nep-dev New Economics Papers
on Development
Issue of 2023‒10‒09
ten papers chosen by
Jacob A. Jordaan, Universiteit Utrecht

  1. How Much Would Reducing Lead Exposure Improve Children’s Learning in the Developing World? By Lee Crawfurd; Rory Todd; Susannah Hares; Justin Sandefur; Rachel Silverman Bonnifield
  2. Ethnic conflict: the role of ethnic representation By Bhalotra, Sonia; Clots-Figueras, Irma; Iyer, Lakshmi
  3. Lighting the path forward? The impact of rural road construction on structural transformation in India: new evidence from the PMGSY Scheme and two complementary natural experiments By Thomas Kurian
  4. Partisan Alignment, Insurgency and Public Safety: Evidence from the Indian Red-corridor By Ashani Amarasinghe; Pushkar Maitra; Yuchen Zhongs
  5. Identifying Gender Disparities on the Time to Repay Microfinance Group Loans: Evidence from Mexico By Bátiz-Zuk Enrique; González-Holden Alexa
  6. Rainfall Variability and Labor Allocation in Uzbekistan: The Role of Women's Empowerment By Otrachshenko, Vladimir; Popova, Olga; Alimukhamedova, Nargiza
  7. Menarche, Marriage Age, Education, and Employment in Africa, the Middle East, and Central Asia By Seth R. Gitter; Onyedikachukwu Onyemeziem; William Corcoran
  8. Returns to Education in the Marriage Market: Bride Price and School Reform in Egypt By : Jingyuan Deng; Nelly Elmallakh; Luca Flabbi; Roberta Gatti
  9. Does human capital influence the gender gap in earnings? Evidence from four developing countries By Marcello Perez-Alvarez; Catherine Porter; Anvita Ramachandran
  10. What If It Never Happened? Subjective Treatment Effects of a Negative Shock on Youth Labour Market Outcomes in Developing Countries By Favara, Marta; Freund, Richard; Perez-Alvarez, Marcello

  1. By: Lee Crawfurd (Center for Global Development); Rory Todd (Center for Global Development); Susannah Hares (Center for Global Development); Justin Sandefur (Center for Global Development); Rachel Silverman Bonnifield (Center for Global Development)
    Abstract: Around half of children in low-income countries have elevated blood lead levels. What role does lead play in explaining low educational outcomes in these settings? We conduct a new systematic review and meta-analysis of observational studies on the relationship between lead exposure and learning outcomes. Adjusting for observable confounds and publication bias yields a benchmark estimate of a 0.12 standard deviation reduction in learning per natural log unit of blood lead. As all estimates are non-experimental, we present evidence on the likely magnitude of unobserved confounding, and summarize results from a smaller set of natural experiments. Our benchmark estimate accounts for over a fifth of the gap in learning outcomes between rich and poor countries, and implies moderate learning gains from targeted interventions for highly exposed groups (≈ 0.1 standard deviations) and modest learning gains (< 0.05 standard deviations) from broader public health campaigns.
    Date: 2023–07–30
  2. By: Bhalotra, Sonia (University of Warwick, CAGE); Clots-Figueras, Irma (University of Kent); Iyer, Lakshmi (University of Notre Dame)
    Abstract: We investigate the impact of the political representation of minority groups on the incidence of ethnic conflict in India. We code data on Hindu-Muslim violence and Muslim political representation in India and leverage quasi-random variation in legislator religion generated by the results of close elections. We find that the presence of Muslim legislators results in a large and significant decline in Hindu-Muslim conflict. The average result is driven by richer states and those with greater police strength. Our results suggest that the political empowerment of minority communities can contribute to curbing civil conflict.
