Antoinette van der Merwe, Fritz Brugger, I. Günther
Although artisanal gold mining is known for human rights violations and environmental degradation, it is an increasingly important economic activity in many African countries, with a high potential to alleviate poverty. Due to increased demand for gold investment during the COVID-19 pandemic, the monthly international gold price has increased by 20% from January to May 2020. To understand how the COVID-19 pandemic has influenced gold miners, we analyse a panel survey of about 170 artisanal gold miners interviewed 2 months before the first case of COVID-19 in Burkina Faso. Follow-up surveys were done early in the pandemic and about 1 year after baseline. Various pre-existing local market failures caused local gold prices to decrease by 20%–30% from January to May 2020, when international gold prices noticeably increased. Market failures include oligopsonistic market conditions on the mines, which worsened due to travel restrictions that disrupted trading routes, reduced local traders' liquidity and made it difficult for traders to reach mines. Moreover, we find that miners have very little knowledge of international gold prices, and due to insecurity and credit constraints, they are unable to wait for local prices to recover. Once travel restrictions were lifted, the local gold price recovered close to the global gold price. To make local markets more competitive and ensure that miners benefit from rising international gold prices, governments could broadcast world gold prices on local radio, increase trading opportunities and provide access to credits for miners.
{"title":"Rising Gold Prices but Lower Incomes for Gold Miners: Evidence on Market Imperfections from Burkina Faso during COVID-19","authors":"Antoinette van der Merwe, Fritz Brugger, I. Günther","doi":"10.1093/jae/ejac032","DOIUrl":"https://doi.org/10.1093/jae/ejac032","url":null,"abstract":"\u0000 Although artisanal gold mining is known for human rights violations and environmental degradation, it is an increasingly important economic activity in many African countries, with a high potential to alleviate poverty. Due to increased demand for gold investment during the COVID-19 pandemic, the monthly international gold price has increased by 20% from January to May 2020. To understand how the COVID-19 pandemic has influenced gold miners, we analyse a panel survey of about 170 artisanal gold miners interviewed 2 months before the first case of COVID-19 in Burkina Faso. Follow-up surveys were done early in the pandemic and about 1 year after baseline. Various pre-existing local market failures caused local gold prices to decrease by 20%–30% from January to May 2020, when international gold prices noticeably increased. Market failures include oligopsonistic market conditions on the mines, which worsened due to travel restrictions that disrupted trading routes, reduced local traders' liquidity and made it difficult for traders to reach mines. Moreover, we find that miners have very little knowledge of international gold prices, and due to insecurity and credit constraints, they are unable to wait for local prices to recover. Once travel restrictions were lifted, the local gold price recovered close to the global gold price. To make local markets more competitive and ensure that miners benefit from rising international gold prices, governments could broadcast world gold prices on local radio, increase trading opportunities and provide access to credits for miners.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45259945","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract There has been a widespread view that firm size distribution (FSD) in developing countries has been characterised as having a ‘missing middle’. We have investigated this question using evidence from the entire population of Ethiopian manufacturing firms, including small informal firms. Based on the analysis, we have documented the following four facts. First, there is no evidence of a bimodal distribution in the FSD. Second, small firms overwhelmingly, and increasingly, dominate the distribution. Third, the distribution of the average product of factor input is neither bimodal nor an inverted U-shaped. Fourth, we have investigated the potential regulatory notches of employment sizes of the sort often thought to discourage firm growth and have found no unusual bunching of firms near the notch points. More recently it has been argued by Tybout that instead of looking at the actual FSD to capture a ‘missing middle’, the actual should be compared with an undistorted one, which could be characterised as Paretian. We show, using this approach, that there is a ‘missing middle’ when using employment shares. However, when we look at firm share, by size category, over time large firms have been missing as well.
