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on Development |
| By: | Alvaredo, Facundo (Paris School of Economics); Bourguignon, Francois (Paris School of Economics); Ferreira, Francisco H. G. (London School of Economics); Lustig, Nora (Tulane University) |
| 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. We find that there is quite a bit of uncertainty regarding inequality levels for the same country/year combinations. Differences in inequality levels estimated from household surveys alone are present but they derive from differences in the construction of the welfare indicator, the unit of analysis, or the treatment of the data. With harmonized household surveys, the discrepancies are quite small. The range, however, expands significantly when –to correct for undercoverage and underreporting especially at the top of the distribution– inequality estimates come from some combination of surveys and administrative tax data. The range increases even further when survey-based income aggregates are scaled to achieve consistency not only with tax registries but with National Accounts. Since no single method to correct for underreporting at the top 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. Although the evidence roughly until the 1970s is too fragmentary and difficult to compare, clearer patterns emerge for the last fifty years. The main feature is a broad inverted U curve, with inequality rising in most countries prior to and often during the 1990s, and falling during the early 21st century, at least until around 2015, when trends appear to diverge across countries. This pattern is broadly robust but features considerable variation in timing and magnitude depending on the country. |
| Keywords: | income inequality, measurement, Latin America and the Caribbean |
| JEL: | D31 D63 O54 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17201 |
| By: | Brunori, Paolo (University of Florence); Ferreira, Francisco H. G. (London School of Economics); Neidhöfer, Guido (Turkish-German University) |
| 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 model selection. 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. |
| Keywords: | inequality of opportunity, intergenerational mobility, Latin America |
| JEL: | D31 I39 J62 O15 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17202 |
| By: | Leight, Jessica; Hirvonen, Kalle; Zafar, Sarim |
| Abstract: | Over the last 20 years, a burgeoning scholarly literature has analyzed the effects of cash transfer and cash plus interventions in a wide range of contexts and using a range of empirical designs. We conduct a systematic review and meta-analysis to estimate the pooled effect of any cash or cash plus intervention on livelihoods-related outcomes (consumption, income and labor supply), ultimately compiling 305 different treatment estimates from 155 treatment arms in 104 studies (and in 43 countries). Using random effects and multilevel models, our findings suggest that cash transfer programming is associated with an increase of between $1 and $2 in monthly household consumption and income per $100 in cumulative transfers, an effect that persists for a period of roughly three years (inclusive of the period of program implementation); this effect is meaningfully larger (as much as $4 larger) for cash transfer programs that also include a cash plus livelihoods intervention. There are no significant effects observed on labor force participation. We also present a range of estimates capturing the longer-term (cumulative) effects of cash transfers on consumption under alternate assumptions. |
| Date: | 2024–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:dnc2r |
| By: | Benček, David; Schneiderheinze, Claas |
| Abstract: | Comparing emigration rates of countries at different stages of economic development, an inverse u-shape emerges. Since the “migration hump” peaks at an average income of 6000 to 10 000 USD, economic progress in developing countries is often assumed to increase migration consistently. However, it is poorly understood to what extend country-level characteristics, individual incomes and other dimensions of development evoke this pattern, which limits its value for causal inference and concrete policy advice. In this paper we focus on the role of economic growth and investigate whether in developing countries emigration indeed increases with economic progress at shorter more policy-relevant time periods of up to 10 years. Using 35 years of data on migration flows to OECD destinations, we successfully reproduce the hump-shape in the cross-section. However, our more rigorous fixed effects panel estimations that exploit the variation over time robustly feature contrasting results: emigration rates fall as incomes increase. This finding holds independent of the level of income a country starts out at. In contrast to prevailing development emigration narratives, our results imply that rising individual incomes discourage emigration and hence conducive economic policies can reduce emigration. Our findings do not rule out that other slow-moving development dimensions such as educational advancement, demographic change, and structural economic transformation could still increase migration in the long term. |
