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on Development |
| By: | Alvaredo, Facundo; Bourguignon, François; Ferreira, Francisco H. G.; Lustig, Nora |
| Abstract: | Drawing on a comprehensive compilation of quantile shares and inequality measures for 34 countries, including over 5, 600 estimated Gini coefficients, we review the measurement of income inequality in Latin America and the Caribbean over the last seven decades. Although the evidence from the first quarter century – roughly until the 1970s – is too fragmentary and difficult to compare, clearer patterns emerge for the last fifty years. The central feature of these patterns is a broad inverted U curve, with inequality rising in most countries prior to the 1990s, and falling during the early 21st Century, at least until the mid-2010s, when trends appear to diverge across countries. This broad pattern is modified by country specificities, with considerable variation in timing and magnitude. Whereas this broad picture emerges for income inequality dynamics, there is much more uncertainty about the exact levels of inequality in the region. The uncertainty arises from the disparity in estimates for the same country/year combinations, depending on whether they come from household surveys exclusively; from some combination of surveys and administrative tax data; and on whether they attempt to scale income aggregates to achieve consistency with National Accounts estimates. Since no single method is fully convincing at present, we are left with (often wide) ranges, or bands, of inequality as our best summaries of inequality levels. Reassuringly, however, the dynamic patterns are generally robust across the bands. |
| Keywords: | income inequality; measurement; Latin America and the Caribbean |
| JEL: | D31 D63 O54 |
| Date: | 2023–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120557&r=dev |
| By: | Manh Hung Do; Trung Thanh Nguyen |
| Abstract: | Water is critical for agriculture in developing countries and climate change has created extreme weather events that push farmers into poverty. In this study, we first examine the role of year-round irrigation at village level in ensuring irrigation at household level and helping farmers to cope with weather shocks. We then investigate the effects of irrigation on crop farming efficiency, income, and poverty of rural households. We use a panel dataset of 1, 681 households in Thailand and 1, 699 households in Vietnam collected in 2010, 2013, and 2016 with a total number of 10, 140 observations. Our results show that the availability of year-round irrigation at village level positively and significantly increases the share of irrigated land areas at household level. Besides, weather shocks significantly decrease crop farming efficiency and an improvement in irrigation has a positive effect on farming efficiency. Further, an increase in irrigated land share at household level increases crop income and total household income, and decreases poverty. Our results suggest that making irrigation water available throughout the year is needed for farmers to cope with extreme weather events and to escape from poverty. This should be done by developing infrastructure for ensuring year-round irrigation. |
| Keywords: | Thailand, Vietnam, Irrigation, Multidimensional poverty, Instrumental variable |
| JEL: | Q57 Q12 R20 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:tvs:wpaper:wp-034&r=dev |
| By: | Javier Olivera |
| Abstract: | This paper studies active ageing and its distribution among older adults in a sample of 18 Latin American countries. For this purpose, a multidimensional index of active ageing is estimated for each individual, as well as its distribution in each country. This strategy makes it possible to measure inequalities in the ageing process, and also to consider different value judgements in the overall assessment of quality of life during ageing. Thus, the study sheds light on discrepancies in the quality of ageing within and between countries. Furthermore, individual factors associated with the degree of inequality in active ageing are analysed by means of regressions using Gini re-centred influence functions. A higher proportion of people with secondary education and better access to water and sewerage services is found to be associated with reduced inequality in active ageing. Country-level variables — such as health expenditure, pension coverage, access to health care and the poverty rate among older people — are key in explaining between-country differences in active ageing. |
| Keywords: | Active ageing; Old age; Inequality; Well-being; Latin America |
| JEL: | H55 I18 I31 J14 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2023-07&r=dev |
| By: | Menezes-Filho, Naercio; Narita, Renata |
| Abstract: | This paper describes the patterns of worker turnover in selected Latin American countries and their implications for wage inequality. It documents a higher positive annual wage growth rate for jobto-job changers compared to stayers, due to turnover capturing the immediate gains from search behavior in the short run. Younger workers benefit relatively more from the positive effects of jobto-job changes, as expected. We also show that transitions are relatively higher within the informal sector for most countries, and particularly so for workers without college education. Moreover, total job separations and transitions from formal into informal employment occur more often among low-skill and young individuals. Next, the paper analyzes wage growth by percentiles for all workers and job-to-job movers for each country over a more extended period. We find that jobto-job changes are inequality-reducing in the short run, consistent with search gains associated with turnover exhausting more rapidly for high-paid workers. In contrast, we find that human capital effects dominate the search effects in the long run, as human capital accumulates over time. Thus, long-run wage growth is lower for job changers than for stayers, so that, while in the short run the search effects tend to dominate those of human capital, in the long run the opposite occurs. As unskilled workers change jobs more frequently, this suggests that job changes are inequalityincreasing in the long run. A potential explanation for limited wage growth in Latin American economies may include high informality rates. Policies to reduce wage inequality should focus on improving the conditions for positive turnover towards better investment and, thus, higher-quality jobs. |
