Embedded Files
About: BREAD Fellows and Affiliates often submit Working Papers to be listed on the BREAD website. You can view BREAD Working Papers below.
Repository: BREAD Working Papers are hosted in a Github repository (linked here) to ensure files are accessible freely and publicly.
About: BREAD Fellows and Affiliates often submit Working Papers to be listed on the BREAD website. You can view BREAD Working Papers below.
Repository: BREAD Working Papers are hosted in a Github repository (linked here) to ensure files are accessible freely and publicly.
Instructions for submitters: If you are a BREAD Fellow or Affiliate looking to submit a working paper, please submit it to ibread@princeton.edu and include the following: (1) Title, (2) Abstract, (3) Authors, and (4) Live link / Pdf that you want included on the website. Submissions must include all four to be accepted.
Instructions for submitters: If you are a BREAD Fellow or Affiliate looking to submit a working paper, please submit it to ibread@princeton.edu and include the following: (1) Title, (2) Abstract, (3) Authors, and (4) Live link / Pdf that you want included on the website. Submissions must include all four to be accepted.
Date: Summer 2021
Date: Summer 2021
WP#: 599
WP#: 599
Authors: Matteo Bobba, Tim Ederer, Gianmarco Leon-Ciliotta, Christopher A. Neilson, and Marco Nieddu
Authors: Matteo Bobba, Tim Ederer, Gianmarco Leon-Ciliotta, Christopher A. Neilson, and Marco Nieddu
Abstract: This paper studies how increasing teacher compensation at hard-to-staff schools can reduce inequality in access to qualified teachers. Leveraging an unconditional change in the teacher compensation structure in Peru, we first show causal evidence that increasing salaries at less desirable locations attracts better quality applicants and improves student test scores. We then estimate a model of teacher preferences over local amenities, school characteristics, and wages using geocoded job postings and rich application data from the nationwide centralized teacher assignment system. Our estimated model suggests that the current policy is both inefficient and not large enough to effectively undo the inequality of initial conditions that hard-to-staff schools and their communities face. Counterfactual analyses that incorporate equilibrium sorting effects characterize alternative wage schedules and quantify the cost of reducing structural inequality in the allocation of teacher talent across schools.
Abstract: This paper studies how increasing teacher compensation at hard-to-staff schools can reduce inequality in access to qualified teachers. Leveraging an unconditional change in the teacher compensation structure in Peru, we first show causal evidence that increasing salaries at less desirable locations attracts better quality applicants and improves student test scores. We then estimate a model of teacher preferences over local amenities, school characteristics, and wages using geocoded job postings and rich application data from the nationwide centralized teacher assignment system. Our estimated model suggests that the current policy is both inefficient and not large enough to effectively undo the inequality of initial conditions that hard-to-staff schools and their communities face. Counterfactual analyses that incorporate equilibrium sorting effects characterize alternative wage schedules and quantify the cost of reducing structural inequality in the allocation of teacher talent across schools.
Date: Fall 2021
Date: Fall 2021
WP#: 598
WP#: 598
Authors: Joshua W. Deutschmann, Jared Gars, Jean-Francois Houde, Molly Lipscomb, and Laura Schechter
Authors: Joshua W. Deutschmann, Jared Gars, Jean-Francois Houde, Molly Lipscomb, and Laura Schechter
Abstract: Privatization of a public good (the management of sewage treatment centers in Dakar, Senegal) leads to an increase in the productivity of downstream sewage dumping companies and a decrease in downstream prices of the services they provide to households. We use the universe of legal dumps of sanitation waste from May 2009 to November 2018 to show that legal dumping increased substantially following privatization – on average an increase of 61.7%, or an increase of about 14,000 cubic meters each month. This is due to increased productivity of all trucks, not just those associated with the company managing the treatment centers. Household-level survey data shows that prices of legal sanitary dumping decreased by ten percent following privatization, and DHS data show that diarrhea rates among children under five decreased in Dakar relative to secondary cities in Dakar following privatization with no similar effect on respiratory illness as a placebo.
Abstract: Privatization of a public good (the management of sewage treatment centers in Dakar, Senegal) leads to an increase in the productivity of downstream sewage dumping companies and a decrease in downstream prices of the services they provide to households. We use the universe of legal dumps of sanitation waste from May 2009 to November 2018 to show that legal dumping increased substantially following privatization – on average an increase of 61.7%, or an increase of about 14,000 cubic meters each month. This is due to increased productivity of all trucks, not just those associated with the company managing the treatment centers. Household-level survey data shows that prices of legal sanitary dumping decreased by ten percent following privatization, and DHS data show that diarrhea rates among children under five decreased in Dakar relative to secondary cities in Dakar following privatization with no similar effect on respiratory illness as a placebo.
