German Development Economics Conference 2024

23 May 2024, 14:00 → 24 May 2024, 22:00 Europe/Berlin

Leibniz Universität Hannover

Andreas Fuchs (University of Göttingen), Axel Dreher (Heidelberg University), Christian Leßmann (TUD), Esther Gehrke (Wageningen University), Guenther Isabel (ETH Zurich), Krisztina Kis-Katos (University of Göttingen, Chair of International Economic Policy), Martin Gassebner (Leibniz Universität Hannover), Matthias Schündeln (Goethe University Frankfurt), Michael Grimm (University of Passau), Rainer Thiele (IfW Kiel)

The annual conference brings together international scholars and researchers of development economics and neighboring fields. Plenary sessions with keynote speakers, parallel sessions with contributed papers, and poster sessions will reflect the current state of research in development economics and provide a forum for exchange for researchers and practitioners.

Special events:
Keynotes: Sandra Sequeira (LSE) and Tavneet Suri (MIT)
Ceremony for the KfW Award for practice-oriented development research.

     

2024 Call for Papers GDE Hannover.pdf

2024 Program GDE final.pdf

Thursday, 23 May

14:15 → 15:15 Registration

15:15 → 16:15 Parallel Session 1: Conflicts in Agriculture

15:15 Less Conflict During Harvest Season? Analysing the Relationship between Satellite Data on Crop Season and Conflict on the Micro-Level in Rural Kenya

This study contributes to the existing literature on income and conflict by examining the under-investigated sector of smallholder farming. A significant portion of the population, particularly in developing countries, is still highly dependent on the agricultural sector. Data on income in small-scale agriculture is often limited to surveys and case studies. To address this limitation, we utilise satellite data to detect the time of harvest and examine its impact on conflict frequency and likelihood.

Our study focuses on Kenya, a country in which smallholder farmers and their crops are still heavily dependent on rain. This dependence on seasonal weather and the resulting variation in crop development provides us with some exogeneity in the timing of harvest. We investigate the relation between harvest season and the likelihood of local conflict, using panel data at the ward administrative unit level for rural Kenya and apply a two-way fixed effects model. Data on conflicts are derived from the Armed Conflict Location Events Data (ACLED) (Raleigh et al. 2010), which includes geocoded conflict events. To determine harvest seasons for each ward, we use satellite data on plant greenness – the normalized difference vegetation index (NDVI) - (Copernicus 2023), and a crop cycle detection software by Eklundh & Jönsson (2012). Combining the data, we end up with a database that provides observations on a 10-day basis for the years 2000 to 2019. This enables us to elaborate on the relationship between conflicts and harvest seasons controlling for ward-fixed effects and year-fixed effects. The study's main finding is that conflict incidents decrease during harvest time. This negative trend is particularly evident when examining protests and riots. Further, our additional analysis indicates that the crop cycle, in general, may affect conflict likelihood. There are more conflicts in the lean season and just before harvest and fewer conflicts postharvest. These results may relate to liquidity constraints just before harvest and discretionary money from output sales in the postharvest season.

References
Copernicus (2023), ‘European Union, Copernicus Land Monitoring Service’, European Environment Agency (EEA)

Eklundh, L. & Jönsson, P. (2012), ‘TIMESAT 3.1 Software Manual’, Lund University, Sweden pp. 1–82

Raleigh, C., Linke, A., Hegre, H. & Karlsen, J. (2010), ‘Introducing ACLED: An armed conflict location and event dataset’, Journal of Peace Research 47(5), 651–660

Speaker: Nicole Karnaus

Karnaus and Seelos - Less Conflict during Harvest Season.pdf

15:45 Land-use transformation and conflict: The effects of oil palm expansion in Indonesia

Agricultural commodity booms can improve rural employment and livelihoods, but also accelerate land-use change in rural areas. Where land-use rights are unclear and economic institutions non-cohesive, such booms can trigger social conflict over land. We investigate this phenomenon in Indonesia, where rising global demand for palm oil caused a large expansion in production area over the past decades. Based on a yearly panel of 2,755 rural sub-districts from 2005 to 2014, we link highly detailed data on local outbreaks of conflict to variations in plantation expansion incentives. We show that local incentives to establish new plantations lead to violent disputes over land, resources and political representation, an effect that is distinct from the impact of income shocks in already established production areas. The adverse consequences increase with the importance of land rents as an income source, and are more pronounced in areas where land is more contestable and unequally distributed, as well as during local elections. Our findings underline the importance of Indonesia’s ongoing land reform efforts and the necessity of rural land transformation to go hand in hand with conflict mitigation strategies.

Speaker: Tobias Hellmundt (University of Göttingen)

Land use transformation and conflict_Hellmundt_Cisneros_KisKatos_2024.pdf

15:15 → 16:15 Parallel Session 2: Natural Resources

15:15 The dynamics of cattle expansion and deforestation in the Brazilian Amazon

Demand for agricultural products is a major driver of deforestation in the Brazilian Amazon. However, it is well known that newly deforested land is relatively unproductive, and agricultural products are barred from the predominant agriculture supply chains. An alternative, intermediate channel is the appropriation of unclaimed public land, where forest is cut and agricultural activity feigned to justify claims of ownership. In this paper, we identify the deforestation impacts of expanding agricultural production, differentiating it from other channels with different implications for economic and environmental policy. We use a shift-share design, exploiting international changes in beef consumption and geo-referenced locations of slaughterhouses, to identify causal effects, and find that pasture and cattle herd expansions are major drivers of deforestation. We also find that these impacts diminished in recent years, indicating that other factors, such as land appropriation motives, have become relatively more important. Our findings suggest that agricultural intensification could help decrease land pressure, and highlight the growing deforestation impacts of an ongoing expansion of infrastructure and legalization of land claims in the Brazilian Amazon.

Speaker: Nikolas Kuschnig (Vienna University of Economics and Business)

Vashold_deforestation_cattle_Brazil.pdf

15:45 Mining for Evidence: Corporate Social Responsibility (CSR)’s Impact in Africa

The debate on the impact of Corporate Social Responsibility (CSR) activities by mining companies on local development has largely been based on anecdotal rather than empirical evidence. We provide empirical evidence on the impact of CSR of large-scale industrial mining companies on education, child undernutrition and household wealth in 14 African countries between 2010 and 2019. We combine a novel mining dataset with
individual-level data from the Demographic and Health Surveys. We estimate a two-way fixed effects model, Callaway & Sant’Anna (2021)’s model, and a spatial difference-in-differences model. We find that CSR initiatives have an no effect on education and child undernutrition and a negative effect on wealth. We also explore factors that could drive CSR contributions. Although results lean predominantly towards a functionalist motivations of CSR, the approach to CSR also aligns with development and Public Relations driven objectives

Speaker: Guenther Isabel (ETH Zurich)

15:15 → 16:15 Parallel Session 3: Climate Change

15:15 Climate change adaptation: Evidence from an RCT in rural Bangladesh

This study evaluates a women-focused livelihood support project in climate-affected regions of South-western Bangladesh, in Khulna and Satkhira districts. The evaluation, involving 3,120 households with women beneficiaries, exploits a randomized control trial to measure a project's impact on household income, food security, and resilience to climate change. Key findings include a significant increase in household income, improved food security, and enhanced preparedness for climate events. However, the project showed limited effects on women's decision-making power within households. These insights are vital for understanding the effectiveness of livelihood support in empowering women in vulnerable settings, highlighting both achievements and areas for future improvement.

Speakers: Alexandra Avdeenko (World Bank, University of Heidelberg), Jakob Jordi Gärtner (Uni Heidelberg)

15:45 Can weather shocks give rise to a poverty trap? Evidence from Nigeria

As extreme weather events are becoming more frequent, the chronic poor, being overly exposed to these shocks, risk suffering the highest price. The 2012 flood in Nigeria was the worst in 40 years and hit more than 3 million people. Using nationally representative panel data, I study households’ asset dynamics for the period 2010-2019. I find that households hit by the flood converge to multiple equilibria consistent with the poverty trap hypothesis. In particular, households whose assets fell below the threshold converge to a low-level equilibrium point, whereas better endowed households converge to a high steady state. This is consistent across several empirical methods, ranging from parametric to non-parametric methods, as well as panel threshold estimation. Robustness checks further examine the validity of the findings, testing different asset indexes and flood definitions, as well as controlling for conflict-related events and other climatic shocks. Identifying a poverty trap is crucially helpful for designing poverty alleviation policies and fostering a country’s development.

Speaker: Giulia Malevolti (Potsdam Institute for Climate Impact Research)

Nigeria_GMalevolti - may23_red.pdf

15:15 → 16:15 Parallel Session 4: Poverty Measurement

15:15 Stress-testing the international poverty line and the official global poverty statistics

We investigate the current method of derivation of the international poverty line used for monitoring SDG 1 in two key directions: a) we ask whether the official method used by the World Bank is fit for the purpose of measuring extreme poverty and if their method is defensibly valid both internally and externally; and b) we ask whether the resulting statistics perform acceptably well in terms of accuracy and precision. Using comparative analysis, error accounting methods and minimization criteria on key poverty indicators, our investigation gathers compelling evidence that leans towards a negative answer to both questions. We conclude that the adaptation of alternative methods for monitoring global poverty should be considered in official capacity with urgency.

Speaker: Michail Moatsos (Maastricht University and King's College London)

15:45 Where Is Poverty Concentrated? New Evidence Based on Internationally Consistent Urban and Poverty Measurements

The lack of comparable urban definitions across countries has presented a significant challenge in effectively addressing poverty in both urban and rural areas. This study aims to tackle this issue by comparing subnational poverty statistics across countries, integrating internationally consistent definitions of urban areas into the World Bank’s official global poverty measurement framework. Focusing primarily on 16 Sub-Saharan African countries, the analysis reveals that poverty rates tend to be lower in densely populated urban areas. However, the findings also highlight that urban areas have a higher concentration of impoverished populations than previously estimated. These results underscore the importance of employing consistent urban definitions in cross-country poverty analysis and call for a reevaluation of geographically targeted policies to expedite poverty reduction efforts.

Speaker: Robin Moellerherm (Heidelberg University)

nakamura-et-al-2023-where-is-poverty-concentrated-new-evidence-based-on-internationally-consistent-urban-andpoverty.pdf

15:15 → 16:15 Parallel Session 5: Female Workers

15:15 Stronger Together: Promoting Export through Female-only SME Consortia

Exporting provides business opportunities with high returns but requires high managerial knowledge and skills, the network and confidence to create international contacts, and the scale to overcome fixed costs. All of which female entrepreneurs tend to lack. We conduct an RCT to test an intervention that tackles these problems simultaneously. Over two years, export-interested female entrepreneurs in complementary sectors receive support to establish a consortium, a legally connected group of firms, to cooperate in exporting. In addition, firms receive business and export consulting. At midline, two-thirds of the female entrepreneurs decided to become consortium members. Consortia members doubled their regular contact with other female entrepreneurs, gained entrepreneurial confidence, improved management practices, and increased their companies' profit. While export outcomes have not increased yet, consortia members are more likely to know Tunisia’s trade agreements, have potential foreign clients, and invest in their exports.

