likely to underestimate gender gap and rural-urban gap in educational opportunities.
    Keywords: Conditional Variance,Family Background,Intergenerational Educational Mobility,Risk Adjusted Mobility Measures,China,India,Indonesia
    JEL: I24 J62 O12
    Date: 2022
  13. By: Úbeda, Fernando; Mendez, Alvaro; Forcadell, Francisco Javier
    Abstract: Lack of access to banking is a major problem that contributes to inequality in the developing world. For this reason, financial inclusion is a crucial objective of the Sustainable Development Goals (SDGs). In this study, we investigate the impact of the sustainable practices of multinational banks (MNBs) on financial inclusion. Drawing from a sample of 24 developing countries and 28,089 individuals, we obtain robust evidence about the positive effect of sustainable practices on financial inclusion. We find that MNBs increase the use of mobile bank accounts in the developing world. We also find that when these MNBs follow sustainable practices, the use of mobile bank accounts positively intensifies. These findings are consequential because mobile banking is one of the most powerful means to achieve financial inclusion in the developing world.
    Keywords: sustainable banking; finance inclusion; mobile banking accounts; sustainable development goals
    JEL: G00 G20 G21 Q01 Q56 D63
    Date: 2022
  14. By: Andrea Otero-Cortés
    Abstract: This paper estimates the marginal treatment effect of informality on wages for Brazil at the individual level using regional data on labor inspectors for identification. The results show that there is significant essential heterogeneity among otherwise identical workers that lead them to self-select into the type of jobs, formal or informal, that better reward their skills. The Average Treatment Effect (ATE) is 22%, but not statistically different from zero. But there are individuals with very low non-observed costs of formality that in fact earn premiums of up to 100% of their wage rate from being formal and workers who would be hurt from switching to formality as they experience very high non-observed costs of being formal. Two policy experiments in which we tighten enforcement of the labor law via hiring more labor inspectors increases the likelihood of workers being formal, but it has, on average, a negative effect on wages for the workers who are induced to switch from informality to formality. **** RESUMEN: Este documento estima para Brasil el efecto marginal de la formalidad laboral en los salarios a nivel individual utilizando una combinación de datos regionales sobre inspecciones laborales y actividad económica. Los resultados muestran que existe una heterogeneidad esencial significativa entre trabajadores que son idénticos en sus características observadas, que los lleva a auto-seleccionarse en el tipo de trabajos, formales o informales, que recompensan mejor sus habilidades. El efecto promedio del tratamiento (ATE) es del 22%, pero no es estadísticamente diferente de cero. Sin embargo, hay individuos con costos de formalidad no observados muy bajos que de hecho ganan primas de hasta el 100% de su salario por ser formales y trabajadores que se verían perjudicados por cambiar a la formalidad ya que experimentan costos no observados muy altos de ser formales. Dos experimentos de políticas en los que imponemos una aplicación más estricta de la ley laboral mediante la contratación de más inspectores laborales aumenta la probabilidad de que los trabajadores sean formales, pero tiene, en promedio, un efecto negativo en los salarios de los trabajadores que son inducidos a pasar de la informalidad a la formalidad.
    Keywords: Labor informality, labor regulation, enforcement, marginal treatment effects, Informalidad laboral, regulación laboral, aplicación, efectos marginales de tratamiento
    JEL: H26 J24 J32 J46 K31
    Date: 2022–06–10
  15. By: Mahrt, Kristi; Herforth, Anna W.; Robinson, Sherman; Arndt, Channing; Headey, Derek D.
    Abstract: In most countries and globally, malnutrition rates exceed poverty rates. The World Bank estimates that about 9 percent (689 million) of the global population is poor, yet an estimated 25 percent (2 billion people) suffer from micronutrient deficiencies. Such a discrepancy begs the question: Do standard poverty metrics poorly reflect nutritional needs? The most prevalent methodology for measuring poverty in low- and middle-income countries – the cost of basic needs approach – estimates food baskets that satisfy a dietary energy standard while reflecting consumption patterns of poor households. However, poor households typically consume monotonous diets characterized by large quantities of calorically cheap staple foods that are poor sources of nutrients. This reality creates a circular logic whereby the cost of basic nutritional needs is estimated from populations who are consuming nutritionally inadequate diets. We argue that a healthy diet is a basic need and that the standard used to calculate cost of basic needs food poverty lines should be expanded to satisfy nutritional dietary recommendations, while continuing to reflect context-specific dietary patterns. We develop an approach to estimate food poverty lines that satisfies the food group proportionality associated with healthy diet recommendations while also adhering to observed within-food group consumption patterns of poor households. Furthermore, we address the limitation of estimating a single national food basket – which fails to capture variation in local consumption patterns driven by preferences, availability, and relative prices – by estimating utility-consistent regional poverty lines. We demonstrate the approach using data from Myanmar. Energy-based poverty lines significantly underestimate the cost of acquiring a healthy diet, are severely deficient in multiple micronutrients, and therefore result in a drastic underestimate of the rate of poverty based on a healthy diet standard. The resulting higher cost of basic needs also has important implications for inclusive economic growth strategies and nutrition-sensitive food policies and social protection.
