nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2016‒08‒14
eight papers chosen by
Karl Petrick
Western New England University

  1. "The Impact of Immigration on the Native-born Unemployed" By Fernando Rios-Avila; Gustavo Canavire-Bacarreza
  2. Does “Ban the Box” Help or Hurt Low-Skilled Workers? Statistical Discrimination and Employment Outcomes When Criminal Histories are Hidden By Jennifer L. Doleac; Benjamin Hansen
  3. Cognitive Droughts By Lichand, Guilherme; Mani, Anandi
  4. Did the Paris Agreement Plant the Seeds of a Climate Consistent International Financial Regime? By Dasgupta, Dipak; Espagne, Etienne; Hourcade, Jean-Charles; Minzer, Irving; Nafo, Seyni; Perissin-Fabert, Baptiste; Robins, Nick; Sirkis, Alfredo
  5. Start-up Nation? Slave Wealth and Entrepreneurship in Civil War Maryland By Felipe González; Guillermo Marshall; Suresh Naidu
  6. Export Crops and Civil Conflict By Benjamin Crost; Joseph Felter
  7. Eliminating Extreme Poverty in Africa: Trends, Policies and the Role of International Organizations By Zorobabel Bicaba; Zuzana Brixiova; Mthuli Ncube
  8. Mobile Phone Innovation and Inclusive Human Development: Evidence from Sub-Saharan Africa By Simplice Asongu; Agyenim Boateng; Raphael Akamavi