Speaker: Munch Florian (London School of Economics)

munch_female_export_consortia.pdf

15:45 Information asymmetries and female labour exchange in rural Tanzania

Development economists have long studied how informal arrangements among community members may substitute for an imperfect and incomplete market. This paper assesses whether informal arrangements may actually promote exchanges in the market. We study rural labour exchange groups, an organization that is found in many different areas but still underdocumented in the economic literature. Our theoretical analysis shows that these teams offer an advantage to employers, who may outsource the monitoring of workers' effort to the team. Team members are incentivized to provide high effort because a deviation would lead to the team dissolution, including for home production. Using data from north-west Tanzania, we confirm the model's predictions: Women who are part of a labour exchange team are more likely to obtain paid farm work, and are more often hired for tasks for which teams have a comparative advantage.

Speaker: Christelle Dumas (University of Fribourg)

15:15 → 16:15 Parallel Session 6: Health Outcomes

15:15 Interplay of Financial Mechanisms and Agricultural Price Volatility: Implications for Child Health in Rural India

The study, addresses influence of financial infrastructure on child health outcomes in rural India, with a specific focus on how enhanced access to rural banks can mitigate the adverse effects of agricultural income shocks. The study employs data from the Indian National Family and Health Surveys (NFHS- 4 and 5), integrating them with local agricultural income fluctuations, as determined by the interaction between global agricultural price fluctuations and local agricultural conditions, alongside local indicators of financial development. The findings reveal that proximity to rural banks significantly mitigates the detrimental impacts of these shocks on child health. This challenges the conventional notion that rural communities with limited financial sector access experience minimal benefits. Instead, it uncovers the indirect yet substantial advantages of expanded financial accessibility in safeguarding children's health during economic instability.

Speaker: Dimitrios Argyros (University College Dublin)

15:45 Weather shocks, recall error and health

A growing body of literature indicates that heat stress and precipitation deficiencies can pose a critical threat to human health, particularly in less developed countries with low coping capacities and high exposure. The aims of this study are twofold. First, we shed light on the recall of drought events in rural Thailand by linking longitudinal survey data with objective meteorological data. Here, an anomaly in the survey design serves as a natural experiment. We find that a shorter time interval between surveys has a large positive effect on households correctly reporting a drought event. Second, we shed light on the health effects of droughts. In our panel over seven waves, we find a strong effect on diseases reported by the households, which emphasizes the importance of strategies to cope with extreme weather events.

Speaker: Julian Wichert (Leibniz University Hannover)

tsep_weather.pdf

15:15 → 16:15 Parallel Session 7

15:15 ____________

16:30 → 18:00 Official Conference Welcome (Krisztina Kis-Katos and Martin Gassebner) and Keynote Tavneet Suri (MIT Sloan School of Management)

18:15 → 19:00 Poster Session

19:00 → 21:00 KfW reception, best paper award ceremony

Friday, 24 May

09:00 → 10:30 Parallel Session 1: Conflicts and Peace Building

09:00 Can International Initiatives Promote Peace? Diamond Certification and Armed Conflicts in Africa

The Kimberley Process Certification Scheme (KPCS) aims to prevent so-called conflict diamonds -- diamonds that come from conflict zones -- from entering world markets. The scheme works by tracking diamonds and by limiting trade among KPCS members to certified diamonds. This paper studies the scheme's impact on armed conflict in Africa. We exploit grid-cell level variation in the propensity to extract alluvial diamonds, and compare grid cells with and without this propensity before and after the introduction of the KPCS in 2002. Our results show that the KPCS led to a permanent and significant reduction in armed conflict.

Speaker: Andreas Link (University of Erlangen-Nuremberg)

Diamonds January2024.pdf

09:30 Insuring peace: Index-based livestock insurance, droughts, and conflict

We provide quasi-experimental evidence of how an innovative market-based solution using remote-sensing technology can mitigate drought-induced conflict. Droughts are a major driver of conflict in Africa, particularly between nomadic pastoralists and sedentary farmers. The Index-Based Livestock Insurance (IBLI) piloted in Kenya provides automated, preemptive payouts to pastoralists affected by droughts. Combining plausibly exogenous variation in rainfall and the staggered rollout of IBLI in Kenya over the 2001-2020 period, we find that IBLI strongly reduces drought-induced conflict. Key mechanisms are an income smoothing effect and reduced migratory pressure for pastoralists, reducing the likelihood of miscoordination with other land users. Our study suggests that market-based solutions are a scalable, cost-effective pathway to mitigate conflict, complementing political solutions such as institutional reforms.

Speaker: Paul Schaudt (University of St.Gallen)

Insuring_Peace.pdf

10:00 Conflict, Trust and Political Preferences

Political trust in Armenia underwent a remarkable transformation, rising from 22 percent in 2017 to 71 percent in 2019 and then sharply dropping to 14 percent in 2021. This swift shift can be attributed to two pivotal events: the successful Velvet Revolution in 2018 and the military loss in the Second Nagorno-Karabakh (NK) War in 2020. This study explores the precise impact of these events, as shocks to institutions, on political trust by exploiting geographic disparities in exposure. Using an event study design and a unique pseudo-panel based on geo-referenced survey data from 2017, 2019, and 2021, with over 4,700 respondents across 182 locations, we find that exposure to the Velvet Revolution increased government trust by 40 percentage points in 2019, while exposure to the NK War reduced it by 20 percentage points in 2021 compared to the baseline. Exposure to both events further decreased government trust by seven percentage points in 2021. Voting results align with our findings, with the incumbent government gaining votes in positively affected regions and losing support in war-exposed areas. An investigation into the mechanisms revealed that, post-war, regions unaffected by the conflict but exposed to the Velvet Revolution prioritized concerns related to unemployment and poverty, contrasting with the conflict-related focus in the rest of the country. Hence, the effect of the negative institutional shock on political survival can be alleviated if it occurs following a positive shock, and if the exposure to the negative shock varies within the country, despite its national significance.

Speaker: Anna Minasyan (University of Groningen)

Conflict__Trust_and_Political_Preferences.pdf

09:00 → 10:30 Parallel Session 2: Social Networks

09:00 Disconnecting Dissent: The Effect of Internet Shutdowns on Protests

Internet shutdowns are an increasingly common form of repression, with India being responsible for nearly half of global shutdown events. Ordered by local and state authorities, many of these shutdowns aim to restore public order and quell protests and riots. So far, however, there is no causal evidence that this measure is effective in achieving its stated goal. Social media has been shown to facilitate protests as well as hate crimes through lowering organizational cost. Yet, internet shutdowns could also foster further resentment by protesters as well as turn a situation unpredictable and chaotic. By harmonizing several data sources, I construct a novel data set that measures over 500 government-ordered internet shutdowns between 2012 and 2022 in India on the district level. To causally identify the effect of internet shutdowns on protest and riot incidence, a difference-in-differences design is utilized with subdistricts that were intended to have their internet blocked but unintentionally receive signals from unaffected neighboring districts as control groups. It is shown that contrary to the intended goal, internet shutdowns have an incendiary effect and increase riots.

Speaker: Thomas Schiller

Disconnecting_Dissent Paper.pdf

09:30 Combating Fake News in Health: An online Survey

Combating Fake News in Health: An online Survey

The rapid and far-reaching dissemination of misinformation on social media
is a threat to global health. As a consequence, several media platforms
have recently established tools to combat its spread like fact-checks or warning
signs of misinformation. In this research project, we assess the effectiveness
of two tools (pre- and debunking) on sharing behavior of accurate
and misleading news in the context of vaccination in Sub-Saharan Africa and
examine the underlying psychological mechanisms. A novelty of our study
is the introduction of endogenous information acquisition that allows us to
shed light on the impact of confirmatory search behavior. Using a large-scale
online survey experiment with 11,192 Facebook users from six African countries,
we show that fact-checks and forewarnings about misinformation are
reducing the sharing of misinformation. Fact-checks have a double effect,
increasing the circulation of accurate news if information is self-selected.
Generally, self-selected information are processed more intensely than nonselected
information, however are equally likely to be shared. The effects
can

Speaker: Maximilian Guigas (BNITM)

10:00 Rural Internet and Religious Identities

Social identities determine who we consider as 'us' and who as 'them'. Diverse nation states are confronted with an ongoing challenge to unite communities behind a shared national identity trumping local, ethnic, or religious identities. Information technologies spread narratives that can influence the weights of these different identities. This paper examines the consequences of the arrival of fast internet on Hindu-Muslim divisions in rural Indian communities. It leverages the staggered roll-out of the largest rural government broadband program in the world in a spatial Regression Discontinuity Design (RDD). It introduces precise data on 175,157 broadband connections in villages and combines it with data on violent acts by extreme individuals, distortions in welfare provisions by powerful local village heads, and voting behavior at the polling station level. The estimates document a surge in discrimination of the religious out-group by village heads at the household level considering novel data on over 5 million registered households in Jharkhand. Muslims receive 12.5% fewer work days under a non-Muslim village head and gain 29.2% under a Muslim village head relative to Muslims in neighboring villages with the respective village head but without fast internet. Further results highlight a rise in violent acts and divisions in voting behavior between Muslim and non-Muslim villages.

Speaker: Johannes Matzat (University of Lucerne & Hebrew University)

Matzat_Internet_ReligiousConflict.pdf

09:00 → 10:30 Parallel Session 3: Public Interventions

09:00 Improving Citizens’ Acceptance for Carbon Taxes in China

This paper aims to understand how to explain carbon taxes and how to design redistribution policies to win support for carbon taxes using a representative survey on 3,460 Chinese citizens. Each participant is randomly assigned to two sets of information: (i) what the carbon tax is and how it works; and (ii) personalized information on gains and losses under a specific carbon tax redistribution policy. We find that Chinese citizens are most convinced by the “polluters pay” element of carbon taxes. Moreover, providing detailed information on gains and losses usually does not increase the acceptance, except that receiving information on gains would increase the acceptance under the uniform redistribution scheme.

Speaker: Yuanwei Xu (Ruhr University Bochum)

09:30 Fiscal Exchange and Tax Compliance: Strengthening the Social Contract Under Low State Capacity

This article provides evidence that increased salience of public service provision can strengthen the social contract and increase tax compliance in a low-capacity setting. I conduct a field experiment randomizing information about public service provision across 5,494 property owners and tenants in Freetown, Sierra Leone. Receiving information increases property tax payments by 20% on average. The effect is driven by increases in tax compliance on both the extensive and intensive margin. Residents of low-value properties are 7–16 percentage points more likely to pay taxes when informed about public services that are both geographically accessible and respond to the citizens’ most urgent needs, suggesting a benefit-based approach to taxation. Revenue effects are largely driven by residents of high-value properties, who depend less on the public provision of services, and for whom the treatment seems to act as a more general signal of government performance.