| JEL: | N0 R14 J01 |
| Date: | 2023–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120556&r=dev |
| By: | Brunori, Paolo; Ferreira, Francisco H. G.; Neidhöfer, Guido |
| Abstract: | How strong is the transmission of socio-economic status across generations in Latin America? To answer this question, we first review the empirical literature on intergenerational mobility and inequality of opportunity for the region, summarizing results for both income and educational outcomes. We find that, whereas the income mobility literature is hampered by a paucity of representative datasets containing linked information on parents and children, the inequality of opportunity approach – which relies on other inherited and pre-determined circumstance variables – has suffered from arbitrariness in the choice of population partitions. Two new data-driven approaches – one aligned with the ex-ante and the other with the ex-post conception of inequality of opportunity – are introduced to address this shortcoming. They yield a set of new inequality of opportunity estimates for twenty-seven surveys covering nine Latin American countries over various years between 2000 and 2015. In most cases, more than half of the current generation’s inequality is inherited from the past – with a range between 44% and 63%. We argue that on balance, given the parsimony of the population partitions, these are still likely to be underestimates. |
| JEL: | D31 I39 J62 O15 |
| Date: | 2023–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120555&r=dev |
| By: | Nshakira-Rukundo, Emmanuel; Tabe-Ojong, Martin Paul Jr.; Gebrekidan, Bisrat Haile; Agaba, Monica; Surendran-Padmaja, Subash; Dhebibi, Boubaker |
| Abstract: | Climate change and conflicts co-exist in many countries with significant welfare and socio-environmental implications. Different approaches are being promoted to adapt and build resilience to these fragilities including the adoption of sustainable farm practices that have the potential to increase agricultural productivity and maintain environmental sustainability. We undertake a systematic review and perform a meta-analysis to understand and synthesize the adoption and impacts of agricultural technologies and natural resource management practices with a special attention to fragile and conflict affected settings. We employ state of the art machine learning methods to enable process and selection of appropriate papers from a universe of over 78, 000 papers from leading academic databases. We find that studies on adoption and impact of agricultural technologies and natural resource management practices are highly clustered around Ethiopia and Nigeria. We do not find any studies on Small Island States. We observe a wide array of characteristics that influence adoption of these technologies. Of the over 1400 estimates of determinants collected, majority predict input technologies while very few studies and estimates are found in relation to risk management and mechanisation technologies. Our meta-analysis shows an average effect size of 7 - 9% for the different technologies and practices. For the outcomes: land productivity, food security and household welfare, we obtain effect sizes of 6, 8 and 9% respectively. We do not observe much in terms of publication bias. Both climate and conflict vulnerability not only cause far more food insecurity, poverty, and degradation of the environment on their own but also reinforce each other through the climate change – conflict linkage. For these detrimental effects to be curtailed, utilisation of climate-smart agricultural technologies and natural resource management practices need to be encouraged. We thus lend credence to the development, dissemination and upscaling of these sustainable practices. We observe a lot of space for growth and adoption of these technologies. |
| Keywords: | technology adoption; natural resources management; fragility; conflicts; climate change; impact resilience; agricultural technology; mechanization; food security; poverty |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:2199&r=dev |
| By: | Jafarov, Jafar (Georgia State University); Singh, Tejendra P. (Georgia State University); Sahoo, Soham (Indian Institute of Management Bangalore) |
| Abstract: | We investigate how air pollution impacts outdoor activity avoidance, leveraging changes in local wind direction in an instrumental variable setup for causal identification. Our findings reveal a substantial reduction in time spent outdoors during polluted days, mainly driven by decreased engagement in employment-related activities. This effect varies significantly across age, education level, usual principal activity status, consumption expenditure, and residential location. Moreover, reduced outdoor time due to air pollution can potentially promote a more equitable allocation of unpaid caregiving responsibilities within households via increased male involvement. Our results rule out information provision as the primary mechanism and remain robust under various sensitivity tests. |
| Keywords: | air pollution, time-use, labor supply, intrahousehold bargaining, avoidance behavior, India |
| JEL: | D13 J22 O13 Q53 Q56 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16552&r=dev |
| By: | Alfano, Marco (Lancaster University); Goerlach, Joseph-Simon (Bocconi University) |
