Pub Date : 2025-11-20DOI: 10.1016/j.jdeveco.2025.103684
Idossou Marius Adom
This paper argues that firms’ transition from informality to formality is important in Sub-Saharan Africa but was overlooked in the literature. It develops a structural dynamic model of heterogeneous firms, rationalizing the empirical relationship between transition from informality to formality and taxes, financial constraints, regulations and enforcement. When calibrated to Nigeria’s data, the results of the model show that different policies can significantly reduce informality through both the extensive margin (i.e the creation of new formal firms) and the intensive margin (i.e the formalization of incumbent informal firms) with a positive effect on aggregate production, TFP, and government revenue. In absence of financial constraints, the intensive margin becomes quantitatively insignificant, demonstrating the importance of financial constraints in firms’ decision to delay formalization and underscoring the relevance of transition in modeling informality.
{"title":"A structural analysis of firms’ transition from informality to formality in Nigeria","authors":"Idossou Marius Adom","doi":"10.1016/j.jdeveco.2025.103684","DOIUrl":"10.1016/j.jdeveco.2025.103684","url":null,"abstract":"<div><div>This paper argues that firms’ transition from informality to formality is important in Sub-Saharan Africa but was overlooked in the literature. It develops a structural dynamic model of heterogeneous firms, rationalizing the empirical relationship between transition from informality to formality and taxes, financial constraints, regulations and enforcement. When calibrated to Nigeria’s data, the results of the model show that different policies can significantly reduce informality through both the extensive margin (i.e the creation of new formal firms) and the intensive margin (i.e the formalization of incumbent informal firms) with a positive effect on aggregate production, TFP, and government revenue. In absence of financial constraints, the intensive margin becomes quantitatively insignificant, demonstrating the importance of financial constraints in firms’ decision to delay formalization and underscoring the relevance of transition in modeling informality.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103684"},"PeriodicalIF":4.6,"publicationDate":"2025-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145623670","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Human behaviors and innovations often spread through social networks, yet the mechanisms driving this diffusion — information sharing or persuasion — remain debated. Using a large-scale randomized controlled trial in Uttar Pradesh, India, we examine these dynamics while promoting a newly introduced savings commitment product. Our findings reveal persuasion as the dominant channel: villages where persuasion was incentivized experienced significantly higher product sign-up and take-up rates, even without corresponding increases in financial literacy or product knowledge. Conversely, providing information alone had minimal impact. The combined intervention of persuasion and information delivered the highest outcomes, highlighting their complementary roles. These results highlight the critical importance of persuasion in driving behavioral change and suggest that information dissemination alone may often be insufficient for effective adoption and diffusion.
{"title":"Diffusion in social networks: Experimental evidence on information sharing vs persuasion","authors":"Marcel Fafchamps , Asad Islam , Debayan Pakrashi , Denni Tommasi","doi":"10.1016/j.jdeveco.2025.103686","DOIUrl":"10.1016/j.jdeveco.2025.103686","url":null,"abstract":"<div><div>Human behaviors and innovations often spread through social networks, yet the mechanisms driving this diffusion — information sharing or persuasion — remain debated. Using a large-scale randomized controlled trial in Uttar Pradesh, India, we examine these dynamics while promoting a newly introduced savings commitment product. Our findings reveal persuasion as the dominant channel: villages where persuasion was incentivized experienced significantly higher product sign-up and take-up rates, even without corresponding increases in financial literacy or product knowledge. Conversely, providing information alone had minimal impact. The combined intervention of persuasion and information delivered the highest outcomes, highlighting their complementary roles. These results highlight the critical importance of persuasion in driving behavioral change and suggest that information dissemination alone may often be insufficient for effective adoption and diffusion.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103686"},"PeriodicalIF":4.6,"publicationDate":"2025-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145623668","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-19DOI: 10.1016/j.jdeveco.2025.103681
Stepan Gordeev
In many of the poorest countries, agriculture is unproductive and subsistence farming is widespread. I propose nutrition demand as a mechanism that drives the production decisions of subsistence farmers and ultimately contributes to low aggregate agricultural productivity. I explore this mechanism in a model of farm-operating households facing explicit caloric needs and costly domestic trade, and test the model’s predictions on Malawian household-level data. In the model and in the data, the smallest farmers focus their consumption on obtaining calories and specialize their production in unsold staple crops; medium farmers diversify both their diet and their subsistence production; the largest farmers shift consumption to purchased goods by producing and selling marketable farm products. I quantify the aggregate implications of this farm-level product choice using the model. It suggests that lowering trade frictions enough for the average share of output sold by farmers to reach even 50% would make the country’s agricultural sector 47% more productive. Half of this increase is caused by the mechanically reduced erosion of output, and the other half by a better alignment of individual farmers’ product choice with their comparative advantage rather than their family’s nutritional needs or food preferences.
