Showing papers in "Economic Development and Cultural Change in 2008"
TL;DR: In this paper, the authors examined the impact of the 1993 Land Law of Vietnam, which gave households the power to exchange, transfer, lease, inherit, and mortgage their land use rights.
Abstract: We examine the impact of the 1993 Land Law of Vietnam, which gave households the power to exchange, transfer, lease, inherit, and mortgage their land‐use rights. We use household surveys before and after the law was passed, together with the considerable variation across provinces in the speed of implementation of the reform, to identify the impact of the law. We find that the additional land rights led to statistically significant increases in the share of total area devoted to long‐term crops and in labor devoted to nonfarm activities. However, these changes are not large in magnitude and appear to be driven mainly by the increased security of tenure provided by the law rather than by increased access to credit markets or greater land market participation.
286 citations
TL;DR: The authors found that women leaders are drawn from the upper end of the quality distribution of women, and that female leaders perform no differently than male leaders, while institutional factors matter much more for women than for men: women perform better than men in situations in which they have more...
Abstract: There is increasing interest in whether improving the participation of women in government will lead to more gender equality. We test this with data collected from South India, using a natural experiment that randomly reserves one‐third of all presidencies in democratically elected village councils (panchayats) for women candidates. Previous research has found that such “reservations” result in policy decisions that are closer to the preferences of women; qualitative research has argued, conversely, that it results in token appointments in which women are appointed by elites and are poorly educated and aged. We do not find evidence in favor of the tokenism hypothesis, finding that women leaders are drawn from the upper end of the quality distribution of women. However, we find that female leaders perform no differently than male leaders. Our results also indicate that institutional factors matter much more for women than for men: women perform better than men in situations in which they have more...
129 citations
TL;DR: This article examined the transmission of international coffee prices through the domestic value chain in Uganda and found that producer price fluctuations are inconsistent with constant transaction costs, and investigated three possible explanations for this finding: storage and contango, marketing costs that increase with price, and trader entry that raises search time.
Abstract: Using detailed data from three simultaneous surveys of producers, traders, and exporters, this paper examines the transmission of international coffee prices through the domestic value chain in Uganda. We find that producer price fluctuations are inconsistent with constant transaction costs. We investigate three possible explanations for this finding: storage and contango, marketing costs that increase with price, and trader entry that raises search time. We test and reject the storage and marketing costs explanation, but we find some evidence of trader entry in response to a rise in export price. Our findings suggest that small itinerant traders enter in response to an export price increase, probably taking advantage of farmers’ ignorance of the rise in wholesale price.
119 citations
TL;DR: In this article, the authors examined the effects of early childhood nutrition on schooling investments and outcomes to assess the dynamic nature of human capital production, using panel data from South Africa and found that improving children's health significantly lowers the age when they start school, increases grade attainment, decreases grade repetition, and improves learning performance.
Abstract: This article examines the effects of early childhood nutrition on schooling investments and outcomes to assess the dynamic nature of human capital production, using panel data from South Africa. Height‐for‐age Z‐score is used as a measure of health and nutritional status in early childhood. Based on a comparison of siblings, the empirical analysis shows that improving children’s health significantly lowers the age when they start school, increases grade attainment, decreases grade repetition, and improves learning performance in the early stage of schooling. However, the observed effect diminishes as a child ages, which implies that (i) height at ages earlier than three better explains subsequent schooling outcomes and/or (ii) the role of health capital changes from one schooling stage to another.
106 citations
TL;DR: This article found that while global retail chains sell better quality food, their prices are 40% to 90% higher, ceteris paribus, than those seen in traditional retail markets in poor countries, characterized by high food price elasticities, a lack of willingness to pay for quality, and small retail margins.
Abstract: Global retail chains are becoming increasingly dominant in the global food trade, and their rise leads to dramatic impacts on agricultural supply chains and on small producers. However, the prospects and impacts of a food retail revolution in poor countries are not yet well understood. Here, I examine this question in Madagascar, a poor but stable country in which global retailers have been present for over a decade. The survey and analysis find that while global retail chains sell better‐quality food, their prices are 40%–90% higher, ceteris paribus, than those seen in traditional retail markets. In poor settings, characterized by high food price elasticities, a lack of willingness to pay for quality, and small retail margins, supermarkets appear to set prices with an eye toward maximizing profits on the basis of price‐inelastic demands for quality products from a small middle class interested in one‐stop shopping. It seems unlikely that global retail chains will further increase their food reta...