Speaker: Laura Montenbruck (GNOI)

jmp_montenbruck.pdf

10:00 ____________

09:00 → 10:30 Parallel Session 4: Commons in Agriculture

09:00 Large-Scale Irrigation and Commercialization of Agriculture in South Africa

I estimate the impacts of irrigation canals on annual crop productivity and the structure of the agricultural sector in South Africa. I use remotely sensed measures of crop yields and a novel land cover classification dataset in a regression disconti- nuity framework with relative elevation to the nearest canal as a running variable. I find that canals increase yields of two major crops (maize and wheat) and also lead to expansion of commercial farming. On the other hand, subsistence farmers with ac- cess to irrigation do not expand area under production. Furthermore, they experience lower yields relative to their counterparts in the control areas. Subsistence farmers are mostly concentrated in the former homelands, and therefore, large-scale irrigation exacerbates the post-apartheid spatial inequalities in South Africa.

Speaker: Tereza Varejkova (University of Maryland, College Park)

Irrigation_Draft_Varejkova_Tereza.pdf

09:30 Small-scale farmers’ willingness to pay for information: A comparison of individual purchase decisions with contributions to a club good

Over-application of fertilizers is common in Indonesia harming the environment and reducing farmers’ profits. Soil tests combined with individualized fertilizer recommendations can help to reduce the over-application of fertilizer, yet they are rarely used and typically not offered by extension officers. Hence, high hopes are pinned on a market-based dissemination. In this paper, we elicit small-scale farmers’ revealed willingness-to pay for rapid low-cost soil test kits in Indonesia. We use an incentive-compatible auction, based on the Becker-DeGroot-Marschak (BDM) approach. We compare two different ways soil tests could be distributed among farmers outside of our experiment by government extension officers. In the first experimental arm, we offer farmers the chance to bid for the service of having their soil tested with a rapid soil test. In the second experimental arm, farmers are asked to make a bid for their contribution to buy the complete soil test kit including a training how to use them as a farmer group. A further design feature of our sample is that half of the farmers were randomly assigned to a one-day training on soil fertility management in 2022. Hence, we test whether farmers who were offered that training systematically differ in their price bids from those farmers who were not offered that training. Our results suggest that the willingness-to-pay for soil tests is substantial and hence, a provision by extension workers at a subsidized rate would be feasible. On a per test basis, both types of provisions imply comparable price bids. We do not find much free riding in the group setting. For lower subsidies the service provision would be more effective, but for higher subsidies uptake would be higher in the group setting. Yet, prior training in soil management has no or if at all a very small positive effect. These results provide the first evidence on the effectiveness of alternative distribution channels of rapid low-cost soil tests among small-scale farmers.

Speaker: Michael Grimm (University of Passau)

10:00 ____________

09:00 → 10:30 Parallel Session 5: Migration

09:00 Income and Migration: Evidence from a Century of Windfall Income Shocks

This article studies the effect of windfall income shocks on emigration, conditionally on economic development. The theory of relative income differences between countries assumes that migration decreases with economic development. A growing literature, however, supports the existence of a mobility transition, promoting an inverse U-shaped relationship between income and migration. We provide novel empirical evidence by exploiting the Spanish national Christmas lottery as a natural experiment to study the effect of windfall income on local emigration from 1877 to 1970. We find that a positive income shock increases international emigration for relatively poor regions within Spain, but not for the most economically developed regions. The results suggest that a windfall income shock may be a way to alleviate the financial constraints associated with pre-funding migration costs. Our findings add to the literature on the causes of migration by adding a microfounded but long-run perspective.

Speaker: Sebastian Leue (Helmut-Schmidt-Universität Hamburg)

Income and Migration.pdf

09:30 Cultural Similarity and Migration: New evidence from a gravity model of migration

Theory suggests that cultural similarity of countries increases migration flows between them. This paper brings best practices from the trade gravity literature to migration and tests this prediction. Using time-varying and time-invariant similarity variables based on religion, language, genetics, and the World Values Survey, I estimate a theory-consistent gravity model on a panel of international and domestic migration flows (>200 countries, 1990-2019, 5-year intervals). The main results using time-varying similarity variables and implementing a three-way fixed effects structure with origin-year, destination-year, and corridor fixed effects, do not show the hypothesized positive effect of cultural similarity on migration. Instead, religious similarity has a significant negative effect on migration, while WVS-based attitudinal similarities regarding individualism, indulgence, and trust are insignificant. Additional results suggest that cultural selection and sorting can explain these findings, where migrants are attracted by destinations that are culturally similar to their personal cultural beliefs rather than the average cultural beliefs of their home country. Results of a two-stage fixed effects (TSFE) procedure and a gravity-specific matching estimator, which both allow theory-consistent estimation of time-invariant similarity variables, such as linguistic and genetic similarity, confirm that the relationship between cultural similarity and migration is more nuanced than previously thought.

Speaker: Tobias Grohmann (University of Groningen)

20240126_Cultural Similarity and Migration.pdf

10:00 Is intent to migrate irregularly responsive to recent German policy adjustments?

We investigate the extent to which asylum policies that aim to deter individuals from migrating irregularly in fact do so. We specifically consider effects of Germany's recent and high-profile asylum policy adjustments, which include accelerated asylum decision processes, the prospect of asylum processing sites outside of Europe, the introduction of a payment card to replace cash benefits, and an extended waiting period for native-level benefits. To do so we implement a conjoint experiment with 989 men aged 18–40 in four cities in Senegal, a population of most-likely irregular migrants in a country where ``l'émigration clandestine’’ is highly salient. We estimate effects of these policy measures on irregular migration intent as a first-stage outcome. We find that offshoring the asylum process significantly and substantially lowers irregular migration intentions across nearly all types of subjects. Extending the waiting time for native-level benefits only has a small, marginally significant effect on intent, and no effect among the poorest subjects and those that are most motivated to migrate internationally. Neither reducing asylum processing times nor replacing cash benefits with a payment card significantly alters intentions. We note that the presence or absence of an effect does not resolve political and normative questions concerning these policies, which are not the subject of this particular study.

Speaker: Maximiliane Sievert (RWI - Leibniz Institute for Economic Research)

BES_BL_conjoint_20240215.pdf

09:00 → 10:30 Parallel Session 6: Social Policies

09:00 Delivering primary care to the homeless - Evidence from Brazil

In this paper, I study the effect of Mobile Street Clinics on health care utilization and social assistance uptake among the homeless in Brazil. I exploit the staggered introduction of Mobile Street Clinics across different municipalities in a difference-in-differences setting, comparing never- or later-treated to earlier-treated municipalities. I find that the opening of a Mobile Street Clinic is associated with a strong increase in primary health care utilization among homeless indivduals, without affecting social assistance utilization. The results provide first quantitative evidence for the effectiveness of delivering targeted health care to the homeless.

Speaker: Malte Becker

09:30 The impact of social health protection on migration: Evidence from Pakistan

We study the impact of social health protection on the decision to migrate by exploiting the Social Health Protection Initiative (SHPI), introduced gradually after 2015 in selected districts of Pakistan. We exploit the imperfect rollout of the program and evaluate the impact of the program on both international and inter-district out-migration.
Employing the difference-in-difference method with district and year fixed effects, we find that enrollment in the SHPI program does not significantly affect international and overall inter-district migration. We further extend our analysis by separately investigating the migration patterns of urban and rural treated areas. We find that the introduction of the program has had no significant impact on the incidence of out-migration from rural areas. However, the impact of the program on out-migration from urban areas shows a negative and significant effect.

Speaker: Andreas Landmann (Friedrich Alexander University Erlangen-Nuremberg)

My_working_paper__Migration_-4.pdf

10:00 The effects of social pensions on monetary and time transfers among the poor: Evidence from Peru

We study the effects of Peru's social pension program Pension 65 on family transfers of money and time. The program provides pensions to individuals aged 65 and over who are officially classified as extreme poor and who do not have other pensions. We use survey data matched to program's administrative registers and exploit the discontinuity around the welfare index that determines eligibility in order to estimate the intention-to-treat effects of the program on family transfers. We find that Pension 65 reduces monetary family transfers by 70% (the effect is 97% for men). There is a substantial increase in childcare hours among men, from 1 to 7 hours a week. The result is consistent with the increase in the number of young children in the household and with the reduction of time spent on leisure activities for men.

Speaker: Javier Olivera (NBB, PUCP, LISER)

Olivera_Javier_The effects of social pensions on monetary and time.pdf

09:00 → 10:30 Parallel Session 7: Research Methods

09:00 A slippery slope: topographic variation as an instrumental variable

A key identification assumption required for causal claims of instrumental variables (IVs) is the exclusion restriction. This paper assesses the validity of this assumption for topographic variation as a widely used IV in empirical economics. A systematic review of leading economics journals identifies 56 different variables that the reviewed literature causally links to topographic variation. We interpret this as strong indication for a problematic prevalence of confounding variables in most topography-based IV studies. While we find that it is common in the literature to control for some of these variables, we point out that this leads to violations of another key identification assumption, the unconfoundedness of the instrument. As an example, we assess in more depth the interwined causal relationship of roads and electrification for Dinkelman (2011), a seminal study that popularized the use of topographic variation IVs. We apply tests to gauge the strength of potential exclusion-restriction violations and discuss common issues in the literature, including IV weakness in the presence of potential exclusion-restriction violations. Our findings suggest a higher standard in transparently discussing, systematically testing, and ultimately choosing to use topographic variation as an IV.

Speaker: Nils Haveresch (RWI-Leibniz Institute of Economic Research, Essen)

09:30 Lost in the Design Space? Construct Validity in the Microfinance Literature

While results from individual Randomized Controlled Trials (RCTs) often do
not hold beyond their particular setting, the accumulation of many RCTs can be
used to guide policy. But how many studies are required to confidently
generalize? Our paper examines construct validity, an often neglected yet
important element affecting generalizability. Construct validity deals with how
the operationalization of a treatment corresponds to the broader theoretical
construct it intends to speak to. The universe of potential operationalizations is
referred to as the design space. We use microfinance as an empirical example,
a literature that is exceptionally rich in RCTs. By systematically reviewing 38
microfinance RCTs, we demonstrate that even this deep experimental literature
only covers a tiny fraction of the design space and that small variations in the
treatment design matter for the observed treatment effects. Most papers
nevertheless generalize from the operationalized treatment to a broad
construct. We conclude that, to maintain construct validity, RCTs should
semantically limit their inference to the operationalized treatment under
evaluation – thereby trading relevance for rigor.