{"title":"Nutrition demand, subsistence farming, and agricultural productivity","authors":"Stepan Gordeev","doi":"10.1016/j.jdeveco.2025.103681","DOIUrl":"10.1016/j.jdeveco.2025.103681","url":null,"abstract":"<div><div>In many of the poorest countries, agriculture is unproductive and subsistence farming is widespread. I propose nutrition demand as a mechanism that drives the production decisions of subsistence farmers and ultimately contributes to low aggregate agricultural productivity. I explore this mechanism in a model of farm-operating households facing explicit caloric needs and costly domestic trade, and test the model’s predictions on Malawian household-level data. In the model and in the data, the smallest farmers focus their consumption on obtaining calories and specialize their production in unsold staple crops; medium farmers diversify both their diet and their subsistence production; the largest farmers shift consumption to purchased goods by producing and selling marketable farm products. I quantify the aggregate implications of this farm-level product choice using the model. It suggests that lowering trade frictions enough for the average share of output sold by farmers to reach even 50% would make the country’s agricultural sector 47% more productive. Half of this increase is caused by the mechanically reduced erosion of output, and the other half by a better alignment of individual farmers’ product choice with their comparative advantage rather than their family’s nutritional needs or food preferences.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103681"},"PeriodicalIF":4.6,"publicationDate":"2025-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145623674","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-19DOI: 10.1016/j.jdeveco.2025.103685
Marcel Fafchamps , Aditya Shrinivas
We propose an improved theoretically-grounded method to test for efficient risk pooling that allows for intertemporal smoothing, non-homothetic consumption, and heterogeneous risk and time preferences. Applying this method to recent panel data from Indian villages generates important new insights while confirming some earlier findings. Year-to-year smoothing of consumption takes place much more at the village level than at the individual level and occurs primarily through financial assets. While there is proportionally more smoothing of food than non-food consumption, accounting for differences in income elasticities between the two statistically eliminates this difference, indicating that risk pooling does not distort consumption choices in our study area. Finally, we find that consumption smoothing is affected jointly by income and liquid assets, and that there is no excess sensitivity to earned income.
{"title":"Intertemporal risk pooling in village economies","authors":"Marcel Fafchamps , Aditya Shrinivas","doi":"10.1016/j.jdeveco.2025.103685","DOIUrl":"10.1016/j.jdeveco.2025.103685","url":null,"abstract":"<div><div>We propose an improved theoretically-grounded method to test for efficient risk pooling that allows for intertemporal smoothing, non-homothetic consumption, and heterogeneous risk and time preferences. Applying this method to recent panel data from Indian villages generates important new insights while confirming some earlier findings. Year-to-year smoothing of consumption takes place much more at the village level than at the individual level and occurs primarily through financial assets. While there is proportionally more smoothing of food than non-food consumption, accounting for differences in income elasticities between the two statistically eliminates this difference, indicating that risk pooling does not distort consumption choices in our study area. Finally, we find that consumption smoothing is affected jointly by income and liquid assets, and that there is no excess sensitivity to earned income.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103685"},"PeriodicalIF":4.6,"publicationDate":"2025-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145623142","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-17DOI: 10.1016/j.jdeveco.2025.103687
Facundo Albornoz , Gonzalo Almeyda Torres , María Lombardi , Victoria Oubiña , Pablo Zoido Lobaton
We study the effect of a randomized one-on-one remote phone tutoring program implemented between 2021 and 2023. The intervention reached almost seven thousand students in seven Latin American countries: Argentina, Brazil, El Salvador, Guatemala, Mexico, Paraguay and Peru. The program targeted students with low initial learning levels and focused on foundational numeracy skills using a differentiated instruction approach. We find that assignment to tutoring increased student test scores by 0.2 SD. Tutoring benefited all students, with no differential effects by gender, age, socioeconomic status, or baseline scores. We find suggestive evidence that students who reported difficulties with concentration or memory may have benefited more. Finally, we find that students with lower initial performance exhibited larger improvements in more basic mathematical operations, whereas those with better performance at baseline saw larger gains in more complex operations. This underscores the importance of offering differentiated instruction based on students’ initial performance.