92 citations
TL;DR: In this article, the authors estimate the wage penalty associated with working in the South African informal sector and find that there is a gross wage penalty of a little over 18% for working in this sector.
Abstract: We estimate the wage penalty associated with working in the South African informal sector. To this end we use a rich data set on non‐self‐employed males that allows one to accurately distinguish workers employed in the informal sector from those employed in the formal sector and link individuals over time. Implementing various econometric approaches we find that there is a gross wage penalty of a little over 18% for working in the informal sector. However, once we reduce our sample to a group for which we can reasonably calculate earnings net of taxes and control for time‐invariant unobservables, the wage penalty disappears.
87 citations
TL;DR: In this paper, a theoretical and empirical analysis of child labor, schooling, and idleness (neither work nor school), with particular emphasis on the roles of child ability and household wealth in determining these decisions, is presented.
Abstract: This paper offers a theoretical and empirical analysis of child labor, schooling, and idleness (neither work nor school), with particular emphasis on the roles of child ability and household wealth in determining these decisions. We show theoretically that “idleness” may be chosen optimally by low‐income households whose child is of low ability. Using a rich data set from the Philippines, we find that while other factors—including mother’s labor supply, the presence of a family business, and access to good school quality—contribute to these decisions, child ability and household wealth are the most important determinants of child idleness and the use of child labor. An implication of our findings is that any policy aiming to reduce child labor and increase child schooling should also target improvements in child ability and cognitive development through investments in the nutrition and health of poor children.
84 citations
TL;DR: In this paper, the authors demonstrate that exporting to advanced countries generates the highest productivity premium and that the ability to benefit from exporting in general and export to advanced markets in particular increases monotonically as one moves along the conditional productivity distribution.
Abstract: Learning‐by‐exporting proponents argue that exporting increases firm‐level productivity by exposing producers to new technologies or through product quality upgrading. This study is based on the observation that the technological superiority and severity of product quality requirements are not the same in all export markets. If learning occurs through the acquisition of new knowledge, exporting to less developed markets should not generate as much productivity growth as exporting to advanced countries. Using firm‐level data from Colombia, I demonstrate that exporting to advanced countries generates the highest productivity premium and that the ability to benefit from exporting in general and exporting to advanced markets in particular increases monotonically as one moves along the conditional productivity distribution.
77 citations
TL;DR: This paper used nationally representative panel data on 5,420 rural households in Zambia, surveyed in 2001 and 2004, to measure the impacts of HIV/AIDS-related prime-age mortality on livelihoods.
Abstract: This article uses nationally representative panel data on 5,420 rural households in Zambia, surveyed in 2001 and 2004, to measure the impacts of HIV/AIDS‐related prime‐age mortality on livelihoods. Using age group and drought shock interactions as instruments for prime‐age mortality, we find that prime‐age mortality is endogenous in pooled OLS models. However, differencing the time‐invariant unobserved household characteristics largely addressed the endogeneity problem. The difference models suggest that the gender and position of the deceased in the household as well as pre‐death household characteristics strongly condition the effects of mortality on household welfare outcomes. Most notably, the death of the male household head leads to relatively severe impacts on farm production and livestock assets compared to the death of other adults. Also, the impact of adult mortality is more severe among households that were initially relatively poor. Contrary to conventional wisdom, we find no clear pa...
76 citations
TL;DR: The authors investigated the impact of conflict-induced displacement and the resettlement policy on household agricultural output and on skill spillover mechanisms between returnees and stayers, finding that returns to on-farm labor are higher for returnees relative to stayers.
Abstract: In 1997 Rwanda introduced a resettlement policy for refugees displaced during previous conflicts. I exploit geographic variation in the speed of implementation of this policy to investigate the impact of conflict‐induced displacement and the resettlement policy on household agricultural output and on skill spillover mechanisms between returnees and stayers. I find that returns to on‐farm labor are higher for returnees relative to stayers, although the evidence suggests that the policy contributed little additional effect to this differential. More speculatively, these differentials suggest that, upon return from conflict‐induced exile, returnees are more motivated to increase their economic performance.
