Farewell Anatolia: Refugees & the rise of the Greek Left

The population exchange of 1923 between Greece and Turkey consolidated the influx of more than 1.5 million refugees from Anatolia and East Thrace into Greece. In this article, we exploit the regional distribution of refugees at the sub-prefectural (province) level as a natural experiment in order to delineate the political effects of what the Greeks call the Asia Minor Catastrophe. We find that the settlement of refugees produced positive persistent effects on the electoral share of left-wing parties in the interwar and postwar periods. This is particularly the case for provinces with a high settlement rate of refugees originating from Asia Minor rather than from East Thrace or the Black Sea region. However, the refugee impact on the left-wing vote disappears completely in the post-dictatorship period.     

The impact of the Bolsa Escola/Familia conditional cash transfer program on enrollment, dropout rates and grade promotion in Brazil

We examine the impact of Brazil's Bolsa Escola/Familia program on Brazilian children's education outcomes. Bolsa provides cash payments to poor households if their children (ages 6 to 15) are enrolled in school. Using school census data to compare changes in enrollment, dropping out and grade promotion across schools that adopted Bolsa at different times, we estimate that the program has: increased enrollment by about 5.5% (6.5%) in grades 1-4 (grades 5-8); lowered dropout rates by 0.5 (0.4) percentage points in grades 1-4 (grades 5-8); and raised grade promotion rates by 0.9 (0.3) percentage points in grades 1-4 (grades 5-8). About one third of Brazil's children participate in Bolsa, so assuming no spillover effects onto non-participants implies that Bolsa's impacts are three times higher than these estimates. However, simple calculations using enrollment impacts suggest that Bolsa's benefits in terms of increased wages may not exceed its costs.     

Baltic Dry Index and the democratic window of opportunity

In their seminal paper, Brückner and Ciccone (2011) document that a significant effect of democratic change may be triggered by negative transitory economic shocks, and that rainfall can open a democratic window of opportunity in sub-Saharan Africa (SSA). As a complement, this paper uses within-country variation in the Baltic Dry Index (BDI) as a source of transitory negative income shocks to SSA countries. The BDI reflects the cost of utilizing dry bulk carriers, which are specially designed vessels for transporting primary goods internationally, where these goods dominate the output and export sectors of the SSA economies. We find that positive BDI cost shocks are followed by significant contraction in income through trade channel and significant improvement in democratic institutions, where BDI can open a window of opportunity for democratic improvement. Instrumental variables estimates indicate that following a negative income shock of one percentage point, democracy scores improve by around 4–5 percentage points on average.     

Cross‐Country Income Differences Revisited: Accounting for the Role of Intangible Capital

This paper develops a new intangible investment database that is consistent and internationally comparable for a set of 60 economies over the period 1995–2011. I find that over time a growing share of total investment consists of intangible assets, rather than investment in tangible assets, like machinery and buildings. Across countries, the level of economic development of a country is positively associated with its investment intensity in intangibles. By including intangible capital as an additional production factor, this paper finds that we can account for substantially more of the variation in cross‐country income levels. Depending on the assumptions regarding the output elasticities of factor inputs, the observed differences in intangible capital can account for up to 16 percentage points of the cross‐country income variation.     

Stunting and selection effects of famine: A case study of the Great Chinese Famine

Many developing countries experience famine. If survival is related to height, the increasingly common practice of using height as a measure of well-being may be misleading. We devise a novel method for disentangling the stunting from the selection effects of famine. Using data from the 1959-1961 Great Chinese Famine, we find that taller children were more likely to survive the famine. Controlling for selection, we estimate that children under the age of five who survived the famine grew up to be 1 to 2 cm shorter. Our results suggest that if a country experiences a shock such as famine, average height is potentially a biased measure of economic conditions during childhood.     

Campaigning and election outcomes in a presidential primary election

This article presents new evidence from the US presidential primary setting on the role campaigning plays in determining election outcomes. Using candidate visits as a measure of campaign intensity, I estimate a discrete choice model of voting using a differentiated products framework where I allow for abstention and create instruments for campaigning based on Democratic Party rules for delegate allocation. On average, a visit by a candidate increases the vote share of this candidate by about 2.4 percentage points and decreases the abstaining share by 0.7 percentage points.     

Horizontal innovation-based growth and product market competition

The influence of the intensity of competition in the product market on economic growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1 − Lerner index) and depends on both the share of factor inputs in total income and the degree of substitutability across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We explain our results in terms of the interplay between the resource allocation and the profit incentive effects.     