Date: Fall 2021
Date: Fall 2021
WP#: 597
WP#: 597
Abstract: During the 2014 Indian general elections, we carried out a large-scale experiment randomizing a radio campaign highlighting the disadvantages of voting for corrupt vote-buying politicians. Official electoral data shows that the radio campaign significantly decreased the vote share of parties that engaged in the most vote buying (as reported by journalists). Voter survey data shows that the campaign increased the salience of government corruption as an election issue and decreased voting for parties that offered gifts. From a policy perspective, we show that radio campaigns are a cost-effective method to influence voter behavior. From a measurement perspective, we show that journalist interviews can impartially identify vote-buying politicians.
Abstract: During the 2014 Indian general elections, we carried out a large-scale experiment randomizing a radio campaign highlighting the disadvantages of voting for corrupt vote-buying politicians. Official electoral data shows that the radio campaign significantly decreased the vote share of parties that engaged in the most vote buying (as reported by journalists). Voter survey data shows that the campaign increased the salience of government corruption as an election issue and decreased voting for parties that offered gifts. From a policy perspective, we show that radio campaigns are a cost-effective method to influence voter behavior. From a measurement perspective, we show that journalist interviews can impartially identify vote-buying politicians.
Date: Summer 2021
Date: Summer 2021
WP#: 596
WP#: 596
Abstract: A randomized experiment among poor entrepreneurs tested the impact of exogenously inducing higher financial aspirations. In theory, raising aspirations could have positive effects by inducing higher effort, but could also reduce effort if unmet aspirations lead to frustration. Treatment resulted in more ambitious savings goals, but nearly all individuals fell far short of reaching these goals. Two years later, treated individuals had not saved more, and actually had lower borrowing and business investments. Treatment also reduced belief in the amount of control over one’s life. Setting aspirations too high can lead to frustration, leading individuals to reduce their economic investments.
Abstract: A randomized experiment among poor entrepreneurs tested the impact of exogenously inducing higher financial aspirations. In theory, raising aspirations could have positive effects by inducing higher effort, but could also reduce effort if unmet aspirations lead to frustration. Treatment resulted in more ambitious savings goals, but nearly all individuals fell far short of reaching these goals. Two years later, treated individuals had not saved more, and actually had lower borrowing and business investments. Treatment also reduced belief in the amount of control over one’s life. Setting aspirations too high can lead to frustration, leading individuals to reduce their economic investments.
Date: Summer 2021
Date: Summer 2021
WP#: 595
WP#: 595
Abstract: This study examines the effect of a tightening of the U.S. air-quality standard for lead in 2009 on the relocation of battery recycling to Mexico and on infant health in Mexico. In the U.S., airborne lead dropped sharply near affected plants, most of which were battery-recycling plants. Exports of used batteries to Mexico rose markedly. In Mexico, production increased at battery-recycling plants, relative to comparable industries, and birth outcomes deteriorated within two miles of those plants, relative to areas slightly farther away. The case provides a salient example of a pollution-haven effect between a developed and a developing country.
Abstract: This study examines the effect of a tightening of the U.S. air-quality standard for lead in 2009 on the relocation of battery recycling to Mexico and on infant health in Mexico. In the U.S., airborne lead dropped sharply near affected plants, most of which were battery-recycling plants. Exports of used batteries to Mexico rose markedly. In Mexico, production increased at battery-recycling plants, relative to comparable industries, and birth outcomes deteriorated within two miles of those plants, relative to areas slightly farther away. The case provides a salient example of a pollution-haven effect between a developed and a developing country.
Date: Summer 2021
Date: Summer 2021
WP#: 594
WP#: 594
Abstract: This study constructs a large new dataset to investigate whether state policy led to ethnic Ukrainians experiencing higher mortality during the 1932–33 Soviet Great Famine. All else equal, famine (excess) mortality rates were positively associated with ethnic Ukrainian population share across provinces, as well as across districts within provinces. Ukrainian ethnicity, rather than the administrative boundaries of the Ukrainian republic, mattered for famine mortality. These and many additional results provide strong evidence that higher Ukrainian famine mortality was an outcome of policy, and suggestive evidence on the political-economic drivers of repression. A back-of-the-envelope calculation suggests that bias against Ukrainians explains up to 77% of famine deaths in the three republics of Russia, Ukraine and Belarus and up to 92% in Ukraine.