  1. By: Fernando Rios-Avila; Gustavo Canavire-Bacarreza
    Abstract: In this policy note, Research Scholar Fernando Rios-Avila and Gustavo Canavire-Bacarreza, Universidad EAFIT, observe that immigration in the United States has a small but statistically significant impact on the labor market behavior of native-born unemployed workers. Their chances of transitioning from unemployment to employment are not affected by the share of immigrants in their job markets, but the native-born unemployed are more likely to leave the labor force when living in areas with a higher relative concentration of immigrants. Three additional results of the study shed light on what might be contributing to this higher rate of labor market exit, with each pointing to the potential role of expectations in creating a discouraged worker effect among the native-born unemployed in high-immigration states.
    Date: 2016–08
  2. By: Jennifer L. Doleac; Benjamin Hansen
    Abstract: Jurisdictions across the United States have adopted "ban the box" (BTB) policies preventing employers from conducting criminal background checks until late in the job application process. Their goal is to improve employment outcomes for those with criminal records, with a secondary goal of reducing racial disparities in employment. However, removing information about job applicants' criminal histories could lead employers who don't want to hire ex-offenders to try to guess who the ex-offenders are, and avoid interviewing them. In particular, employers might avoid interviewing young, low-skilled, black and Hispanic men when criminal records are not observable. This would worsen employment outcomes for these already-disadvantaged groups. In this paper, we use variation in the details and timing of state and local BTB policies to test BTB's effects on employment for various demographic groups. We find that BTB policies decrease the probability of being employed by 3.4 percentage points (5.1%) for young, low-skilled black men, and by 2.3 percentage points (2.9%) for young, low-skilled Hispanic men. These findings support the hypothesis that when an applicant's criminal history is unavailable, employers statistically discriminate against demographic groups that are likely to have a criminal record.
    JEL: J15 J7 J78 K42
    Date: 2016–07
  3. By: Lichand, Guilherme (Harvard University); Mani, Anandi (University of Warwick)
    Abstract: This paper tests whether uncertainty about future rainfall affects farmers’ decision-making through cognitive load. Behavioral theories predict that rainfall risk could impose a psychological tax on farmers, leading to material consequences at all times and across all states of nature, even within decisions unrelated to consumption smoothing, and even when negative rainfall shocks do not materialize down the line. Using a novel technology to run lab experiments in the field, we combine survey experiments with recent rainfall shocks to test the effects of rainfall risk on farmers’ cognition, and find that it decreases farmers’ attention, memory and impulse control, and increases their susceptibility to a variety of behavioral biases. Effects are quantitatively important, equivalent to losing 25% of one’s harvest at the end of the rainy season. Evidence that farmer’s cognitive performance is relatively less impaired in tasks involving scarce resources suggests that the effects operate through the mental bandwidth mechanism.
    Keywords: JEL Classification:
    Date: 2016
  4. By: Dasgupta, Dipak; Espagne, Etienne; Hourcade, Jean-Charles; Minzer, Irving; Nafo, Seyni; Perissin-Fabert, Baptiste; Robins, Nick; Sirkis, Alfredo
    Abstract: Finance has been critical to the development of interest and momentum concerning the Paris Agreement, which emerged from COP21. However, a quick scan of the accord could lead many to derive a disappointing picture because of the absence of practical commitments to financial devices that can limit the risks of climate change. We support the opposite view that the text marks a new departure by committing countries to “making financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development ». This was matched by parallel developments such as the Financial Stability Board’s launch of a new Task Force on climate disclosure. We argue that, further steps now need to be taken within the broader context of financing the new model of prosperity laid out in the UN Sustainable Development Goals (UN, September 2015). At a time of increasing financial uncertainty and inadequate investment in the real economy, putting in place a framework for financing the transition to a low-carbon, resilient model of development is now an economic imperative – and an immense opportunity. Mitigating the systemic risks of climate change while putting the global financial system on a path toward balanced and sustainable development, is in the long-term strategic interests of both industrialized and developing countries and we suggest what practical steps can be accomplished in a near future in this direction.
    Keywords: COP 21, Paris Agreement, Climate Finance, Environmental Economics and Policy, Q5, Q58, F53,
    Date: 2016–07–31
  5. By: Felipe González; Guillermo Marshall; Suresh Naidu
    Abstract: Slave property rights yielded a source of collateral as well as a coerced labor force. Using data from Dun and Bradstreet linked to the 1860 census and slave schedules in Maryland, we find that slaveowners were more likely to start businesses prior to the uncompensated 1864 emancipation, even conditional on total wealth and human capital, and this advantage disappears after emancipation. We assess a number of potential explanations, and find suggestive evidence that this is due to the superiority of slave wealth as a source of collateral for credit rather than any advantage in production. The collateral dimension of slave property magnifies its importance to historical American economic development.
    JEL: N31
    Date: 2016–08
  6. By: Benjamin Crost (University of Illinois at Urbana-Champaign); Joseph Felter (Stanford University)
    Abstract: Many governments and international experts consider a move towards high-value export crops, such as fruits and vegetables, as an important opportunity for economic growth and poverty reduction. Little is known, however, about the effects of export crops in fragile and conflict affected countries. We exploit movements in world market prices combined with geographic variation in crop intensity to provide evidence that increases in the value of a major export crop exacerbate conflict violence in the Philippines. We further show that this effect is concentrated in areas with low baseline insurgent control. In areas with high insurgent control, a rise in crop value leads to a decrease in violence but a further expansion of rebel-controlled territory. These results are consistent with the hypothesis that insurgents gain strength from extorting agricultural exporters and that insurgent strength has a non-monotonic effect on conflict violence because strong insurgent groups can establish local monopolies of violence.
    Keywords: Export Crops, Civil Conflict, Insurgent Control, Bananas
    JEL: O13 H56 D74
    Date: 2016–08
  7. By: Zorobabel Bicaba (African Development Bank); Zuzana Brixiova (IZA and University of Cape Town); Mthuli Ncube (University of Oxford)
    Abstract: Eradicating extreme poverty for all people everywhere by 2030 is the first goal among the UN Sustainable Development Goals that guide the current development agenda. This paper examines its feasibility for Sub-Saharan Africa (SSA), the world's poorest but growing region. It finds that under plausible assumptions extreme poverty will not be eradicated in SSA by 2030, but it can be reduced to low levels. National and regional policies that focus on accelerating growth, while making it more inclusive would accelerate poverty reduction. International organizations, including informal ones such as the G20, can play a key role in this endeavor by encouraging policy coordination and coherence.
    Keywords: Poverty, sustainable development, inclusive growth, policies, governance
    JEL: E21 E25 I32 O11 O20
    Date: 2016
  8. By: Simplice Asongu (Yaoundé/Cameroun); Agyenim Boateng (Glasgow, UK); Raphael Akamavi (Hull, UK)
    Abstract: A recent World Bank report reveals that poverty has been decreasing in all regions of the world with the exception of sub-Saharan Africa (SSA) as more than 45% of countries in the sub-region are off-track from achieving the Millennium Development Goal (MDG) extreme poverty target. This paper investigates the effects of mobile phone technology, knowledge creation and diffusion on inclusive human development in 49 SSA countries for the period 2000-2012 using Tobit model. The study finds that mobile phone penetration in SSA is pivotal to sustainable and inclusive human development irrespective of the country’s level of income, legal origins, religious orientation and the state of the nation. However, the pupil-teacher ratio exerts a negative influence on inclusive human development. The net effects of interactions between the mobile phone and knowledge diffusion variables are positive.
    Keywords: Mobile phones; inclusive human development; Africa
    JEL: G20 I10 I32 O40 O55
    Date: 2016–03

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