Dean Jolliffe ⓡ, Daniel Gerszon Mahler ⓡ, Christoph Lakner ⓡ, Aziz Atamanov ⓡ, Samuel Kofi Tetteh-Baah
Purchasing power parities (PPPs) are used to estimate the international poverty line (IPL) in a common currency and account for relative price differences across countries when measuring global poverty. This paper assesses the impact of the 2017 PPPs on the nominal value of the IPL and global poverty. Updating the $1.90 IPL in 2011 PPP dollars to 2017 PPP dollars results in an IPL of $2.15—a finding that is robust to various methods. Based on an updated IPL of $2.15, the global extreme poverty rate in 2017 falls from the previously estimated 9.3 to 9.1 percent, reducing the count of people who are poor by 15 million. This is a modest change compared with previous updates of PPP data. The paper also assesses the methodological stability between the 2011 and 2017 PPPs, scrutinizes large changes at the country level, and updates alternative, complementary poverty lines with the 2017 PPPs.
{"title":"Poverty and Prices: Assessing the Impact of the 2017 PPPs on the International Poverty Line and Global Poverty","authors":"Dean Jolliffe ⓡ, Daniel Gerszon Mahler ⓡ, Christoph Lakner ⓡ, Aziz Atamanov ⓡ, Samuel Kofi Tetteh-Baah","doi":"10.1093/wber/lhae035","DOIUrl":"https://doi.org/10.1093/wber/lhae035","url":null,"abstract":"Purchasing power parities (PPPs) are used to estimate the international poverty line (IPL) in a common currency and account for relative price differences across countries when measuring global poverty. This paper assesses the impact of the 2017 PPPs on the nominal value of the IPL and global poverty. Updating the $1.90 IPL in 2011 PPP dollars to 2017 PPP dollars results in an IPL of $2.15—a finding that is robust to various methods. Based on an updated IPL of $2.15, the global extreme poverty rate in 2017 falls from the previously estimated 9.3 to 9.1 percent, reducing the count of people who are poor by 15 million. This is a modest change compared with previous updates of PPP data. The paper also assesses the methodological stability between the 2011 and 2017 PPPs, scrutinizes large changes at the country level, and updates alternative, complementary poverty lines with the 2017 PPPs.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142254172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, global commodity prices pass-through to consumer prices are estimated in Africa. The estimation sample includes monthly data for 48 countries over the period 2002m02–2021m04. Sixteen commodity prices are considered separately, rather than aggregate indices that use weights unrepresentative of consumption in Africa. Using local projections in a panel data set, the maximum estimated pass-through is of 23 percent, and the long-run pass-through is of about 20 percent, higher than usually found in the literature. Country-specific regressions are also considered: in the latter, the estimated pass-through is lower for countries with a higher GDP per capita, a lower share of food and energy in the consumption basket, a better quality of transport infrastructure, and a higher openness to trade. Finally, commodity-specific pass-throughs are correlated with the share of corresponding goods in the consumer basket and with the import dependency ratio for this commodity.
{"title":"International Commodity Prices Transmission to Consumer Prices in Africa","authors":"Thibault Lemaire, Paul Vertier","doi":"10.1093/wber/lhae034","DOIUrl":"https://doi.org/10.1093/wber/lhae034","url":null,"abstract":"In this paper, global commodity prices pass-through to consumer prices are estimated in Africa. The estimation sample includes monthly data for 48 countries over the period 2002m02–2021m04. Sixteen commodity prices are considered separately, rather than aggregate indices that use weights unrepresentative of consumption in Africa. Using local projections in a panel data set, the maximum estimated pass-through is of 23 percent, and the long-run pass-through is of about 20 percent, higher than usually found in the literature. Country-specific regressions are also considered: in the latter, the estimated pass-through is lower for countries with a higher GDP per capita, a lower share of food and energy in the consumption basket, a better quality of transport infrastructure, and a higher openness to trade. Finally, commodity-specific pass-throughs are correlated with the share of corresponding goods in the consumer basket and with the import dependency ratio for this commodity.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142269106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper estimates the benefits of FDI for firm performance, differentiating source countries between tax havens and non–tax havens. Using longitudinal data on more than 300,000 initially domestic firms in Ukraine between 1999 and 2013 and employing propensity score matching and panel data methods, this study finds that firms acquired by non–tax haven foreign investors experience substantial increases in employment, productivity, exports, and wages, but the gains are much lower and shorter-lived for firms receiving FDI from tax havens. These findings, based on econometric analysis of nearly the universe of Ukrainian businesses, are consistent with macroeconomic studies and anecdotal evidence that much of the tax-haven FDI in Ukraine actually represents domestic ownership channeled through offshore companies. This “round-trip FDI” results in negligible effects on firm performance and, at a macro level, it overstates the amount of genuine FDI flows into Ukraine.