Abstract: This study constructs a large new dataset to investigate whether state policy led to ethnic Ukrainians experiencing higher mortality during the 1932–33 Soviet Great Famine. All else equal, famine (excess) mortality rates were positively associated with ethnic Ukrainian population share across provinces, as well as across districts within provinces. Ukrainian ethnicity, rather than the administrative boundaries of the Ukrainian republic, mattered for famine mortality. These and many additional results provide strong evidence that higher Ukrainian famine mortality was an outcome of policy, and suggestive evidence on the political-economic drivers of repression. A back-of-the-envelope calculation suggests that bias against Ukrainians explains up to 77% of famine deaths in the three republics of Russia, Ukraine and Belarus and up to 92% in Ukraine.
Date: Summer 2021
Date: Summer 2021
WP#: 593
WP#: 593
Abstract: The COVID-19 pandemic has devastated many low- and middle-income countries (LMICs), causing widespread food insecurity and a sharp decline in living standards. In response to this crisis, governments and humanitarian organizations worldwide have mobilized targeted social assistance programs. Targeting is a central challenge in the administration of these programs: given available data, how does one rapidly identify the individuals and families with the greatest need? This challenge is particularly acute in the large number of LMICs that lack recent and comprehensive data on household income and wealth. Here we show that non-traditional “big” data from satellites and mobile phone networks can improve the targeting of anti-poverty programs. Our approach uses traditional survey-based measures of consumption and wealth to train machine learning algorithms that recognize patterns of poverty in non-traditional data; the trained algorithms are then used to prioritize aid to the poorest regions and mobile subscribers. We evaluate this approach by studying Novissi, Togo’s flagship emergency cash transfer program, which used these algorithms to determine eligibility for a rural assistance program that disbursed millions of dollars in COVID-19 relief aid. Our analysis compares outcomes – including exclusion errors, total social welfare, and measures of fairness – under different targeting regimes. Relative to the geographic targeting options considered by the Government of Togo at the time, the machine learning approach reduces errors of exclusion by 4-21%. Relative to methods that require a comprehensive social registry (a hypothetical exercise; no such registry exists in Togo), the machine learning approach increases exclusion errors by 9-35%. These results highlight the potential for new data sources to contribute to humanitarian response efforts, particularly in crisis settings when traditional data are missing or out of date.
Abstract: The COVID-19 pandemic has devastated many low- and middle-income countries (LMICs), causing widespread food insecurity and a sharp decline in living standards. In response to this crisis, governments and humanitarian organizations worldwide have mobilized targeted social assistance programs. Targeting is a central challenge in the administration of these programs: given available data, how does one rapidly identify the individuals and families with the greatest need? This challenge is particularly acute in the large number of LMICs that lack recent and comprehensive data on household income and wealth. Here we show that non-traditional “big” data from satellites and mobile phone networks can improve the targeting of anti-poverty programs. Our approach uses traditional survey-based measures of consumption and wealth to train machine learning algorithms that recognize patterns of poverty in non-traditional data; the trained algorithms are then used to prioritize aid to the poorest regions and mobile subscribers. We evaluate this approach by studying Novissi, Togo’s flagship emergency cash transfer program, which used these algorithms to determine eligibility for a rural assistance program that disbursed millions of dollars in COVID-19 relief aid. Our analysis compares outcomes – including exclusion errors, total social welfare, and measures of fairness – under different targeting regimes. Relative to the geographic targeting options considered by the Government of Togo at the time, the machine learning approach reduces errors of exclusion by 4-21%. Relative to methods that require a comprehensive social registry (a hypothetical exercise; no such registry exists in Togo), the machine learning approach increases exclusion errors by 9-35%. These results highlight the potential for new data sources to contribute to humanitarian response efforts, particularly in crisis settings when traditional data are missing or out of date.