Speaker: Christina Petrik (Universität Passau)

10:00 Mapping changes in urban informal settlements in sub-Saharan Africa from 2016 to 2022

More than one billion people worldwide live in informal settlements, often called ‘slums’. In sub-Saharan Africa, the world’s fastest urbanizing region, every second urban resident is considered a ‘slum-dweller’. Identifying and mapping the locations of informal settlements at scale and tracking their development over time is thus crucial for adequate policies to alleviate urban poverty and inequality. However, given the rapid and often unplanned urbanization dynamics in African cities, existing monitoring systems are insufficient for tracking the development of informal settlements. Here we show how open-access satellite imagery and machine learning can be used to identify and map urban informal settlements in sub-Saharan Africa across space and time. We developed a machine learning model that combines satellite images with ground truth data on informal settlements from various African cities. Our machine learning pipeline produced 10m resolution probability maps of informal settlements, based on which we calculated estimates of the prevalence and change of informal settlements in 529 cities from 44 countries from 2016 to 2022. We found a high prevalence of informal settlements in many African cities, with particularly high growth rates in Middle and West Africa. In 2022, in 274 of 529 cities the share of the urban population living in informal settlements exceeded 50%, and in 84% of cities, this share increased between 2016 and 2022. Our approach facilitates tracking the spatiotemporal development of informal settlements within cities in a timely and cost-effective manner. Furthermore, it provides first-time estimates of the share and number of people living in informal settlements across sub-Saharan African cities.

Speaker: Nicolas Büttner (ETH Zurich)

Büttner - Mapping informal settlements.pdf

Büttner - Mapping informal settlements - Supplement.pdf

10:30 → 11:00 Coffee

11:00 → 12:30 Parallel Session 1: Post-conflict Environments

11:00 Peace Dividends: The Economic Effects of Colombia's Peace Agreement

The last decades have seen a resurgence of armed conflict globally, renewing the need for durable peace agreements. In this paper, I evaluate the economic effects of the peace agreement between the Colombian government and the largest guerrilla group in the country, the FARC, ending one of the lengthiest and most violent armed conflicts in recent history. Using a difference-in-difference strategy comparing municipalities that historically had FARC presence and those with presence of a similar, smaller guerrilla group, the ELN, before and after the start of a unilateral ceasefire by the FARC, I establish three sets of results. First, violence indicators significantly and sizably decreased in historically FARC municipalities. Second, despite this substantial reduction in violence, I find precisely-estimated null effects across several economic indicators, suggesting no effect of the peace agreement on economic activity. In addition, I use a sharp discontinuity in eligibility to the government's flagship business and job creation program for conflict-affected areas to evaluate the policy's impact, also finding precisely-estimated null effects on the same economic indicators. Third, I present evidence that suggests the reason why historically FARC municipalities could not reap the economic benefits from the reduction in violence is a lack of state capacity, caused both by their low initial levels of state capacity and the lack of state entry post-ceasefire. These results indicate that peace agreements require complementary investments in state capacity to yield an economic dividend.

Speaker: Miguel Fajardo-Steinhäuser (London School of Economics)

MFS_PeaceInColombia.pdf

11:30 Unintended Consequences of UN Reports: Evidence from a Post-Conflict Context

International organizations play a crucial role in the reintegration of former rebels.
They are often the main guarantors and providers of reincorporation projects and
are pivotal in revealing violence during the post-conflict period. Some studies, however,
associate the presence of international missions with political violence. I argue
that international organizations can increase the probability for members of successor
rebel parties to reconsider the use of political violence by providing condemning
reports that reveal government misconduct. How these messages are currently communicated
does not take into consideration the higher psychological susceptibility,
existential vulnerabilities, and volatile environment surrounding this audience. I
test my arguments in Colombia, where the former rebel group FARC participated
for the first time in elections in 2018. Based on a unique sample of FARC supporters
and an experimental design, I show that members of former rebel groups were
more prone to support the reconsideration of political violence when they were confronted
with UN reports condemning government misconduct against their group. I
also show that the FARC did not share these messages on Twitter, indicating that
the FARC leadership is aware that these reports could have the leverage to influence
a critical threshold for former rebels. These results suggest that UN reports
have the potential to negatively affect volatile post-conflict contexts and reveal the
necessity for reevaluating how the UN communicates at the local level.

Speaker: Marcela Ibáñez (University of Zurich)

12:00 ____________

11:00 → 12:30 Parallel Session 2: Politicians

11:00 Job Loss and Political Entry

The supply of politicians affects the quality of democratic institutions. Yet, the role of individual economic shocks for political selection is largely understudied. This paper investigates how experiencing a job loss affects individuals’ decision to enter politics. Using administrative data on the universe of formally employed individuals, local political candidates, and party affiliates in Brazil, and relying on mass layoffs for causal identification, we show that job loss increases the probability that individuals join a political party and run for office in local elections. Heterogeneity analyses reveal a more pronounced increase in candidacies among laid-off individuals with higher financial incentives from office holding and larger predicted income losses. In addition, we find that being eligible for unemployment benefits after job loss also increases party memberships and candidacies. These results are consistent with the reduction in private-sector opportunity costs and the increased time resources explaining the rise in political entry. Moreover, we document that layoff-induced candidates are positively selected in various competence measures, suggesting that economic shocks may improve the quality of politicians.

Speaker: Laura Barros (University of Göttingen)

Barros_Schmeißer.pdf

11:30 Social networks, local elections, and female representation: Evidence from Nepali voter registration data

We use the universe of Nepali voter registration records to examine how social networks shape local-level elections. Using information on individual-level kinship ties among 13.9 million registered voters in 2017, we show how connectedness of individuals to other registered voters and politicians matters for selection into politics. We first establish that political candidates chosen by their party are better connected to voters and other politicians. Further, we show that this correlation is not due to correlated unobservables. Using a regression discontinuity design, we establish a causal link from the political success of one person to the candidacy of their relatives. We show that relatives of bare winners in previous elections are more than twice as likely to be chosen as the party’s candidate for female-reserved seats than relatives of bare losers. To study mechanisms, we investigate effect heterogeneity and find that young women and in-laws are more likely to run if they reside in the same village as the male politician in their family, evidence consistent with women serving as proxies to fill low-ranking female-reserved seats. We also find limited evidence that successful relatives serve as role models that inspire women to run for office.

Speaker: Simon Heß

12:00 Norms of Corruption in Politicians’ Malfeasance

To what extent can audits serve to limit patronage and corrupt networks effectively and sustainably in clientelist societies with a prevailing norm of corruption? We develop a political agency model in which office holders are motivated to reduce rent seeking behavior through re-election incentives operating via elections and audits (formal institutions), but also through reputational concerns that are influenced by the prevailing norm on corruption in their peer group (informal institutions). We show that, while the formal institutions of audits and elections have the desired direct effect of reducing corruption, they also affect informal rules of conduct, which can have unintended effects. We then apply this theoretical framework to evidence from Puerto Rico’s anti-corruption municipal audits program over the period 1987-2014, and argue that the interaction of elections, audits, and norms can help explain a peculiar pattern in the data. Using a quasi-experimental design based on the exogenous timing of audits relative to elections, we find that mayors respond positively to audits in their own community, but negatively to audits - and the corresponding reduction in corruption - in neighboring municipalities. Our estimates suggest a large negative spillover effect: communities where two-thirds of adjacent jurisdictions undergo a (timely) audit experience a 30 percent increase in reported corruption levels.

Speaker: Anke Kessler (Simon Fraser University)

BKZ_NormsMalfeasance_23-10.pdf

11:00 → 12:30 Parallel Session 3: Micro-entrepreneurs

11:00 Light touch, lean tally: impacts of a MSME support programme in Côte d'Ivoire

With Micro, Small and Medium Enterprises (MSMEs) being the most important employers in many developing countries, identifying ways to raise productivity, improve employment conditions and formalise labour in these firms is of prime policy importance. Yet, employment outcomes are often addressed only implicitly in interventions targeting MSMEs and their evaluations, due to the typically small number of employees and the long results chain linking management to employment. We conduct a rigorous impact evaluation of a support programme for MSMEs in Côte d’Ivoire with financial management and human resources (HR) components. 6-18 months after the end of the program, we find muted impacts on business practises, access to finance, and firm performance. On the employment side we find sizeable, positive impacts on employment quality, driven by the share of employees receiving minimum wages and written contracts. We find no significant effect on firm performance and the number of staff. Taken together, our results underscore both the difficulty of boosting firm performance and creating jobs with a low-intensity intervention and the feasibility and importance of improving employment quality in MSMEs in developing countries.

Speaker: Tabea Lakemann (German Institute for Global and Area Studies, University of Goettingen)

Lakemann et al_2024_Light touch lean tally_GDE.pdf

11:30 Gendered Access to Finance: The Role of Team Formation, Idea Quality, and Implementation Constraints in Business Evaluations

Access to finance is crucial for entrepreneurial success, yet constraints for women are particularly pronounced. We structurally unpack whether loan officers evaluate business ideas and implementation constraints differently for male and female entrepreneurs, both as individual entrepreneurs or in entrepreneurial teams. In a lab-in-the-field experiment with Ugandan loan officers, we document gender discrimination of individual female entrepreneurs, but no gender bias in the evaluation of entrepreneurial teams. Together with evidence from a supplementary survey experiment, our results suggest that the observed bias is not driven by animus against female entrepreneurs but rather by differential beliefs about women's implementation constraints in running a business. Policies aimed at team creation for start-up enterprises may have an additional benefit of equalizing access to finance and ultimately stimulating growth.

Speaker: Kristina Czura (University of Groningen)

BartosEtAl_Access2Finance_draft_Feb2024.pdf

12:00 Scaling up financial education among micro-entrepreneurs. Evidence from a randomized saturation experiment

We study direct, spillover and saturation effects of a financial education program on micro-entrepreneurs in Uganda. We randomize the program at the cluster-level, and then randomize the share of treated individuals within treated clusters. 15 months later, the treated show expected effects, such as increased use and amount of mobile money savings or higher investments. Spillovers on untreated peers tend to be insignificant. However, when the share of treated in treated clusters (i.e., saturation) increases, the beneficial effects on the treated become smaller, so that the net effect of the program may turn insignificant if operated at scale.