{"title":"Does the Source of FDI Matter? The Case of Tax Havens","authors":"Solomiya Shpak","doi":"10.1093/wber/lhae036","DOIUrl":"https://doi.org/10.1093/wber/lhae036","url":null,"abstract":"This paper estimates the benefits of FDI for firm performance, differentiating source countries between tax havens and non–tax havens. Using longitudinal data on more than 300,000 initially domestic firms in Ukraine between 1999 and 2013 and employing propensity score matching and panel data methods, this study finds that firms acquired by non–tax haven foreign investors experience substantial increases in employment, productivity, exports, and wages, but the gains are much lower and shorter-lived for firms receiving FDI from tax havens. These findings, based on econometric analysis of nearly the universe of Ukrainian businesses, are consistent with macroeconomic studies and anecdotal evidence that much of the tax-haven FDI in Ukraine actually represents domestic ownership channeled through offshore companies. This “round-trip FDI” results in negligible effects on firm performance and, at a macro level, it overstates the amount of genuine FDI flows into Ukraine.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"26 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142210864","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Irene Brambilla, Andrés César, Guillermo Falcone, Guido Porto
This paper proposes a new link relating export destinations and the organization of the firm: the production of higher-quality varieties exported to rich destinations induces firms to restructure their production processes, becoming organizationally more complex. A theoretical model with these features is presented and then the mechanisms are explored using a panel of Chilean manufacturing plants. The identification strategy of the paper relies on falling tariffs on Chilean products across destinations caused by the signature of Free Trade Agreements with high-income countries (the European Union, the United States, and South Korea). Results show that Chilean plants that were induced by these tariff reductions to start exporting to high-income destinations increased the number of hierarchical layers and upgraded the quality of their products. This involved the addition of qualified supervisors that facilitated the provision of higher product quality. These effects took place at new high-income exporting firms.
{"title":"Organizational Hierarchies and Export Destinations","authors":"Irene Brambilla, Andrés César, Guillermo Falcone, Guido Porto","doi":"10.1093/wber/lhae032","DOIUrl":"https://doi.org/10.1093/wber/lhae032","url":null,"abstract":"This paper proposes a new link relating export destinations and the organization of the firm: the production of higher-quality varieties exported to rich destinations induces firms to restructure their production processes, becoming organizationally more complex. A theoretical model with these features is presented and then the mechanisms are explored using a panel of Chilean manufacturing plants. The identification strategy of the paper relies on falling tariffs on Chilean products across destinations caused by the signature of Free Trade Agreements with high-income countries (the European Union, the United States, and South Korea). Results show that Chilean plants that were induced by these tariff reductions to start exporting to high-income destinations increased the number of hierarchical layers and upgraded the quality of their products. This involved the addition of qualified supervisors that facilitated the provision of higher product quality. These effects took place at new high-income exporting firms.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"17 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142210841","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Xinshen Diao, Mia Ellis, Margaret McMillan, Dani Rodrik
Recent growth accelerations in Africa are characterized by declining shares of the labor force employed in agriculture, increasing labor productivity in agriculture, and declining labor productivity in modern sectors such as manufacturing. To shed light on this puzzle, this study disaggregates firms in the manufacturing sector by average size, using two newly created firm-level panels covering Tanzania (2008–2016) and Ethiopia (1996–2017). The analysis identifies a dichotomy between larger firms with superior productivity performance that do not expand employment and small firms that absorb employment but do not experience much productivity growth. Large, more productive firms use highly capital-intensive techniques, in line with global technology trends but significantly greater than what would be expected based on these countries’ income levels or relative factor endowments.
{"title":"Africa's Manufacturing Puzzle: Evidence from Tanzanian and Ethiopian Firms","authors":"Xinshen Diao, Mia Ellis, Margaret McMillan, Dani Rodrik","doi":"10.1093/wber/lhae029","DOIUrl":"https://doi.org/10.1093/wber/lhae029","url":null,"abstract":"Recent growth accelerations in Africa are characterized by declining shares of the labor force employed in agriculture, increasing labor productivity in agriculture, and declining labor productivity in modern sectors such as manufacturing. To shed light on this puzzle, this study disaggregates firms in the manufacturing sector by average size, using two newly created firm-level panels covering Tanzania (2008–2016) and Ethiopia (1996–2017). The analysis identifies a dichotomy between larger firms with superior productivity performance that do not expand employment and small firms that absorb employment but do not experience much productivity growth. Large, more productive firms use highly capital-intensive techniques, in line with global technology trends but significantly greater than what would be expected based on these countries’ income levels or relative factor endowments.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"26 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141946317","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the impact of digital labor-market platforms on jobs outcomes using a randomized encouragement design embedded in a longitudinal survey of Mozambican technical-vocational college graduates. We differentiate between platforms targeting formal jobs, where jobseekers direct their search, and informal tasks, where clients seek workers. Our analysis reveals statistically insignificant intent-to-treat and complier-average treatment effects for headline employment outcomes in the full sample. Notably, while the average male moderately benefits from platform usage, women do not. Rather, they are less responsive to the encouragement nudge, and female treatment compliers report higher reservation wages and lower job search. This suggests digital platforms can inadvertently perpetuate gender disparities in labor markets.