Date: Summer 2021
Date: Summer 2021
WP#: 592
WP#: 592
Abstract: Using administrative data on over 4 million hospital visits, we document striking gender disparities within a government health insurance program that entitles 46 million poor individuals to free hospital care in Rajasthan, India. Females account for only 33% of hospital visits among children and 43% among the elderly. These shares are lower for more expensive types of care, and far lower than sex differences in illness prevalence can explain. Almost two-thirds of non-childbirth spending is on males. We combine these data with patient survey, census, and electoral data to show that 1) the program is unable to fully offset the costs of care-seeking, which results in disparities in hospital utilization because some households are willing to allocate more resources to male than female health; 2) lowering costs does not reduce disparities, because males benefit as much as females do; and 3) long-term exposure to village-level female leaders reduces the gender gap in utilization, but effects are modest and limited to girls and young women. In the presence of gender bias, increasing access to and subsidizing social services may increase levels of female utilization but fail to address gender inequalities without actions that specifically target females.
Abstract: Using administrative data on over 4 million hospital visits, we document striking gender disparities within a government health insurance program that entitles 46 million poor individuals to free hospital care in Rajasthan, India. Females account for only 33% of hospital visits among children and 43% among the elderly. These shares are lower for more expensive types of care, and far lower than sex differences in illness prevalence can explain. Almost two-thirds of non-childbirth spending is on males. We combine these data with patient survey, census, and electoral data to show that 1) the program is unable to fully offset the costs of care-seeking, which results in disparities in hospital utilization because some households are willing to allocate more resources to male than female health; 2) lowering costs does not reduce disparities, because males benefit as much as females do; and 3) long-term exposure to village-level female leaders reduces the gender gap in utilization, but effects are modest and limited to girls and young women. In the presence of gender bias, increasing access to and subsidizing social services may increase levels of female utilization but fail to address gender inequalities without actions that specifically target females.
Date: Summer 2021
Date: Summer 2021
WP#: 591
WP#: 591
Abstract: Following the widespread adoption of free primary education, African policymakers are now considering making secondary school free, but little is known about the private and social benefits of free secondary education. We exploit randomized assignment to secondary school scholarships among 2,064 youths in Ghana, combined with 12 years of data, to establish that scholarships increase educational attainment, knowledge, skills, and preventative health behaviors, while reducing female fertility. Eleven years after receipt of the scholarship, only female winners show private labor market gains, but those come primarily in the form of better access to jobs with rents (in particular rationed jobs in the public sector). We develop a simple model to interpret the labor market results and help think through the welfare impact of free secondary education.
Abstract: Following the widespread adoption of free primary education, African policymakers are now considering making secondary school free, but little is known about the private and social benefits of free secondary education. We exploit randomized assignment to secondary school scholarships among 2,064 youths in Ghana, combined with 12 years of data, to establish that scholarships increase educational attainment, knowledge, skills, and preventative health behaviors, while reducing female fertility. Eleven years after receipt of the scholarship, only female winners show private labor market gains, but those come primarily in the form of better access to jobs with rents (in particular rationed jobs in the public sector). We develop a simple model to interpret the labor market results and help think through the welfare impact of free secondary education.
Date: Summer 2021
Date: Summer 2021
WP#: 590
WP#: 590
Abstract: We argue that alternative COVID-19 vaccine dosing regimens could potentially dramatically accelerate global COVID-19 vaccination and reduce mortality, and that the costs of testing these regimens are dwarfed by their potential benefits. We first use the high correlation between neutralizing antibody response and efficacy against disease (Khoury et. al. 2021) to show that half or even quarter doses of some vaccines generate immune responses associated with high vaccine efficacy. We then use an SEIR model to estimate that under these efficacy levels, doubling or quadrupling the rate of vaccination by using fractional doses would dramatically reduce infections and mortality. Since the correlation between immune response and efficacy may not be fully predictive of efficacy with fractional doses, we then use the SEIR model to show that fractional dosing would substantially reduce infections and mortality over a wide range of plausible efficacy levels. Further immunogenicity studies for a range of vaccine and dose combinations could deliver outcomes in weeks and could be conducted with a few hundred healthy volunteers. National regulatory authorities could also decide to test efficacy of fractional dosing in the context of vaccination campaigns based on existing immune response data, as some did for delayed second doses. If efficacy turned out to be high, the approach could be implemented broadly, while if it turned out to be low, downside risk could be limited by administering full doses to those who had received fractional doses. The SEIR model also suggests that delaying second vaccine doses will likely have substantial mortality benefits for multiple, but not all, vaccine-variant combinations, underscoring the importance of ongoing surveillance. Finally, we find that for countries choosing between approved but lower efficacy vaccines available immediately and waiting for mRNA vaccines, using immediately available vaccines typically reduces mortality.
