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on Development |
| By: | Fergusson, Leopoldo; Robinson, James A.; Torres, Santiago |
| Abstract: | We investigate how economic inequality can persist in Latin America in the context of radical falls in political inequality in the last decades. Using data from Colombia, we focus on a critical facet of democratization - the entry of new politicians. We show that initial levels of inequality play a significant role in determining the impact of political entry on local institutions, policy, and development outcomes, which can impact future inequality. A vicious circle emerges whereby policies that reduce inequality are less likely to be adopted and implemented in places with relatively high inequality. We present evidence that this is caused both by the capture of new politicians and barriers to institution and state capacity building, and also by the fact that politicians committed to redistribution are less likely to win in relatively unequal places. Our results, therefore, help to reconcile the persistence of economic inequality with the new political context. |
| Keywords: | political entry; public policy; development |
| JEL: | D72 D78 H40 H50 P00 |
| Date: | 2023–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122083&r=dev |
| By: | Saumik Paul; Dhushyanth Raju |
| Abstract: | This study examines the effects of mining productivity shocks on the formal-informal duality in manufacturing and services. Using firm census data from 2014 for Ghana, we measure the rates of informality along extensive (unregistered firms) and intensive (registered firms hiring labourers 'off the books') margins. We find that the changes in the rates of informality along both margins across sectors following mining shocks are heterogeneous. |
| Keywords: | Mining, Informality, Firm productivity, Ghana |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2024-6&r=dev |
| By: | Keraga, Mezid N. (Ethiopian Civil Service University); Lööf, Hans (Royal Institute of Technology); Stephan, Andreas (Linnaeus University) |
| Abstract: | This paper presents new insights into the relationship between innovation and employment in low-income countries. We use firm-level data sourced from the World Bank Enterprise Survey (ES) and focus on six sub-Saharan African (SSA) economies over the period 2003-2019. The econometric results from difference-in-differences (DiD) estimations, in conjunction with propensity score matching show a positive influence of product innovation on both permanent and total firm-level employment. The evidence for employment impact of process innovations is weak. Considering relations between firms, we find a positive intra-industry spillover effect from both product and process innovation on employment in firms operating within the same two-digit industry, while the results for inter-industry spillovers are non-significant or negative. |
| Keywords: | Innovation; Employment; Sub-Saharan; Spillover effects; DID; Matching approach |
| JEL: | J20 O30 |
| Date: | 2024–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0497&r=dev |
| By: | Mahar, Hamad |
| Abstract: | This paper studies the impact of granting formal legal protection to children on their health by studying the impact of the Child Rights Act in Nigeria. Using a Difference in Differences model that is robust to the staggered adoption of this reform across states, I show that granting formal protection to children leads to a reduction in stunting and has limited positive effects on vaccinations. I provide suggestive evidence that the mechanism behind these results is a change in the demand of care by parents. These findings suggest that secular laws which grant protection improve outcomes for children in a society where harmful traditions persist. |
| Date: | 2024–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:ty35q&r=dev |
| By: | Andrea Bernini; Olaf J. de Groot |
| Abstract: | Income inequality remains a significant concern in Mexico, despite a slight decrease in its measure in recent decades. This paper investigates the impact of changes in trade patterns resulting from the North American Free Trade Agreement (NAFTA) on income inequality in Mexico over the past 20 years. Through a decomposition into within- and between-sector inequality, this paper reveals that the contribution of the latter has increased in an environment characterized by decreasing overall income inequality. Trade accounts for approximately 14.5% of the total change in between sector income inequality, representing the most substantial contribution among the factors identified in this study. |
| Date: | 2024–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:1036&r=dev |
| By: | Richa Richa; Ilan Noy; Subir Sen |
| Abstract: | Extreme weather induced migration is a growing concern for low and middle income countries due to the increased variability in the weather and the increase in the number of extreme weather disasters associated with climate change. The objective of this paper is to examine the inter-linkages between weather, disasters, and migration, in India. To examine the bidirectional flow of migrants across Indian states, we estimate gravity models with Poisson Pseudo Maximum Likelihood (PPML), in line with previous studies’ methodology. We find that agriculture-dependent states and states with low level of human development are more likely to face out-migration driven by weather variations and disasters. Internal migration is seasonal, temporary and often short-distance in nature. We find statistical evidence that repeated exposure of vulnerable populations to extreme weather and disasters may ultimately lead to more permanent migration. This raises urgent questions concerning the efficacy of disaster risk management and climate change adaptation policies at the sub-national level. |