Conflict displacement and labor market outcomes in post-war Bosnia and Herzegovina

The war in Bosnia and Herzegovina of the early nineties displaced 1.3 million people. This study uses longitudinal data to document the effects of this displacement on labor market outcomes. To account for endogeneity in displacement, I exploit the fact that the level of violence affected the decision to leave and that pre-war economic performance is orthogonal to local violence levels. I find that displaced Bosnians are less likely to be working relative to the people who stayed. Displaced men experience higher unemployment levels, and displaced women are more likely to drop out of the labor force.     

Do interest rates matter? Credit demand in the Dhaka slums

“Best practice” in microfinance holds that interest rates should be set at profit-making levels, based on the belief that even poor customers favor access to finance over low fees. Despite this core belief, little direct evidence exists on the price elasticity of credit demand in poor communities. We examine increases in the interest rate on microfinance loans in the slums of Dhaka, Bangladesh. Using unanticipated between-branch variation in prices, we estimate interest elasticities from − 0.73 to − 1.04, with our preferred estimate being at the upper end of this range. Interest income earned from most borrowers fell, but interest income earned from the largest increased, generating overall profitability at the branch level.     

The Intergenerational Effects of Paternal Migration on Schooling and Work: What Can We Learn from Children's Time Allocations?

This paper explores the short-run effects of a father's U.S. migration on his children's schooling and work outcomes in Mexico. To get around the endogeneity of paternal migration, I use individual fixed effects and instrumental variables estimation (FEIV) where the instrumental variables are based on U.S. city-level employment statistics in two industries popular with Mexican immigrants. Overall, the estimates suggest that in the short-run, children reduce study hours and increase work hours in response to a father's U.S. migration. Decomposing the sample into sex- and age-specific groups suggests that this is mainly driven by the effects of paternal migration on 12-15 year-old boys. These results are consistent with a story in which the immediate aftermath of a father's migration is one of financial hardship that is borne in part by relatively young children.     

The drowning-refugee effect: media salience and xenophobic attitudes

We study whether salient media coverage of refugees drowning in the Mediterranean affects individual xenophobic attitudes. We combine a randomized survey experiment – a variant of the classic ‘trolley dilemma’ – that implicitly elicits individual attitudes towards foreigners, with variation in interview timing, and find that such issue salience significantly decreases xenophobic attitudes by 2.2 percentage points. Our results thus support the idea that exposure to news describing immigrants as victims (instead of a threat) can significantly affect public opinion and mitigate bias against immigrants.     

Maternal employment trajectories and caring for an infant or toddler with a disability

Mothers caring for an infant or toddler continue to face barriers in returning to work after child birth. Mothers caring for an infant or toddler with a disability, however, may face even greater barriers. This article contributes to the literature by exploring the employment costs for this group of mothers using a novel Australian administrative data set. The employment patterns of mothers with and without a disabled infant or toddler are compared both before and after child birth. The data follow 7600 mothers on a bi-weekly basis for the entire period 12 months before and the 24 months after child birth and contain information on the disability status of the child, measures of employment and the intensity of employment. I find that mothers of disabled toddlers and infants suffer employment disadvantages relative to mothers of non-disabled children. The employment gaps grow from approximately 6 percentage points shortly after their children are born to 14–17 percentage points when their children are 12–24 months old. The employment gaps exist for full-time employment as well as for short part-time employment.     

Economic growth,exports and foreign direct investment in Least Developed Countries: A panel Granger causality analysis

This paper investigates potential Granger causality among the real GDP, real exports and inward FDI in Least Developed Countries for the period between 1970 and 2009. A new panel-data approach developed in Kónya (2006) [Kónya (2006), Exports and growth: Granger causality analysis on OECD countries with a panel data approach, Economic Modelling, 23, 978–992] which is based on SUR systems and Wald tests with country specific bootstrap critical values has been employed. The results indicate direct, one-period-ahead, unidirectional causality from exports to GDP in Haiti, Rwanda and Sierra Leone, and from GDP to exports in Angola, Chad and Zambia. Considering the FDI–Growth nexus, there is evidence of FDI Granger-causing GDP in Benin and Togo, and GDP Granger-causing FDI in Burkina Faso, Gambia, Madagascar and Malawi. While studying EXP–FDI relations, this paper finds that the causality is from FDI to real exports in Benin, Chad, Haiti, Mauritania, Niger, Togo and Yemen, and from real exports to FDI in Haiti, Madagascar, Mauritania, Malawi, Rwanda, Senegal and Zambia.     

What is the optimal rate of R&D investment to maximize productivity growth?

Governments in modern economies devote much policy attention to enhancing productivity and continue to emphasize its drivers such as investment in R&D. This paper analyzes the relationship between productivity growth and levels of R&D investments. The econometric analysis shows that more than 65 per cent of productivity growth variance is due to its dependence on gross domestic expenditure on R&D expressed as percentage of GDP (GERD). Economic analysis shows that productivity growth = f(GERD) is a concave function downwards due to diminishing returns to research investments. In addition, the research shows that the range of GERD between 2.3 per cent and 2.6 per cent maximizes the long-run impact on productivity growth and it is the key to sustained productivity and technology improvements that are becoming more and more necessary to modern economic growth.     