Abstract: We argue that alternative COVID-19 vaccine dosing regimens could potentially dramatically accelerate global COVID-19 vaccination and reduce mortality, and that the costs of testing these regimens are dwarfed by their potential benefits. We first use the high correlation between neutralizing antibody response and efficacy against disease (Khoury et. al. 2021) to show that half or even quarter doses of some vaccines generate immune responses associated with high vaccine efficacy. We then use an SEIR model to estimate that under these efficacy levels, doubling or quadrupling the rate of vaccination by using fractional doses would dramatically reduce infections and mortality. Since the correlation between immune response and efficacy may not be fully predictive of efficacy with fractional doses, we then use the SEIR model to show that fractional dosing would substantially reduce infections and mortality over a wide range of plausible efficacy levels. Further immunogenicity studies for a range of vaccine and dose combinations could deliver outcomes in weeks and could be conducted with a few hundred healthy volunteers. National regulatory authorities could also decide to test efficacy of fractional dosing in the context of vaccination campaigns based on existing immune response data, as some did for delayed second doses. If efficacy turned out to be high, the approach could be implemented broadly, while if it turned out to be low, downside risk could be limited by administering full doses to those who had received fractional doses. The SEIR model also suggests that delaying second vaccine doses will likely have substantial mortality benefits for multiple, but not all, vaccine-variant combinations, underscoring the importance of ongoing surveillance. Finally, we find that for countries choosing between approved but lower efficacy vaccines available immediately and waiting for mRNA vaccines, using immediately available vaccines typically reduces mortality.
Date: Spring 2021
Date: Spring 2021
WP#: 589
WP#: 589
Abstract: The average price of cement in Africa was the highest of any continent in 2011, but by 2017 had fallen by 35 percent, the largest decline in the world, according to data from the International Comparison Program. An empirical industry equilibrium model distinguishes between the fundamental drivers of differences in prices across countries: demand elasticity, costs, conduct, and entry. The model reveals that in 2011 average prices in Africa included the highest mark-ups and marginal costs in the world. The price decline in 2017 is accounted for by a rapid increase in the number of firms producing cement, which lowered mark-ups, and a declining marginal cost of production. Improvements in the quality of infrastructure or institutions could explain declining marginal costs, as could new technology installed by new entrants. Estimated fixed costs of entry are positive, though not systematically higher in Africa compared to other continents, suggesting equally free entry in the presence of a minimum efficient scale that does not vary across continents. These results suggest that the small size of national markets rather than regulation of entry explains why the price of cement was so high in Africa. As the market has grown, prices have fallen.
Abstract: The average price of cement in Africa was the highest of any continent in 2011, but by 2017 had fallen by 35 percent, the largest decline in the world, according to data from the International Comparison Program. An empirical industry equilibrium model distinguishes between the fundamental drivers of differences in prices across countries: demand elasticity, costs, conduct, and entry. The model reveals that in 2011 average prices in Africa included the highest mark-ups and marginal costs in the world. The price decline in 2017 is accounted for by a rapid increase in the number of firms producing cement, which lowered mark-ups, and a declining marginal cost of production. Improvements in the quality of infrastructure or institutions could explain declining marginal costs, as could new technology installed by new entrants. Estimated fixed costs of entry are positive, though not systematically higher in Africa compared to other continents, suggesting equally free entry in the presence of a minimum efficient scale that does not vary across continents. These results suggest that the small size of national markets rather than regulation of entry explains why the price of cement was so high in Africa. As the market has grown, prices have fallen.
Date: Spring 2021
Date: Spring 2021
WP#: 588
WP#: 588
Abstract: We consider the effects of climate change on seasonally migrant populations that herd livestock — i.e., transhumant pastoralists — in Africa. Traditionally, transhumant pastoralists benefit from a cooperative relationship with sedentary agriculturalists whereby arable land is used for crop farming in the wet season and animal grazing in the dry season. Droughts can disrupt this arrangement by inducing pastoral groups to migrate to agricultural lands before the harvest, causing conflict to emerge. We examine this hypothesis by combining ethnographic information on the traditional locations of transhumant pastoralists and sedentary agriculturalists with high-resolution data on the location and timing of rainfall and violent conflict events in Africa from 1989-2018. We show that droughts in the territory of transhumant pastoralists lead to conflict in neighboring areas. Consistent with the hypothesis, these conflict events are concentrated in agricultural areas; they occur during the wet season and not the dry season; and they are due to rainfall’s impact on plant biomass growth. This mechanism explains a sizable proportion of conflict events in Africa, particularly civil conflicts and religious-extremist attacks. We find that the effects are muted in the presence of irrigation aid projects, but not in the presence of other forms of foreign aid. The effects approach zero as pastoral groups share more political power.
