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This dissertation focuses on the intersection of agricultural productivity, youth employment, and investments in human capital development in Sub–Saharan Africa (SSA). Agriculture is a dominant employer and source of income in SSA, and plays an important role in youth employment and educational attainments.In Chapter 1, we study the role of structural transformation in the labor reallocation between the farm and the non–farm sector and the consequential impact on worker demographics. Specifically, we investigate whether agricultural productivity differentially reallocates labor by age and gender. We develop a theoretical model where increased land productivity leads to younger individuals sorting into the non–farm sector while older individuals sort into agriculture. We then use data from Zambia in our empirical analysis. Our main results show some evidence of productivity affecting labor reallocation within recent productivity lags (last 2 years) but not when longer productivity lags (4 or 6) are considered. Specifically, consistent with our model prediction, a 10% increase in a 2–year lagged moving average of productivity decreases the probability of farming by 0.3 percentage points among youth (15–24) and older youth (25–34). We also show that youth (15–24) also exit farming following increased productivity. Increased productivity tends to reduce the intensity of farming across all age groups but the reduction is relatively larger among the youth. In addition, young men are more likely to exit business activity as productivity increases relative to young women – across all productivity lags. In the short term (2–lags), while youth exit farming, there is no differential outcome between genders. However, among older youth, males are more likely to exit farming compared to women. Finally, males mainly drive the reduction in intensity of farming. Overall, while we find some evidence in favor of our hypotheses, the evidence is generally limited to the short term and the marginal effects are quantitatively small.Chapter 2 investigates the impact of agricultural productivity on human capital investments in Tanzania. Agriculture remains a major source of employment and income in Tanzania. Therefore, any agricultural productivity shocks are likely to affect educational investment decisions. Our results provide evidence that increased agricultural productivity boosts spending on uniform, contributions and total academic expenses. We find positive but statistically non–significant effects of productivity on study times. In addition, we find no evidence of heterogeneous effects by student gender. We show evidence that productivity effects are smaller in female–headed households. Finally, we find some evidence that post–primary students experience larger impacts compared to primary school students.In Chapter 3, I investigate the impact of primary school electrification on academic outcomes in Kenya. Between 2014 and 2016, the number of primary schools with electricity rose from 56% to 94%. Schools near the grid network were connected to grid electricity while those further received solar photovoltaics. Using this rapid electrification expansion as a source of identifying variation in a panel fixed effects model, the paper estimates the impact on school test scores, enrollment, and completion. The paper also attempts to quantify the effects of lighting on education performance by relying on the off–grid (solar) electricity coefficients. Using a universe of 8th grade students in public schools in Kenya, the paper finds no evidence that electricity affects test scores or enrollment in the short run. However, off–grid electrification increases completion by 1%. Using off–grid estimates, the paper concludes that lighting has a small positive impact on completion but not on test scores or enrollment.
Development and economic growth take place through the more efficient allocation of inputs into more productive uses. Human capital is a key input since it is the main asset of the majority of the population, especially of the poor, in developing countries. What factors attribute to existing barriers to physical and social mobility of human capital in developing countries? How has expanded global trade affected the allocation and accumulation of skill in developing economies? In three chapters, I study the education and internal migration in China and India, and provide answer to these questions.
This thesis consists of three essays which focus on accounting for the sources of economic inequality in various contexts. The first two essays focus on disparity of agricultural labour productivity across the developing countries, while the third analyzes racial earnings inequality. The main goal of these essays is to shed light on some of the mechanisms which have generated these types of inequality, in order to better design policies for ameliorating them. The first essay is empirical, while the second and third essays construct general equilibrium models so as to quantitatively assess the importance of proposed sources of inequality. The first essay finds that a large proportion of the variation of the level and growth of agricultural labour productivity across a sample of developing countries can be explained by variation in input use across countries. I demonstrate that our understanding of disparity of labour productivity in developing country agriculture can be significantly improved by accounting for variation in the adoption of high-yielding seed varieties and for correlation between input use and technological change across countries. The second essay analyzes the factors which have contributed to agricultural stagnation in Sub-Saharan Africa, despite productivity improvements in agriculture in other developing regions. I construct a quantitative model which can match average Sub-Saharan African trends of agricultural labour productivity, crop yields and input use from 1965 to 2000. The model points to key factors which have constrained agricultural productivity growth over this period, and to the need for diverse yet concerted policies to arrest this stagnation. The third essay presents a quantitative model which sheds light on racial earnings inequality in the U.S., South Africa and Brazil. This model indicates that a large proportion of the racial wage gap in these three countries can be attributed to differential human capital accumulation by race. Most notably, distortions created by the explicit, racially-biased education system which existed in South Africa during Apartheid can explain roughly three quarters of the racial wage gap in South Africa in the early 1990's.