Speaker: Lukas Menkhoff

11:00 → 12:30 Parallel Session 4: Firms

11:00 ICTs’ adoption and informal firms performance in Africa

This paper analyses the impact of mobile money adoption on informal firms performance in 8 African countries. Firm performance is approximated by firms’ total revenues,
total revenues per employee and number of employees. Measuring the impact of mobile
money adoption raises problems of endogeneity and selection bias, since the choice of
adopting mobile money (or not) is not random. Following recent developments in the
literature concerning these issues, we apply the entropy balancing matching method to
transform our data so that the treatment group (firms that have adopted mobile money)
and the control group (firms that have not adopted mobile money) become similar in
terms of moments of our variables of interest. We then measure the impact of mobile
money adoption using weighted least squares with weights generated by balancing
entropy. Finally, we validate the sensitivity of our results by performing the Oster (2019)
test for variable omission bias. Interpreting our most complete regressions, we can
say that mobile money adoption increases annual sales for our sample of informal
firms by 41% and annual sales per employee by 31%. We also check whether selection
on unobservables could affect our results by doing Oster (2019) test. We find that
(unobservables) biais adjust treatment effect has the same magnitude as our complete
regressions and unobservables selection is not sufficient to drive a zero effect of mobile
money on firms’ performance

Speaker: Magloire SESHIE (Université Mohammed VI Polytechnique (Morroco) & Université Clermont Auvergne (France))

11:30 Bargaining Over Taxes: Evidence from Zambian firms

We study tax compliance of microenterprises under turnover taxation. Using administrative data on the universe of tax filings from Zambia, we document strong and sharp bunching (i) in strictly dominated regions where firms would be better off by reducing turnover and (ii) at amounts which imply round number tax liabilities. These observations reject predictions from standard models of tax compliance but can be rationalized when interpreting tax payments as outcomes of negotiations between taxpayers and tax collectors. We conduct a survey of more than 500 microenterprises in Zambia and document that discussing tax payments with officials before filing tax returns is a widespread phenomenon, lending support to the the negotiation channel.
Finally, a randomized lab-in-the-field experiment provides evidence against competing explanations for the observed bunching behavior.

Speaker: Daniel Overbeck (University of Mannheim)

12:00 Carbon taxation in emerging economies

This paper delivers the first comprehensive analysis of how firms respond to carbon taxation in emerging economies. Our evidence builds on exhaustive administrative data from South Africa, the $13^{th}$ largest emitter worldwide. The presented results are twofold. First, we establish stylized facts on the types of firms that are affected, how much revenue is generated from which sector and which share of national emissions the tax is able to capture. Second, we study the dynamic impact of the carbon tax on firm-level outcomes such as sales, profits, capital and labor inputs. We show that the design of the South African Carbon Tax leads to substantial heterogeneity across sectors in terms of how strongly firms are affected. Contrary to the concern that carbon taxes may impede economic growth we measure no negative effects on firm performance on average. However, this result masks important heterogeneity as we indeed estimate substantial differences across affected industries.

Speaker: Johannes Gallé (MCC Berlin)

11:00 → 12:30 Parallel Session 5: Structural Change

11:00 The Bankruptcy Express: Market Integration and Labor Reallocation in Industrializing Britain

We investigate two determinants of firm exits: technological change and market integration. Contrary to previous studies, we argue that these two factors should not be considered separately: their interaction spurs firms' exit even more. To test this hypothesis, we introduce a new dataset on individual bankruptcies at the location-sector-year level in late 19th century Britain, which we combine with rich micro-level census data. In this period, we investigate the effect of the British railway expansion on firm exits and employment changes. We find that the manufacturing sector - the one with most heterogeneous firms - experienced an increase in job creation and in firms' exits following the arrival of the rail. Accordingly, technological change and market integration work together to explain firms' failure and within-sector reallocation.

Speaker: Tobias Korn (Leibniz Universität Hannover)

Korn & Lacroix_Bankruptcies.pdf

11:30 Colonial (Dis)Integration: Concession Companies and Human Development in Mozambique

Concessions to private companies were a common form of economic and administrative organization during the colonial era in Africa. In 1891, Portugal granted the central and northern regions of Mozambique as concessions to private companies, the Mozambique and Niassa Companies. These companies operated with state-like powers and implemented a vast forced labour regime that exploited the natural resources of the leased territories. I use the river-defined concession borders to provide evidence on the long-term effect of this form of private colonization on human development. Using a novel dataset and a regression discontinuity (RD) design, I find that the concession system had contrasting effects on present-day wealth, health, and education outcomes. Individuals living in villages located just inside the former concession borders of the Mozambique Company have significantly higher levels of health and education compared to those living just outside them. They are also wealthier when considering the operational de facto borders. In contrast, individuals living in villages located just inside the former concession borders of the Niassa Company have significantly lower levels of health and education compared to those living just outside them. My results shed light on the enduring impact of colonial-era private concessions and aim to advance understanding of the origins of the lack of integration in Mozambique.

Speaker: Orlando Roman (Geneva Graduate Institute)

12:00 The Breakdown of the English Society of Orders: The Role of the Industrial Revolution

We study the emergence of modern social mobility in England, connected to the breakdown of a society regulated by ascriptive inherited characteristics, and its association with the Industrial Revolution. We combine two new datasets on individual wealth holdings before and after the Industrial Revolution. We show that ascriptive characteristics, such as hereditary titles, occupational last names,or ethnic identity explain less of the variation in wealth and are less predictive of being rich, after the Industrial Revolution. Moreover, these declines are larger in the parts of England most impacted by the revolution. We then study a key facet of this increased social mobility - geographical mobility. We show that areas that experienced greater outward mobility were those that were; more urbanized; less agrarian; had institutionalized markets; higher incomes; were more politically competitive; were less feudal; and where common lands has been enclosed by an act of Parliament.

Speaker: Cara Ebert (RWI - Leibniz Institute for Economic Research)

11:00 → 12:30 Parallel Session 6: Education

11:00 Learning together: Experimental evidence on parental involvement in education in Uganda

Parental involvement in education can be an important contribution to children’s learning, and a crucial complement to other inputs, such as text books. We here report from a field experiment in Uganda, where households were offered educational material and an action plan to engage them in the learning process of their primary-school child. Our findings show that the intervention increased the time mothers spent on learning activities with their child and the time the child spent doing homework. Moreover, the intervention caused an improvement in educational outcomes, with a marked increase in exam enrollment and with improved test scores for children in the lowest-income families. The increased parental involvement in education did not cause an increase in stress or domestic violence.

Speaker: Arne Nasgowitz (Center for Applied Research at NHH (SNF))

11:30 Evaluating the Effect of School Kits on Child Labour: Experimental Evidence from Ghana’s Cocoa Communities

We assess the impact of distributing school kits as an educational intervention to reduce child labour in low-income, rural settings. To do so, we conducted a clustered Randomized Control Trial (RCT) across 64 primary schools, involving 1,743 children and their caregivers in cocoa-growing communities in Ghana. The school kits provided to children included a school uniform, a pair of shoes, a school bag, 10 exercise books, five notebooks, 10 pens, and a mathematical set. We find that school kits reduced household education-related expenses and increased costs of hired adult labour for cocoa farming. This shift resulted in a reduction of children’s involvement in cocoa work by about six percentage points across both six-month and seven-day periods, but did not reduce the overall likelihood of children working on the farm (or other work). Consequently, although school kits significantly reduced participation in hazardous activities, commonly associated with cocoa farming, by about seven percentage points, it did not alter child labour, as children are still exposed to hazardous situations on the farm. Finally, the school kits were particularly effective in reducing child labour among children from poorer households and those with fewer initial school supplies.

Speaker: Erwin Lefoll (ETH Zurich)

schoolkits_childlabour_GDE24.pdf

12:00 Is Patience Malleable via Educational Intervention? Evidence on the Role of Age in Field Experiments

We study the age-dependent malleability of patience via educational interventions designed to foster financial decision-making capabilities and to induce a more future-oriented mindset. We conduct a field experiment covering both youths and adults in Uganda and aggregate evidence from earlier experiments to study the generalizability of effects. In our field experiment, we find heterogenous effects by age: adults’ patience and discount factors are unaffected by the intervention after 15 months follow-up, but we observe large effects on patience and estimated discount factors and field saving behavior for youth. In the meta-analysis, we find that the results are generalizable across contexts.

Speaker: Tim Kaiser (University of Kaiserslautern-Landau (RPTU) & IZA)

dp16399.pdf

11:00 → 12:30 Parallel Session 7: International Trade

11:00 Regional Market Integration and Household Welfare: Spatial Evidence from the East African Community

The distributional consequences of trade liberalization in Africa are under-researched. In this paper, I investigate the differential impact of the East African Community (EAC) on household welfare using three distinct sets of longitudinal, geo-referenced household-level surveys from the three founding members Kenya, Tanzania and Uganda. I thereby treat the re-establishment of the EAC in 2001 – and the expansion to a customs union and common market in 2005 and 2010, respectively – as a regional policy intervention having differential effects on individual households governed by their geospatial location within the countries, a prediction I derive formally from a canonical New Economic Geography (NEG) model, i.e. from a quantitative spatial equilibrium with heterogenous intra-national space. To test this hypothesis, I employ a difference-in-differences specification with treatment intensity given by households’ road distance to internal EAC border crossings, effectively comparing outcomes between ‘interior’ and ‘border’ households (first difference) before and after the intervention (second difference). Results reveal that households located closer to the internal EAC border did not experience positive welfare effects following the re-establishment. Rather, the results hint at the concentration of economic activity, as measured by increased consumption as well as extensive and intensive labor market opportunities in pre-existing agglomerations.

Speaker: Frederik Wild (University of Bayreuth)

EACDist_JMP_2024.02.14.pdf

11:30 Industrial policy and input market access: Evidence from Nigerian fertiliser

Many economies use industrial policy to nurture sectors that produce inputs critical to economic development. While there are theoretical reasons that justify such state interventions, there is limited direct evidence on whether industrial policy in input markets could effectively induce productivity gains for firms that purchase these inputs. In this paper, I make progress on this front by evaluating an import substitution policy in Nigeria that sought to expand domestic production of inorganic fertiliser, a modern input to agriculture. In particular, I focus on assessing two components of the policy: the construction of domestic fertiliser manufacturing plants and a ban on imports of fertilisers. Combining household surveys and geospatial data on plant locations, I estimate the effects of policy-induced changes in access to fertiliser on adoption rates, and crop yields. To deliver credible estimates, I take advantage of the fact that farm-households were differentially exposed to the policy based on their distance to sources of fertiliser. I find that farms closer to sources of fertiliser exhibit higher rates of adoption on both the extensive and intensive margin, as well as greater crop yields. Preliminary evidence also suggests that the observed effect works through retail prices

Speaker: Ricardo Guzman (Aix-Marseille School of Economics)

12:00 What Role for Aid for Trade in (Deep) PTA Relations?

