On the basis of a randomized controlled trial, we evaluate a scholarship program in Mexico, Programa de Becas Educación Media Superior (PROBEMS), aimed at improving graduation rates and test scores among upper secondary school students from poor backgrounds. We find that, on average, the program has no effect on either graduation rates or math and Spanish test scores. We point to two possible reasons for this failure: (i) the program was badly targeted, with many of the recipients being from less disadvantaged families than intended; and (ii) the prior academic achievement of those eligible was often insufficient for successful completion of the academic requirements of upper secondary school. This points to accumulated achievement deficits that could be addressed by interventions targeting learning at an earlier stage.
We study the welfare and human capital impacts of colleges’ (non)participation in Chile’s centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, offers, wait lists, matriculation, and graduation. When the platform expands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds.
We study noisy aggregation of dispersed information in financial markets without imposing parametric restrictions on preferences, information, and return distributions. We provide a general characterization of asset returns by means of a risk-neutral probability measure that features excess weight on tail risks. Moreover, we link excess weight on tail risks to observable moments such as forecast dispersion and accuracy, and argue that it provides a unified explanation for several prominent cross-sectional return anomalies. Simple calibrations suggest the model can account for a significant fraction of empirical returns to skewness, returns to disagreement, and interaction effects between the two.
Over the past decade, national statistical offices in low- and middle-income countries have increasingly transitioned to computer-assisted personal interviewing and computer-assisted telephone interviewing for the implementation of household surveys. The byproducts of these types of data collection are survey paradata, which can unlock objective, module- and question-specific, actionable insights on survey respondent burden, survey costs, and interviewer effects – all of which have been understudied in low- and middle-income contexts. This study uses paradata generated by Survey Solutions, a computer-assisted personal interviewing platform used in recent national household surveys implemented by the national statistical offices of Cambodia, Ethiopia, and Tanzania. Across countries, the average household interview, based on a socioeconomic household questionnaire, ranges from 82 to 120 minutes, while the average interview with an adult household member, based on a multi-topic individual questionnaire, takes between 13 to 25 minutes. The paper further provides guidelines on the use of paradata for module-level analysis to aid in operational survey decisions, such as using interview length to estimate unit cost for budgeting purposes as well as understanding interviewer effects using a multilevel model. Our findings, particularly by module, point to where additional interviewer training, fieldwork supervision, and data quality monitoring may be needed in future surveys.
The US-China trade war created net export opportunities rather than simply shifting trade across destinations. Many "bystander" countries grew their exports of taxed products into the rest of the world (excluding the United States and China). Country-specific components of tariff elasticities, rather than specialization patterns, drove large cross-country variation in export growth of tariff-exposed products. The elasticities of exports to US-Chinese tariffs identify whether a country's exports complement or substitute the United States or China and its supply curve's slope. Countries that operate along downward-sloping supplies whose exports substitute (complement) the United States and China are among the larger (smaller) beneficiaries of the trade war.
Does economic growth close labor market-linked gender gaps that disadvantage women? Conversely, do gender inequalities in the labor market impede growth? To inform these questions, we conduct two analyses. First, we estimate regressions using data on gender gaps in a range of labor market outcomes from 153 countries spanning two decades (1998-2018). Second, we conduct a systematic review of the recent economics literature on gender gaps in labor markets, examining 16 journals over 21 years. Our empirical analysis demonstrates that growth is not a panacea. While economic gender gaps have narrowed and growth is associated with gender gap closures specifically in incidence of paid work, the relationship between growth and labor market gaps is otherwise mixed, and results vary by specification. This result reflects, in part, the gendered nature of structural transformation, in which growth leads men to transition from agriculture to industry and services while many women exit the labor force. Disparities in hours worked and wages persist despite growth, and heterogeneity in trends and levels between regions highlight the importance of local institutions. To better understand whether gender inequalities impeded growth, we explore a nascent literature that shows that reducing gender gaps in labor markets increases aggregate productivity. Our broader review highlights how traditional explanations for gender differences do not adequately explain existing gaps and how policy responses need to be sensitive to the changing nature of economic growth. We conclude by posing open questions for future research.
Low- and middle-income nations host 76 percent of the world's refugees. This study uses original data to explore within-country spatial variability in refugee-hosting responsibilities. We find that hosting responsibilities for the displaced Rohingya people in Bangladesh are allocated in similarly unequal fashion when analyzed at the national, regional, and microregional levels. Refugee camps are placed in socioeconomically disadvantaged communities relative to both Bangladesh as a whole and surrounding areas. Our findings underscore the importance of considering host communities in the coordination of humanitarian responses to refugee crises to prevent economic hardship and political backlash.
Does a woman’s take-up of government benefits vary with her perception of how they will be shared within the household? Using randomized assignment to alternative information treatments, we examine this question in the context of Saudi women’s willingness to apply for unemployment assistance (Hafiz). We compare the take-up among women who receive no program information to three groups: those who receive information on program eligibility conditions (Eligibility group) and those who receive additional information that their registration status is broadly confidential (Privacy group) or that they fully control registering and accessing benefits (Agency group). Three months later, the treatments, on average, doubled Hafiz applications, with the treatment impacts largest for the Agency group. Women from poorer households and married women are most responsive to the Agency and Privacy interventions respectively. These findings are consistent with collective household bargaining models where family members’ spending preferences differ; we predict larger treatment impacts when there is more competition for resources.
