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on Development |
| By: | Paolo Pinotti (Bocconi University); Diogo G. C. Britto (Bocconi University); Alexandre Fonseca (Federal Revenue of Brazil); Breno Sampaio (Universidade Federal de Pernambuco); Lucas Warwar (Universidade Federal de Pernambuco) |
| Abstract: | We provide the first estimates of intergenerational income mobility for a developing country, namely Brazil. We measure formal income from tax and employment registries, and we train machine learning models on census and survey data to predict informal income. The data reveal a much higher degree of persistence than previous estimates available for developed economies: a 10 percentile increase in parental income rank is associated with a 5.5 percentile increase in child income rank, and persistence is even higher in the top 5%. Children born to parents in the first income quintile face a 46% chance of remaining at the bottom when adults. We validate these estimates using two novel mobility measures that rank children and parents without the need to impute informal income. We document substantial heterogeneity in mobility across individual characteristics - notably gender and race - and across Brazilian regions. Leveraging children who migrate at different ages, we estimate that causal place effects explain 57% of the large spatial variation in mobility. Finally, assortative mating plays a strong role in household income persistence, and parental income is also strongly associated with several key long-term outcomes such as education, teenage pregnancy, occupation, mortality, and victimization. |
| Keywords: | Intergenerational Mobility, Inequality, Brazil, Migration, Place Effects |
| JEL: | J62 D31 I31 R23 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2223&r=dev |
| By: | Chiara Castrovillari; Tomohide Mineyama; Patcharaporn Leepipatpiboon |
| Abstract: | This paper contributes to the research on the macroeconomic origins of conflict. Based on a sample of 133 low- and middle-income countries over a 30-year period, it analyses to what extent changes in a country’s commodity terms-of-trade (ToT) can explain an increase in the incidence and intensity of conflicts through their effect on aggregate income. While the evidence from previous studies on the link between macroeconomic conditions and conflict is rather inconclusive, we find a significant relationship. Our baseline model finds that a negative commodity ToT shock leads to an increase in the number of conflict events and fatalities. Moreover, the effect plays out over several years albeit with decreasing strength after the second year; and its magnitude is twice as large for Low-Income Countries and Fragile and Conflict-affected States when compared with the sample average. In addition, our results show that macroeconomic shocks are creating more violence in countries with higher inequality and in cases where fiscal policy faces relatively stronger constraints on financing a response to the initial shock to incomes. Our results are robust to a number of plausible variations in model specification. The paper’s results, in conjunction with previous studies that emphasize the economic cost of conflicts, suggest the presence of a fragility trap—a vicious cycle of worsening economic conditions and deteriorating conflicts. Effective policies and well-tailored external financial support could be expected to help countries address this challenge. |
| Keywords: | Conflict; terms-of-trade shock; commodity prices; low-income countries; fragile and conflict-affected states; spillover |
| Date: | 2023–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/068&r=dev |
| By: | Richard Freund (University of Cape Town, School of Economics) |
| Abstract: | In 2021, Ethiopia experienced a prolonged drought after two consecutive failed rainy seasons. This paper investigates the effect of the drought on young adults’ experiences of anxiety and depression by applying a difference-in-differences strategy to this event, in a natural experiment. I construct a Standardised Precipitation Index using 40 years of satellite rainfall data to exogenously measure local drought intensity and combine with unique longitudinal data. I find that exposure to the drought increases the probability of young adults experiencing symptoms consistent with either mild or severe anxiety (depression) by nearly 12 (10) percentage points. This represents a 63% and 55% increase relative to the pre-drought sample averages, respectively. These results are robust across alternative model specifications and a variety of sensitivity checks. The impact on depression is driven by those who were severely exposed to the drought, while both mild and severe exposure affect anxiety. The drought has a greater impact on individuals in rural households, those working in agriculture, and on individuals born into the poorest households. According to the mediation model estimated, the increase in mental health issues may partly be explained by the drought’s impact on inflation, perceived household poverty, and physical illness. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:294&r=dev |
| By: | Giulia Bettin (Marche Polytechnic University and MoFiR); Amadou Jallow (University of the Gambia); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR) |
| Abstract: | The literature on the impact of natural disasters on remittances has provided mixed evidence so far, with identification remaining a key challenge. This paper studies the insurance role of remittances by investigating their dynamic response in the aftermath of a disaster. We use a novel and rich panel dataset of monthly remittance flows from Italy to 81 developing countries for the period 2005 to 2015. We find that monthly remittance flows on average increase by 2% due to natural disasters in migrants' home countries. The response gets significant a few months after the event and tends to disappear within a year from the disaster occurrence. The intensity and timing of remittances' responsiveness are heterogeneous according to the nature of the disaster, the receiving country's characteristics, and migrants' socio-economic conditions in the host country. |
| Keywords: | migrants' remittances, international migration, natural disasters |
| JEL: | F24 F22 Q54 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:179&r=dev |
| By: | David McKenzie (Development Economics Research Group, World Bank); Dean Yang (Department of Economics, University of Michigan) |
| Abstract: | Many research and policy questions surrounding migration are causal questions. We want to know what causes people to migrate, and what the consequences of migration are for the migrants, their families, and their communities. However, answering these questions requires dealing with the self-selection inherent in migration choices. Field and natural experiments offer methodological approaches that enable answering these causal questions. We discuss the key conceptual and logistical issues that face applied researchers when applying these methods to the study of migration, as well as providing guidance for practitioners and policymakers in assessing the credibility of causal claims. For randomized experiments, this includes providing a framework for thinking through what can be randomized; discussing key measurement and design issues that arise from issues such as migration being a rare event, and in measuring welfare changes when people change locations; as well as discussing ethical issues that can arise. We then outline what makes for a good natural experiment in the context of migration and discuss the implications of recent econometric work for the use of difference-in-differences, instrumental variables (and especially shift-share instruments), and regression discontinuity methods in migration research. A key lesson from this recent work is that it is not meaningful to talk about “the†impact of migration, but rather impacts are likely to be heterogeneous, affecting both the validity and interpretation of causal estimates. |