| Abstract: | This paper estimates the effect of exposure to terrorist violence on education. Since terrorists may choose targets endogenously, we construct a set of novel instruments. To that end, we leverage exogenous variation from a local terrorist group's revenues and its affiliation with al-Qaeda. Across several Kenyan datasets we find that attacks suppress school enrolment more than predicted by difference-in-differences-type estimators. This indicates that terrorists target areas experiencing unobserved, positive shocks. Evidence suggests fears and concerns as mechanisms of impact, rather than educational supply. |
| Keywords: | conflict, education, instrumental variables |
| JEL: | D74 I25 O15 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16544&r=dev |
| By: | Eldridge Moses (Department of Economics and ReSEP, Stellenbosch University) |
| Abstract: | This paper uses 2021 and 2022 school-level administration data to examine the relationship between primary and high school locations to determine whether high-quality secondary schools still mostly draw learners selectively from nearby 'feeder' primary schools, and as a result affect racial diversity in enrolments. We find that race is still a powerful predictor of access to high-quality secondary schools in South Africa. Gauteng's poorest-performing schools are home to mostly Black and Coloured learners, while its best-performing schools have an over-representation of White and Asian/Indian learners (relative to their overall population proportions in Gauteng). The findings in this paper suggest that the uneven distributions of high-quality schools, feeder zone rules and affordability constraints prevent many South African learners from enrolling in high-quality schools. |
| Keywords: | School choice, education quality, South Africa, inequality |
| JEL: | I24 I25 I28 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers379&r=dev |
| By: | Sean Kiely; Dorothee Buehler; Ute Rink; Kristin Kiesel |
| Abstract: | Could households be both more vulnerable and more resilient to shocks depending on the type of shock experienced and the overall circumstances in which they live? If so, what policy implications can be drawn from such findings? We investigate both the immediate effects of shocks on household’s income and assets, and the longer-term poverty dynamics of households with a disabled member (DH) and without a disabled member (NDH) in Vietnam. Additionally, we assess differences in behaviors and beliefs between these two household groups and the extent to which these differences can explain variations in the impact of shocks on their economic livelihoods. Our results indicate that DHs are more risk averse and believe they will face more health shocks than NDHs, but also experience a greater number of health shocks and total shocks. Examining the immediate impact of shocks, we find that DHs are more resilient in the face of health-related shocks, however, they face large income losses when confronted with weather and agricultural shocks. While these immediate effects may lead one to conclude that policies for DHs should address these natural shocks, our poverty dynamics analysis paints a different picture. Households with a disabled member that face one or more health shocks are significantly more likely to have experienced chronic or transitory poverty than households where a disability is not present. Yet, these households are no more likely to end up in poverty when faced with shocks outside of the health domain. This suggests that the greater number of cumulative shocks, primarily driven by more frequently experienced health shocks, makes them more vulnerable to natural shocks than NDHs and weakens their overall resiliency. Thus, the cumulative number of health shocks may be the strongest determinant of poverty in the long run for DHs, and policies aimed at reducing poverty need to account for the unique experiences of these households. |
| Keywords: | Poverty dynamics, Disability, Cumulative shocks, Risk preferences, Panel data, Vietnam |
| JEL: | D13 I32 I12 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:tvs:wpaper:wp-035&r=dev |
| By: | Manh Hung Do |
| Abstract: | Understanding households’ resilience-building strategies is vital for the domains of humanitarian assistance, economic development, and poverty reduction, especially in the places where are vulnerable to shocks. In this study, we assess the correlation between households’ risk attitude and their resilience-building strategies, namely savings as an absorptive capacity and income diversification as an adaptive capacity. We examine the effects of these resilience strategies on reducing the impacts of shocks and poverty. We use a panel data of 1227 identical households for Vietnam in two waves of the Thailand Vietnam Socio Economic Panel (TVSEP) project to investigate the above issues. Our results from instrumental variable (IV) estimations show that more risk-adverse households tend to save more and diversify their income portfolios. These precautionary strategies to build up their resilience capacity help prevent them from reducing consumption to cope with shocks and from falling into poverty in absolute, relative, and multidimensional measures. We suggest that rural development policies in developing countries should focus on facilitating more income generation and employment opportunities. Furthermore, the development of rural education and infrastructure for information and communication technology (ICT) should be taken into account of designing poverty reduction programs. |
| Keywords: | Panel data, Absorptive capacity, Adaptive capacity, Instrumental variables |
| JEL: | C33 Q00 Q12 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:tvs:wpaper:wp-033&r=dev |
| By: | Muhammad Aulia Anis (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada); Wisnu Setiadi Nugroho (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada); Eny Sulistyaningrum (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada) |
