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on Development |
| By: | Rémi Bazillier (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS-IRD); María Moraga-Fernández (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS-IRD, Ruhr University Bochum - Institute of Development Research and Development Policy) |
| Abstract: | Despite the widespread use of minimum wage policies to combat poverty in Africa, research on their effects remains limited. This paper addresses this gap by examining the economic impact of minimum wage shocks on firms across the African continent using firm-level data from the World Bank Enterprise Surveys. We document that all but four African countries have a minimum wage system. Between 2002 and 2019, we identify 13 shocks-defined as a 30% real increase-in 11 countries. Employing a difference-in-differences approach, we estimate the causal effects of these shocks on labor costs, employment, sales, and productivity. To address potential endogeneity, we instrument minimum wage changes using social protest intensity. We find that minimum wage shocks significantly increase labor costs per worker, suggesting at least a partial enforcement of regulations. However, we detect no robust impact on employment. Instead, firms partly offset higher labor costs through increased sales or productivity. We identify three complementary mechanisms: (1) a cleansing effect, where less productive firms exit; (2) capital investment as an adjustment channel; and (3) a local demand boost, with stronger sales effects in large markets |
| Keywords: | Minimum Wages; Africa; employment; firms; labor regulations |
| JEL: | J38 E24 O15 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:25006 |
| By: | Nathaniel Jensen; Jose Lopez-Rivas; Karlijn Morsink; Emma Rikken |
| Abstract: | We examine the impact of climate shocks and drought insurance on inter-communal pastoral conflict in Kenya and Ethiopia. Using NASA’s eMODIS satellite data on pasture availability and a 40-season longitudinal household dataset, our findings highlight the dual role of pasture scarcity and pasture abundance in driving conflict, contingent on seasonal timing. Negative shocks leading to pasture scarcity increase conflict in dry seasons, while positive shocks that lead to pasture abundance fuel conflict in subsequent rainy seasons. Leveraging exogenous variation in drought insurance, we find that while insurance reduces conflict on average, this masks important heterogeneity. Ex post indemnity payments mitigate conflict during droughts, but ex ante insurance coverage exacerbates conflict when pasture is abundant in rainy seasons. These findings highlight the dual relationship between resource availability and conflict, and the importance of considering the impact of policy interventions in this light. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:csa:wpaper:2025-02 |
| By: | Rute Martins Caeiro; Rachel Sabates-Wheeler; Patricia Justino |
| Abstract: | This paper examines the role of social protection in mitigating the adverse effects of conflict on household welfare. We assess the impact of a graduation intervention linked to Ethiopia's Productive Safety Net Programme, focusing on Amhara, a region severely affected by the Tigray conflict. Using data from a large randomized controlled trial and panel surveys conducted before and after the conflict, we evaluate the effectiveness of social protection in conflict settings. Our estimation strategy leverages variation in conflict exposure combined with exogenous programme participation. |
| Keywords: | Conflict, Social protection, social safety nets, Poverty, Ethiopia |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-9 |
| By: | Yitbarek, Eleni; Tesfaye, Wondimagegn |
| Abstract: | While many of the studies to date have focused on the production end of the value chain-i.e., ways to help farmers grow more food, there is limited evidence regarding the impacts of climate shocks on the other stages of agricultural value chains. Recognizing that food security is not just an issue of production, there is now an emerging literature that attempts to link climate change with agricultural value chains. This study fills a critical gap in the literature by assessing the impacts of weather shocks not only on production but also on the post-production stages (storage and sales) across the agricultural value chains of four key commodities in Ethiopia: teff, maize, coffee, and dairy. The study addresses two questions: (i) How do weather shocks impact different stages of agricultural value chains? and (ii) are the negative effects of weather shocks on agricultural value chains heterogeneous by gender? We document that negative rainfall shocks drastically reduce maize and teff yields by about 40% and 37%, respectively, and significantly impact teff storage. Coffee yield is less affected by rainfall shocks, though its storage decreases by 28%. Temperature increases reduce yields for maize, teff, and coffee, with coffee also experiencing declines in storage and sales. For teff, temperature increases reduce the quantity stored by about 6.7% and sales by 18.5%. Similarly, an increase in temperature lowers coffee sales by 24.6%. Dairy production shows minimal sensitivity to both rainfall shocks and temperature variations. These effects vary by gender of the household head. For maize, temperature increases negatively affect yields more for male-headed households. Teff and coffee show varying impacts based on gender, with male-headed households experiencing more pronounced negative effects. |