{"title":"Remote tutoring in Latin America","authors":"Facundo Albornoz , Gonzalo Almeyda Torres , María Lombardi , Victoria Oubiña , Pablo Zoido Lobaton","doi":"10.1016/j.jdeveco.2025.103687","DOIUrl":"10.1016/j.jdeveco.2025.103687","url":null,"abstract":"<div><div>We study the effect of a randomized one-on-one remote phone tutoring program implemented between 2021 and 2023. The intervention reached almost seven thousand students in seven Latin American countries: Argentina, Brazil, El Salvador, Guatemala, Mexico, Paraguay and Peru. The program targeted students with low initial learning levels and focused on foundational numeracy skills using a differentiated instruction approach. We find that assignment to tutoring increased student test scores by 0.2 SD. Tutoring benefited all students, with no differential effects by gender, age, socioeconomic status, or baseline scores. We find suggestive evidence that students who reported difficulties with concentration or memory may have benefited more. Finally, we find that students with lower initial performance exhibited larger improvements in more basic mathematical operations, whereas those with better performance at baseline saw larger gains in more complex operations. This underscores the importance of offering differentiated instruction based on students’ initial performance.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103687"},"PeriodicalIF":4.6,"publicationDate":"2025-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145579000","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-14DOI: 10.1016/j.jdeveco.2025.103682
Jessica Leight , Daniel Gilligan , Melissa Hidrobo , Harold Alderman , Michael Mulford
In recent years, a growing literature has examined the potential of multifaceted, intensive graduation models that address multiple barriers constraining households’ exit from poverty. In this paper, we present new evidence from a randomized trial of a lighter-touch (less intensive) graduation model implemented in Ethiopia. The primary experimental arms are a bundled intervention including a transfer valued at PPP $374 (randomly assigned to be cash or equivalent value in poultry), training, and savings groups; a simpler intervention including training and savings groups only; and a control arm. We find that three years post-baseline, the intervention inclusive of the transfer leads to increases in savings and cash income from livestock, though there is no shift in consumption or food security and very little evidence of asset accumulation; these effects are generally consistent regardless of the modality of the transfer (cash versus poultry). The effects of training and savings groups alone are minimal.
{"title":"Can a light-touch graduation model enhance livelihood outcomes? Evidence from Ethiopia","authors":"Jessica Leight , Daniel Gilligan , Melissa Hidrobo , Harold Alderman , Michael Mulford","doi":"10.1016/j.jdeveco.2025.103682","DOIUrl":"10.1016/j.jdeveco.2025.103682","url":null,"abstract":"<div><div>In recent years, a growing literature has examined the potential of multifaceted, intensive graduation models that address multiple barriers constraining households’ exit from poverty. In this paper, we present new evidence from a randomized trial of a lighter-touch (less intensive) graduation model implemented in Ethiopia. The primary experimental arms are a bundled intervention including a transfer valued at PPP $374 (randomly assigned to be cash or equivalent value in poultry), training, and savings groups; a simpler intervention including training and savings groups only; and a control arm. We find that three years post-baseline, the intervention inclusive of the transfer leads to increases in savings and cash income from livestock, though there is no shift in consumption or food security and very little evidence of asset accumulation; these effects are generally consistent regardless of the modality of the transfer (cash versus poultry). The effects of training and savings groups alone are minimal.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103682"},"PeriodicalIF":4.6,"publicationDate":"2025-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145578998","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In developing countries, informal labor is not only employed by illegal or unregistered firms but also by legal firms that hire workers informally, known as the intensive margin of labor informality. Reducing this type of work may have ambiguous effects on formal employment, depending on factors such as firm size and productivity. In collaboration with Peru's labor inspection authority, we conducted a randomized mailing experiment targeting large firms with a high propensity for employing workers informally. The authority sent letters with either deterrence messages detailing fines for non-compliance or social norms messages highlighting the positive impacts of formality. We analyzed the impact of this intervention on formal employment levels over the following two years using monthly administrative data. The treated firms (particularly those in the deterrence treatment arm) and larger firms increased their formal employment levels. However, these increases followed a seasonal pattern coinciding with the high labor demand during the tourist season, suggesting that prior to the intervention, firms were employing temporary workers informally. The higher perceived cost of non-compliance led them to formalize some of these workers. The informal hiring of seasonal workers by these firms appears to have been motivated by basic tax evasion, and the absence of a negative effect on firm-level formal employment indicates that the firms were exploiting rents from low enforcement of regulations.