Abstract: We consider the effects of climate change on seasonally migrant populations that herd livestock — i.e., transhumant pastoralists — in Africa. Traditionally, transhumant pastoralists benefit from a cooperative relationship with sedentary agriculturalists whereby arable land is used for crop farming in the wet season and animal grazing in the dry season. Droughts can disrupt this arrangement by inducing pastoral groups to migrate to agricultural lands before the harvest, causing conflict to emerge. We examine this hypothesis by combining ethnographic information on the traditional locations of transhumant pastoralists and sedentary agriculturalists with high-resolution data on the location and timing of rainfall and violent conflict events in Africa from 1989-2018. We show that droughts in the territory of transhumant pastoralists lead to conflict in neighboring areas. Consistent with the hypothesis, these conflict events are concentrated in agricultural areas; they occur during the wet season and not the dry season; and they are due to rainfall’s impact on plant biomass growth. This mechanism explains a sizable proportion of conflict events in Africa, particularly civil conflicts and religious-extremist attacks. We find that the effects are muted in the presence of irrigation aid projects, but not in the presence of other forms of foreign aid. The effects approach zero as pastoral groups share more political power.
Date: Winter 2021
Date: Winter 2021
WP#: 587
WP#: 587
Abstract: We run a randomized controlled trial coupled with lab-in-the-field social network experiments in urban Dakar. Decision spillovers and health externalities play a large role in determining uptake of sanitation technology, with decision spillovers being largest among households that don’t receive significant subsidies. There is no evidence that social mechanisms such as social pressure, learning from others, or reciprocity explain the spillovers. We do find evidence of a fourth, non-social, mechanism impacting decisions: increasing returns to scale. As more neighbors adopt the sanitary technology, it becomes more worthwhile for other households to adopt as well.
Abstract: We run a randomized controlled trial coupled with lab-in-the-field social network experiments in urban Dakar. Decision spillovers and health externalities play a large role in determining uptake of sanitation technology, with decision spillovers being largest among households that don’t receive significant subsidies. There is no evidence that social mechanisms such as social pressure, learning from others, or reciprocity explain the spillovers. We do find evidence of a fourth, non-social, mechanism impacting decisions: increasing returns to scale. As more neighbors adopt the sanitary technology, it becomes more worthwhile for other households to adopt as well.
Date: Winter 2021
Date: Winter 2021
WP#: 586
WP#: 586
Abstract: In response to the COVID-19 outbreak, the governments of most countries ordered the closure of schools, potentially exacerbating existing learning gaps. This paper evaluates the effectiveness of an intervention implemented in Italian middle schools that provides free individual tutoring online to disadvantaged students during lock-down. Tutors are university students who volunteer for at least 3 hours per week. They were randomly assigned to middle school students, from a list of potential beneficiaries compiled by school principals. Using original survey data collected from students, parents, teachers and tutors, we find that the program substantially increased students’ academic performance (by 0.26 SD on average) and that it significantly improved their socio-emotional skills, aspirations, and psychological well-being. Effects are stronger for children from lower socioeconomic status and, in the case of psychological well-being, for immigrant children.
Abstract: In response to the COVID-19 outbreak, the governments of most countries ordered the closure of schools, potentially exacerbating existing learning gaps. This paper evaluates the effectiveness of an intervention implemented in Italian middle schools that provides free individual tutoring online to disadvantaged students during lock-down. Tutors are university students who volunteer for at least 3 hours per week. They were randomly assigned to middle school students, from a list of potential beneficiaries compiled by school principals. Using original survey data collected from students, parents, teachers and tutors, we find that the program substantially increased students’ academic performance (by 0.26 SD on average) and that it significantly improved their socio-emotional skills, aspirations, and psychological well-being. Effects are stronger for children from lower socioeconomic status and, in the case of psychological well-being, for immigrant children.