We quantify the effects of the political development cycle – the fluctuations between the left (Maoist) and the right (pragmatist) development policies – on growth and structural transformation of China in 1953-1978. The left policies prioritized structural transformation towards non-agricultural production and consumption at the cost of agricultural development. The right policies prioritized agricultural consumption through slower structural transformation. The imperfect implementation of these policies led to large welfare costs of the political development cycle in a distorted economy undergoing a structural change.
Less than 30% of people in Africa received a dose of the COVID-19 vaccine even 18 months after vaccine development. Here, motivated by the observation that residents of remote, rural areas of Sierra Leone faced severe access difficulties, we conducted an intervention with last-mile delivery of doses and health professionals to the most inaccessible areas, along with community mobilization. A cluster randomized controlled trial in 150 communities showed that this intervention with mobile vaccination teams increased the immunization rate by about 26 percentage points within 48–72 h. Moreover, auxiliary populations visited our community vaccination points, which more than doubled the number of inoculations administered. The additional people vaccinated per intervention site translated to an implementation cost of US $33 per person vaccinated. Transportation to reach remote villages accounted for a large share of total intervention costs. Therefore, bundling multiple maternal and child health interventions in the same visit would further reduce costs per person treated. Current research on vaccine delivery maintains a large focus on individual behavioural issues such as hesitancy. Our study demonstrates that prioritizing mobile services to overcome access difficulties faced by remote populations in developing countries can generate increased returns in terms of uptake of health services.
We document that sales of individual products decline steadily throughout most of the product life cycle. Products quickly become obsolete as they face competition from newer products sold by competing firms and the same firm. We build a dynamic model that highlights an innovation-obsolescence cycle, where firms need to introduce new products to grow; otherwise, their portfolios become obsolete as rivals introduce their own new products. By introducing new products, however, firms accelerate the decline of their own existing products, further depressing their sales. This mechanism has sizable implications for quantifying economic growth and the impact of innovation policies.
We document strong skill matching in Turkish firms’ production networks. Additionally, in the data, export demand shocks from rich countries increase firms’ skill intensity and their trade with skill-intensive domestic partners. We explain these patterns using a quantitative model with heterogeneous firms, quality choices, and endogenous networks. A counterfactual economy-wide export demand shock of 5% leads both exporters and nonexporters to upgrade quality, raising the average wage by 1.2%. This effect is nine times the effect in a scenario without interconnected quality choices. We use the model to study the conditions for the success of export promotion policies.
A currency’s essential feature is to be a medium of exchange. This study explores the potential of cryptocurrencies to be used in daily transactions in El Salvador, the first country to make bitcoin legal tender. The government’s “big push” introduced “Chivo Wallet,” a digital wallet sharing features with Central Bank Digital Currencies (CBDCs), with perks to use it for trading bitcoins and US dollars. Through a nationally representative, face-to-face survey of 1800 households and blockchain data encompassing all Chivo Wallet transactions, we document a pattern of low and decreasing usage of digital payments and bitcoin. Privacy and security concerns are key adoption barriers, which speaks to a policy debate on crypto and CBDCs with anonymity at its core. Additionally, we estimate Chivo Wallet’s adoption cost and complementarities among adopters.
Climate policies vary widely across countries, with some countries imposing stringent emissions policies and others doing very little. When climate policies vary across countries, energy-intensive industries have an incentive to relocate to places with few or no emissions restrictions, an effect known as leakage. Relocated industries would continue to pollute but would be operating in a less desirable location. We consider solutions to the leakage problem in a simple setting where one region of the world imposes a climate policy and the rest of the world is passive. We solve the model analytically and also calibrate and simulate the model. Our model and analysis imply: (1) optimal climate policies tax both the supply of fossil fuels and the demand for fossil fuels; (2) on the demand side, absent administrative costs, optimal policies would tax both the use of fossil fuels in domestic production and the domestic consumption of goods created with fossil fuels, but with the tax rate on production lower due to leakage; (3) taxing only production (on the demand side), however, would be substantially simpler and almost as effective as taxing both production and consumption, because it would avoid the need for border adjustments on imports of goods; and (4) the effectiveness of the latter strategy depends on a low foreign elasticity of energy supply, which means that forming a taxing coalition to ensure a low foreign elasticity of energy supply can act as a substitute for border adjustments on goods.
Conditional cash transfer (CCT) programs aim to reduce poverty or advance social goals by encouraging desirable behavior that recipients under-invest in. An unintended consequence of conditionality may be the distortion of recipients’ behavior in ways that lower welfare. We first illustrate a range of potential distortions arising from CCT programs around the world. We then show that in the simple case where a CCT causes low return participants to select into a behavior, and social returns and private perceived returns are aligned, transfer size plays an important role: the larger the transfer, the stronger the distortion becomes, implying that (i) there is an optimal transfer size for such CCTs, and (ii) unconditional cash transfers (UCTs) may be better than CCTs when the transfer amount is large. We provide empirical evidence consistent with these claims by studying a cash transfer program conditional on seasonal labor migration in rural Indonesia. In line with theory, we show that when the transfer size exceeds the amount required for travel expenses, distortionary effects dominate and migration earnings decrease.