In the outskirts of the capital Addis Ababa, where a lot of rural-urban migrants settle, one starting point into the city’s formal labor market is the country’s burgeoning ready-made garment industry. Ethiopia represents one of the lowest-cost manufacturing destinations in the world. Firms tend to pay extremely low wages clustered around the local poverty line. They offer little to no upward mobility, so that the vast majority of workers will not advance past the level of machine operators. With its low but stable wages and almost no skill requirements, the ready-made garment industry provides what Blattman and Dercon have called an “industrial safety net.”
Did you miss this year’s Northeast Universities Development Consortium conference, or NEUDC? I did, unfortunately!
NEUDC is a large development economics conference, with more than 160 papers on the program, so it’s a nice way to get a sense of new research in the field.
Thankfully, since NEUDC posts submitted papers, I was able to mostly catch up. I went through 147 of the papers and summarized them below, by topic. If a paper you loved or presented isn’t in the rundown, feel free to add a brief summary in the comments. (Why 147 instead of 160? I skipped a few macro papers and the papers that weren’t posted.)
These links should take you to your topic of interest: Agriculture, cash transfers and asset transfers, credit and insurance, crime, conflict, violence, and war, culture, norms, and corruption, education, elections and political economy, firms, governance, bureaucracy, and social capital, health (including WASH), jobs (including public works), marriage, methodology, migration, mobile phones and mobile money, poverty, inequality, and shocks, psychology, taxes, and traffic.
I have just finished writing up and expanding my recent policy talk on active labor market policies (ALMPs) into a research paper (ungated version) which provides a critical overview of impact evaluations on this topic. While my talk focused more on summarizing a lot of my own work on this topic, for this review paper I looked a lot more into the growing number of randomized experiments evaluating these policies in developing countries. Much of this literature is very new: out of the 24 RCTs I summarize results from in several tables, 16 were published in 2015 or later, and only one before 2011.
I focus on three main types of ALMPs: vocational training programs, wage subsidies, and job search assistance services like screening and matching. I’ll summarize a few findings and implications for evaluations that might be of most interest to our blog readers – the paper then, of course, provides a lot more detail and discusses more some of the implications for policy and for other types of ALMPs.
- Chris Blattman provides an incentive to delay giving up on that great research idea you’ve been peddling for years in this story from the EconTalk podcast: For years, he pitched random African factory owners the idea of an RCT of factory employment. “They’d usually look at me kind of funny. They wouldn’t leap at the possibility. I was just this person they met on a plane.” One day it worked, and six weeks later he was randomizing applicants.
This is the first in our series of posts by Ph.D. students on the job market this year.
One of the key challenges of markets is to assess the quality of goods. A look at online dating websites – a market where information asymmetries loom particularly large - shows different ways in which people try to communicate that they are of “high quality”. A common strategy is to start your introduction with “My friends describe me as…” (to be followed by some glowing testimony “…smart, athletic, high-achieving – yet humble”). Why may this strategy not be effective? It raises questions about whether these friends are truthful and whether they have all the relevant information about your quality as a partner. The really interesting question you never see answered is: “How would your ex-partner describe you?”
My job market paper “The Value of Reference Letters”, coauthored with Rulof Burger (SU) and Patrizio Piraino (UCT), is about the challenges hiring firms face in identifying high-quality applicants. While the literature has largely focused on the role of friends and family members (Topa 2011, Beaman and Magruder 2012) in job referrals, we investigate whether information from ex-employers can facilitate the matching process. Specifically, we test the effect of a standardized reference letter asking previous employers to rate workers on a range of hard skills (e.g. numeracy, literacy) and soft skills (e.g. reliability, team ability).
This is the fifth in our series of posts by students on the job market this year.
Do people perform better when working with friends or do their friends distract them from doing their job well? Does the effect depend on their personality traits? I investigate these questions in the context of a seafood-processing plant in Vietnam in which several workers perform the identical task – cleaning and filleting fish -- at 4-person tables in a processing room. I collaborated with the management to design and implement a field experiment in which employees were randomly assigned to positions within the room each day. I use random variation in a worker’s proximity to friends to estimate the effect of working with friends on job performance. Before the experiment, I administered a baseline survey to collect information on employees’ friendship ties and personality characteristics. I find that employees are less productive when working with friends but only when friends are close enough to socialize with each other. I also find that personality traits matter and explain a significant portion of individual differences in socializing behaviors at work. Conversely, socializing with friends explains a large portion of why workers with certain personality traits – notably, conscientiousness – are more productive workers.
This is the third in our series of posts by students on the job market this year.
Economists tend to believe that travel and trade costs reduce welfare. Trade papers like Irwin (2005), Redding & Sturm (2008), Storeygard (2014), and Etkes & Zimring (2014) draw on evidence from the United States, West Germany, sub-Saharan Africa, and the Gaza Strip to support this idea. One might reasonably expect, therefore, that the welfare of Palestinian commuters declined during the Second Palestinian Uprising (2000-2007), when the Israeli army deployed hundreds of roadblocks and checkpoints along the West Bank’s internal road network in order to defend Israeli civilian settlements. Although these obstacles were intended to deter and intercept militants, they had the unintended consequence of delaying Palestinian civilian travel between Palestinian towns, and from Palestinian towns to Israel (B’Tselem (2007), World Bank (2007)). Two World Bank working papers (Cali & Miaari (2014), van der Weide et al (2014)) take advantage of this ‘natural experiment’ to study the effects of travel costs on commuters’ welfare, finding that economic outcomes of Palestinians declined in the face of obstacle deployment. My job market paper, however, finds a very different result: while obstacles reduced the welfare of laborers in some towns, laborers from other towns actually benefited from obstacles. The salient outcome of obstacle deployment was not welfare reduction, but rather welfare inequality.