| Keywords: | International migration, Economic development, Development assistance |
| JEL: | F22 F63 O15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:301403 |
| By: | Ande Shen; Jiwei Zhou |
| Abstract: | This paper explores the causal impact of education opportunities on rural areas by exploiting the higher education expansion (HEE) in China in 1999. By utilizing the detailed census data, the cohort-based difference-in-differences design indicates that the HEE increased college attendance and encouraged more people to attend senior high schools and that the effect is more significant in rural areas. Then we apply a similar approach to a novel panel data set of rural villages and households to examine the effect of education opportunities on rural areas. We find contrasting impacts on income and life quality between villages and households. Villages in provinces with higher HEE magnitudes underwent a drop in the average income and worse living facilities. On the contrary, households sending out migrants after the HEE experienced an increase in their per capita income. The phenomenon where villages experienced a ``brain drain'' and households with migrants gained after the HEE is explained by the fact that education could serve as a way to overcome the barrier of rural-urban migration. Our findings highlight the opposed impacts of education opportunities on rural development and household welfare in rural areas. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.12915 |
| By: | Chiwuzulum Odozi, John (Ajayi Crowther University); Uwaifo Oyelere, Ruth (Agnes Scott College) |
| Abstract: | The issue of land inequality has garnered renewed interest in development literature due to its potential impact on the welfare of smallholder farmers. Poverty reduction is a crucial sustainable development goal, and a clearer understanding of the factors contributing to poverty is essential for effective, targeted policy initiatives in Nigeria. Investigating the potential relationship between land access and household poverty-related outcomes is highly relevant for both land and social welfare policy and is the focus of our paper. Using data from the four waves of the Nigeria General Household Panel Survey (GHS), we examine how the amount of land an agricultural household operates and the value of that land affect the probability of living in poverty. We employ both a fixed effects and a correlated random effects approach to explore our research question. Our results suggest a significant relationship between land access, as measured by land size, and poverty incidence. We also find evidence suggesting nonlinearities in the relationship between land access and poverty. |
| Keywords: | land access, land value, Nigeria, poverty, land size, inequality |
| JEL: | Q15 Q12 D31 I32 I30 O1 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17230 |
| By: | Bhagowalia, Priya; Chandna, Arjita |
| Abstract: | This study examines the association between women’s income and household nutrition using the India Human Development Survey (2005, 2011). Assuming that the household head and his/her spouse are the primary members who influence household nutrition, we explore the association between the primary woman’s income as a share of the total income of the primary couple, with household nutrition and diet diversity. The results show that the primary woman’s income share has a positive and significant association with household calorie intake especially with calories obtained from carbohydrates, but a significant negative association with calories from fats and no association with calories obtained from protein. Additionally, the positive association of the primary woman’s income share with household calorie intake is weaker in the presence of other educated women that have specific hierarchical relationship with the primary woman. The study thus underscores the importance of women’s relative bargaining power in improving household nutrition. |
| Keywords: | Agricultural and Food Policy, Consumer/Household Economics, International Development |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344312 |
| By: | Marc F. Bellemare (University of Minnesota); Eeshani Kandpal (Center for Global Development); Katherina Thomas (Universitat de Barcelona) |
