US federal transfers to individuals are large, countercyclical, vary geographically, and are often credited for helping stabilize regional economies.
... See More + This paper estimates the short-run effects of these transfers using plausibly exogenous regional variation in temporary stimulus packages and earlier permanent Social Security increases. States that received larger transfers tended to grow faster contemporaneously, with a multiplier of around 1.5 for permanent transfers and 1/3 for temporary transfers. Results are broadly consistent with an open-economy New Keynesian model. At business-cycle frequencies, cross-region transfer multipliers are not large, suggesting only modest gains in regional stabilization from US federal automatic stabilizers.
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Policy Research Working Paper WPS9244 MAY 12, 2020
Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages.
... See More + This conventional approach is not necessarily suitable for analyzing urbanization at the early stage in developing countries, where a majority of urban workers engage in self-employment and/or informal jobs. Focusing on one of the poorest and largest among those countries, this paper sheds light on an aspect of urbanization and agglomeration: the transition in the mode of labor from self-employment/informal jobs to wage employment/formal jobs. Applying the instrumental variable approach to national labor force survey data sets, the analysis underscores several labor market transitions across space in urban Ethiopia. First, the town population size and the share of workers with wage employment are strongly correlated. The probability of engaging in wage work increases by 4.5 percentage points with a log increase in population size. Second, this relationship is particularly strong among disadvantaged workers, such as the female, young, and/or less educated population. Finally, the study documents higher labor force participation and lower underemployment in larger towns.
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Policy Research Working Paper WPS9184 MAR 13, 2020
This paper studies how a positive export shock -- the sharp increase in garment-sector exports that began at the end of the Multifibre Arrangement (MFA) -- spread through Bangladesh's labor markets.
... See More + Although the end of the MFA was arguably exogenous to Bangladesh, the authors instrument export demand with OECD imports to ensure identification. The paper compares estimates of the local labor market effects (wages and informality) and estimates from wage equations that reflect the predictions from long-run, general-equilibrium neoclassical trade theory. As in other studies, this paper finds that the export shock was localized both in terms of sector and geography. Wages increased and informality decreased in sub-districts more exposed to the export shock. Unlike in other studies, these local labor market effects dissipate quickly. Furthermore, Bangladesh's export shock was sector specific, limited predominantly to the female-intensive garment and textile sector. The paper shows that, following the increase in exports of the female-intensive good, the male-female wage gap closes considerably throughout the country -- not just in the apparel sector. In relatively small Bangladesh, the national labor market seems to be more integrated compared to larger countries studied, possibly suggesting that labor adjustment costs are lower in smaller countries.
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Policy Research Working Paper WPS9176 MAR 09, 2020
Accurate estimates of men's and women's employment are at the heart of understanding sources of productivity and economic growth and designing well-targeted, gender-sensitive labor policies.
... See More + How respondent selection in household and labor force surveys affects these estimates is a key question, for which experimental evidence outside of high-income settings is limited. Leveraging two concurrent, national surveys in Malawi that differed in their approach to respondent selection, the analysis shows that compared to the best practice of privately interviewing adults about their employment outcomes, the common "business-as-usual" approach that permits the use of proxy respondents and non-private/group interviews leads to significant underreporting of employment across a range of wage- and self-employment activities, with stronger effects for women and for a longer (12-month) recall period. Under the business-as-usual approach, the main factors linked to under-reporting include household wealth, proxy reporting, and potential difficulties associated with interpreting/answering on questions regarding household non-farm enterprises.
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Policy Research Working Paper WPS9152 FEB 18, 2020
Kilic,Talip; Van den Broeck,Goedele; Koolwal,Gayatri B.; Moylan,Heather G.Disclosed
In recent years, there has been renewed attention on policies to enhance the income generating capacity and productivity of the poor (World Bank, 2012).
... See More + Since both skills and capital can limit productive choices (Lucas, 1978; Banerjee and Newman, 1992), many programs specifically tackle those constraints to improve entry and returns to nonagricultural wage employment or self-employment. Yet the existing evidence base shows mixed results of such program. Even when they are positive, we do not know how sustainable the impacts are over time, especially once beneficiaries graduate from the programs. As such, substantial questions remain about how to design programs to increase skills and foster productive employment. A different set of policies aims to intervene earlier in the lifecycle and focuses on human capital accumulation during early childhood. Such interventions are often specifically motivated by their long-term potential to sustainable increase human capital, in part based on the Heckman (2008) hypothesis that ‘skills beget skills. Yet, except for a relatively small-n experiment of a parenting intervention in Jamaica (Gertler et al, 2004) evidence of long-term impacts of such programs in low- or middle-income settings is limited. This study hence contributes to various literatures by providing long-term evidence on the effectiveness of a productive safety nets program and an early childhood parenting intervention, targeted to the rural poor in a low-income setting.
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The study aims to provide insights to policy makers in measuring the impact of trade liberalization and regional integration measures on gender employment and wages.
... See More + The study incorporates gender-differentiated employment and wages for selected South Asian economies across sectors to identify targeted value chains and economic activities, particularly among green trade sectors. This is the first major attempt to develop a gender-differentiated data set for South Asian countries, within the widely used Global Trade Analysis Project framework, to examine the nexus between trade, green economy, and gender. Two illustrative scenarios are examined. The first scenario examines a complete tariff elimination among the Bhutan-Bangladesh-India-Nepal grouping of countries in all sectors. The second scenario involves complete tariff elimination among countries in South Asia. The results indicate that a free trade agreement signed by all countries is likely to be more beneficial compared with only some countries signing the free trade agreement. Women's employment grows faster than men's employment, as most of the sectors that benefit due to these free trade agreements are women intensive. Growth in women's employment and wages in South Asia is consistent with growth in green sectors.
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Policy Research Working Paper WPS9119 JAN 22, 2020
