Empirical Development Economics
Lightning Round SessionSaturday, Jan. 4, 2025 10:15 AM - 12:15 PM (PST)
- Chair: Allan Hsiao, Stanford University
Climate Hazards, Childhood Experiences, and Development Trajectories: The Long-Term Impact of GLOF Exposure
Abstract
This paper investigates the long-term impact of Glacier Lake Outburst Floods (GLOF) exposure during childhood (age 0 to 16) on human development outcomes in the High Mountainous Asia (HMA) region. This area has the world's highest mountain ranges and the largest volume of ice on Earth outside the polar regions – and plays a crucial role in water security and socio-economic sustainability. However, this region is the most susceptible to the impacts of climate change (World Meteorological Organization). One pressing concern is the expected increase in GLOFs which pose a significant threat to communities downstream. Despite this danger, the medium and long-term effects of GLOFs remain missing from the literature. The identification strategy exploits the exogenous variation in geographic location, timing, and exposure of birth cohorts using geospatial analysis. The novel insights gained from this study will contribute to a deeper understanding of the socio-economic cost of hydrological hazards.Diaspora and Economic Development in Armenia: A Survey-Based Analysis
Abstract
This project is a unique survey-based analysis of the determinants and trajectories of the Armenian diaspora’s uneasy willingness to engage with and actual contributions to Armenia’s socio-economic development. Globally, the recent economic development and business literature has been focusing on the national diasporas as novel sustainable mechanisms for economic development. This paper informs the often-abstracted discussions by leveraging its unique Armenian Diaspora Online Survey – 2024 to attempt to capture the inner motivations for what the business and policy literature now refers to as diaspora engagement. The results of the survey are indicative and revealing of the hidden potential of the diaspora but also of the Armenian diaspora’s complex multilayering across various dimensions. Despite much despair in the responses, there is a strong feeling of belonging to one’s culture and association with the ancestral homeland. This contrasts with some of the results from a similar survey that ran between 2015-2018 where the connection with Armenia was explicitly weaker. At the same time, this latest iteration just like the one before reports erosion in trust towards the officialdom and concerns over institutional maturity of the existing diaspora mechanisms in the communities abroad and in Armenia. It appears that a triangular dynamic across identity, trust, and engagement infrastructure continue to dominate and determine interactions between the Armenian diaspora and the Republic of Armenia. On a hopeful note, the potential of the Armenian diaspora for Armenia’s socio-economic development has not yet been fully exhausted.Impact of Ready Made Garment Factories on Women’s Health in Bangladesh
Abstract
Ready Made Garment (RMG) factories continue to expand in Bangladesh, employing 4.2 million workers, a large majority of whom are women. Studies show that exposure to the RMG sector in the country has led to improved education and decision-making among women. We build on this literature to assess whether gains in women's improved agency and opportunities through exposure to the RMG sector in the country have translated into better health outcomes for women. Specifically, we study the impact on health indicators such as anthropometric measures, hemoglobin, and anemia levels. Leveraging the variation in factory opening time and the distance from factories, we find that exposure to factories is positively associated with improved hemoglobin levels and higher BMI. Findings from this study hold implications not only for Bangladesh but also for other low and middle-income countries with a substantial RMG sector.Land Titling and Village Inequality: Evidence from China
Abstract
Over the past 40 years, China has recorded impressive growth. However, with rapid economic advancement, disparities in income, resources, and access to opportunities have widened. Land, a critical asset among rural households, exemplifies these inequalities through its distribution and utilization, reflecting broader economic and social divides.This study enhances the existing literature by examining the effects of a land titling program on intra- and inter-village inequality in rural China. The land titling program, which was rolled out nationwide across counties starting in 2014, aimed to enhance land rights security by providing land certification. This study employs a difference-in-differences (DID) strategy to empirically evaluate the program's effects. The empirical results indicate that the land titling program significantly increased intra-village inequality while reducing inter-village inequality. Land titling has raised the average village income level, predominantly by increasing the incomes of households that were already at higher income levels, through facilitated land transfer, increased investment, and promoted off-farm employment. On a broader scale, land titling can improve land use efficiency and productivity among farmers, thereby narrowing the economic disparities between different villages. To further clarify the mechanisms through which the land titling program affects inequality in rural areas, several pathways were examined.
Our study contributes to the existing literature in three significant aspects. First, by utilizing a large, representative dataset from China, our study provides clear empirical evidence amidst the mixed results currently available, offering a multiple perspectives understanding of the land titling program's impacts. Second, it examines the mechanisms through which land titling influences intra- and inter-village inequality, shedding light on the interplay between policy implementation and rural economics. Third, as land titling is a crucial policy in rural China, this study serves as a critical policy evaluation, offering insights and evidence for policymakers.