67 citations
TL;DR: In this article, the authors report on the results of an economic analysis that uses 3 years of data from a series of quasi-experimental areas (called preproduction trials) in China's GM rice program that were carried out in the fields of small and relatively poor producers in two provinces in China.
Abstract: Although genetically modified (GM) crops are being grown on increasing large areas in both developed and developing countries, with few minor exceptions, there has been almost no country that has commercialized a GM major food crop. One reason may be that it is unclear how the commercialization of GM crops will help poor, small farmers. The objective of this article is to report on the results of an economic analysis that uses 3 years of data from a series of quasi‐experimental areas (called preproduction trials) in China’s GM rice program that were carried out in the fields of small and relatively poor producers in two provinces in China. The article shows that the use of GM rice by farmers in preproduction trials allows farmers to reduce pesticide use and labor input. The effect on yields is less clear, and the findings suggest that there is very little if any yield effect. The article concludes by arguing that the commercialization of GM rice in China could have consequences that exceed the di...
TL;DR: The authors evaluate the success of the Venezuelan government's latest nationwide literacy program, Mision Robinson, using official Venezuelan government survey data, and they find at most a small positive effect of the program on literacy rates, and in many specifications the program's impact is statistically indistinguishable from zero.
Abstract: We evaluate the success of the Venezuelan government’s latest nationwide literacy program, Mision Robinson, using official Venezuelan government survey data. Controlling for existing trends in literacy rates by age groups over the period 1975–2005, we find at most a small positive effect of Mision Robinson on literacy rates, and in many specifications the program's impact is statistically indistinguishable from zero. This main result is robust to time series analysis by birth cohort and to state‐level difference‐in‐differences estimation. The results appear to be inconsistent with recent official claims of the complete eradication of illiteracy in Venezuela, but they resonate with existing research on other adult literacy programs, which have usually been expensive failures.
TL;DR: In this paper, the determinants of participation in non-farm activities and of nonfarm incomes across rural households in the Himalayan region of India have been analyzed and shown that education plays a major role in accessing more remunerative nonfarm employment.
Abstract: Nonfarm activities generate, on average, about 60% of rural households’ incomes in the Himalayas. This article analyzes the determinants of participation in nonfarm activities and of nonfarm incomes across rural households. A unique data set collected in the Himalayan region of India allows us to deal with the heterogeneity of rural nonfarm activities by using aggregations into categories that are useful both analytically and for policy purposes. We conduct an empirical inquiry that reveals that education plays a major role in accessing more remunerative nonfarm employment. Other household assets and characteristics such as land, social status, and geographical location also play a role.
TL;DR: The authors used data from Madagascar to examine how an upcoming election or political patronage might induce governments to deviate from goals such as poverty reduction using a nationwide, commune level data set, and tested three competing explanations of how public goods are allocated across districts.
Abstract: This article uses data from Madagascar to examine how an upcoming election or political patronage might induce governments to deviate from goals such as poverty reduction Using a nationwide, commune‐level data set, the article tests three competing explanations of how public goods are allocated across districts Projects can be allocated on the basis of local need with the goal of reducing poverty or rewarding one’s political base, or the desire to win votes for an upcoming election The evidence from an analysis of three projects suggests that two of the three projects responded to local needs and a third seemed to be influenced by both election and patronage concerns An analysis of the 2001 presidential election in Madagascar shows that voters do appear to reward the incumbent for projects received in their districts
TL;DR: In this article, the authors used differences in the phasing in of a new lending program designed to serve clients of the largest snack food company in Mexico to identify the impact of credit on outcomes of small retail enterprise in Mexico City.
Abstract: The lack of credit is often mentioned as one of the major constraints facing small businesses. We use differences in the phasing in of a new lending program designed to serve clients of the largest snack food company in Mexico to identify the impact of credit on outcomes of small retail enterprise in Mexico City. We find that the loans have positive impacts on the smallest firms but negative impacts on larger firms. These results are consistent with hypotheses that smaller firms have higher returns to capital and face greater credit constraints. Given that the program involved loans given for 4‐month terms, we find surprisingly large effects on investment in fixed assets.
TL;DR: This article identified the returns to schooling in urban China using individual-level variation in educational attainment caused by exogenous city-wide disruptions to education during the Cultural Revolution from 1966 to 1976.