{"title":"Large firms and the intensive margin of labor informality evidence from an enforcement intervention in Peru","authors":"Mariano Bosch , Guillermo Cruces , Stephanie González , María Teresa Silva-Porto","doi":"10.1016/j.jdeveco.2025.103679","DOIUrl":"10.1016/j.jdeveco.2025.103679","url":null,"abstract":"<div><div>In developing countries, informal labor is not only employed by illegal or unregistered firms but also by legal firms that hire workers informally, known as the intensive margin of labor informality. Reducing this type of work may have ambiguous effects on formal employment, depending on factors such as firm size and productivity. In collaboration with Peru's labor inspection authority, we conducted a randomized mailing experiment targeting large firms with a high propensity for employing workers informally. The authority sent letters with either deterrence messages detailing fines for non-compliance or social norms messages highlighting the positive impacts of formality. We analyzed the impact of this intervention on formal employment levels over the following two years using monthly administrative data. The treated firms (particularly those in the deterrence treatment arm) and larger firms increased their formal employment levels. However, these increases followed a seasonal pattern coinciding with the high labor demand during the tourist season, suggesting that prior to the intervention, firms were employing temporary workers informally. The higher perceived cost of non-compliance led them to formalize some of these workers. The informal hiring of seasonal workers by these firms appears to have been motivated by basic tax evasion, and the absence of a negative effect on firm-level formal employment indicates that the firms were exploiting rents from low enforcement of regulations.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"180 ","pages":"Article 103679"},"PeriodicalIF":4.6,"publicationDate":"2025-11-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145883980","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-11DOI: 10.1016/j.jdeveco.2025.103683
Martin Paul Jr. Tabe-Ojong , Ange T. Kakpo , Jourdain C. Lokossou
We examine the impact of extreme heat on household labor allocation using earth observation and microdata from Ghana, Mali, and Nigeria. We find that extreme heat affects household labor in distinct ways with significant cross-country heterogeneities. In Nigeria, extreme heat reduces labor use at the extensive margin but increases labor use at the intensive margin. Notably, child labor rises while adult labor declines at the extensive margin. In Mali, extreme heat leads to an overall increase in household labor, particularly among women and children, whereas Ghana shows minimal impact except for reduced child labor. Both Mali and Nigeria experience decreases in hired labor, animal traction, and associated labor costs under extreme heat exposure. These patterns could be explained by farmers’ adaptive strategies: extreme heat triggers the build-up of pests, weeds, and diseases, which could induce farmers to use more pesticides and engage in manual weeding, which are labor-demanding. Moreover, households rely on climate-resistant crop varieties and cropland expansion, which may require additional labor efforts. These findings underscore the nuanced effects of extreme heat on rural labor markets and the importance of context-specific adaptation strategies.