| Keywords: | climate, disasters, bilateral migration, NELM, gravity model |
| JEL: | O15 Q54 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10919&r=dev |
| By: | Taryn Dinkelman; Grace Kumchulesi; Martine Mariotti |
| Abstract: | Between 1967 and 1974, a bilateral treaty increased circular labor migration from Malawi to South Africa by 200%, bringing over 53 million USD in earnings into origin communities. A deadly migrant worker plane crash in 1974 ended these flows and led to migrant repatriation. We study how this shock affected local labor markets. In regions receiving more migrant capital after the crash, workers, particularly women, shifted from farming into non-farm work over thirty years. Investments in non-farm physical and human capital contribute to these sectoral changes. This natural experiment shows that temporary capital inflows can permanently reshape rural labor markets. |
| JEL: | J21 J24 O15 O55 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32144&r=dev |
| By: | Amorim, Guilherme (University of Illinois at Urbana-Champaign); Britto, Diogo (University of Milan Bicocca); Fonseca, Alexandre (Federal Revenue of Brazil); Sampaio, Breno (Universidade Federal de Pernambuco) |
| Abstract: | We study the effects of job loss and unemployment insurance (UI) on health among Brazilian workers. We construct a novel dataset linking individual-level administrative records on employment, hospital discharges, and mortality for a 17-year period, rarely available in the context of developing countries. Leveraging mass layoffs for identification, we find that job loss increases hospitalization (+33%) and mortality risks (+23%) for male workers, while women are not affected. These effects are pervasive over the distribution of age, tenure, income and education, and men's children are also negatively affected. Remarkably, about half of these impacts are driven by external causes associated with accidents and the violent Brazilian context. Using a regression discontinuity design, we show that access to UI partially mitigates the adverse effects of job loss on health. Our results indicate that the health costs of job loss are only partially explained by the income losses associated with job displacement. |
| Keywords: | job loss, unemployment insurance, hospitalization, deaths |
| JEL: | I12 J63 J65 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16790&r=dev |
| By: | Garcez, Lucas N. (University of Tennessee); Padilla-Romo, María (University of Tennessee); Peluffo, Cecilia (University of Florida); Pineda-Torres, Mayra (Georgia Institute of Technology) |
| Abstract: | We study the causal relationship between educational attainment and teenage birth rates by focusing on a large-scale, country-wide reform that made high school compulsory and removed previously existing school capacity constraints in Mexico. Relying on administrative data on schools and births, we implement a difference-in-differences strategy that exploits variation across time and municipality-level exposure to the reform to explore the effects of expanding educational opportunities on teenage fertility. We find that teenage birth rates decreased by 2.8 percent after the education reform in municipalities with high increases in high school availability relative to municipalities with low increases. This decline is not driven by a decline in the time teenagers had to engage in risky behaviors (incapacitation effect) but a potential change in expectations for the future. |
| Keywords: | education reform, teenage birth rate, human capital |
| JEL: | I12 I21 I28 J13 J16 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16791&r=dev |
| By: | Canavire Bacarreza, Gustavo J. (World Bank); Puerta-Cuartas, Alejandro (Universidad Carlos III de Madrid); Beverinotti, Javier (Inter-American Development Bank) |
| Abstract: | A decline in poverty generally masks regional disparities that are due to varying efficiency among states. Using a generalized true random-effects model, we distinguish between persistent and transient inefficiencies on subnational efficiency to reduce poverty and its determinants in Bolivia. Our findings reveal that states differ in terms of efficiency, with some excelling and others facing challenges. Persistent inefficiency emerges as pivotal, emphasizing the need for long-term policy recalibration. We find that when the macroeconomic conditions in Bolivia allow for a 10 percent reduction in the poverty rate, states can achieve at most an 8.2 percent reduction, and on average, they reduce it by 7.3 percent. Efficiency correlates positively with the tertiary sector's size; relationships with the primary and secondary sectors depend on their size, showing positive associations only if these sectors are fairly large. Additionally, states with lower unemployment and informality tend to be more efficient, highlighting the labor market's crucial role. |
| Keywords: | poverty, Bolivia, efficiency analysis |
| JEL: | C23 D63 I32 O41 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16794&r=dev |
| By: | Pranab Bardhan; Sandip Mitra; Dilip Mookherjee; Anusha Nath |
