Syndicate content

December 2017

12 of our favorite development papers of the year

Berk Ozler's picture

Development Impact will now be on break over the next couple of weeks for the holidays, resuming in early January after the AEA annual meetings. Inspired by some of the interesting lists of favorite papers of the year (e.g. Noah Smith, Matt Notowidigdo) we thought we’d each offer three of our favorite development economics papers for the year...

How do household contributions to public goods respond to cash transfers? Guest post by Michael Walker

This is the eighteenth and final entry in this year's job market series. You can read them all here

A central question in development economics is how to fund public goods. Informal taxation, whereby households make direct contributions to local public goods (such as water resources, roads and schools) outside of the formal tax system, is an important source of funding for public goods in many low-income countries, especially Kenya (Olken and Singhal 2011, Ngau 1987, Barkan and Holmquist 1986). Informal taxes are coordinated and collected by local leaders and enforced via social sanctions rather than the state. In a formal tax system, legal statutes dictate how taxes change with household income. But how does informal taxation respond to changes in household income?  

My job market paper first quantifies informal taxation in Kenya. Using household panel data, I estimate informal tax schedules over the income distribution and test whether informal taxes respond to changes in earned income. Second, I estimate how informal taxation and public goods respond to a large, one-time increase in income from a randomized unconditional cash transfer program targeting poor households.   

The Earlier the Better? Timing and Type of Investments to Mitigate Early-Life Shocks: Guest post by Valentina Duque

This is the seventeenth, and penultimate, of this year’s job market series.
Research question and motivation
 That early-life events can affect adult outcomes is now well established. Lifelong health, education, and wages are all shaped by events of the in-utero and early-childhood environments (Barker 1992Cunha and Heckman, 2007Almond et al., 2017). To the extent that adverse shocks can often not be prevented, a key task for researchers and policymakers is to ascertain the potential for and degree of mitigation: Could investing in children's health and education help reduce gaps caused by early-life adversities?
In my job-market paper, we study whether the returns on human capital investments on children differ by exposure to adverse early-life shocks. We focus on two shocks that significantly affect households in developing countries: adverse weather shocks -- i.e., floods and droughts, which reduce children's initial skills--, and the introduction of conditional cash transfers (CCTs), which provide monetary subsidies to families with young children conditional on investments in children's health and education. In particular, we provide empirical evidence on how the effects of CCTs on children's long-term educational outcomes interact with children's early-life exposure to adverse weather shocks.

Weekly links December 15: non-frivolous frivolous expenses, Indian internal borders, aspirations, and much more…

David McKenzie's picture

Why don’t people migrate more? A lab experiment of sequential decision-making: Guest post by Zach Barnett-Howell

This is the sixteenth in this year’s job market series

Darling you got to let me know // Should I stay or should I go?
One way to escape poverty is to leave it behind. Literally. Moving from a poorer to richer area is so advantageous for individuals that an entire literature on migration has developed to explain why more people don't move.

If you say that you are mine // I’ll be here ‘till the end of time
Bryan, Chowdhury, and Mobarak conducted an experiment in northwestern Bangladesh to induce migration. They offered households a small subsidy to migrate, a round-trip bus ticket worth $8.50. This proved sufficient for people to migrate, and those who migrated earned more and enjoyed higher levels of welfare. So it brought up a new question: why hadn’t those households already decided to migrate?
This immobility is problematic because it’s not supposed to happen. Foundational migration theories, like the Harris-Todaro model, were designed to explain movement from poorer to richer areas. These migrations made sense: people were arbitraging wages and other amenities across space, receiving more by being elsewhere. But how can we explain the opposite—people who don’t migrate—when the welfare gains would be tremendous?

If I go, there will be trouble // if I stay it will be double
In my job market paper I explain why people rationally would not make moves that offer higher welfare. I do this by modeling migration as a sequential decision where people try to figure out which location would suit them best.

Work and see? Child mortality decline, fertility delay and women’s labor force participation Guest Post by Selma Walther

This is the thirteenth in this year's job market series.

Malthus’ pessimistic view of development was that improved living standards would be cancelled out by population growth in the long run. However, this scenario stands in contrast with historical and current experience, as developing countries have successfully escaped from this trap, with a slow-down in population growth. The modern experience of developing countries is thought to be best explained by increases in life expectancy, which cause people to have fewer children. However, causal estimates in support of this hypothesis remain rare (Galor 2012).