{"title":"Turning up the heat: Extreme heat and labor implications in West Africa","authors":"Martin Paul Jr. Tabe-Ojong , Ange T. Kakpo , Jourdain C. Lokossou","doi":"10.1016/j.jdeveco.2025.103683","DOIUrl":"10.1016/j.jdeveco.2025.103683","url":null,"abstract":"<div><div>We examine the impact of extreme heat on household labor allocation using earth observation and microdata from Ghana, Mali, and Nigeria. We find that extreme heat affects household labor in distinct ways with significant cross-country heterogeneities. In Nigeria, extreme heat reduces labor use at the extensive margin but increases labor use at the intensive margin. Notably, child labor rises while adult labor declines at the extensive margin. In Mali, extreme heat leads to an overall increase in household labor, particularly among women and children, whereas Ghana shows minimal impact except for reduced child labor. Both Mali and Nigeria experience decreases in hired labor, animal traction, and associated labor costs under extreme heat exposure. These patterns could be explained by farmers’ adaptive strategies: extreme heat triggers the build-up of pests, weeds, and diseases, which could induce farmers to use more pesticides and engage in manual weeding, which are labor-demanding. Moreover, households rely on climate-resistant crop varieties and cropland expansion, which may require additional labor efforts. These findings underscore the nuanced effects of extreme heat on rural labor markets and the importance of context-specific adaptation strategies.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103683"},"PeriodicalIF":4.6,"publicationDate":"2025-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145578999","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-07DOI: 10.1016/j.jdeveco.2025.103674
Zhu Chen , Jipeng Zhang , Kang Zhou
This paper investigates how local governments in China respond to demographic shifts by reducing migration restrictions through Hukou reform. We construct a novel measure of reform intensity by combining a data-driven approach with textual analysis of official policy documents. By quantifying the share of pre-reform migrants who would qualify for local urban Hukou under the most recent settlement criteria, our measure captures the endogenous constraints embedded in local settlement policies. Using this measure, we estimate the impact of local population aging on Hukou policy changes. We find that cities with higher aging levels are more likely to lower thresholds for migrant settlement, with stronger effects in prefectures facing lower fertility rates. Mechanism analysis further highlights the role of population aging as a driver of labor market deregulation and urban development.
{"title":"Endogenous migration restrictions and population aging in China","authors":"Zhu Chen , Jipeng Zhang , Kang Zhou","doi":"10.1016/j.jdeveco.2025.103674","DOIUrl":"10.1016/j.jdeveco.2025.103674","url":null,"abstract":"<div><div>This paper investigates how local governments in China respond to demographic shifts by reducing migration restrictions through Hukou reform. We construct a novel measure of reform intensity by combining a data-driven approach with textual analysis of official policy documents. By quantifying the share of pre-reform migrants who would qualify for local urban Hukou under the most recent settlement criteria, our measure captures the endogenous constraints embedded in local settlement policies. Using this measure, we estimate the impact of local population aging on Hukou policy changes. We find that cities with higher aging levels are more likely to lower thresholds for migrant settlement, with stronger effects in prefectures facing lower fertility rates. Mechanism analysis further highlights the role of population aging as a driver of labor market deregulation and urban development.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103674"},"PeriodicalIF":4.6,"publicationDate":"2025-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145528347","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use comprehensive data on bilateral labor agreements (BLAs) and migration across all country pairs from 1960 to 2020 to estimate the impact of BLAs on migration. In our preferred specification, which includes a rich set of fixed effects, BLAs increase migration by 68 percent (or 0.52 log points) within a decade. Among regular corridors—those with at least ten migrants in each period of the sample—migration increases by 21 percent (or 0.19 log points). Effects are stronger for BLAs involving low- and lower-middle-income origin countries, but are negligible for origin countries in Africa, likely driven by weaker institutional capacity for implementation. Our estimates imply substantial welfare gains through increased migrant earnings. Low- and lower-middle-income countries can gain US$116 million annually from a BLA with a regular destination. If countries in sub-Saharan Africa were to experience similar effects, welfare gains could be as high as US$54 million annually.
{"title":"Do bilateral labor agreements increase migration? Global evidence from 1960 to 2020","authors":"Maheshwor Shrestha , Heidi Kaila , Narcisse Cha’ngom , Samik Adhikari","doi":"10.1016/j.jdeveco.2025.103673","DOIUrl":"10.1016/j.jdeveco.2025.103673","url":null,"abstract":"<div><div>We use comprehensive data on bilateral labor agreements (BLAs) and migration across all country pairs from 1960 to 2020 to estimate the impact of BLAs on migration. In our preferred specification, which includes a rich set of fixed effects, BLAs increase migration by 68 percent (or 0.52 log points) within a decade. Among regular corridors—those with at least ten migrants in each period of the sample—migration increases by 21 percent (or 0.19 log points). Effects are stronger for BLAs involving low- and lower-middle-income origin countries, but are negligible for origin countries in Africa, likely driven by weaker institutional capacity for implementation. Our estimates imply substantial welfare gains through increased migrant earnings. Low- and lower-middle-income countries can gain US$116 million annually from a BLA with a regular destination. If countries in sub-Saharan Africa were to experience similar effects, welfare gains could be as high as US$54 million annually.</div></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":"179 ","pages":"Article 103673"},"PeriodicalIF":4.6,"publicationDate":"2025-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145473629","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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