Published on Development Impact

Weekly links January 19: Indian jobs and inequality issues, industrial policy for development, academic fraud, and more…

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·       VoxDev has a post up by Oliver Hanney which draws together examples of posts which show different causal identification methods applied to development issues – you can see posts up which have used natural experiments, DiD, RDD, IV, RCTs and Calibrated models – which he suggests could also be useful supplements for educators looking to give examples for methods they are teaching.

·       Also on VoxDev, a talk with Dani Rodrik on using industrial policy to promote economic development. He argues that economists were mostly against industrial policy on pragmatic grounds rather than deep theoretical thought – they just were skeptical about rent-seeking and government capacity. He also notes that industrial policy is now being carried out for a wider range of reasons than it used to be – e.g. promoting resilience in supply chains, promoting good jobs, promoting the climate transition, and also geopolitical and national security reasons. He notes causal inference for industrial policy is hard, and most of the evidence was based on correlations between government intervention and industry-level measures, so wasn’t very good. Now, we have some evidence from historical or geographic natural experiments (e.g. when industries got protected for some exogenous reasons), as well as regional industrial policies using some IV or DiD strategies now – which now suggests that the industries targeted by government policies generally have benefited and grown. He says the specific instruments are very context-specific – its not just tax incentives and subsidies. One key thing is that developing countries should now be focusing a lot more on services, which is where the jobs will be, and not on manufacturing, and this will require a wider range of public services. Programs should target the more entrepreneurial by having programs they have to opt-in and self-select into programs.

·       Cornell’s Econ that really matters blog has started a series of weekly posts this month by job market candidates. Here is Ritwika Sen on how supervisors transmit tacit knowledge to workers; and Russell Morton on prices and relational contracting in Indian garment supply chains. Each also comes accompanied with an elevator pitch video if you want to hear the candidate giving their quick overview.

·       The Freakonomics podcast has a two episode series on academic fraud and the open science movement (part 1, part 2), with a big focus on papers by Francesca Gino and Dan Ariely, and discussion with the Data Colada team:  “Last year, an astonishing 10,000 research papers were retracted”

·       In the Indian Express, Abhijit Banerjee and Esther Duflo discuss their views on progress against poverty in India and on what dimensions of inequality matter, on employability, education issues, and the need for people to eat more protein – given how unreliable consumption data are now in India, Abhijit notes a multidimensional poverty index might be helpful to use;  he also discusses the different types of inequality in India and which have increased and declined. And on jobs: “And in particular, in India, the obsession with government jobs is really counterproductive. It’s extraordinarily counterproductive, because people spend the first six, seven years of what would be the working life taking tests, trying to get a job, etc, and then failing, and then taking (some other) job. And I’ve written about this: the Indian labour force participation data looks very strange. At 30, suddenly, everybody, all the males are working. And so that’s reflective of the fact that we have created a system where this obsession with government jobs is hurting employability. People don’t want (other) jobs.We did some work with training programmes, and people were trained, and then they didn’t want the jobs they could get from the training. In that sense, I think that we really need to take this beast — of a government job as being the ideal of life — head-on. All the employability issues are connected to that”

·       Call for papers:

o   the third summer ThReD (Theoretical Research in Development Economics) conference will be held at the University of Namur on June 20-21, with a submission deadline of March 8.

o   Barcelona summer forum has its call for papers open, with submissions due Feb 28. The micro development session is June 12-13, but there are many other sessions as well on a wide variety of topics.


David McKenzie

Lead Economist, Development Research Group, World Bank

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