{"title":"Firm Size Distribution in African Manufacturing Firms: Revisiting the ‘Missing Middle’","authors":"Kahsay G Tsaedu, Zhihong Chen, Hana W Azmete","doi":"10.1093/jae/ejac029","DOIUrl":"https://doi.org/10.1093/jae/ejac029","url":null,"abstract":"Abstract There has been a widespread view that firm size distribution (FSD) in developing countries has been characterised as having a ‘missing middle’. We have investigated this question using evidence from the entire population of Ethiopian manufacturing firms, including small informal firms. Based on the analysis, we have documented the following four facts. First, there is no evidence of a bimodal distribution in the FSD. Second, small firms overwhelmingly, and increasingly, dominate the distribution. Third, the distribution of the average product of factor input is neither bimodal nor an inverted U-shaped. Fourth, we have investigated the potential regulatory notches of employment sizes of the sort often thought to discourage firm growth and have found no unusual bunching of firms near the notch points. More recently it has been argued by Tybout that instead of looking at the actual FSD to capture a ‘missing middle’, the actual should be compared with an undistorted one, which could be characterised as Paretian. We show, using this approach, that there is a ‘missing middle’ when using employment shares. However, when we look at firm share, by size category, over time large firms have been missing as well.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135276695","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Talip Kilic, Goedele Van den Broeck, Gayatri Koolwal, Heather Moylan
Accurate estimates of men's and women's employment are necessary for understanding sources of productivity and growth and designing well-targeted, gender-sensitive labour policies. This paper aims to address a key question—how respondent selection in household and labour force surveys affects these estimates—by leveraging two concurrent national surveys in Malawi that relied on the same questionnaire and field teams but differed in their approach to respondent selection. As compared with direct and private interviews with respondents, the ‘business-as-usual’ approach that allows for proxy reporting when targeted respondents are not available, as well as a mix of other standard survey approaches often used under time and resource constraints, is associated with significantly lower reporting of employment across a range of wage and self-employment activities. Although the effects are seemingly limited in absolute terms, they are quite large in relative terms, vis-à-vis the average participation rates and they tend to be more pronounced for women respondents and concerning questions with longer/12-month recall periods. The analysis also examines how household wealth, proxy reporting and difficulties associated with interpreting questions may be linked to lower reporting in the business-as-usual approach, and which can be examined in future methodological experimentation.
{"title":"Are You Being Asked? Impacts of Respondent Selection on Measuring Employment in Malawi","authors":"Talip Kilic, Goedele Van den Broeck, Gayatri Koolwal, Heather Moylan","doi":"10.1093/jae/ejac025","DOIUrl":"https://doi.org/10.1093/jae/ejac025","url":null,"abstract":"Accurate estimates of men's and women's employment are necessary for understanding sources of productivity and growth and designing well-targeted, gender-sensitive labour policies. This paper aims to address a key question—how respondent selection in household and labour force surveys affects these estimates—by leveraging two concurrent national surveys in Malawi that relied on the same questionnaire and field teams but differed in their approach to respondent selection. As compared with direct and private interviews with respondents, the ‘business-as-usual’ approach that allows for proxy reporting when targeted respondents are not available, as well as a mix of other standard survey approaches often used under time and resource constraints, is associated with significantly lower reporting of employment across a range of wage and self-employment activities. Although the effects are seemingly limited in absolute terms, they are quite large in relative terms, vis-à-vis the average participation rates and they tend to be more pronounced for women respondents and concerning questions with longer/12-month recall periods. The analysis also examines how household wealth, proxy reporting and difficulties associated with interpreting questions may be linked to lower reporting in the business-as-usual approach, and which can be examined in future methodological experimentation.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"73 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138543231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The 19th International Conference of Labour Statisticians (in 2013) redefined thelabour statistics standards, and most National Statistical Offices are currently transitioning to the revised standards. A major change, of which few academics seem to be aware, is that the concept of employment has been narrowed to work for pay or profit. By the revised standards, farming, which is mainly intended for own use, is no longer considered employment, and such a farmer is no longer considered to be employed or in the labour force. Instead, their work is captured under a new indicator of own-use production work. This paper analyses the implications of the revised standards on measures of employment in Sub-Saharan Africa drawing on specialised agricultural surveys from Ghana and Malawi and nationally representative multi-topic household surveys from two early adapters, Malawi and Nigeria. In some contexts, 70% to 80% of farmers produce for family consumption and are therefore, based on this activity, not considered employed by the revised standards; however, there is wide geographic variation. Moreover, farmers are more likely to produce for sale at the end of the growing season of the main local crop than earlier in the season. Men are more likely than women to produce for sale. Official labour statistics, based on the revised standards, show significantly lower employment-to-population ratios in rural Africa and give the impression of rural populations much less reliant on agriculture and much further along in the process of structural change than what was indicated by the previous standards.