The overall objective of this thesis is to analyze the determinants and welfare effects of changes in agricultural productivity, rural population size and exposure to weather shocks in developing nations. The thesis is organized in three chapters. Chapter 1 analyzes the welfare and distributional effects of large dams in Sub Saharan Africa. The empirical strategy exploits the fact that, in Africa, a substantial number of dam construction was preceded by the establishment of international river basin treaties and authorities which dealt with the management of water resources and encouraged the construction of dams. Exploiting this policy context, this chapter develops an instrumental variable strategy using differences in suitability for dam(explained by differences in river gradients) between river basins within the same treaty basin to address the endogeneity of dam location. The results show that in river basins where a dam is built children are shorter and weigh less. These negative effects are amplified by recent adverse rainfall shocks. In river basins located downstream from a dam, child height and weight improve significantly. These gains are smaller when recent rainfall realizations were low. Taken together the findings demonstrate that dam construction in Sub-Saharan Africa clearly creates losers and winners showing the scope for more effective policymaking in order to capture the benefits from investing in large dam while compensating those who would lose. An interesting area for future research is to analyze whether and how institutional quality could alleviate the unequal distribution of the costs and benefits of dam construction in Sub Saharan Africa. Chapter 2 investigates how rural out-migration affects rural labor markets in developing countries. This question is of great importance given the role rural-urban and rural-rural population movements play in the process of structural transformation and economic development. As the Agricultural sector shrinks, workers leave rural areas for manufacturing and services jobs in cities. How does this process affect rural labor markets and the welfare of those who remain in rural areas? This paper examines this question empirically by investigating the effect of rural out-migration on rural wages using Brazilian population censuses from 1980 to 2000. I develop an approach for estimating the effect of rural out-migration on rural wages using the evidence that rural out-migration rates are different across cohorts of workers and that these differences change over time. The results indicate that a 10 percent increase in rural out-migration raises rural wages by 1 to 5 percent. This result suggests that rural out-migration flows in Brazil between 1991 and 2000 have increased wages by 3 to 6.5\%. In chapter 3 I analyze the short-run and medium-run consequences of agricultural shocks on human capital accumulation using data from Zambia. Because of their large dependence on rain-fed agriculture, a large proportion of households in developing countries are particularly vulnerable to rainfall shocks. Moreover, the usual mechanisms for smoothing income or consumption(credit and insurance) may be missing or limited in such economies. Households' inability to transfer resources across time and state of the nature may lead them to adopt coping strategies that are detrimental to asset and human capital accumulation. Using data collected around two periods of drought in Southern Africa, I examine whether exposure to agricultural shocks affects schooling and whether these effects persist or diminish over time. I find that exposure to the droughts reduced enrollment rates by 10 percentage points and years of schooling by 8 percentage points in the short-run. I also find some evidence of partial catch-up in the medium-run which suggests that children exposed to the drought remained in school at older ages. These findings have important policy implications. They suggest that technologies to reduce rainfall shocks and safety nets may have large benefits in reducing delays and increasing the rate of human capital accumulation. Moreover education policies should target regions and individuals exposed to agricultural or income shocks in order to limit drops in enrollment rates and facilitate the return of students who temporarily left school.
Work is constantly reshaped by technological progress. New ways of production are adopted, markets expand, and societies evolve. But some changes provoke more attention than others, in part due to the vast uncertainty involved in making predictions about the future. The 2019 World Development Report will study how the nature of work is changing as a result of advances in technology today. Technological progress disrupts existing systems. A new social contract is needed to smooth the transition and guard against rising inequality. Significant investments in human capital throughout a person’s lifecycle are vital to this effort. If workers are to stay competitive against machines they need to train or retool existing skills. A social protection system that includes a minimum basic level of protection for workers and citizens can complement new forms of employment. Improved private sector policies to encourage startup activity and competition can help countries compete in the digital age. Governments also need to ensure that firms pay their fair share of taxes, in part to fund this new social contract. The 2019 World Development Report presents an analysis of these issues based upon the available evidence.
This Open Access book explores the multifaceted nature of agricultural and rural development in Asia and examines the extent to which the Asian experience is being replicated in contemporary Africa. This volume compiles the works of top scholars who provided analyses and evidences from household-level surveys collected for many years in several parts of Asia and Africa. The most important finding presented in this book is that African agricultural development has evolved following the pathways of Asian agricultural development. The common pathways are borrowed technology from abroad and adaptive research in rice farming; secured property rights on natural resources; adoption of ICTs; investments in human capital, including training; and launching of the high-value agriculture. In both continents, agricultural development started in the crop sector, which had a strong tendency to induce the dynamic development of other sectors in rural areas. [Resumen de la editorial]
An analysis of recent data on the economic behavior of market institutions in sub-Saharan Africa, with implications for future research and current policy. In Market Institutions in Sub-Saharan Africa, Marcel Fafchamps synthesizes the results of recent surveys of indigenous market institutions in twelve countries, including Benin, Ghana, Kenya, Madagascar, Malawi, and Zimbabwe, and presents findings about economics exchange in Africa that have implications both for future research and current policy. Employing empirical data as well as theoretical models that clarify the data, Fafchamps takes as his unifying principle the difficulties of contract enforcement. Arguing that in an unpredictable world contracts are not always likely to be respected, he shows that contract agreements in sub-Saharan Africa are affected by the absence of large hierarchies (both corporate and governmental) and as a result must depend to a greater degree than in more developed economies on social networks and personal trust. Fafchamps considers policy recommendations as they apply to countries in three different stages of development: countries with undeveloped market institutions, like Ghana; countries at an intermediate stage, like Kenya; and countries with developed market institutions, like Zimbabwe. Market Institutions in Sub-Saharan Africa caps ten years of personal research by the author. Fafchamps, in collaboration with such institutions as the Africa Division of the World Bank and the International Food Policy Research Institute, participated in the surveys of manufacturing firms and agricultural traders that provide the empirical basis for the book. The result is a work that makes a significant contribution to research on the continuing economic stagnation of many countries in sub-Saharan Africa and is also largely accessible to researchers in other fields and policy professionals.