    Keywords: conflict, violence, religion, political representation, police, close elections JEL Classification: D72, D74, J15
    Date: 2023
  3. By: Thomas Kurian
    Abstract: 1 billion people worldwide live over 2 km from a paved road. Consequently, I investi-gate medium-run impacts of rural road construction on structural transformation in India- identifying how responsive such benefits are based on a) external market condi¬tions and b) in-village electrification. I leverage a regression discontinuity design and triple difference strategy, exploiting discontinuities in population-based eligibility and staggered rollout of the Indian PMGSY rural road program- which aimed to provided all-weather road (AWR) connectivity to 115, 000 villages nationwide. I combine the program with a unique natural experiment induced by the US fracking boom, which created a parallel agricultural commodity boom in the price of guar, a crop provid¬ing a necessary fracking input. I compare heterogeneous impacts of AWRs in villages with high and low-intensity exposure to the fracking boom, and separately investigate heterogeneity of roads by village electrification access, exploiting variable implemen-tation intensity of the nationwide RGGVY electrification program. My results im¬ply structural transformation benefits of AWRs are relatively unresponsive to village electrification, whereas external economic conditions can drastically influence these impacts. RD analysis showcases labor reallocation gains from AWRs were entirely concentrated in non-Boom villages- where roads caused a 12.1-7 percentage-point reduction in share of workers employed in agriculture, and 9.2-8 percentage-point in-creased share employed in non-agricultural manual labour. Conversely, AWRs caused significantly reduced (net zero) structural transformation benefits in boom villages. My findings are robust to multiple specification tests, varying electrification levels, and suggest substantial within-village heterogeneity, with largest discrepancies in new labor market entrants. A plausible mechanism is reduced out-migration impacts of AWRs in boom-villages. These results confirm theoretical predictions that local eco¬nomic conditions can drastically influence the impact of infrastructure investments suggesting the need for effective spatial and temporal targeting.
    Date: 2023
  4. By: Ashani Amarasinghe; Pushkar Maitra; Yuchen Zhongs
    Abstract: Better economic outcomes can prevail when governments at different levels of hierarchy are politically aligned. This often happens because upper level governments are more willing to transfer resources to, and invest in public goods in, aligned constituencies, where the elected candidate belongs to the party in power. In this paper we examine whether such political alignment causally affects public safety. We consider the case of the Naxalite insurgency in India, an issue of significant public safety and security. We focus on close elections using a regression discontinuity (RD) design, which allows us to examine the causal impact of electing a (state ruling party) aligned candidate at the constituency level. Our RD estimates show that the election of an aligned candidate leads to a significant reduction in the incidence of violence. We find that the benefits of alignment are amplified where politically aligned constituencies are spatially clustered. Examining the role of local natural resource activity, i.e., mining, as an underlying mechanism, we find that this negative effect is driven by constituencies close to mining areas. These findings confirm the relevance of political alignment in delivering public safety within constituencies, and the potential role played by local mining activity.
    Keywords: Political alignment; Naxalite insurgency; public safety; India
    Date: 2023–09
  5. By: Bátiz-Zuk Enrique; González-Holden Alexa
    Abstract: This paper investigates how gender disparities affect the time to repay group micro-finance loans using survival analysis and hazard decomposition techniques. We also control for the effect of the COVID-19 pandemic on the time needed by micro-finance loan borrowers to repay. We use a large sample of bank microfinance group loans from August 2017 to August 2021. Despite the fact that female borrowers' overall default rate is smaller, our unconditional estimates show that female borrowers default almost the equivalent of three consecutive installments earlier. Moreover, this result persists when we control for micro, industry, and macroeconomic factors. We also observe that the COVID-19 pandemic materialized as a spike in aggregate default rates that gradually reduced afterward. Our study identified a potential gender gap that has been understudied in the literature.
    Keywords: Credit markets;Microfinanceloan;Group lending;Gender;Survival analysis
    JEL: C41 G21 J16 O12 O16
    Date: 2023–09
  6. By: Otrachshenko, Vladimir (Justus Liebig University, Giessen); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS)); Alimukhamedova, Nargiza (CERGE-EI)
    Abstract: Employing novel household survey data, this paper examines how rainfall variability and mean temperature affect individual labor supply in Uzbekistan, a highly traditional lower-middle-income country in Central Asia. The findings suggest that rainfall variability induces the reallocation of labor supply: (i) out of agriculture to unemployment, (ii) from unemployment to business activities and irregular remunerated activities, and (iii) from being out of labor force to unemployment. These effects differ in rural and urban areas and by gender. In addition, active women's involvement in the labor market and household decision-making mediates the impact of climate variability on employment choices, especially in rural areas. This implies that traditional gender roles may make households in developing countries more vulnerable to adverse consequences of climate change, while women's empowerment may smooth such consequences.
