nep-dev New Economics Papers
on Development
Issue of 2022‒12‒12
nine papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. NAFTA and drug-related violence in Mexico By Hidalgo, Eduardo; Hornung, Erik; Selaya, Pablo
  2. This Is a Man’s World: Crime and Intra-Household Resource Allocation By María Hernández de Benito
  3. The Effect of Violent Conflict on the Socioeconomic Condition of Households in Nigeria: The Case of Kaduna State By Daniel Tuki
  4. Inequality, Income Dynamics, and Transitions of Mexican Workers By Puggioni Daniela; Calderón Mariana; Cebreros Alfonso; Fernández León; Inguanzo José A.; Jaume David
  5. Learning Inequalities during COVID-19: Evidence from Longitudinal Surveys from Sub-Saharan Africa By Dang, Hai-Anh; Oseni, Gbemisola; Zezza, Alberto; Abanokova, Kseniya
  6. Determinants of Subjective Poverty in Rural and Urban Areas of South Africa By Santos Bila; Mduduzi Biyase
  7. Cambodian Refugees By Kogure, Katsuo; Kubo, Masahiro
  8. Working Paper 366 - Remittances and employment in family-owned firms: Evidence from Nigeria and Uganda By Ainembabazi John Herbert; Francis H. Kemeze
  9. Human Capital Development: New Evidence on the Production of Socio-emotional Skills By Mark Mitchell; Marta Favara; Catherine Porter; Alan Sánchez

  1. By: Hidalgo, Eduardo (University of Cologne,); Hornung, Erik (University of Cologne,); Selaya, Pablo (University of Copenhagen)
    Abstract: We study how NAFTA changed the geography of violence in Mexico. We propose that this open border policy increased traffcking profits of Mexican cartels, resulting in violent competition among them. We test this hypothesis by comparing changes in drug-related homicides after NAFTA’s introduction in 1994 across municipalities with and without drug-traffcking routes. Routes are predicted least cost paths connecting municipalities with a recent history of detected drug traffcking with U.S. land ports of entry. On these routes, homicides increase by 2.3 per 100,000 inhabitants, which is equivalent to 27% of the pre-NAFTA mean. These results cannot be explained by changes in worker’s opportunity costs of using violence resulting from the trade shock. JEL Codes: K42 ; F14 ; D74 ; O54
    Keywords: Violence ; NAFTA ; Free Trade ; Mexico ; Illegal Drug Traffcking ; Conflict
    Date: 2022
  2. By: María Hernández de Benito (Universidad de Alicante)
    Abstract: Exposure to community violence is a pervasive development challenge. I study the effects of violent crime on intra-household resource allocation and bargaining power exploiting the onset of the Mexican drug war. I estimate a system of demand equations and find the escalation in violence reallocated expenditures toward male goods, at the expense of food and other necessities. These findings would typically be interpreted as a deterioration in women’s bargaining power. But changes in crime may have also affected consumption preferences. To provide further evidence, I study changes in intra household decision-making, structurally estimate women’s resource shares, and analyze single households’ expenditures.
    Keywords: crime, Mexico, intra-household resource allocation, Engel curves, women’s bargaining power, resource shares, decision-making
    JEL: D10 D13 J16 O10
    Date: 2022–11
  3. By: Daniel Tuki (Research fellow, Migration Integration and Transnationalization Department, WZB Berlin Social Science Center, Germany)
    Abstract: The incidence and intensity of violent conflict in Nigeria have been rising steadily since 2016. However, the states across the country are not equally affected. Moreover, the nature of the conflicts and the conditions under which they occur vary across Nigeria’s states. Relying on novel survey data that was collected from Kaduna, the second state most affected by violent conflict in Nigeria, this study examines the effect that exposure to violent conflict has on the socioeconomic condition of households. The instrumental variable regressions show that violent conflict worsens the socioeconomic condition of households. A unit increase in the number of violent conflicts within the 30km buffer around the dwellings of the households increases the likelihood of them being unable to meet their food needs by 0.3 percent. This finding is robust to alternative data, buffer sizes, and estimation techniques. Improvements in state capacity was found to reduce the likelihood of households being in a poor socioeconomic condition. This is because economic activity does not thrive in an environment characterized by insecurity.
    Keywords: Violent conflict, Conflict exposure, Socioeconomic condition, Poverty, Kaduna State, Nigeria
    JEL: D3 O12 R20
    Date: 2022–11
  4. By: Puggioni Daniela; Calderón Mariana; Cebreros Alfonso; Fernández León; Inguanzo José A.; Jaume David
    Abstract: We characterize the salient features of the distribution of earnings and earnings changes of formal workers in Mexico using social security records for the period 2005-2019. We find strong evidence of deviations from normality of these distributions. Comparing the results obtained with administrative data and household survey data suggests that this latter source of information is inadequate to fully capture the evolution of inequality and the properties of earnings changes. We also study the impact of transitions out of and back into formal employment on wages earned in the formal sector and the effect of early exposure to informality on future earnings. We document that workers who exit formal employment experience a significant wage penalty upon re-entry and that having the first job in the informal sector has a negative and significant impact on future earnings.