While recent preferential trade agreements (PTAs) cover an increasingly broad range of policy areas beyond their traditional competence for reducing bilateral tariffs, little is known about the implications of this new emphasis on interactions with other trade-related policy measures. We approach this gap by examining the effectiveness of bilateral aid for trade (AfT) in deep North–South PTA relations. To this end, we use a structural gravity model for bilateral panel data of 29 OECD DAC countries and 144 developing countries from 2002–2015 and find that the marginal effect of AfT decreases as the policy areas of a PTA expand. Further investigation of the underlying mechanisms suggests that the observed trade-off between PTA depth and AfT effectiveness may be due to compliance with the non-tariff provisions contained in deep PTAs. We find two lines of reasoning plausible. First, compliance efforts appear to consume large fractions of AfT and thus reduce AfT available for potentially more effective projects, as we do not observe an alignment of AfT in deep PTAs. Second, since we also observe heterogeneity in interactions across donors, depending on their specific project portfolios, AfT provided by high-income PTA partners could well be used to redirect exports to third countries with comparatively fewer bilateral obligations. Donor countries should therefore carefully weigh compliance costs to developing countries against the non-trade benefits of common deep PTAs, and accurately identify financial and technical assistance needs together with their PTA partners.

Speaker: Tim Vogel (German Institute of Development and Sustainability (IDOS))

DP_13.2023.pdf

12:30 → 13:30 Lunch

13:30 → 15:00 Plenary Session Keynote Sandra Sequeira (London School of Economics)

15:00 → 16:30 Parallel Session 1: Race, Religion and Identity

15:00 Racial Peer Effects at Work: Evidence from Worker Deaths in Brazil

We study the impact of working with same-race coworkers on individuals' retention at firms. Using administrative employer-employee data from Brazil, we exploit unexpected deaths of workers from different race groups as exogenous shocks to the peer group composition. We find that a decrease in the non-white share of coworkers leads to lower levels of retention among non-white workers but does not affect the retention of white workers. The effects are driven by quits rather than layoffs, are highly heterogeneous across occupation characteristics, and interact with the gender composition of the peer group. Our findings highlight how peer dynamics contribute to differences in the careers of non-white and white employees.

Speaker: Katharina Fietz (GIGA | University of Göttingen)

Fietz_Brazil_Worker_Death_Feb_2024.pdf

15:30 Natural Disasters and Sharia Laws

The paper studies the effect of natural disasters on the introduction of religious laws using a unique dataset on Sharia laws in the largest Muslim country – Indonesia. We find that districts in proximity to a natural disaster are 37 percent more likely to introduce Sharia law in the following year, and the effect persists over the following years. Testing for the mechanism, we use a longitude survey to show that natural disasters are associated with higher self-reported religiosity and frequency of praying in areas closer to the natural disasters. This is the first study to link natural disasters and religiosity to the institutionalization of religious laws.

Speaker: Fabian Haas (Department of International Economic Policy, University of Freiburg)

NaturalDisastersAndShariaLaws.pdf

16:00 Teachers’ caste bias affects students’ mental health and aspirations in Bihar, India

Social identity-based prejudice has a debilitating effect on various life outcomes. While the social science literature primarily focuses on the economic and social consequences, the mental health effects of such biases are vastly under-studied. We investigate this question in the context of caste discrimination in Bihar, India, using a large-scale, detailed, representative survey of public schools. Our analysis shows that a backward caste student has 0.42sigma higher depression score and is 19 percentage points more likely to be categorized as `depressed', relative to a forward caste student, when taught by a forward caste teacher. To understand the source of the effect on mental health, we show that forward caste teachers systematically underestimate the learning levels of backward caste students relative to forward caste ones. This constitutes an objective measure of teachers' caste-based prejudice. Further, backward caste students also exhibit considerably lower levels of educational aspirations relative to their forward caste counterparts. Our estimates suggest that about 7.7m students suffer from depression in Bihar, and out of that 6.7m are from backward castes. A significant proportion of such cases arise because of teachers’ caste prejudice.

Speaker: Ritwik Banerjee (IIM Bangalore)

15:00 → 16:30 Parallel Session 2: Democratic Institutions

15:00 Dominance and Dissent: Party Influence and Social Unrest in South Africa

Social unrest and weak electoral competition are common in many developing
countries, but how dominant parties respond to discontent is not well understood. This paper examines how electing dominant party representatives affects social unrest in South Africa. The African National Congress (ANC) has held a hegemonic position in South African politics since the end of apartheid but has faced frequent criticism for poor service delivery and allegations of corruption and government malpractice. Using georeferenced data on riots and protests and a regression discontinuity design, I show that areas controlled by the ANC have significantly lower levels of violent social unrest compared to opposition-controlled areas with similar characteristics. Furthermore, by combining multiple data sources, this paper offers insights into how stronger accountability measures and public policy interact in shaping social unrest in a dominant party setting.

Speaker: Sebastian Jävervall (Kiel Institute for the World Economy)

Javervall_unrest_2024-01.pdf

15:30 Access to Primary Care and Voting Outcomes: Evidence from healthcare expansion in Brazil

This paper investigates whether improved access to primary care physicians resulted in electoral benefits for the incumbent government in Brazil. In 2013, the Brazilian Workers Party introduced a large-scale program aimed at expanding primary health care access by employing and retaining thousands of doctors to under-served, vulnerable municipalities. Employing a difference-in-difference estimation on a matched panel of 4,400 municipalities over elections in 2002-2022, I find that where the program was strongly improving healthcare access, the Workers Party gained roughly 1.5 percentage points during two election cycles. The increase is driven by an expansion in the availability of doctors as opposed to new clinics or equipment.

Speaker: Stefan Sliwa Ruiz (University of Groningen)

PMM_voting-StefanSliwaRuiz.pdf

16:00 Does Development Contribute to Democracy? Microeconomic Evidence from Severe Climate Events

This paper first shows the potential of climate change to affect the stability of political systems. More specifically, using data from Africa, I show that experiencing extreme weather events decreases support for democracy in the population. Second, I show evidence that suggests that variation in food availability is a channel that connects weather events with support for democratic systems. Finally, the results provide a fresh perspective on the relationship between economic development and democracy. Using individual-level data allows me to tie the analysis closely to some of the micro-foundations in existing theories. The results show that improvements in living conditions lead to stronger support for a democratic system.

Speaker: Matthias Schündeln (GNOI)

15:00 → 16:30 Parallel Session 3: Youth Career Interventions

15:00 Unlocking young women's minds? The impact of a low-cost career guidance program

Young people lacking job-qualifying skill formation are likely to face precarious labor market conditions in the future. This might be particularly the case for youth from disadvantaged backgrounds and young women facing rigid gender norms at risk of not entering the labor force. Career guidance prior to making major career choices has the potential to alleviate these risks. We examine whether and how a low-cost 10-hour long career guidance program implemented during school hours can facilitate career choices as well as labor market entry in the future. Our results from a school-level clustered randomized controlled trial ($n>5000$) in urban India with primarily female students in the final grade of 45 secondary schools show that the program increases the share of students pursuing further skill formation and encourages students to consider their interests as the most important criterion for the selection of their career path.

Speaker: Ankush Asri (Radboud University)

15:30 "You can be anything you want!" A randomized-controlled trial to broaden adolescents’ occupational interests

We investigate if changing students’ personal mindsets (by allowing them to explore their own interests), affects the way in which they acquire information about possible careers and in which they process information about higher education (formal education and vocational training). We find that students who participated in our intervention seek information about more diverse career paths, and shift their focus from occupations that require university education towards occupations that require a high school degree. We do not find that they process higher education-related information differently than students who participated in a placebo intervention. This seems to be because students shifted their information acquisition away from occupations that require a university degree towards occupations that require a high school degree, such that high school-related information remained equally relevant to students in both groups, and was thus appropriately processed.

Speaker: Claudia Schupp (UWVL)

paper_GDE.pdf

16:00 Better programs, better jobs? Evaluating a skills-training program for disadvantaged young women in Ghana

Improved workforce development programs and education in general are of high priority for national governments and development cooperation to tackle the rising youth underemployment in many Sub-Saharan African countries coupled with continued population growth and increasing urbanization rates. Nevertheless, rigorous evidence of their effectiveness remains scarce and finds mixed results. We conducted a randomized controlled trial of a best-case scenario training program in Ghana. The program improved participants’ employment probability and certain aspects of employment quality and livelihoods, but the impact strongly depends on the program design and implementation. Expectation surveys reveal that stakeholders are overly optimistic about program effectiveness and update their beliefs only to a limited extent when presented with evaluation results.

Speaker: Sarah Frohnweiler (RWI - Leibniz Institute for Economic Research)

15:00 → 16:30 Parallel Session 4: Resilience and Adaptation

15:00 Resilience to shocks and poverty in developing countries: Empirical evidence from rural households in Southeast Asia

The question “How resilient are rural households?” is becoming an important research issue, especially in the context of more frequent and severe shocks in rural areas of developing countries. We use balanced panel data from 3367 households from Thailand and Vietnam collected in 2010, 2013, and 2016 to estimate a (latent) variable reflecting resilience capacity of rural households and examine the influences of resilience capacity on mitigating the impact of shocks and improving household welfare. We employ a generalized structural equation model (GSEM) to estimate the latent variable representing households’ resilience capacity. The results from fixed-effects estimations show that the lagged resilience capacity of rural households has a significant and negative correlation with losses caused by shocks. Moreover, the results of fixed-effects estimations with a control function approach indicate that an improvement in the resilience capacity can prevent rural households from falling into poverty in absolute and multidimensional terms.

Speaker: Manh Hung Do (Institute for Environmental Economics and World Trade, Leibniz University Hannover)

15:30 Climate-Induced Extreme Weather Events: Can Rural Households Recover? Evidence from India

Against the background of growing climate change-related extreme weather events leading to environmental/natural disasters, we assess the capacity of rural households to manage recovery in developing countries. We investigate this in the context of floods in South India by studying both the extent and patterns of financial damage and the recovery from flood-induced damage.
Using primary data from 600 households before and after the floods of 2018, we find that the majority of the households (66 percent) report suffering financial damage in flood and only 22 percent reported some form of reinvestment to repair or replace flood-induced damage. In this study, we investigate both these phenomena and the factors influencing them in two parts. In the first part, we examine the diverse aspects of flood-induced financial damage. In the second part, we look at the recovery from the extreme weather events which have differential impact in the regions sampled. As borrowing is identified as an important way to manage risks and emergencies by households in developing countries where alternate risk management mechanisms are not available, we examine the role of debt literacy in recovery. Using Ordinary Least Squares and Tobit regressions, we provide evidence that there exists a positive association between debt literacy and reinvestment post-flood (at 10 percent). We find that the relationship remains positive and significant (at 5 percent) in the case of reinvestment in crops and durables. This implies that higher debt literacy might be enabling better access to formal channels of credit for reinvestment. The findings could help policymakers to devise effective risk mitigation and management strategies in the aftermath of shocks in regions lacking formal risk management mechanisms. Informed policies could improve the financial well-being of vulnerable rural households using suitable institutional credit supply mechanisms to support reinvestment.