| Abstract: | Using rural household survey data from West Bengal, we find that voters respond positively to excludable government welfare benefits but not to local public good programs, while reporting having benefited from both. Consistent with these voting patterns, shocks to electoral competition induced by exogenous redistricting of villages resulted in upper-tier governments manipulating allocations across local governments only for excludable benefit programs. Using a hierarchical budgeting model, we argue these results provide credible evidence of the presence of clientelism rather than programmatic politics. |
| JEL: | H40 H75 H76 O10 P48 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32158&r=dev |
| By: | Dang, Hai-Anh (World Bank); Kilic, Talip (World Bank); Hlasny, Vladimir (UN ESCWA); Abanokova, Kseniya (World Bank); Carletto, Calogero (World Bank) |
| Abstract: | Survey data on household consumption are often unavailable or incomparable over time in many low- and middle-income countries. Based on a unique randomized survey experiment implemented in Tanzania, this study offers new and rigorous evidence demonstrating that survey-to-survey imputation can fill consumption data gaps and provide low-cost and reliable poverty estimates. Basic imputation models featuring utility expenditures, together with a modest set of predictors on demographics, employment, household assets and housing, yield accurate predictions. Imputation accuracy is robust to varying survey questionnaire length; the choice of base surveys for estimating the imputation model; different poverty lines; and alternative (quarterly or monthly) CPI deflators. The proposed approach to imputation also performs better than multiple imputation and a range of machine learning techniques. In the case of a target survey with modified (e.g., shortened or aggregated) food or non-food consumption modules, imputation models including food or non-food consumption as predictors do well only if the distributions of the predictors are standardized vis-à-vis the base survey. For best-performing models to reach acceptable levels of accuracy, the minimum-required sample size should be 1, 000 for both base and target surveys. The discussion expands on the implications of the findings for the design of future surveys. |
| Keywords: | consumption, poverty, survey-to-survey imputation, household surveys, Tanzania |
| JEL: | C15 I32 O15 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16792&r=dev |
| By: | Cedrick Kalemasi Mosengo (University of Kinshasa, the DRC); Christian Zamo Akono (University of Yaoundé 2, Cameroon) |
| Abstract: | The aim of this study is to assess the effect of informal employment on the occurrence of overeducation in developing countries, focusing on the specific case of the DRC. Using employment data, we determine the incidence of overeducation and we isolate the role of informal employment as a determinant of overeducation. To measure overeducation, we mainly use the normative (adequationist) approach. We find an incidence of overeducation in the order of 33.3% in the DRC labor market. The econometric results based on recursive bivariate Probit suggest a positive and significant effect of informal employment. The results found are robust even when using the statistical approach as an alternative measure of overeducation. These findings suggest a set of measures likely to reduce the incidence of overeducation on the labor market. These should focus on the formalization of informal sector employment and policies to improve labor market matches. |
| Keywords: | Skills mismatch, Overeducation, Undereducation, Informal employment |
| JEL: | E26 E24 I21 J24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:24/004&r=dev |
| By: | Scarpini, Celeste; Santoro, Fabrizio; Abounabhan, Mary; Diouf, Awa |
| Abstract: | In this paper we look into the increasing use of electronic payment technologies in low-income countries (LICs), with a particular focus on the use of mobile money in Ghana. Our study evaluates the effectiveness of tax exemptions for incentivising businesses and customers to adopt digital merchant payments, and shaping their perceptions of the tax system. Specifically, we investigate the impact of an exemption embedded in Ghana's electronic transfer levy (e-levy), implemented in May 2022. Through a mixed-methods approach, involving survey data from 1, 065 businesses and focus group discussions with Ghanaian citizens, we explore the barriers and drivers to merchants' (businesses’) registration with mobile money for digital merchant payments. We assess the impact of the exemption on payment methods and customer preferences, as well as merchants' perceptions of the tax system. Our findings highlight that larger digitally- and financially-inclusive businesses are more likely to adopt digital merchant payments. The exemption appears to have encouraged the use of mobile money for merchant payments, leading to a shift away from personal accounts. However, cash remains prevalent among both users and non-users of mobile money. Merchants using the exempted service express more satisfaction with various aspects of the e-levy policy, and show greater trust in the government and the fairness of the tax system. Our study offers valuable insights into the adoption of digital merchant payments in LICs, and the impact of tax exemptions on merchants' behaviour and perceptions. We provide policy recommendations aimed at promoting the uptake of digital payments among merchants, and enhancing the effectiveness of the tax administration. |
| Keywords: | Finance, |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:idq:ictduk:18237&r=dev |