{"title":"The Gendered Impact of Digital Jobs Platforms: Experimental Evidence from Mozambique","authors":"Sam Jones, Kunal Sen","doi":"10.1093/wber/lhae019","DOIUrl":"https://doi.org/10.1093/wber/lhae019","url":null,"abstract":"This study examines the impact of digital labor-market platforms on jobs outcomes using a randomized encouragement design embedded in a longitudinal survey of Mozambican technical-vocational college graduates. We differentiate between platforms targeting formal jobs, where jobseekers direct their search, and informal tasks, where clients seek workers. Our analysis reveals statistically insignificant intent-to-treat and complier-average treatment effects for headline employment outcomes in the full sample. Notably, while the average male moderately benefits from platform usage, women do not. Rather, they are less responsive to the encouragement nudge, and female treatment compliers report higher reservation wages and lower job search. This suggests digital platforms can inadvertently perpetuate gender disparities in labor markets.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140936305","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Spatial isolation is considered to be one of the main determinants of poverty. Therefore, many transport investments are undertaken with the stated objective of poverty reduction. This paper evaluates the effect of a Tanzanian program that rehabilitated 2,500 km of major roads on rural livelihoods. The analysis uses a large set of variables describing household behavior in order to provide a complete picture of the adjustments. The identification consists of combining a household fixed effects strategy with propensity score matching. Some damaging effects of the program are found on the rural population in the two years following the intervention: the price of rice decreases; households reallocate labor away from agriculture and provide more wage work, but the increase in wage income does not compensate for the loss in agricultural income. Nor do households seem to be benefiting from the fall in the price of rice at consumption level. These results are consistent with rural households facing increased competition due to reduced transportation costs.
{"title":"Better Roads, Better Off? Evidence on Upgrading Roads in Tanzania","authors":"Christelle Dumas, Ximena Játiva","doi":"10.1093/wber/lhae017","DOIUrl":"https://doi.org/10.1093/wber/lhae017","url":null,"abstract":"Spatial isolation is considered to be one of the main determinants of poverty. Therefore, many transport investments are undertaken with the stated objective of poverty reduction. This paper evaluates the effect of a Tanzanian program that rehabilitated 2,500 km of major roads on rural livelihoods. The analysis uses a large set of variables describing household behavior in order to provide a complete picture of the adjustments. The identification consists of combining a household fixed effects strategy with propensity score matching. Some damaging effects of the program are found on the rural population in the two years following the intervention: the price of rice decreases; households reallocate labor away from agriculture and provide more wage work, but the increase in wage income does not compensate for the loss in agricultural income. Nor do households seem to be benefiting from the fall in the price of rice at consumption level. These results are consistent with rural households facing increased competition due to reduced transportation costs.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"28 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140616065","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Developing countries face the largest exposure to the negative effects of climate change. However, as temperature and rainfall patterns change, we have a limited understanding of their impact on these countries and the mitigation strategies that may be needed. In this paper, we utilize administrative panel data to examine the impact of weather shocks on violent and property crimes in Jamaica. We find strong evidence that a one-standard-deviation increase in the daily temperature (2○C) increases violent crime by 3.67 percent, due to an increase in the number of murders (3.44 percent), shootings (7.53 percent), and cases of aggravated assault (6 percent). However, our results suggest that temperature changes have no statistical impact on property crime. In addition, we find that a one-standard-deviation increase in rainfall (2 mm) reduces crimes such as shootings (1.53 percent), break-ins (2.27 percent), and larcenies (3.85 percent), but it has a minimal impact on other categories of crime.