Speaker: Remya Tressa Jacob

16:00 Weather shocks, migration, and in-place adaptation

Allowing for in-place adaptation when analysing climate migration drastically changes policy implications. Besides sending migrants, Kenyan households react to temperature shocks by transiting to less climate-sensitive (non-agricultural) occupations and by changing livestock species. These in-place adaptations shed light on the mechanisms through which common policies weaken temperature’s effect on migration. Better infrastructure catalyses occupational transitions and reduces other adjustment margins such as migration and livestock composition. Random unconditional cash transfers attenuate temperature’s effect on migration by softening welfare losses. We rationalise household responses to weather shocks using a model of joint migration, occupation, and livestock choices by households accounting for equilibrium adjustments in local wages. We show that the three coping strategies are substitutes and that infrastructure lowers the effect of temperature shocks on migration at lower costs than several other common policies. Compared to ours, a model that considers migration as the only coping strategy under-estimates the mitigating impact of infrastructure investment on the effect of heat on migration by more than half.

Speaker: Marco Alfano (Lancaster University)

AlfanoGoerlach-Feb2024.pdf

15:00 → 16:30 Parallel Session 5: Labor Markets

15:00 Job Loss and the Distributional Effects of Self-Employment Spells

It is well established that job loss has a negative impact on workers' career trajectories, but little is known about the mediating effect of transitions into self-employment. Using a rich data set of the universe of formal employment records in Brazil matched with detailed data on business ownership, I leverage mass displacement events to investigate the link between job loss, self-employment, and reemployment. I focus my analysis around a policy change in 2009 that significantly reduced barriers to microenterprise formation (i.e. formal self-employment). Prior to the policy change, the self-employment path after a job dismissal was primarily followed by high-income workers. After the reform, low-income workers closed one-third of this gap. While both high- and low-income workers who take the self-employment path are 63-65p.p. less likely to return to wage employment, there are significant distributional effects for those who eventually do return. High-income workers face a wage penalty of 12 log points, while the estimates are non-significant for low-income workers, who are partially shielded from large losses due to minimum wage regulations. The 2009 policy change, while making formal self-employment more attractive, does not appear to alter these reemployment patterns. My results are consistent with self-employment being an important option for distressed workers facing job loss, especially those at the bottom of the income distribution.

Speaker: Fabiano Dal-Ri (Cornell University)

DalRi_JobLoss_SelfEmployment_20240212.pdf

15:30 Regulating Manufacturing FDI: Local Labor Market Responses to a Protectionist Policy in Indonesia

We analyze the effect of rising protectionism towards foreign direct investment (FDI) on domestic employment, exploiting revisions in Indonesia's highly-granular negative investment list, and spatial variation in the exposure of the manufacturing sector to these investment restrictions. Rising restrictions caused employment gains at the local level. In our main specification, FDI regulation explains one-tenth of the aggregate employment increases observed between 2006 and 2016 in Indonesia. These employment gains go along with a reorganization of the local production structure. Local exposure to FDI restrictions is linked to new firm entries in the manufacturing sector that are concentrated among micro and small enterprises. While we cannot rule out that foreign capital gets substituted by domestic labor (thus driving employment gains), we document that at least part of the effect is driven by spillover-effects along the local value chain and an increase in the size of the local service sector, triggered by increased immigration and demand for housing.

Speaker: Esther Gehrke (Wageningen University)

NIL_labor_market_15February2024.pdf

16:00 The Impact of Flash Floods on the Spatial Distribution of Businesses and Workers

This paper analyzes how a natural disaster affects the spatial distribution of establishments and workers, using the devastating 2008 Santa Catarina Flash Flood (Brazil) as a natural experiment. We combine synthetic-aperture radar images that show the exact location of flood spots with geocoded employer-employee data to estimate the impact of the disaster. We find that establishments in affected areas have a higher chance of closure but they do not adjust to the shock through business relocation or market entry. Workers dismissed in the wave of disaster face reduced job prospects, with no impact on wages or migration rates for those who do find new employment. These effects persist over the analyzed 5- to 9-year period.

Speaker: Philipp Ehrl (Getulio Vargas Foundation)

DAWG version PE 01-2024.pdf

15:00 → 16:30 Parallel Session 6: Healthcare Utilization

15:00 Impacts of Public Insurance on Health Access and Outcomes - Evidence from India

At more than 50%, India has one of the world’s highest out-of-pocket healthcare expenditure rates. Historically, low cost healthcare has been provided by the government through public healthcare facilities. Faced with a high demand for tertiary healthcare and an overcrowded public healthcare infrastructure, the central and various state governments adopted a model of public-private-partnership where the government will pay the insurance premium for low income households who will be covered by the insurance at various government and private hospitals for their tertiary care needs. However, given the wide disparity in quality across
private hospitals, it is not clear how such a framework would affect the demand for private healthcare or overall health outcomes. We analyse a pioneering public insurance scheme in India, the Rajiv Aarogyasri program (RAS), introduced by the state of Andhra Pradesh(AP) between 2007 and 2008, on maternal and child health outcomes. India has consistently ranked
low in maternal and child health outcomes among its peers and a leading factor contributing to high infant and maternal mortality rates is the low rate of institutional deliveries. Since RAS covers institutional reproductive care, particularly subsidizing private care, we first
examine if RAS increases institutional deliveries, particularly in private hospitals. Second, we study if the program led to improvements in key outcome variables that might have come from increased access to institutional care, specifically out-of-pocket costs and infant mortality. Using pooled cross-section data from three waves of District Level Health Survey(DLHS), we estimate a difference-in-differences model, by exploiting variation in the timing of births between 2000-2015 and using contiguous districts in the neighboring states without RAS as a plausible control group. Our tests confirm parallel pre-treatment trends between the treatment and the control districts. We find that deliveries in private hospitals increased, and government hospitals decreased after the introduction of the program. However, even as the use of private facilities increased, we find that out-of-pocket costs declined. Further
examination shows that these effects come from households who were more likely to be using government hospitals before the introduction of RAS suggesting a substitution effect of the relative price change – a switch to private from government hospitals. We do not find an overall increase in access to tertiary care, nor any effect on infant mortality. However,
heterogeneity analysis reveals that the program likely bridged the gender gap in access to costly private healthcare. Even as we observe a more pronounced decrease in OOP expenses for male births relative to female births, girls are more likely to be born at private facilities
following the implementation of RAS, whereas boys’ likelihood of being born in private facilities remains unchanged before and after RAS. This suggests that parents were more inclined to opt for costly private institutional deliveries for male children in comparison to female children prior to the introduction of RAS.

Speaker: Titir Bhattacharya (University of Warwick)

15:30 Health Insurance Preferences for Outpatient Care – A Discrete Choice Experiment in Pakistan

State-funded health insurance schemes are increasingly implemented in the Global South, but utilization and acceptance often remains lower than desired for Universal Health Coverage. Including features that address the beneficiary population’s preferences could improve this. We conducted a Discrete Choice Experiment to elicit preferences for a new public outpatient health insurance for low-income households in Pakistan at scheme design stage. We included five attributes that reflected the dimensions of real policy trade-offs during scheme design: healthcare providers, services, health conditions, coverage amount and premium. The main effects reveal relevance of all attributes and strong preferences for including higher-level healthcare providers as well as telemedicine and for covering chronic disease needs. We see suggestive evidence that even in a setting with low insurance literacy, choices regarding which health conditions to cover were made to maximise benefits along known, pre-existing health complaints and risk-factors. We do not detect substantial heterogeneity in preferences across socio-demographic strata, respondent and household health status, indicating rather homogenous preferences.

Speaker: Alina Imping (University of Erlangen-Nürnberg)

DCE_Pakistan_Draft_240209.pdf

16:00 Self-medication under Uncertainty: Insights on Consumer Behavior and Drug Quality in Burkina Faso

In many countries access to quality health care services is still low and access affordable, quality-assured, and effective medicine constrained by inadequate regulation, poor supply chain management, and weak gate-keeping. In such settings, self-medication is common. In this study, we aim to better understand self-medication with antibiotics in Burkina Faso. Chemical quality testing of antibiotic medicines indicates that one in three products on the market is substandard or falsified, exposing consumers to significant risk and uncertainty. Our household survey data and experiments show that consumers are aware of the risk of poor-quality antibiotics, but face challenges in accurately assessing medicine quality. Furthermore, we find that the preference for self-medication increases linearly as quality becomes more certain, suggesting a direct trade-off between improved medicine quality and self-medication.

Speaker: Lena Merkel (German Institute for Global and Area Studies (GIGA) and Bernhard Nocht Institute for Tropical Medicine (BNITM))

15:00 → 16:30 Parallel Session 7: Connectivity

15:00 Bridging Seasonal Disconnectivity in Rural Rwanda: Economic and Environmental Impacts of Trailbridges

I measure the impact of trailbridges connecting rural Rwandan villages on remote-sensed developmental and ecological outcomes. Modern trailbridges provide safe and consistent commutes to work, school, markets and healthcare. To identify the causal effect of increasing villagers' mobility, I use variation in bridge construction timing and feasibility to compare villages in similar need of a bridge. The average treatment effect is a 3% increase in population, a 14% increase in night time light, and a 40% reduction in deforestation, indicative of improved biomass fuel market efficiency due to trade. Comparing villages on either side of the bridge by distance to all-weather roads reveals consistent effects. These findings underscore the value of completing missing pedestrian links with affordable infrastructure in fostering socio-economic development and environmental sustainability.

Speaker: Cannon Cloud (Goethe Univeristy Frankfurt)

BridgeImpactCloud.pdf

15:30 Market Day Coordination, Market Size, and Rural Development

Market days are the pulse of rural, economic and social life in many parts of the world and millions of people rely for their daily sustenance on weekly markets. They are also a complex coordination problem between sellers and buyers that determines who participates where and when in market exchange. I study the role of this long-standing institution in shaping agglomeration and present-day local trade patterns. I identify a natural experiment in Western Kenya in which market schedules over the past century were set quasi-randomly, inducing exogenous variation in markets competing over participants with their neighbors on the same day of the week. I find that market schedule coordination causally and lastingly affected market attendance, driven by cross-attendance from other villages, as well as present-day population and nighttime luminosity as a proxy for economic activity.