| Keywords: | climate shocks, value chains, agriculture, Ethiopia |
| JEL: | Q12 Q54 Q18 Q13 J16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:314435 |
| By: | Nicolas Cerkez |
| Abstract: | Climate change and the erosion of democratic norms are two of the most pressing global challenges. This paper establishes a link between individuals’ support for democracy and extreme weather events, such as droughts, in the context of sub-Saharan Africa - a region highly vulnerable to climate change and where democratic norms are fragile. I analyze this relationship using Afrobarometer data on support for democracy from 2002 to 2015, covering 129, 002 individuals across 16 countries, combined with granular weather data from 1960 to 2015 at a 27km × 27km grid cell resolution. I find that exposure to drought reduces support for democracy by 2.56%, but that this effect is limited to individuals living in established democracies. I further explore how this weakening of democratic norms is linked to exposure to non-democratic governance systems, proxied by proximity to development projects funded by autocratic regimes. I find that the effect of droughts on support for democracy is significant only for individuals exposed to autocratic systems. Finally, I provide suggestive evidence that this reduction in support for democracy is associated with lower political engagement, as measured by participation in demonstrations. These findings highlight the political costs of climate change in developing countries. |
| JEL: | Q54 Q56 P16 P48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:csa:wpaper:2025-03 |
| By: | Magbondé, Kadoukpè Gildas |
| Abstract: | Despite the expansion of global value chains (GVCs) over the last three decades, African countries trail the other developing regions in terms of GVC integration. Yet, the drivers of African countries' GVC participation are not well understood compared to developed countries. The current paper fills this knowledge gap by providing empirical evidence of the institutional drivers of GVC participation in Africa. It uses the instrumental variable approach based on a panel dataset of 37 African countries spanning the period 2002-2018 to examine the impacts institutions have on total, backward, forward GVCs as well as GVC position. Though no significant effect is recorded with respect to total GVC participation, the instrumental-variable estimates suggest that upgraded institutions encourage backward GVCs and reduce both forward GVCs and upstreamness. For a successful transition from upstream stages of GVCs, African countries must consider strengthening their political and economic institutions. |
| Keywords: | Institutions, global value chains, African countries and instrumental variable approach |
| JEL: | F13 F23 P48 E02 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:314433 |
| By: | Rafael Van der Borght; Oscar Anil Ishizawa Escudero; Thuret, Jean; Joaquin Ignacio Munoz Diaz |
| Abstract: | Droughts are increasingly cited as a driver of urbanization across Sub-Saharan Africa, yet little is known about the role they play in shaping the spatial expansion of cities. Combining satellite imagery on built- up areas with climatic data for 1984–2015, this study empirically examines whether and to what extent droughts influence the spatial expansion of African cities. It further investigates the heterogeneity of these effects across cities and countries. The findings indicate that extreme droughts significantly accelerate the built-up growth rate of cities, while more frequent but less severe droughts have negligible impacts. Importantly, these effects are strongly differentiated across cities. The 1 percent most extreme droughts boost the average speed at which new settlements emerge in the surroundings of a country's largest city by 75 percent, yet they do not alter the expansion of smaller cities and towns. These drought-induced effects intensify the sprawl of the largest cities and bear important policy implications. Extreme droughts put additional pressure on the largest and often overcrowded cities, potentially deepening congestion effects. They also contribute to exacerbating the speed at which cities expand in flood-prone areas, thereby magnifying urban flood risk. As the climate changes, the frequency of both extreme droughts and extreme rainfall events is projected to increase across the region, aggravating the likelihood of future drought-induced expansions of the largest cities and worsening urban flood risk prospects. These findings call for urgent and tailored risk reduction measures in both cities and rural areas. |
| Date: | 2025–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11099 |
| By: | Bhattacharjee, Sandipa |