Abstract: In determining whether a country's higher education system should be expanded, it is important for policymakers first to determine the extent to which high private returns to post-secondary education are an indication of the scarcity of graduates instead of the high unobserved ability of students who choose to attend post-secondary education. To this end, the paper identifies the returns to schooling in urban China using individual-level variation in educational attainment caused by exogenous city-wide disruptions to education during the Cultural Revolution from 1966 to 1976. For city-cohorts who experienced greater disruptions, children's educational attainment became less correlated with that of their fathers and more influenced by whether their fathers held administrative positions. The analysis calculates returns to college education using data from the China Urban Labor Survey conducted in five large cities in 2001. The results are consistent with the selection of high-ability students into higher education. The analysis also demonstrates that these results are unlikely to be driven by sample selection bias associated with migration, or by alternative pathways through which the Cultural Revolution could have affected adult productivity.
TL;DR: In this paper, a factor adjustment model suggests that the extent to which rental markets allow households to attain their desired operational holding size is extremely limited, pointing towards factor market imperfections (no rental for oxen), lack of alternative employment opportunities, and tenure insecurity as possible reasons underlying such behavior, suggesting that rather than worrying almost exclusively about Marshallian inefficiency, it is equally warranted to give due attention to the policy framework within which land rental markets operate.
Abstract: Although a large theoretical literature discusses the possible inefficiency of sharecropping contracts, the empirical evidence on this phenomenon has been ambiguous at best. Household-level fixed-effect estimates from about 8,500 plots operated by households that own and sharecrop land in the Ethiopian highlands provide support for the hypothesis of Marshallian inefficiency. At the same time, a factor adjustment model suggests that the extent to which rental markets allow households to attain their desired operational holding size is extremely limited. Our analysis points towards factor market imperfections (no rental for oxen), lack of alternative employment opportunities, and tenure insecurity as possible reasons underlying such behavior, suggesting that, rather than worrying almost exclusively about Marshallian inefficiency, it is equally warranted to give due attention to the policy framework within which land rental markets operate.
TL;DR: In this paper, the authors investigated the relationship between isolation and subjective welfare and found that isolation is associated with a significant reduction in subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors.
Abstract: Using detailed geographical and household survey data from Nepal, this article investigates the relationship between isolation and subjective welfare. We examine how distance to markets and proximity to large urban centers are associated with responses to questions about income and consumption adequacy. Results show that isolation is associated with a significant reduction in subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors. The reduction in subjective welfare associated with isolation is much larger for households that are already relatively close to markets. These findings suggest that welfare assessments based on monetary income and consumption may seriously underestimate the subjective welfare cost of isolation.
TL;DR: It is concluded that wealthier men have stronger preferences for condom use, which offsets the negative effect of larger transfers that they give to their sexual partners.
Abstract: Many observers believe that wealthy men play a disproportionate role in the continuing spread of HIV/AIDS infection in sub‐Saharan Africa through their involvement in informal exchange relationships, where money and gifts (referred to as “transfers”) are given to a range of nonmarital sexual partners. In this case, wealthier men are riskier sexual partners because they can afford to give larger transfers, which have been found to be negatively associated with condom use. Alternatively, wealthier men might have greater incentives to practice safe sex at later stages of the epidemic, or wealthier men might match with female partners who have particularly strong preferences for condom use. Accordingly, economic status would be positively associated with condom use. I use survey data from urban Kisumu, Kenya, to investigate the various mechanisms through which economic status is associated with sexual risk behavior. My results show that wealth is positively associated with transfers; however, wealth ...
TL;DR: In this paper, a comparative analysis of the impact of the AIDS epidemic in Cambodia and Thailand on the parents of adults who die of AIDS and how this impact interacts with poverty is provided.
Abstract: The present study provides a comparative analysis of the impact of the AIDS epidemic in Cambodia and Thailand on the parents of adults who die of AIDS and how this impact interacts with poverty. It examines the relationship between economic status and routes through which losing an adult child can affect the parents, including caregiving during illness, payment of medical and living expenses, reduced economic activity, funeral expenses, loss of support from the deceased adult child, the fostering of orphaned grandchildren, and community reaction. Finally, an assessment is made of the impact on the overall economic situation of the parents. Generally, negative consequences appear more widespread in Cambodia, but economic status shows a stronger association with outcomes in Thailand. Thus the gap between poor Thais and Cambodians is often modest despite substantial differences in overall levels. The higher levels of hardship reported in Cambodia and the often minimal difference by economic status l...