| Abstract: | Air pollution is a significant issue in emerging economies like Indonesia, with detrimental effects on human health. This study aimed to analyse the impact of air pollution on child development, using various datasets and employing an instrumental variable approach. The findings revealed that an increase of 1 𠜇𠑔/𠑚3 in regional PM 2.5 concentration had a significant negative effect on child growth, reducing height-for-age and weight-for-age scores by 0.08 standard deviations. No significant impact was observed on the stunting variable. The study also found that girls were particularly susceptible to impaired child development due to air pollution. These results emphasize the need for policies targeting air pollution reduction to support healthy child development, especially in low-income households. |
| Keywords: | Air Pollution, Child Development, PM 2.5, Instrumental Variable |
| JEL: | I15 Q51 Q53 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:gme:wpaper:202308009&r=dev |
| By: | Tenzing, Janna; Conway, Declan |
| Abstract: | Ethiopia’s flagship ‘Productive Safety Net Programme’ (PSNP) entered its fifth phase of implementation in 2021. After more than fifteen years, the Government reoriented the programme’s targeting of woredas (districts) with a history of food insecurity, to prioritising those experiencing ‘extreme poverty through shocks’ – particularly drought. In doing so, it has rebranded the PSNP as an ‘adaptive’ safety net. The focus of the ‘adaptive social protection’ policy agenda, however, extends beyond responding to biophysical risks associated with climate variability and change; it also seeks to address non-climatic, contextual factors underpinning relational vulnerability to climate change. This study asks whether the PSNP’s system of geographic targeting at the start of its fifth phase aligns with this more comprehensive framing of ‘adaptive social protection’. Using binary logit regression analysis, it assesses whether the PSNP-covered woredas are those most exposed to three major risks in the country: drought, flooding, and political conflict. We find that, controlling for poverty headcount rate and population density, PSNP coverage is positively associated with districts experiencing higher year-to-year drought conditions, yet woredas with higher multi-year drought variability are less likely to be covered. We find no relationship between PSNP coverage and exposure to flood risk, which is unevenly distributed across the country. Whilst the programme is currently well-targeted toward districts facing disproportionately high levels of political insecurity, this association disappears if the recent escalation of conflict beginning in 2020 is disregarded. As such, this study points to risks that PSNP administrators need to be more attentive to as they consider expanding the programme’s geographical footprint to become more ‘adaptive’. Doing so could better support the strengthening of PSNP participants’ long-term resilience to climate change. |
| JEL: | Q50 |
| Date: | 2023–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120563&r=dev |
| By: | Tillian, Pablo (World Bank); Kokas, Deeksha (Nanyang Technological University, Singapore); Góes, Carlos (University of San Diego); Lopez-Acevedo, Gladys (World Bank) |
| Abstract: | This paper examines the overall impact of exports while accounting for supply chain linkages on local labor market outcomes in Egypt between 2007 and 2018. We assess the effects not only on directly exporting industries but also on industries indirectly affected by rising export demand. Furthermore, we examine potential impacts on specific worker groups, such as high-skilled individuals and female workers. The results show that trade does not lead to the same connection with domestic labor markets in Egypt as observed in other countries, as highlighted in the existing literature explaining the adverse effects of imports on developing countries. Despite being more open to trade, trade-intensive industries in Egypt have not experienced a significant increase in their share of employment within the overall workforce. |
| Keywords: | trade policy, trade flows, labor market outcomes, firm dynamics |
| JEL: | F13 F14 F15 F16 J23 J31 O15 O19 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16547&r=dev |
| By: | Bahi, Dhilanveer Teja Singh; Paavola, Jouni |
| Abstract: | Despite the acceleration of electrification in India, many communities still suffer from the direct and indirect effects of energy poverty. We investigate whether access to liquified petroleum gas (LPG) and consumption expenditure can be used as measures of energy poverty in India, with a particular focus on gender equality. A district-level, quantitative analysis of household survey data was performed for the energy-poor states of Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh, and West Bengal. Wellbeing and gender equality indices were constructed from contextually relevant indicators, whilst LPG access was considered in terms of physical access, affordability, and awareness. Levels of consumption expenditure were considered based on the updated urban poverty line for India. We found that LPG access and consumption expenditure do not have significant relationship with wellbeing or gender equality. The result indicates that the traditional economic approach of using consumption expenditure cannot capture the multidimensionality of energy poverty. This has significant implications as it challenges the status quo of energy poverty measurement in India. The research also adds value to existing arguments that electricity access cannot be used as a sole indicator of energy poverty, by extending the argument to access to a modern cooking fuel. LPG access was however strongly associated with the education of women on the health effects of ‘chulha’ smoke. Consumption expenditure is also strongly associated with female property ownership which calls for future research on this novel relationship. Overall, this study calls for shifting energy poverty discussions to emerging concepts such as wellbeing and gender equality. |
| Keywords: | energy poverty; modern cooking fuels; wellbeing; gender equality; India |
| JEL: | Q40 |
| Date: | 2023–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120564&r=dev |