Date: Winter 2021
Date: Winter 2021
WP#: 585
WP#: 585
Abstract: We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects economic outcomes in the presence of informality. We show that: (1) Trade openness unambiguously decreases informality in the tradable sector, but has ambiguous effects on aggregate informality. (2) The productivity gains from trade are understated when the informal sector is omitted. (3) Trade openness results in large welfare gains even when informality is repressed. (4) Repressing informality increases productivity, but at the expense of employment and welfare. (5) The effects of trade on wage inequality are reversed when the informal sector is incorporated in the analysis. (6) The informal sector works as an “unemployment,” but not a “welfare buffer” in the event of negative economic shocks.
Abstract: We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects economic outcomes in the presence of informality. We show that: (1) Trade openness unambiguously decreases informality in the tradable sector, but has ambiguous effects on aggregate informality. (2) The productivity gains from trade are understated when the informal sector is omitted. (3) Trade openness results in large welfare gains even when informality is repressed. (4) Repressing informality increases productivity, but at the expense of employment and welfare. (5) The effects of trade on wage inequality are reversed when the informal sector is incorporated in the analysis. (6) The informal sector works as an “unemployment,” but not a “welfare buffer” in the event of negative economic shocks.
Date: Winter 2021
Date: Winter 2021
WP#: 584
WP#: 584
Abstract: Conditional cash transfer programs have spread to over 60 countries in the past two decades, but little is known about their long-term effects. We estimate the lasting impact of childhood exposure to Mexico’s flagship program Progresa by leveraging the age structure of benefits and geographic variation in early program penetration nationwide. Childhood exposure improves women’s outcomes in early adulthood, with increases in educational attainment, geographic mobility, labor market performance, and household living standards. For men, effects are smaller and more difficult to distinguish from spatial convergence.
Abstract: Conditional cash transfer programs have spread to over 60 countries in the past two decades, but little is known about their long-term effects. We estimate the lasting impact of childhood exposure to Mexico’s flagship program Progresa by leveraging the age structure of benefits and geographic variation in early program penetration nationwide. Childhood exposure improves women’s outcomes in early adulthood, with increases in educational attainment, geographic mobility, labor market performance, and household living standards. For men, effects are smaller and more difficult to distinguish from spatial convergence.
Date: Winter 2021
Date: Winter 2021
WP#: 583
WP#: 583
Abstract: This paper develops a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. We take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing survey, focusing on producers of rubber and plastic products. Assuming constant elasticities of substitution of outputs and inputs within firms, we aggregate from the firm-product to the firm level and show how quality and variety choices may bias standard estimators. Using real exchange rates and variation in the “bite” of the national minimum wage, we construct external instruments for materials and labor choices. We implement a simple two-step instrumental-variables method, first estimating a difference equation to recover the materials and labor coefficients and then estimating a levels equation to recover the capital coefficient. Under the assumption that the instruments are uncorrelated with firms’ quality and variety choices, this method yields consistent estimates, free of the quality and variety biases we have identified. Our point estimates differ from those of existing methods and changes in our preferred productivity estimator perform relatively well in predicting future export growth.
Abstract: This paper develops a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. We take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing survey, focusing on producers of rubber and plastic products. Assuming constant elasticities of substitution of outputs and inputs within firms, we aggregate from the firm-product to the firm level and show how quality and variety choices may bias standard estimators. Using real exchange rates and variation in the “bite” of the national minimum wage, we construct external instruments for materials and labor choices. We implement a simple two-step instrumental-variables method, first estimating a difference equation to recover the materials and labor coefficients and then estimating a levels equation to recover the capital coefficient. Under the assumption that the instruments are uncorrelated with firms’ quality and variety choices, this method yields consistent estimates, free of the quality and variety biases we have identified. Our point estimates differ from those of existing methods and changes in our preferred productivity estimator perform relatively well in predicting future export growth.
Date: Winter 2021
Date: Winter 2021
WP#: 582
WP#: 582
Abstract: We investigate the historical origins of female genital cutting (FGC), a harmful practice widespread across Africa. We test the hypothesis –substantiated by historical sources– that FGC was connected to the Red Sea slave trade route, where women were sold as concubines in the Middle East and infibulation was used to ensure chastity. We hypothesize that differential exposure of ethnic groups to the Red Sea route determined differential adoption of the practice. Combining individual level data from 28 African countries with novel historical data on slaves’ shipments by country, ethnic group and trade routes from 1400 to 1900. We find that women belonging to ethnic groups whose ancestors were exposed to the Red Sea route are more likely to be infibulated or circumcised today and are more in favor of continuing the practice. The estimated effects are very similar when slave exports are instrumented by distance to the North-Eastern African coast. Finally, the effect is smaller for ethnic groups that historically freely permitted premarital sex — a proxy for low demand for chastity.