TL;DR: This paper used repeated rounds of Demographic and Health Survey data from eight African countries to examine changes in and determinants of three HIV risk behaviors: age at first intercourse, number of current sexual partners, and use of condoms.
Abstract: We use repeated rounds of Demographic and Health Survey data from eight African countries to examine changes in and determinants of three HIV risk behaviors: age at first intercourse, number of current sexual partners, and use of condoms. As a prelude, we assess the within‐country comparability of DHS surveys over time. We find some evidence of changes in sample composition, which is easily handled in a multivariate framework. More problematic is evidence that people may be changing how they respond to questions about HIV behavior. This likely represents an increase in social desirability bias over time, and where it occurs our estimates of risk reduction are probably upper bounds on the true effects. Overall the picture is one of reductions in risk behaviors over recent 4–6‐year intervals, especially with respect to condom use; in some cases the changes seem large given the short time periods involved. With some exceptions, however, the extent and pervasiveness of these changes seems inadequate ...
TL;DR: In this paper, the authors examined the effects of non-agricultural land use on agrarian organization and land reform in an economy characterized by limited credit and land rental markets.
Abstract: This article examines the effects of nonagricultural land use on agrarian organization and land reform in an economy characterized by limited credit and land rental markets. The nonagricultural demand for land, under credit constraint, generates a potential mismatch between the distribution of land and the distribution of farming skills. This disparity reduces the agricultural output if the land rental market is absent. A perfect land rental market is shown to determine the highest possible agricultural output. Policy implications from the model include, in addition to market improvements, the fact that small farmers rather than landless people should be the target of redistributive land reform programs.
TL;DR: In this paper, the authors examined the factors motivating Mexican agrarian communities with forests to participate and invest in timber production activities, an opportunity that has opened in the past 20 years due to changes in Mexican forestry policy.
Abstract: Ownership and control are rarely synonymous. This article examines the factors motivating Mexican agrarian communities with forests to participate and invest in timber production activities, an opportunity that has opened in the past 20 years due to changes in Mexican forestry policy. We propose that contractual difficulties with downstream production services and buyers led community members to forward integrate into the wood production industry to enjoy greater benefits from production. An incomplete contracting model frames our analysis while original community‐level data from Oaxaca, Mexico, serves as the basis for empirical quantification. Using measures of specificity of investments, uncertainty, multiple uses of the forest, and managerial and labor expertise, it is found that communities with higher levels of human, social, and resource capital endowments are more likely to integrate forward into timber‐processing activities.
TL;DR: Results indicate that the program significantly improves the health of boys and girls in the treatment area, and is a complement to household wealth in improving girls’ nutritional status.
Abstract: This article evaluates the impact of a reproductive health program on the nutritional status of children under the age of 10 in rural Bangladesh. The program was administered in a treatment area while retaining an equally impoverished area as control through a doorstep delivery, allowing us to estimate treatment effects without problems of endogenous program placement and self‐selected participation. A reduced‐form demand approach has been applied using Matlab Health and Socioeconomic Survey of 1996 data to estimate program effects, returns to mother’s education, the joint effect of the program and household characteristics, as well as gender differences in nutritional outcomes. Results indicate that the program significantly improves the health of boys and girls in the treatment area. Mother’s education has a positive impact on child's health, more so for girls than boys. The program is a substitute for maternal education in improving boys’ health, whereas it is a complement to household wealth ...
TL;DR: In this paper, the authors examined the linkage between the ownership structure and productivity of joint ventures in the Chinese manufacturing sector and found that foreign participation, especially from Japan, Singapore, the United States, and Europe, is positively correlated with productivity.
Abstract: This article uses a unique panel data set of all large‐ and medium‐sized joint ventures in the Chinese manufacturing sector to examine the linkage between the ownership structure and productivity of joint ventures. The results suggest that foreign participation, especially from Japan, Singapore, the United States, and Europe, is positively correlated to productivity. The productivity is highest for wholly foreign‐owned enterprises (WFOEs) and lowest for the Hong Kong, Macao, and Taiwan–invested enterprises controlled by a state partner. The joint ventures controlled by state partners invest the most in research and development, while WFOEs invest the least.