| Abstract: | How much do the poor spend on food when their income increases? We estimate a key economic parameter—the income elasticity of food expenditures—using data from the randomized evaluations of five conditional cash transfer programs in Mexico, Nicaragua, the Philippines, and Uganda. The transfers provided routine, exogenous increases of 12 to 23 percent of baseline income for at least a year to recipients at or below the global poverty line. Using pooled ordinary least squares and Bayesian hierarchical models, we first show that expenditures on all food categories increase with income. But even among some of the poorest people in the world, all of whom are experiencing high hunger levels, our estimated income elasticity for food is 0.03, i.e., much smaller than many published estimates that either rely on cross-sectional variation or study responses to large income shocks. Next, we run the first credible test of Bennett’s Law—the empirical regularity whereby poor households respond to income increases by (i) shifting spending from coarse to fine staples, or (ii) spending more on protein than staples—and find partial support for it. While income increases lead consumers to substitute fine grains for coarse grains and protein for staples, again the estimated shifts are smaller than previous estimates. Quantifying how small and routine income changes affect food demand in low- and middle-income countries can inform the policy discourse on poverty reduction, nutrition, and social protection, as well as the debate on the impact of economic growth on global carbon emission patterns. |
| Keywords: | Food Demand, Elasticities, Conditional Cash Transfers, Low- and Middle- Income Countries |
| JEL: | D12 D13 O12 Q11 Q18 R22 |
| Date: | 2024–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:wpaper:701 |
| By: | Srithilat, K. |
| Abstract: | This study examines the impact of the Don Sahong Hydropower Dam on food and nutrition security in the Mekong River Basin. This study uses the Household Food Insecurity Access Score (HFIAS) and Household Dietary Diversity Score (HDDS) to measure food insecurity and dietary diversity among households affected by the dam's construction. Preliminary results indicate higher levels of food insecurity and lower dietary diversity among these households. The study underscores the need for comprehensive impact assessments and sustainable planning practices in infrastructure development. It also calls for interventions to improve food security and dietary diversity among households affected by such projects. The findings from this study will contribute to a better understanding of the intricate interplay between infrastructure development, ecological preservation, and food security, providing valuable insights for policy-making and sustainable development practices. |
| Keywords: | Environmental Economics and Policy, Food Security and Poverty |
| Date: | 2024–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ags:asea24:344452 |
| By: | KOUAKOU, Dorgyles C.M. |
| Abstract: | Using firm-level data from the World Bank Enterprise Surveys, covering 159 countries from 2006 to 2023, we examine whether past informality affects the credit constraints of registered firms. Estimations, based on the entropy balancing method, indicate that registered firms that began operations informally are more likely to be credit-constrained than those that started in the formal sector. This finding is extremely robust to a variety of robustness tests, including instrumental variables, propensity score matching, potential omitted variables, restricted samples, alternative measures of credit constraints, and different specifications such as Linear Probability, Logit, and Probit models. Heterogeneity analysis reveals that the detrimental impact of past informality lessens with firm size, firm age, and better structural factors like regulatory quality, trade openness, entrepreneurial dynamism, and public spending. Productivity, competition from the informal sector, and the quality of financial statements are key channels through which past informality increases credit constraints for registered firms. |
| Keywords: | Past informality status; Credit constraints; Entropy balancing |
| JEL: | G20 O12 O16 O17 |
| Date: | 2024–08–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121766 |
| By: | Sylvain Dessy; Luca Tiberti; Marco Tiberti; David Zoundi |
| Abstract: | Rural communities in developing countries often experience growing-season droughts – a spatially covariant income shock disrupting mutual insurance mechanisms. These communities might leverage traditional practices such as polygyny to enhance economic resilience. This is particularly effective when co-wives come from geographically dispersed kinship networks, facilitating the inflow of financial support during droughts. Analyzing data from rural Mali, we exploit the quasi-random nature of droughts and variations in polygyny rates across communities. We control for time and community fixed effects and several observable correlates of drought potentially affecting polygyny. Results show that polygyny is linked with increased financial aid from distant kin during droughts, mitigating negative effects on crop yields. Additionally, polygyny prevalence remains unaffected by negative rainfall deviations, suggesting its role as a pre-established cultural strategy for managing income shocks. Hence, public policy aiming to phase out practices like polygyny for community survival must consider these cultural dimensions of resilience strategies. |
| Keywords: | Village economies; Drought; Polygyny; Resilience strategy; Mali |
| JEL: | C12 D12 J12 J13 O55 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2024_13.rdf |