| Abstract: | This paper exploits an education policy in India generated by a 2010 schooling reform to examine the effect of education on women's family planning decisions. The key element of the reform was that it required students to complete eight years of primary education (age 6-14 years). I employ an instrumental variable difference-in-difference approach that mea- sures the exogenous variation in treatment intensity in different states across birth cohorts of women measured by birth year and birth months. The reform led to an increase in total years of education, a delay in the age at first marriage, a postponement of sexual activity, and reduced fertility beginning at the age of 22. I also examine the potential mechanisms through which increased education affects fertility. The findings suggest early use of modern contraceptives, reduction in the marital education gap, increased literacy, and utilization of healthcare services contribute to reduced fertility. These results are consistent with the in- creased empowerment of women influencing their fertility decision thereby highlighting the importance of the government's efforts to promote education through policy initiatives. |
| Keywords: | education, fertility, India |
| JEL: | I25 J13 J18 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1588 |
| By: | Mumin, Yazeed Abdul; Ali, Williams |
| Abstract: | Recent technological advances and policy initiatives present Africa with enormous growth potential from participating in global value chains (GVCs). However, the widening income inequality is raising questions as to whether participation in GVCs plays any role in this observed phenomenon. Despite the increased attention on regional and global value chains, and on income inequality in Africa, little attention has been given to investigating the potential nexus between both. This study investigates the impacts of GVC participation on income inequality and the underlying mechanisms in Africa. We applied the instrumental variable (IV) approach to address potential endogeneity between GVC participation and income inequality. We find that participation in GVCs substantially reduces income inequality in Africa, which is largely through increased relative prices of exports, access to improved technologies and economic upgrading. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:314434 |
| By: | Ezzat, Asmaa; Zaki, Chahir |
| Abstract: | Efficient institutions matter in promoting Global Value Chains (GVCs) participation since they help reduce transaction costs for firms that engage in trade. Competition policy is considered an important dimension of these institutions. This paper investigates whether competition policy matters for participation of emerging countries in GVCs, with a special focus on African countries. To do so, we use the EORA dataset on backward and forward linkages and merge it with different indicators pertaining to the de jure (competition law) and the de facto (market dominance, antimonopoly, etc.) measures of competition policy. We find that both the de jure and the de facto dimensions of competition policy matter for backward and forward GVC participation. In addition, our findings indicate that this relationship is non-linear as the market can become saturated. Two important transmissions channels can explain this effect: market diversification and trade liberalization. These results remain robust after we control for the endogeneity between GVC and competition. In the case of African countries, we find that more diversified economies benefit from competitive markets, whereas other results remain unchanged, especially for the de jure measures. |
| Keywords: | competition policy, GVC, Africa |
| JEL: | D40 F12 F14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:314432 |
| By: | Fenske, James (University of Warwick); Gupta, Bishnupriya (University of Warwick); Mukhopadhyay, Anwesh (University of Warwick) |
| Abstract: | We review the present-day impacts of colonial rule on former colonies. Persistence exists because of multiple equilibria, path dependence, institutions, culture, knowledge, and technology. Empirical work in this literature primarily uses tools from applied econometrics, though best practices are needed to overcome the limitations of these tools. Colonial interventions relating to institutions, infrastructure, land, forced labour, the slave trade, and human capital all have measurable impacts in the present. And yet many colonial interventions have failed to persist or have led to reversals. These cases are informative about why colonial rule still matters, as are cases where precolonial influences have had persistent impacts despite, or even because of, colonial rule. |
| Keywords: | JEL Classification: |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:752 |
| By: | Sam Jones; Marcelo Mucocana |
| Abstract: | Measurement errors in macroeconomic aggregates such as GDP have been widely lamented, particularly in low-income contexts. This study investigates the reliability of one component of national accounts, agricultural sector output. Focusing first on the case of Mozambique, we use a series of 12 harmonized national agricultural micro-surveys to construct estimates of gross annual output in the sector. Compared to corresponding national accounts values for the period 2002-20, the micro-survey estimates are about 50% lower. |
| Keywords: | Measurement error, GDP, National accounts, Agriculture, Survey data, Mozambique, Survey |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-7 |