{"title":"The Impact of Weather Shocks on Violent and Property Crimes in Jamaica","authors":"Nicholas A. Wright, Aubrey M. Stewart","doi":"10.1093/wber/lhae016","DOIUrl":"https://doi.org/10.1093/wber/lhae016","url":null,"abstract":"\u0000 Developing countries face the largest exposure to the negative effects of climate change. However, as temperature and rainfall patterns change, we have a limited understanding of their impact on these countries and the mitigation strategies that may be needed. In this paper, we utilize administrative panel data to examine the impact of weather shocks on violent and property crimes in Jamaica. We find strong evidence that a one-standard-deviation increase in the daily temperature (2○C) increases violent crime by 3.67 percent, due to an increase in the number of murders (3.44 percent), shootings (7.53 percent), and cases of aggravated assault (6 percent). However, our results suggest that temperature changes have no statistical impact on property crime. In addition, we find that a one-standard-deviation increase in rainfall (2 mm) reduces crimes such as shootings (1.53 percent), break-ins (2.27 percent), and larcenies (3.85 percent), but it has a minimal impact on other categories of crime.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"52 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140723742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Graziella Bertocchi, Arcangelo Dimico, Gian Luca Tedeschi
This study explores the factors that shape natives’ attitudes toward citizenship acquisition for foreigners. The hypothesis is that, in Sub-Saharan Africa, the slave trade represents a deep determinant of contemporary attitudes toward citizenship, through a proximate determinant which is the level of trust. Accordingly, individuals belonging to ethnic groups with higher exposure to historical slave exports are more likely to exhibit a sense of distrust toward strangers, and are consequently more likely to oppose citizenship laws that favor the inclusion of foreigners. The findings indicate that individuals with higher levels of trust toward other people do exhibit more favorable attitudes regarding the acquisition of citizenship at birth for children of foreigners, that these attitudes are also negatively related to the intensity of the slave trade, and that the underlying inverse relationship between trust and the slave trade is confirmed. Other factors such as conflict, kinship tightness, and witchcraft beliefs, which could also influence attitudes toward citizenship through the channel of trust, do not yield the same distinct pattern of associations as observed with the slave trade.
{"title":"Strangers and Foreigners: Trust and Attitudes toward Citizenship in Sub-Saharan Africa","authors":"Graziella Bertocchi, Arcangelo Dimico, Gian Luca Tedeschi","doi":"10.1093/wber/lhae014","DOIUrl":"https://doi.org/10.1093/wber/lhae014","url":null,"abstract":"This study explores the factors that shape natives’ attitudes toward citizenship acquisition for foreigners. The hypothesis is that, in Sub-Saharan Africa, the slave trade represents a deep determinant of contemporary attitudes toward citizenship, through a proximate determinant which is the level of trust. Accordingly, individuals belonging to ethnic groups with higher exposure to historical slave exports are more likely to exhibit a sense of distrust toward strangers, and are consequently more likely to oppose citizenship laws that favor the inclusion of foreigners. The findings indicate that individuals with higher levels of trust toward other people do exhibit more favorable attitudes regarding the acquisition of citizenship at birth for children of foreigners, that these attitudes are also negatively related to the intensity of the slave trade, and that the underlying inverse relationship between trust and the slave trade is confirmed. Other factors such as conflict, kinship tightness, and witchcraft beliefs, which could also influence attitudes toward citizenship through the channel of trust, do not yield the same distinct pattern of associations as observed with the slave trade.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"15 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140570012","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study explores the impact of a light-touch job-facilitation intervention that supported young female job seekers during the application process for factory work in a newly constructed industrial park in Ethiopia. Using data from a panel of 687 job seekers and randomized access to the support intervention, the study finds that treated applicants are more likely to be employed and have higher earnings and savings eight months after baseline, although these impacts are short-lived. Four years later, the effects on employment and income largely dissipated. The results suggest that young women face significant barriers to engaging in factory work in the short run that a simple job-facilitation intervention can help overcome. In the long term, however, these jobs do not offer a better alternative than other income-generating opportunities.
{"title":"Do Factory Jobs Improve Welfare? Experimental Evidence from Ethiopia","authors":"Girum Abebe, Niklas Buehren, Markus Goldstein","doi":"10.1093/wber/lhae015","DOIUrl":"https://doi.org/10.1093/wber/lhae015","url":null,"abstract":"This study explores the impact of a light-touch job-facilitation intervention that supported young female job seekers during the application process for factory work in a newly constructed industrial park in Ethiopia. Using data from a panel of 687 job seekers and randomized access to the support intervention, the study finds that treated applicants are more likely to be employed and have higher earnings and savings eight months after baseline, although these impacts are short-lived. Four years later, the effects on employment and income largely dissipated. The results suggest that young women face significant barriers to engaging in factory work in the short run that a simple job-facilitation intervention can help overcome. In the long term, however, these jobs do not offer a better alternative than other income-generating opportunities.","PeriodicalId":501583,"journal":{"name":"The World Bank Economic Review","volume":"44 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140570102","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}