| Keywords: | Experimental Methods, Difference-in-Differences, Instrumental Variables, Regression Discontinuity, Natural Experiment, Migration |
| JEL: | F22 J61 O15 C93 C23 C26 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2226&r=dev |
| By: | Mastrangelo, João Paulo; Gori Maia, Alexandre |
| Abstract: | We evaluate the extent to which farms with secure land rights are less prone to deforest and more likely to comply with the Forest Code in the Brazilian Amazon. We use a unique dataset with farm-level information for the whole population of farms in the state of Acre, Brazil. We work with a proxy for land tenure security defined as the absence of overlapping property rights, which means that for each rural plot, there is only one land title attesting to whom the legal ownership belongs. We evaluate the impacts of secure land right on the farm's share of the deforested area and the likelihood that farmers comply with the Brazilian Forest Code, which defines a limit of 20% of the deforested area in each farm. The non-randomness between the treatment (land security) and control (land insecurity) groups is controlled using the inverse probability weighting regression adjustment. Our results highlight that land tenure security reduces the deforested area and increases compliance with the Forest Code. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc23:334335&r=dev |
| By: | Takwanisa Machemedze (DataFirst, University of Cape Town); Mercy Shoko (School of Public Health, University of the Witwatersrand; Demographic & Population Statistics, and Health & Vital Statistics, Statistics South Africa); Mark Collinson (Population and Public Health, School of Public Health, University of the Witwatersrand; MRC/Wits University Rural Public Health and Health Transitions Research Unit (Agincourt); South African Population Research Infrastructure Network (SAPRIN), Department of Science and Technology and South African Medical Research Council); Martin Wittenberg (School of Economics, and DataFirst, University of Cape Town) |
| Abstract: | Progress on achieving the Sustainable Development Goals requires high quality measurement. Too few attempts are made to assess the accuracy of existing measurements and how it changes over time. We compare household counts and electrification rates for the Agincourt Health and Demographic Surveillance Site (HDSS), as measured in the 1996, 2001 and 2011 national censuses and in the database of the HDSS. The household measurements in the two systems agree within a few percentage points in 2001 and 2011 but show much bigger divergences in 1996. The population counts also show impressive agreement, with perhaps some over-enumeration of older males in the national census. Overall, survey and census information seem to provide accurate measures of population access to electricity. |
| Keywords: | Electricity access, rural households, HDSS data |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:290&r=dev |
| By: | Ludovic Mbakop (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey); Glenn Jenkins (Queen's University); Leonard Leung (Asian Development Bank, Manilla, The Philippines); Kamil Sertoglu (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey) |
| Abstract: | This study measures the impact of traceability attributes on international buyers’ willingness to pay for coffee produced in Ethiopia and the impact of accurate information on the production location of the coffee on the pricing according to its type and grade. Two sets of regressions models were used to investigate the important determinant factors affecting the export prices of trader and producer coffee, one each for trader and producer coffee, to measure the impact of the ECX on the prices and to evaluate the effect of the coffee types and grades on the prices. The results show that after coffee was forced to be traded via the ECX, traceable coffee export prices increased more than the reported price of non-traceable coffee. We also found that after the introduction of the ECX, the reported export prices of coffee were much more closely aligned to the movements in the international prices of coffee than before the ECX. Furthermore, we also find evidence that exporters and overseas buyers do not trust the results of the inspection and grading of coffee by the ECX unless traceability is also present. This is the first study to evaluate foreign buyers’ willingness to pay for the attribute of traceability of Ethiopian coffee and to see how traceability has affected buyers’ trust in the grades given by the ECX for the coffee it graded. |
| Keywords: | Ethiopian commodity exchange, Ethiopian coffee, Coffee traceability, Commoditization |
| JEL: | D40 E23 Q17 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1504&r=dev |
| By: | Miranda, Javier; Börner, Jan |
| Abstract: | Sustainable use of land resources is at the core of the bioeconomy, and it is of central importance for development in the coming decades. The United Nations Sustainable Development Goals reflect this aspect of development both directly and indirectly. Important global trends, such as a growing and richer world population, are consistently increasing demand for biomass products, leading to tradeoffs among related goals such as “Zero Hunger” and “Life on Land.” Regarding land supply for biomass production, there is a need for agricultural land and pressure in forest areas. Empirical evidence at regional and global levels points to land suitability, local and international markets, and governance as major drivers of land supply for the bioeconomy. However, global models lack an economically consistent description of the divergence between legal requirements for land use (de jure) and current land use trends (de facto) in tropical regions, where these tradeoffs are expected to be higher. Our analysis empirically estimates the average marginal effect of the socioeconomic, climatic, and governance drivers of land supply in the tropics. We used subnational panel data to construct a fractional response model to estimate these effects. Then, we used the econometric results to calculate heterogeneous individual land supply elasticities to commodity prices at the subnational level. Our results support the idea that in forest-abundant areas, soaring prices reinforce agricultural land expansion. Further, our results support previous evidence that the type of governance (conventional or environmental) determines the likelihood of a reduction or expansion of agricultural land in the tropics but with a very small magnitude compared to other drivers. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use |
| Date: | 2023–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:334202&r=dev |