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Policy Research Working Paper series publication roundup for the weeks of May 24 and 31

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This blog is a biweekly feature highlighting recent working papers from around the World Bank Group that were published in the World Bank’s Policy Research Working Paper Series. This entry introduces eight papers published during the weeks of May 24 and 31 on various topics, the mortality and poverty impacts of the COVID-19 pandemic, firm exit during the pandemic, female land titling in Lesotho, the return of Syrian refugees, among others. Here are the highlights of select findings.

First, we present two papers which analyze the mortality and poverty impacts of the COVID-19 pandemic across countries. A paper on Death and Destitution by Francisco Ferreira and coauthors quantifies mortality and poverty in 145 countries and discusses how aggregate welfare losses vary across countries.  One paper, The Intergenerational Mortality Tradeoff of COVID-19 Lockdown Policies by Lin Ma and coauthors, quantitatively evaluates a tradeoff between the expected number of COVID-19-related deaths averted by lockdowns and an increase in infant and child mortality due to consequent economic contraction. 

  • Death and Destitution: This paper estimates that almost 20 million life-years were lost to COVID-19 by December 2020. In the most conservative definition, more than 120 million additional years were spent in poverty because of the pandemic. The mortality burden increases sharply with per capita national income. By contrast, the poverty burden of the pandemic is much higher for poor countries. The distribution of aggregate welfare losses—combining mortality and poverty—depends on the choice of poverty lines and the relative weight placed on mortality and poverty. With a constant absolute poverty line and a relatively low welfare weight on mortality, poorer countries are found to bear a greater welfare loss from the pandemic (Figure 1). Authors suggest that the poverty consequences of the pandemic should be given as much importance in the global policy conversation as its mortality consequences.

Figure 1: Total welfare losses from the pandemic and GDP per capita, adopted by Ferreira et al. (2021)

Total welfare losses from the pandemic and GDP per capita, adopted by Ferreira et al

Note: This figure asumes extreme poverty (the $1.90 line) and higher weight on economic destitution relative to mortality.

  • The Intergenerational Mortality Tradeoff of COVID-19 Lockdown Policies: By calibrating the economic and mortality outcomes from a uniform 7 weeks of lockdown in 85 countries, authors found that the lockdown led to an average of 1.76 child deaths for every COVID-19 fatality averted in low-income countries. The ratio falls to 0.59 and 0.06 in the case of lower-middle and upper-middle income countries, respectively. As a result, lockdowns lower the total mortality by 6.2 percent in high-income countries, but raise total mortality by 2.6 percent in low-income countries since the economic contraction leads to a higher number of child deaths than the number of adult fatalities averted by the lockdown.

The next two papers discuss firm productivity and innovation. Productivity and Firm Exit during the COVID-19 Crisis by Silvia Muzi and coauthors examines whether the economic crisis induced by the COVID-19 pandemic exhibits a Schumpeterian “cleansing” of less productive firms. Financial Structure and Firm Innovation by Davide Mare, Francesca de Nicola, and Faruk Miguel explores the role of a firm’s funding sources for firm innovation.

  • Productivity and Firm Exit during the COVID-19 Crisis: Using firm-level data collected before and after the outbreak of the COVID-19 crisis for 31 countries, authors find that less productive firms have a higher probability of permanently closing during the crisis, suggesting that the process of cleansing unproductive arrangements may be at work. Authors also report a negative relationship between having a digital presence and firm exit during the pandemic, especially for small firms.
  • Financial Structure and Firm Innovation: Analyzing the firm-level data of 104 countries during 2009–18, authors demonstrate that a firm’s financial sources matter in the choice to innovate and the extent to which a firm innovates. Funding by non-bank financial institutions is strongly associated with the overall extent of innovation and adoption, especially in countries with more developed financial markets and institutions. It suggests that developing the financial sector can bring benefits in terms of innovation. 

Two papers focus on gender issues. One is about female land titling in Lesotho, while another is about a female empowerment program in India. Since 2010, Lesotho has implemented legal and institutional changes to allow female land ownership, established a new land agency, reduced the cost of registering land, and carried out systematic urban land titling. Using Registry Data to Assess Gender-Differentiated Land and Credit Market Effects of Urban Land Policy Reform by Daniel Ayalew Ali and Klaus Deininger assesses the impact of regulatory reforms in Lesotho by analyzing administrative data covering 10 years before and after the reform. Participatory Theater Empowers Women by Karla Hoff, Jyotsna Jalan, and Sattwik Santra tests whether community-based participatory theater—a novel, cultural intervention—can change social norms on domestic violence and reduce its occurrence in India. A community-based theater provides interactive plays and induces the audience to think critically about their prescribed gender roles.  

  • Using Registry Data to Assess Gender-Differentiated Land and Credit Market Effects of Urban Land Policy Reform: Authors report three key findings. Policy reform and systematic titling increase women’s access to documented land rights, i.e., the likelihood of a newly registered plot having a female owner increased by 55 percentage points. Second, the share of registered parcels sold or pledged as mortgage more than doubled due to the cost reductions of subsequent sporadic registration. Third, systematic registration had no impact on credit access.
  • Participatory Theater Empowers Women: Authors conducted a survey in 92 villages in West Bengal, India. The survey revealed that village exposure for at least 10 years to such interactive plays reduced physical abuse by a quarter, and increased wives’ roles in decision making in their households. Additionally, village exposure to the plays halved the proportion of men who believed that it was acceptable for a husband to beat his wife.

Finally, we highlight two papers: one investigates the decisions of Syrian refugees to return home, and other is about incentive payments on health care workers’ performance. 

  • When Do Refugees Return Home? by Lori Beaman, Harun Onder, and Stefanie Onder analyzes the factors that influenced the return of Syrian refugees from Lebanon, Jordan, and Iraq to Syria during an active period of conflict, from January 2011 to March 2018. Analyzing novel subdistrict-month panel data, the authors found that better security and improved access to electricity (by extension, utilities) in Syria have increased the likelihood of return. Additionally, return rates vary according to demographic characteristics. In general, single, older men have a higher likelihood of return.
  • Information, Loss Framing, and Spillovers in Pay-for-Performance Contracts by Sebastian Bauhoff and Eeshani Kandpal examines the direct and indirect impacts of Pay-for-Performance (PFP) contracts on health workers’ adherence to clinical guidelines. PFP contracts can elicit effort through information and financial incentives, such as rewards and penalties. To examine the effect of PFP contracts, the authors conducted a field experiment on 1,363 maternity care workers in 691 primary health facilities in Nigeria. The experiment includes three arms (information only, rewards, and penalties). Results show that the incentive arms of rewards and penalties significantly outperform the information arm. Both rewards and penalties increase overall performance by about 8 percent and increase incentivized actions by 20 percent. By contrast, information alone does not increase performance. Findings provide a rationale for adopting at least small incentives in lieu of information-only interventions.

The following are other interesting papers published during the past few weeks. Please check out these articles as well!

The Policy Research Working Paper Series encourages the exchange of ideas on development and quickly disseminates the findings of research that is in progress.

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