    Keywords: MYANMAR; BURMA; SOUTHEAST ASIA; ASIA; nutrition; poverty; healthy diets; food prices; basic needs; poverty measurement; poverty lines; cost of healthy diets; cost of basic needs
    Date: 2022
  16. By: Juliana Helo Sarmiento
    Abstract: This paper analyzes the relationship between temperature, mortality, and adaptation opportunities in a tropical country. Such countries host almost 40% of the world's population, and face inherently different environmental, demographic, and socio-economic conditions than their counterparts in temperate areas. Using detailed data from all Colombian municipalities, I show that even at narrow temper- ature ranges, which are characteristic of the tropics, anomalously hot or cold days increase mortality. An additional day with mean temperature above 27°C (80.6°F) increases mortality rates by approximately 0.24 deaths per 100,000, equivalent to 0.7% of monthly death rates. Unlike temperate locations, I find that deaths attributed to infectious diseases and respiratory illnesses drive this relationship in the hot part of the distribution, mainly affecting children aged 0-9. These findings uncover new factors and populations at risk, and imply that the average person who dies after a hot temperature shock loses approximately 30 years of life. I also provide evidence that access to health care and quality of services could serve as a mediating factor between temperature and mortality.
    Keywords: Weather, Temperature, Mortality
    JEL: I12 Q50 Q54
    Date: 2022–05–20
  17. By: Samuel Standaert; Glenn Rayp (-)
    Abstract: Many research analyses monitoring the patterns and evolution of international migration would benefit from high-frequency data on a global scale. However, the presently existing databases force a choice between the frequency of the data and the geographical scale. Yearly data exist but only for a small subset of countries, while most others are only covered every 5 to 10 years. To fill in the gaps in the coverage, the vast majority of databases use some imputation method. Gaps in the stock of migrants are often filled by combining information on migrants based on their country of birth with data based on nationality or using ‘model’ countries and propensity methods. Gaps in the data on the flow of migrants, on the other hand, are often filled by taking the difference in the stock, which the ’demographic accounting’ methods then adjust for demographic evolutions. This paper proposes a novel approach to estimating the most likely values of missing migration stocks and flows. Specifically, we use a Bayesian state-space model to combine the information from multiple datasets on both stocks and flows into a single estimate. Like the demographic accounting technique, the state-space model is built on the demographic relationship between migrant stocks, flows, births and deaths. The most crucial difference is that the state-space model combines the information from multiple databases, including those covering migrant stocks, net flows, and gross flows. The result of this analysis is a global, yearly, bilateral database on the stock of migrants according to their country of birth. This database contains close to 2.9 million observations on over 56,000 country pairs from 1960 to 2020, a ten-fold increase relative to the second-largest database. In addition, it also produces an estimate of the net flow of migrants. For a subset of countries –over 8,000 country pairs and half a million observations– we also have lower-bound estimates of the gross in- and outflow.