Identifying non-cooperative behavior among spouses: Child outcomes in migrant-sending households

I propose a model of household decision-making under asymmetric information and show that resulting allocations may not be fully cooperative. The model yields a simple test for cooperative decision-making, which I apply to data from China. I find that, when the father migrates without his family, children spend more time in household production, while mothers spend less time in both household production and income-generating activities. This is not consistent with standard cooperative models of the household: simply reallocating time to compensate for the father's absence would cause an increase in household labor for both children and mothers and, if migration occurs in response to a negative shock, we should observe an increase in mothers' time in income-generating activities rather than a reduction. The results also do not appear to be driven by an increase in mothers' bargaining power, as children's human capital is not affected by migration, controlling for income.     

The human capital consequences of civil war: Evidence from Guatemala

We combine data from the 2002 National Population Census and the distribution of the number of human rights violations and victims across 22 departments to examine how Guatemala's 36-year-long civil war affected human capital accumulation. The year of birth and the department of birth jointly determine an individual's exposure during school age to three different periods of the civil war, namely the initial period (1960-1978), the worst period (1979-1984), and the final period (1985-1996). We find a strong negative impact of the civil war on the education of the two most disadvantaged groups, namely rural Mayan males and females. Among rural Mayan males, those who were school age during the three periods of the civil war in departments where more human rights violations were committed completed 0.27, 0.71, and 1.09 years less of schooling respectively whereas rural Mayan females exposed to the three periods of the war completed 0.12, 0.47, and 1.17 years less of schooling respectively. Given an average of 4.66 and 3.83 years of schooling for males and females, these represent declines of 6, 15, and 23% for males and 3, 12, and 30% for females. Our results are robust to the inclusion of indicators for department of residence, year of birth, and controls for different trends in education and human development in war-affected and peaceful departments of Guatemala and suggest that the country's civil war may have deepened gender, regional, sectoral, and ethnic disparities in schooling.     

Living in limbo: Economic and social costs for refugees

Our paper tests the hypothesis that living in limbo could have negative consequences for the socio-economic integration of refugees. We define limbo as a protracted period when asylum seekers are waiting for the decision concerning their permanent refugee status. Relying on the French survey of migrants, France's longitudinal survey of migrants (ELIPA), we measure integration by labour market participation, fluency in French, finding new French friends and studying. To account for the endogeneity of limbo, we instrument it with the administrative backlog. We find that living longer in limbo during the asylum-seeking period slows down future integration of refugees, but results differ with respect to gender and educational attainment. While having lived longer in limbo slows down most aspects of socio-economic integration for refugees with no degree or a high school degree, those with a bachelor's degree do not experience negative effects. Male refugees who had lived longer in limbo have a lower likelihood of being employed and studying in France, while similar females make fewer French friends.     

Accounting for the effect of health on cross-state income inequality in India

We perform development accounting in accordance with [Weil, 2005] and [Weil, 2007] in a cross-state analysis of India. Results of similar magnitude are found, demonstrating that health can account for 1% to 18% of income differences depending on the health measure.     

Does an intra-household flypaper effect exist? Evidence from the educational fee reduction reform in rural China

We test for evidence of an intra-household flypaper effect by evaluating the impact of an educational fee reduction reform in rural China on different categories of household expenditure, including spending on individual children. Using pre- and post-reform data, this study exploits cohort comparisons, variation in the extent of school fee reductions across different villages, and variation in the subsidies received by children enrolled in different grades within the same family to identify the impact of the reform. The results show that educational fee reductions are matched by increased voluntary educational spending on the same children who receive the fee reductions, providing strong evidence of an intra-household flypaper effect.     

Poverty Dynamics,Violent Conflict,and Convergence in Rwanda

This paper analyzes the poverty impact of the violent events that affected Rwanda in the 1990s. The main objective of the paper is to identify systematically potential mechanisms linking violent conflict with changes in poverty across provinces and households in Rwanda before and after a decade of violence. In accordance with emerging literature on the long‐term economic effects of violent conflict, we find empirical evidence for economic convergence between richer and poorer Rwandan provinces and households following the conflict shocks. Using a small but unique panel of households surveyed before and after the conflict period, we find that households whose house was destroyed or who lost land ran a higher risk of falling into poverty. We do not find much evidence for an economic effect of violent deaths at the household level due to substitution effects of labor within the household. Non‐violent deaths however seem to increase income per adult equivalent for the survivors. Results are shown to be robust to sample selection and IV models.