Speaker: Moritz Poll (Brown University)

PollMarketDaysGDE.pdf

16:00 Subways or Minibuses? Privatized Provision of Public Transit

Workers in developing countries waste significant time commuting, and gaps in public transit constrain access to productive jobs. In many cities, privately-operated minibuses provide 50–100% of urban transit, at the cost of long wait times and poor personal safety for riders. Should developing-country cities follow the typical recommendation of bus rapid transit or subway investments or rather optimize this existing, home-grown network? I build a micro-founded model of privatized shared transit subject to externalities in matching between buses and passengers. I then estimate the model with newly collected data on minibus and passenger queues in Cape Town and stated user preferences for exogenously-varied commute attributes. I find that Cape Town’s existing bus rapid transit decreased welfare, net of costs, but socially-optimal minibus fares and commuter taxes correct matching externalities, particularly benefit low-skill workers, and reduce spatial misallocation. Government actions to improve security bring even more substantial welfare gains.

Speaker: Lucas Conwell (University College London)

Conwell_Lucas_Job_Market_Paper_compressed.pdf

16:30 → 17:00 Coffee

17:00 → 18:00 Parallel Session 1: Regional Favoritism

17:00 Wedded to Prosperity? Informal Influence and Regional Favoritism

We investigate the informal influence of political leaders' spouses on the subnational allocation of foreign aid. Building new worldwide datasets on personal characteristics of political leaders and their spouses as well as on geocoded development aid projects (including new data on 19 Western donors), we examine whether those regions within recipient countries that include the birthplace of leaders' spouses attract more aid during their partners' time in office. Our findings for the 1990-2020 period suggest that regions including the birthplaces of political leaders' spouses receive substantially more aid from European donors, the United States, and China. We find that more aid goes to spousal regions prior to elections and that developmental outcomes deteriorate rather than improve as a consequence. For Western aid but not for China, these results stand in some contrast to those for leader regions themselves. This suggests that aid from Western donors is directed from serving obvious political motives to promoting more hidden ones.

Speaker: Lennart Kaplan (GAU)

17:30 Political Favoritism and internal migration in Benin

In this paper we explore the role of regional connections with a national leader as a pull factor of internal migration in Benin by exploiting granular census data over the period 1991-2013. The empirical analysis is based on a gravity model of migration and utilizes a PPML estimator. Controlling for a diverse set of fixed effects, we show that being connected to a national leader goes along with statistically significant levels of migration into the respective districts. We also provide more detailed evidence that links these migration movements to the presence of political favoritism through its ability to improve economic opportunities and the access to public goods at the local level. The evidence in this paper blends in well with the related literature on political favoritism extending it by a previously unexplored dimension.

Speaker: Alexander Stöcker (German Institute of Development and Sustainability (IDOS))

1855306204.pdf

17:00 → 18:00 Parallel Session 2: Foreign Aid

17:00 Regional Effects of the Belt and Road Initiative

This paper addresses the gap in the literature concerning the impact of the Belt and Road Initiative (BRI) infrastructure projects at a regional level. Utilizing a staggered difference-in-differences approach, we analyze the effects of BRI transport infrastructure, including railways, roads, and logistic hubs, on local development. To achieve this, we develop a geographic dataset detailing the timelines of project implementation and completion, and combine it with night light output and population data at the pixel level. Our results indicate a modest increase in population development following project completion, but no significant long-term regional economic growth as measured by nightlight output. The construction phase, however, temporarily boosts economic activity, which subsides after completion. Logistic hubs demonstrate greater developmental impacts compared to railways and roads. Additionally, we observe no significant local migration during the construction phase. Overall, this paper contributes to our understanding of the potential effects of transport infrastructure on regional economies.

Speaker: Alexander Bareis (Universität Siegen)

17:30 Aid Allocation and Deportation Enforcement

Scaling up the forced return of migrants has turned into a popular policy call in most destination countries. However, its execution faces practical difficulties because repatriating migrants requires cooperation on the part of origin countries who are typically opposed to the reception of deportees. We argue that the allocation of official development assistance is used as a bargaining chip in two-sided strategic interactions: Deporting countries use the promise of aid as a strategic tool to enforce cooperation. Seen from the receiving end, repatriation of deportees can be leveraged to obtain more aid. We test this argument on a sample of more than 2800 deportation corridors from 31 European countries to 121 countries of citizenship over the period 2008 to 2021. To address the main identification challenge of unobserved bilateral migration potentially driving both deportations and aid, we estimate the effect of aid on executed returns conditional on previously emitted orders to leave. We find that the elasticity of executed returns with respect to orders to leave increases for countries with a stronger reliance on aid: While a 1% increase in orders to leave is associated with a 0.24% increase in forced returns in a scenario of no aid, the elasticity of returns with respect to orders increases by an additional 0.02% increase for every 1% increase in bilateral aid. For the average deportation corridor, this translates to a relatively small increase of executed returns per aid dollar spent. This effect is more relevant if no repatriation agreements are in place; and the effect is weaker in countries with access to Chinese aid, suggesting a better bargaining position of countries of origin. In sum, our findings lend support to a paradox of aid and migration policies: Aid allocation is used to obtain cooperation on a migration policy that responds to domestic politics in destination countries but that is likely detrimental to economic development at origin and expensive for deporting countries.

Speaker: Christian Ambrosius (GNOI)

Deportation Corridors and ODA_GDE.pdf

17:00 → 18:00 Parallel Session 3: Energy Use

17:00 Lost in transition – The decline of LPG usage and the charcoal renaissance in urban Senegal

Claims for removing fossil fuel subsidies in the Global South are based on climate and equity concerns, but they can be at odds with improving access to LPG as a clean cooking fuel. We examine the case of urban Senegal where LPG usage rates were among the highest in Sub-Saharan Africa in the late 2000s. Using representative data, we show that LPG usage rates declined sharply following the removal of LPG subsidies in 2009. Counterintuitively, the decline was not reversed when world market prices led to a local price decrease. To explore this puzzle, we use detailed household data from a survey we conducted in two waves in 2009 and 2019. We find that households switched back to charcoal after the subsidy removal, yet over time they increasingly use newly promoted energy-efficient charcoal stoves. These stoves make the transition back to LPG less attractive. Our results suggest that the energy transition of the poor is a highly price responsive process. Pricing instruments such as end user subsidies and carbon taxes should be used cautiously and with an eye on the poor.

Speaker: Julian Rose (RWI - Leibniz Institute for Economic Research)

17:30 Saving lives with cooking gas? Unintended effects of targeted LPG subsidies in Peru

I study a nationwide gas stove program which aims to convert Peruvian households from wood-fuel cooking to liquefied petroleum gas (LPG) cooking. Using 16 waves of Peru’s Demographic and Health Survey, I show that infant mortality increases by 15% on average as a result of the intervention. Subsidizing LPG also causes a higher incidence of symptoms of acute respiratory infections in under-5 children and of moderate or severe anemia among adult women. I provide suggestive evidence that these health impacts are due to an increase in total exposure to air pollutants and to unanticipated behavioral effects of the intervention.

Speaker: Thomas THIVILLON (Bordeaux School of Economics, University of Bordeaux)

Thivillon_CookingGas.pdf

17:00 → 18:00 Parallel Session 4: Shock-coping Strategies

17:00 Shouldering the Weight of Climate Change: Intra-household Resource Allocation after Rainfall Shocks

This paper investigates the effect of rainfall shocks on the allocation of household con- sumption among children, women, and men in Malawi. The identification relies on the spatial-temporal variation in the occurrence of rainfall shocks in four agricultural growing seasons between 2010 and 2019. I estimate a collective model of household to retrieve individual resource shares and their determinants. Results show that a drought in the growing season is likely to induce the redistribution of household resources from women and children towards men. Welfare analyses based on the comparison of individual consumption and poverty rates show that women tend to bear the burden of the shock within the household. The negative effect of a drought on women’s resource shares is more pronounced in areas where men are more actively involved in income-generating and off-farm activities than women after a drought. This suggests that the drought-induced redistribution of resources within household is likely motivated by ‘life-boat ethics’, that is, nourishing the members with higher marginal productivity and potential to bring cash income to the household.

Speaker: Ulugbek Aminjonov (Bordeaux School of Economics)

AMINJONOV Ulugbek Shouldering the Weight of Climate Change - Intrahousehold Resource Allocation after Rainfall Shocks.pdf

17:30 Solar technology as a shock-coping device: Evidence from rural Tanzania

Solar home systems, a technology that is by now widely used to access electricity by households not connected to the grid, can also provide a strategy for income diversification.
We demonstrate this based on unique high-frequency loan repayment and electricity usage data of about 20,000 Tanzanian farmers over four years. Relying on machine learning based classification, we predict the likelihood that farmers run a small-scale business on a daily basis. Conditional on household and district-year fixed effects, we show that some farmers take advantage of their solar home system to generate income in the aftermath of vegetation shocks. Business uptake provides a short-term shock coping strategy, especially in more remote areas where electricity related services are scarce. This application also highlights new potential uses of high-frequency observational data in contexts where survey data is scarce.

Speaker: Friederike Lenel (PIK; Uni Göttingen)

17:00 → 18:00 Parallel Session 5: Gender Norms

17:00 Does gender equality in labor participation bring real equality? Evidence from developing and developed countries

The Female Labor Force Participation (FLFP) has a strong and significant dis-equalizing impact in at least three groups of developing countries, and relatively low initial participation levels, based on a macro- and micro-data comparison. Whereas, in developed countries, both a cross-country comparison and a literature review have shown that the relationship is tendentially equalizing. Based on a decile level data analysis in developing countries, we found that the FLFP showed higher levels of returns among top deciles compared to the lower ones. This evidence emphasizes the importance of developing policies to encourage participation among women belonging to lower deciles of the income distribution.

Speaker: Michele Fabiani (University of Macerata)

Manuscript_whit author details.docx

17:30 How do harmful social norms interact? Evidence from the Revised Family Code in Ethiopia

Abstract:
The prevalence of female genital cutting (FGC) remains high, despite increasing policy efforts to combat this harmful practice. In Ethiopia, 25 million women alive today have been cut and FGC is strongly linked to norms regarding early marriage by serving as a signal for pre-marital virginity. I, therefore, study how a law that raised women’s minimum marriage age marriage from 15 to 18 in Ethiopia affected FGC. Exploiting the staggered roll-out of the reform across regions with a two-way fixed effects approach, I find that the reform substantially reduced FGC prevalence by around seven percentage points. These effects are mostly driven by women living in rural areas. Among rural women, the effects are additionally larger in districts with lower child-marriage levels prior to the reform but do not seem to depend on ethnic groups’ age of cutting. Overall, policies that target specific harmful practices can have positive spillover effects on other related norms, thereby improving women’s well-being and potentially the development of economies altogether.

Speaker: Anne Simon (Leibniz-University Hannover)

FGC_EMR_Ethiopia_Paper_AnneSimon.pdf

17:00 → 18:00 Parallel Session 6

17:00 ____________

17:00 → 18:00 Parallel Session 7

17:00 ____________

18:00 → 18:30 Conference Closing

18:30 → 20:00 Dinner (at own expense)