    Keywords: Bilateral migration data, Stock, Imputation, State-Space model
    Date: 2022–05
  18. By: Demissie, Birhan S.; Kasie, Tesfahun A.; Upton, Joanna B.; Blom, Sylvia A.
    Abstract: Climate shock, specifically drought causes serious adverse effects on household welfare in rural Ethiopia. As a direct response to such shocks, resilience and related activities become the country’s key development agenda. In this context, we examine the relationship between climate shock and household consumption and then assess how household resilience influences this relationship. By combining historical observations of climate extremes and Ethiopian Socioeconomic survey datasets, we find that both short-term and long-term droughts are significantly associated with reduced consumption, and this relationship is moderated by resilience. We look at the resilience indicators that possibly mediate the effects of drought on either realized or probabilistic measures of consumption to understand what is associated with the ability to withstand or recover quickly from drought. We reframe the resilience as capacity approach and resilience as a normative condition approach that reflect two distinct ways of inferring resilience. In the resilience as capacity approach, we model realized consumption as a dependent variable and interaction terms between drought and hypothesized resilience indicators as joint explanatory variables. From our hypothesized resilience indicators, we find some indicators that are associated with attenuating the adverse effects of drought shock on realized household consumption. These include wealth index, informal transfer, and formal transfer indicators. In the resilience as a normative condition approach, we model probabilistic household consumption as a dependent variable and same interaction terms and find income diversification, livestock diversification, and agricultural asset indicators. This study has important implications for both research and policy. The adverse effects of droughts on consumption inform the investment need and policy design around resilience. The resilience indicators associated with attenuating the adverse effects of drought shock on realized and probabilistic consumption has also important implications. First, the nexus between drought and consumption via specific resilience indicators associated with attenuating the adverse effect of drought on consumption informs policy design around these indicators. Second, our interest variable framing to identify the specific resilience indicators associated with attenuating the adverse effects of drought on both realized and probabilistic household consumption provides insight to bridge the resilience as capacity and resilience as a normative condition approaches classic debate with the question of whether resilience is a right-hand or left-hand side variable.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy
    Date: 2021–10–01
  19. By: Hikaru Kawarazaki (Graduate school in Economics at University College London); Minhaj Mahmud (Asian Development Bank); Yasuyuki Sawada (Faculty of Economics, The University of Tokyo); Mai Seki (Ritsumeikan University); Kazuma Takakura (Graduate School of Economics, The University of Tokyo)
    Abstract: In the already very rich and crowded literature on education interventions, the use of test scores to capture students’cognitive abilities has been the norm when measuring the impact. We show that even in randomized controlled trials (RCTs), estimated treatment effects on the true latent abilities can still be biased towards zero, because test scores are often censored outside of zero and full marks. This paper employs sui generis data from a field experiment in Bangladesh as well as data sets from existing highly-cited studies in developing countries to illustrate theoretically and empirically that this remaining classical sample selection problem exists. We suggest three concrete ways to correct such bias: First, to employ the conventional sample selection correction methods; second, to use tests that are designed with an extensive set of questions from easy to challenging levels which allow students to answer the maximum they could; and third, to incorporate each student’s completion time in estimation.
    Date: 2022–05
  20. By: Sachiko Miyata (Ritsumeikan University); Yasuyuki Sawada (Faculty of Economics, The University of Tokyo); Kazuma Takakura (Graduate School of Economics, The University of Tokyo)
    Abstract: This paper investigates a new technology’s long-term processes of adoption, standardization, and decline. Specifically, we examine the decision to invest in floating net aquaculture, introduced as a social safeguard program for poor Indonesian households that were involuntarily resettled because of a dam/reservoir construction project. We find the program helped transform and sustain the livelihood of resettlers by facilitating the adoption of this new technology. We also find behavioral irreversibility in technology adoption, resulting in overfishing in the reservoir. Considering the increasing importance of hydropower and renewable energy sources, this innovative resettlement program provides critical policy insight.
    Date: 2022–05
  21. By: Alessandro Maravalle; Alberto González Pandiella
    Abstract: The access to formal financial services in Mexico is particularly low. Access is also significantly unequal across income levels, gender, between rural and urban areas and across regions. SMEs access to bank credit is low, hampering firms’ ability to grow and innovate. The use of cash and informal credit is still widespread, especially in rural areas, where financial infrastructure is underdeveloped. The diffusion of digital financial services is slowly advancing but remains low, hindered by a relatively low level of financial literacy and a digital divide. Expanding access to finance would enable Mexican households to invest in education and health, and better manage income shocks and smooth consumption. It would also enable Mexican firms to invest more, increase productivity and create formal jobs. Low-income households, small firms and more disadvantaged regions would particularly benefit, as it would unlock new economic opportunities for them. Boosting competition in the banking sector would facilitate SMEs access to credit by lowering interest rate margins. Upgrading the regulatory framework of the financial system would help increase competition and quality of financial services. The potential of the fintech sector is yet to be materialised, which would further increase competition and bring financial services to wider segments of the population. Strengthening financial education and digital literacy would facilitate a larger and better use of traditional and digital financial services.
    Keywords: competition, credit, digital, financial education, financial inclusion, FinTech, SMEs
    JEL: D18 G2 G41 G51 G52 G53 O32
    Date: 2022–06–03
  22. By: Pedro Molina Ogeda; Emanuel Ornelas; Rodrigo R. Soares
    Abstract: We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left's identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence-proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments-declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature.
    Keywords: trade shocks, elections, unions, Brazil
    Date: 2021–11–17

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