    Keywords: rainfall variability, labor market, agriculture, employment, women's empowerment, Uzbekistan, Central Asia
    JEL: J16 J21 J43 P28 Q54
    Date: 2023–09
  7. By: Seth R. Gitter (Department of Economics, Towson University); Onyedikachukwu Onyemeziem (Department of Economics, Towson University); William Corcoran (Department of Economics, Towson University)
    Abstract: Child marriage is still relatively common in low-income countries, with 40% of Sub-Saharan African and 25% of Middle Eastern girls marrying before the age of 18. Case studies in individual countries have shown that delaying marriage for girls is associated with more years of schooling and a higher probability of employment. Many of these studies have used menarche, the age of a girl’s first menstrual period, as an instrument for marriage age to avoid omitted variable bias. This paper tests and demonstrates the external validity of these case studies across 12 countries using data from demographic health surveys. We show that age at menarche is a potential instrument for marriage age in the pooled sample and stronger in countries with higher rates of child marriage. The results support previous findings that delayed marriage is associated with a higher number of years of school completed and probability of employment, with a few exceptions where average marriage age is higher. This work adds to the evidence base for policy to increase marriage age for the long-term well-being of women in low-income countries.
    Keywords: Child Marriage, Women's Menarche, Menarche.
    JEL: O12 I25
    Date: 2023–09
  8. By: : Jingyuan Deng (World Bank’s Office of the Chief Economist for the Middle East and North Africa); Nelly Elmallakh (World Bank’s Office of the Chief Economist for the Middle East and North Africa); Luca Flabbi (University of North Carolina); Roberta Gatti (World Bank’s Office of the Chief Economist for the Middle East and North Africa)
    Abstract: This paper posits marriage market returns as a contributing factor to stagnant female labor force participation despite increasing female education. The paper examines the marriage market returns of female education by exploiting a very direct measure of returns: bride price, a significant amount of resources transferred by the groom at the time of marriage. The paper also looks at current and future husband’s wages as additional sources of returns. It addresses endogeneity and identification issues by exploiting a school reform in Egypt that reduced the number of years required to complete primary education from six to five. The staggered rollout of the reform generates exogenous sources of variation in female schooling both across and within birth years and administrative units. The analysis implements an instrumental variable estimator with fixed effects at the birth year and at the administrative unit levels. The estimated return to a bride’s compulsory education is about 100% for bride price, about 14% for husband’s wage at the time of marriage, and about 16% for a measure of husband’s permanent income. Further empirical evidence suggests that educational assortative mating could be an important mechanism through which the marriage market returns are taking place.
    Date: 2023–08–20
  9. By: Marcello Perez-Alvarez; Catherine Porter; Anvita Ramachandran
    Abstract: This paper investigates the relationship between human capital and the gender gap in earnings in four developing countries. We use high-quality panel data spanning 12 years from Ethiopia, India, Peru, and Vietnam, to construct latent stocks of cognitive and non-cognitive skills measured during adolescence. We investigate the relationship between these skills and subsequent earnings acquired in early adulthood, thereby avoiding common challenges of measurement error and simultaneity issues. Our results suggest that women earn significantly less than men in all four countries, even after accounting for differences in carefully constructed skill endowments. Interestingly, the gender gap in earnings decreases at higher cognitive skill levels in two out of the four countries. We find that these country-level variations are driven by differences in employment status as opposed to differences in earnings among the employed, and may reflect differences in unpaid care work. We further explore how the gender earnings gap varies in the context of the COVID-19 crisis. While earnings decreased for both men and women during this period, the pre-pandemic relationships between human capital and gender gaps persisted and were strengthened. By comparing the same youth cohort in different countries and periods, we elucidate the contexts under which human capital can become a force of gender convergence in the labour markets of developing countries.
    Date: 2023
  10. By: Favara, Marta (University of Oxford); Freund, Richard (University of Oxford); Perez-Alvarez, Marcello (University of Göttingen)
    Abstract: This paper examines the subjective treatment effects of a negative shock created by the COVID-19 pandemic on the labour market outcomes of young adults in India, Peru, and Vietnam. We leverage subjective counterfactual outcomes at the individual-level that were purposely collected from over 7, 000 individuals to this aim. Our findings suggest that the shock denied employment opportunities and reduced earnings. On average, the pandemic reduced monthly earnings by 19.4% and employment levels by 17.5% in our three-country-sample. Country-specific magnitudes are lowest for India and highest for Vietnam. However, these average effects belie that a substantial proportion of individuals, particularly those from disadvantaged backgrounds, are pushed into employment by the pandemic. This frequently comes at the expense of their education, hinting at youth labour acting as a buffer against transitory shocks. According to our findings, the perceived effects of the pandemic on labour market outcomes carry important implications for young people's well-being and behaviour. Individuals who are denied employment display significantly higher rates of anxiety, lower rates of COVID-19 vaccination, and lower desired fertility.
    Keywords: subjective treatment effects, labour market, COVID-19, youth, developing countries
    JEL: J21 J11 C21 C83 D84
    Date: 2023–08

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