Finance and Mutuality: Experimental Evidence on Credit with Performance-Contingent Repayment
Abstract
We collaborate with a large multinational that wishes to increase the productivity of micro-distributors in its supply chain by financing a business asset. We conduct a field experiment comparing financing under traditional debt contracts with three alternatives that offer a greater sharing of risk and reward. We find the largest impacts from a novel hybrid contract, which combines debt-like features with performance-contingent payments. Our findings suggest substantial mutual benefits for the multinational, its micro-distributors, and stockpoints in its supply chain. These results highlight the potential of financial contracts that leverage improved performance data observability in low- and middle-income countries.Scorching Heat and Shrinking Horizons: The Impact of Rising Temperatures on Marriages and Migration in Rural India
Abstract
This study delves into the gendered impacts of rising temperatures from climate change on long-term female migration patterns in rural India. We utilize a panel fixed-effects model to investigate the relationship between temperature levels and migration trends by employing a district-level panel dataset that combines Census data for years 1991, 2001, and 2011, multiple rounds of household surveys, and local weather measurements. Our results showcase statistically significant declining effects of rising temperatures on female rural-rural and rural-urban migration in the country. Specifically, the findings suggest that a 1 degree C temperature increase is associated with a 22% decline in rural-urban and a 13% decline in rural-rural female migration in an average district in India. This decline is primarily due to diminishing marriage-related migration among women in the northern districts of the country, which have a historically high prevalence of dowry. We identify decreasing agricultural yields from rising temperatures as an underlying mechanism that is reducing resources to finance dowry in northern India. We further note that the declines in female migration are driven by districts with poor access to credit, and more so in the northern districts.Tailoring Advice and Incentives to Enhance Consumer Welfare from Catastrophic Drought Insurance
Abstract
Standard economic theory posits that consumers should make welfare-maximizing decisions, but empirical evidence shows frequent suboptimal choices reflecting practical challenges such as complex financial products and limited financial literacy. Moreover, sales-driven approaches reliant on commission-based agents, the most common approach in the insurance industry, may not maximize consumer welfare.We investigate how tailored advice and aligned incentives for insurance agents affect consumer welfare in index insurance uptake among pastoral communities in southern Ethiopia. Through a clustered randomized controlled trial involving pastoralists from 240 villages across 80 kebeles, we randomly assigned participants to three groups: receiving tailored advice for pastoralists and standard sales incentives for agents, receiving tailored advice and aligned incentives, or no advice with standard sales incentives. Tailored advice is formulated based on real-time calculations of the expected consumer surplus (ECS) for insuring different shares of herd sizes. To align agent incentives with consumer welfare, incentives are structured to decrease as consumer purchase decisions deviate from the tailored advice.
Tailored advice, coupled with aligned incentives for sales agents, reduces insurance uptake while promoting adherence. However, providing tailored advice alone has minimal impact on pastoralists' decisions. When coupled with aligned incentives, tailored advice increases adherence by 2.6 percentage points and decreases insurance uptake by 1 percentage point, a 12.5 percent decrease. Additionally, trust in sales agents decreases by approximately 0.5 standard deviations due to tailored advice. Furthermore, the combination of tailored advice and aligned agent incentives boosts sales agent efforts, with a 3.6 percentage point increase in the share of incentivized herders, representing a 17 percent increase. Moreover, tailored advice increases the probability of a sales agent earning any incentives from a village by 5 percentage points, regardless of the incentive scheme.
Tainted Waters, Fractured Futures: Links between Dams and Children’s Health in India
Abstract
Large dams are a key and costly investment in agricultural productivity for poor and rich countries alike. Despite controversies over environmental degradation and community displacements, dams continue to be built with the expectation that the benefits will outweigh costs and negative externalities. This paper investigates an understudied link between dams and children’s health in India, focusing on spatially-varying increased agrichemical exposure among mother and children, and the health effects of that exposure. Combining high-resolution river basin data, which links every Indian basin to its respective upstream and downstream basin, and two most recent rounds of the National Family Health Survey, I construct a panel dataset of child mortality rates at the river basin level. I merge this with a comprehensive database documenting dam constructions in India, and water quality data from the Central Pollution Control Board, which tests water at numerous sites across India. To causally identify the impacts of dams on children, I use an instrumental variable following Duflo and Pande (2007), exploiting the fact that dams are most likely to be built on moderate river gradients. I find that dams significantly increase mortality rates for children in India. The most substantial increase in mortality is observed in neonatal mortality rates, indicating strong in-utero shock effects. Results are robust to several sensitivity and placebo tests. Preliminary results examining the pathways indicate almost all of the neonatal mortality increases are linked to river basins with high nitrate loads, providing evidence that dams induced increases in agrichemicals exposure has huge costs on children. Our findings underscore the substantial and ignored costs of dams to children’s health. It is well documented that health in infancy is linked to later-life productivity and wellbeing, and if these costs to children are unaddressed, then the long-run benefits of dams could be grossly overestimated.The Countervailing Investment and Rental-Supply Effects of Securing Land Ownership: Evidence from Nicaragua.
Abstract
Securing land ownership has been hypothesized to bring about significant gains in both agricultural output and poverty reduction for rural economies endowed with unequal land ownership distributions. However, these win-win economic gains largely hinge on the premise that security improvement will simultaneously boost land-attached investments and increase land rental supply to facilitate land access for the rural poor. This paper argues that non-security barriers to long-term land rental contracts could break this premise by causing a countervailing interaction between the investment and rental-supply effects of securing land ownership. I provide suggestive evidence from Nicaragua, one of the poorest countries in Latin America. Recent panel data of rural household surveys show that after a plausibly exogenous improvement in land ownership security, previously-credit-unconstrained households significantly increased land-attached investments but not rented-out land, while previously-credit-constrained households did the opposite. These findings hold even for matched households based on their initial likelihood of being credit-constrained.JEL Classifications
- O2 - Development Planning and Policy