Abstract: We investigate the historical origins of female genital cutting (FGC), a harmful practice widespread across Africa. We test the hypothesis –substantiated by historical sources– that FGC was connected to the Red Sea slave trade route, where women were sold as concubines in the Middle East and infibulation was used to ensure chastity. We hypothesize that differential exposure of ethnic groups to the Red Sea route determined differential adoption of the practice. Combining individual level data from 28 African countries with novel historical data on slaves’ shipments by country, ethnic group and trade routes from 1400 to 1900. We find that women belonging to ethnic groups whose ancestors were exposed to the Red Sea route are more likely to be infibulated or circumcised today and are more in favor of continuing the practice. The estimated effects are very similar when slave exports are instrumented by distance to the North-Eastern African coast. Finally, the effect is smaller for ethnic groups that historically freely permitted premarital sex — a proxy for low demand for chastity.
Date: Fall 2020
Date: Fall 2020
WP#: 581
WP#: 581
Abstract: This paper examines resilience of Chinese firms to the Covid-19 shock, and how it varied with a cluster index (measuring spatial agglomeration of firms in related industries) at the county level. Two data sources are used: entry flows of newly registered firms in the entire country, and an entrepreneur survey regarding operation of existing firms. Both datasets show greater resilience in counties with a higher cluster index, after controlling for industry dummies and local infection rates, besides county and time dummies in the entry data. We then explore possible explanations for these findings. Reliance of clusters on informal entrepreneur hometown networks provides part of the explanation. Closer proximity to suppliers and customers, and higher on-line sales help explain some of the better performance of incumbents in clusters.
Abstract: This paper examines resilience of Chinese firms to the Covid-19 shock, and how it varied with a cluster index (measuring spatial agglomeration of firms in related industries) at the county level. Two data sources are used: entry flows of newly registered firms in the entire country, and an entrepreneur survey regarding operation of existing firms. Both datasets show greater resilience in counties with a higher cluster index, after controlling for industry dummies and local infection rates, besides county and time dummies in the entry data. We then explore possible explanations for these findings. Reliance of clusters on informal entrepreneur hometown networks provides part of the explanation. Closer proximity to suppliers and customers, and higher on-line sales help explain some of the better performance of incumbents in clusters.
Date: Summer 2020
Date: Summer 2020
WP#: 580
WP#: 580
Abstract: We study the relationship between risk and schooling investment in a low income setting, with a particular focus on possible ex ante effects. We first present a model that shows that such effects can arise if the human capital production function exhibits dynamic complementarity and parental preferences for human capital are not too concave. We then estimate the key parameters of the model using multiple rounds of panel data from rural India that contain, in each round, three seasons of time allocation for each sampled child. These estimates suggest an elasticity of schooling investments with respect to risk of -0.09 in this context. We then use cross-round differences in village-level irrigation interacted with rainfall variability to estimate the relationship between income risk and school time. Using this variation, we find an estimated elasticity of study time with respect to risk between -0.05 and -0.04. Finally, we simulate the effects of an implicit social insurance program, modeled after the National Rural Employment Guarantee Scheme (NREGS). Our results suggest that the risk-reducing effect of the NREGS may offset adverse effects on child education that were evident during the NREGS phase-in due to rising wages.
Abstract: We study the relationship between risk and schooling investment in a low income setting, with a particular focus on possible ex ante effects. We first present a model that shows that such effects can arise if the human capital production function exhibits dynamic complementarity and parental preferences for human capital are not too concave. We then estimate the key parameters of the model using multiple rounds of panel data from rural India that contain, in each round, three seasons of time allocation for each sampled child. These estimates suggest an elasticity of schooling investments with respect to risk of -0.09 in this context. We then use cross-round differences in village-level irrigation interacted with rainfall variability to estimate the relationship between income risk and school time. Using this variation, we find an estimated elasticity of study time with respect to risk between -0.05 and -0.04. Finally, we simulate the effects of an implicit social insurance program, modeled after the National Rural Employment Guarantee Scheme (NREGS). Our results suggest that the risk-reducing effect of the NREGS may offset adverse effects on child education that were evident during the NREGS phase-in due to rising wages.
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