    Keywords: Earnings dynamics;higher-order earnings risk;inequality;worker transitions;informal labor markets
    JEL: E24 J24 J31 J46
    Date: 2022–11
  5. By: Dang, Hai-Anh (World Bank); Oseni, Gbemisola (World Bank); Zezza, Alberto (World Bank); Abanokova, Kseniya (World Bank)
    Abstract: There is hardly any study on learning inequalities during the COVID-19 pandemic in a low-income, multi-country context. Analyzing 34 longitudinal household and phone survey rounds from Burkina Faso, Ethiopia, Malawi, Mali, Nigeria, Tanzania, and Uganda, we find that while countries exhibit heterogeneity, the pandemic generally results in lower school enrolment rates. We find that policies targeting individual household members are most effective for improving learning activities, followed by those targeting households, communities, and regions. Households with higher education levels or living standards or those in urban residences are more likely to engage their children in learning activities and more diverse types of learning activities. Furthermore, we find some evidence for a strong and positive relationship between public transfers and household head employment with learning activities for almost all the countries.
    Keywords: COVID-19, education, learning activities, enrolment, sub-Saharan Africa, household surveys
    JEL: D0 H0 I2 O1
    Date: 2022–10
  6. By: Santos Bila (College of Business and Economics, University of Johannesburg); Mduduzi Biyase (College of Business and Economics, University of Johannesburg)
    Abstract: This paper extends the investigation from objective to subjective poverty, an issue that has received inadequate attention in South Africa. The empirical analysis based on the fixed effects two-stage least squares (FE-2SLS) and Living Condition Survey (LSC) reveal that household size, being male, being married or divorced, holding primary and tertiary education are strong predictors of subjective poverty across sub-samples. However, the determinants of rural subjective poverty are slightly different to the determinants of urban subjective poverty. For example, owning a piece of land appear to be important in explaining poverty in the rural sample, contrary to the urban sample. Moreover, we find that health and unemployment are strong predictors of urban sample, while they are not significant for the rural sample. The results have important implications for policy intervention. It suggests that land is still an important component of diverse livelihoods for rural people and can assist rural emerging farmers to be involved in large-scale farming.
    Keywords: Determinants; location; fixed effect instrumental variable; Subjective poverty
    JEL: D63 I32 I38
    Date: 2022
  7. By: Kogure, Katsuo; Kubo, Masahiro
    Abstract: This paper examines the consequences of forced displacement for Cambodian refugees during the Cambodian conflict (1978-1991). Using complete count 1998 Census microdata, we focus on the two major groups of returnees, namely those from the neighboring countries of Thailand and Vietnam, which were under the control of different great powers, respectively Western and Eastern, during the Cold War. The former stayed in refugee camps with humanitarian assistance prior to repatriation and the latter did not. Consistent with the availability of humanitarian assistance, our analyses reveal that the returnees from Thailand attained higher levels of education - while those from Vietnam, by contrast, attained lower levels of education - than stayers. On the other hand, the two groups both experienced worse labor market outcomes, with employment shifts from the primary sector to the immature tertiary sector. Such adverse displacement impacts are relatively stronger for later returnees. We provide suggestive evidence that adverse displacement impacts can be attributed to congested labor markets resulting from limited access to available agricultural land, exacerbated by the high contamination of landmines and UXOs during the conflict. Our results demonstrate that forced displacement due to conflict in a developing country can be a potential source of future misallocation.
    Keywords: conflict, forced displacement, refugees, repatriation, Cambodia
    JEL: O15 J24 D74 N35
    Date: 2022–11
  8. By: Ainembabazi John Herbert (African Development Bank); Francis H. Kemeze (African Development Bank)
    Abstract: The link between remittance transfers and job creation in recipient communities offers a kind of private-sector led economic growth. This link has been largely ignored in migration research. Using nationally representative panel household data collected from Nigeria and Uganda, we investigate the relationship between job creation in familyowned firms and remittances. We measure remittances as a share of household income in order to capture income and substitution effects. We find that employment of family members into family-owned firms is high in households receiving small amounts of remittances relative to their household income. As the share of remittance transfers in household income increases, the likelihood of hiring family members decreases as it increases for hired workers. The threshold point appears to occur when remittance transfers contribute more than a half of household income. The implication of our findings is that remittance transfers induce an income effect by increasing reservation wage of family members which reduces their likelihood of working in family business, which in turn opens up employment opportunities for non-family individuals. Our findings point to a sign of hidden potential of remittances to spur job creation in migrants’ communities if policies to increase the size of remittance transfers are put in place.
    Keywords: Remittances, Family-owned firmes, employment, economic growth JEL classification: D13, F24, O12, J22
    Date: 2022–07–08
  9. By: Mark Mitchell; Marta Favara; Catherine Porter; Alan Sánchez
    Abstract: We estimate a dynamic model of socio-emotional skill development between ages 8-22 for a Peruvian cohort born in 1994. At age 8 there is no wealth gradient, in contrast to cognitive skills. However, by age 12 inequalities emerge and widen through age 19, driven by differential household investments, and cross-productivity with cognitive skills. In early adulthood, we separate socio-emotional skills into two distinct domains – social skills and task effectiveness - that evolve differently, and are differently correlated with risky behaviours such as smoking or taking drugs. Unequal initial household resources perpetuate inequality across generations through cognitive and task effectiveness skills.
    Keywords: Human capital, child development, dynamic factor analysis, socio-emotional skills
    JEL: C38 J13 J24 O15 O54
    Date: 2022

This nep-dev issue is ©2022 by Jacob A. Jordaan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.