A family affair: are dynastic CEOs really worse managers? Guest post by Daniela Scur

This is the twelfth in this years' job market series.
Family firms are the most prevalent type of firm in the world. This is especially true in emerging economies, where family firms account for over half of medium-sized firms in the manufacturing sector. In particular, dynastic family firms – that is, where the founding family owns a controlling share and have appointed a second-generation (or later) family member as the CEO – account for a quarter of these firms. Since supporting such firms as the “backbone of the economy” is very politically popular (as this skilfully edited video from Last Week Tonight with John Oliver shows), it is crucial to understand more about these firms. More specifically, we need to understand how they operate and what their impact is on the economy and labour markets. Although there is mixed evidence on whether family ownership is a good thing, the weight of the evidence is that dynastic family CEOs are usually bad news for productivity. But why is that the case?

Workers Unite: Cooperative Property Rights and Development in El Salvador - Guest post by Eduardo Montero

This is the eleventh entry in this year's job market series. You can read the previous entries here.

"On March 5th, we went to sleep as poor colonos [laborers]. On March 6th, we woke up rich, as landholders."  –Cooperative Member, La Maroma Cooperative, 2017

Cooperative Property Rights in Latin America

Latin America has high levels of land inequality. In fact, land inequality is frequently cited as a key driver of Latin America’s comparative underdevelopment. In response to these high levels of inequality, over half of Latin American countries have attempted land reform programs to transform haciendas, in which an owner contracts laborers to work on the land, into agricultural cooperatives, in which workers jointly own and manage production. The figure below illustrates the Latin American countries that have attempted a land reform since the 1920s.


Avoiding #MeToo: Harassment Risk and Women’s College Choice -- Guest post by Girija Borker

This is the tenth entry in this year's job market series. You can read the previous entries here.

Street harassment, or sexual harassment in public spaces, is a serious problem around the world. In Delhi, 95 percent of women aged 16-49 report feeling unsafe in public spaces (UN Women and ICRW 2013). Women incur significant psychological costs from sexual harassment (Langton and Truman 2014) and actively take precautions to avoid such confrontations (Pain 1997). However, there is limited evidence on the economic costs of daily harassment. Moreover, there is no quantitative evidence of the effect harassment has on women’s human capital attainment.
One potential cost of an environment in which street harassment is prevalent is that women may avoid opportunities that would otherwise be available to them. In Delhi University (DU), for example, women tend to attend lower quality colleges than men, even though on average they do as well or better than men on the national high school exams. In my job market paper, I ask whether women choose to attend lower quality colleges in order to avoid sexual harassment while travelling to and from college. I answer this question in a context where 71 percent of the enrolled students live at home with their families and travel to college every day, mostly by public transport, and where over 89 percent of female students have faced some form of harassment while traveling in the city. Specifically, 63 percent of female students have experienced unwanted staring, 50 percent have received inappropriate comments, 40 percent have been touched, groped, or grabbed, and 26 percent have been followed.  I find that women’s college choice can be explained in part by their concerns about exposure to street harassment.

Pricing water when the poor share: evidence from Manila: Guest post by William Violette

This is the ninth in this years' job market series
Despite large investments in piped water throughout the developing world, the share of urban households without piped water has remained stable at 5% for middle-income countries and at 20% for low-income countries over the past decade.  Given health, time-savings, and other benefits from piped water, how can water utilities set prices in order to close gaps in access while still covering costs?  Conventional wisdom is that subsidizing fixed connection fees with high marginal prices can improve access especially for the poor, but this policy can have the opposite effect when households share water connections, which is common in the developing world.  I observe that over 23% of households in Manila access piped water through a neighbor's connection.  In this context, high marginal prices weaken incentives for households to extend water access to their neighbors through sharing.  Similarly, connection fee subsidies may have limited impacts on access because sharing households already split any fixed costs with their neighbors.

Female condoms - a technology for women with low bargaining power? Guest post by Karlijn Morsink

This is the eighth in this year’s series of posts by PhD students on the job market. 

Condoms are the only well-established technology that protect against sexually transmitted infections (STIs). Yet in 2015 alone, an estimated 3.3 billion risky sex acts took place without condoms in Sub-Saharan Africa, leading to 910,000 new HIV infections (UNAIDS, 2016a). Women disproportionally bear the costs associated with risky sex: they are more vulnerable to HIV infection, and carry the burden of unwanted pregnancy (UNAIDS, 2016b). Yet despite women standing to benefit most from condom use, the decision to use a condom is joint, and both sexual partners must agree. Thus women with low bargaining power may struggle to convince their male partners to use condoms.