{"title":"Who Is Employed? Evidence from Sub-Saharan Africa on Redefining Employment","authors":"Isis Gaddis, Gbemisola Oseni, Amparo Palacios-Lopez, Janneke Pieters","doi":"10.1093/jae/ejac021","DOIUrl":"https://doi.org/10.1093/jae/ejac021","url":null,"abstract":"The 19th International Conference of Labour Statisticians (in 2013) redefined thelabour statistics standards, and most National Statistical Offices are currently transitioning to the revised standards. A major change, of which few academics seem to be aware, is that the concept of employment has been narrowed to work for pay or profit. By the revised standards, farming, which is mainly intended for own use, is no longer considered employment, and such a farmer is no longer considered to be employed or in the labour force. Instead, their work is captured under a new indicator of own-use production work. This paper analyses the implications of the revised standards on measures of employment in Sub-Saharan Africa drawing on specialised agricultural surveys from Ghana and Malawi and nationally representative multi-topic household surveys from two early adapters, Malawi and Nigeria. In some contexts, 70% to 80% of farmers produce for family consumption and are therefore, based on this activity, not considered employed by the revised standards; however, there is wide geographic variation. Moreover, farmers are more likely to produce for sale at the end of the growing season of the main local crop than earlier in the season. Men are more likely than women to produce for sale. Official labour statistics, based on the revised standards, show significantly lower employment-to-population ratios in rural Africa and give the impression of rural populations much less reliant on agriculture and much further along in the process of structural change than what was indicated by the previous standards.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"21 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138531831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper collects a unique data set of classified ads and exploits quasi-random variation in the applicant pool composition to show that there exists hiring discrimination against immigrants in South Africa’s informal sector. Consistent with a tournament models in which immigrants are penalised, I find that both immigrant and native job seekers receive more employer clicks on their profile when being pooled with immigrant job applicants. Results also show that immigrants search further away, especially if they live in areas with high employer discrimination. This spatial sorting presents an important cost of discrimination that has largely been ignored in the literature.
{"title":"Labor Market Discrimination and Sorting: Evidence From South Africa","authors":"Martin Abel","doi":"10.1093/jae/ejac013","DOIUrl":"https://doi.org/10.1093/jae/ejac013","url":null,"abstract":"This paper collects a unique data set of classified ads and exploits quasi-random variation in the applicant pool composition to show that there exists hiring discrimination against immigrants in South Africa’s informal sector. Consistent with a tournament models in which immigrants are penalised, I find that both immigrant and native job seekers receive more employer clicks on their profile when being pooled with immigrant job applicants. Results also show that immigrants search further away, especially if they live in areas with high employer discrimination. This spatial sorting presents an important cost of discrimination that has largely been ignored in the literature.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"40 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138531830","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Empirical research depends on reliable data. Yet, in many countries, statistical agencies do not have the capacity to collect high-quality data on economic development. This is especially the case in Africa, where the capacity to collect such data is affected by the same historical factors that explain economic development—in particular, the slave trade. We hypothesise that the impact of the slave trade on economic development in Africa is biased because cross-country heterogeneity in statistical capacity related to the slave trade creates a non-classical measurement error in gross domestic product (GDP) per capita. Our empirical evidence supports this view. When replacing GDP per capita by nighttime light intensity per capita—an indicator of economic development unrelated to statistical capacity—the impact of the slave trade on economic development drops by a factor of 2–4 depending on model specification and estimation methodology (OLS, IV and high-dimensional sparse models). Various robustness tests further corroborate our main hypothesis.
{"title":"Statistical Capacity Matters: The Long-Term Effects of Africa’s Slave Trade on Development Reflected by Nighttime Light Intensity","authors":"Erkan Gören, A. Winkler","doi":"10.1093/jae/ejac020","DOIUrl":"https://doi.org/10.1093/jae/ejac020","url":null,"abstract":"\u0000 Empirical research depends on reliable data. Yet, in many countries, statistical agencies do not have the capacity to collect high-quality data on economic development. This is especially the case in Africa, where the capacity to collect such data is affected by the same historical factors that explain economic development—in particular, the slave trade. We hypothesise that the impact of the slave trade on economic development in Africa is biased because cross-country heterogeneity in statistical capacity related to the slave trade creates a non-classical measurement error in gross domestic product (GDP) per capita. Our empirical evidence supports this view. When replacing GDP per capita by nighttime light intensity per capita—an indicator of economic development unrelated to statistical capacity—the impact of the slave trade on economic development drops by a factor of 2–4 depending on model specification and estimation methodology (OLS, IV and high-dimensional sparse models). Various robustness tests further corroborate our main hypothesis.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45454705","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Drawing from a robust identification strategy and household panel data collected before and after households were exposed to the Boko Haram conflict, this paper addresses the question of whether resilience capacity is an important factor in mitigating household risks of food insecurity due to conflict shocks. Using the non-parametric difference-in-differences framework, the paper identifies that the shocks negatively affect food security, but resilience capacity attenuates the effects. While resilience actively protects households from the adverse stressors, the paper observes that the pillars of resilience were also significantly decimated by the conflict, thereby weakening households’ long-run capacity to withstand future shocks. The results are prescriptively unchanged after adjusting the operating spatial distance of exposure or switching the measure of conflict exposure to conflict intensity represented as battle fatalities. These estimates align well with the various hypotheses of the resilience approach to sustainable development. It is, therefore, recommended that conflict intervention programs incorporate rebuilding resilience, which might help restore households’ ability to overcome future shocks.
{"title":"The Boko Haram Conflict and Food Insecurity: Does Resilience Capacity Matter?","authors":"G. Agwu","doi":"10.1093/jae/ejac015","DOIUrl":"https://doi.org/10.1093/jae/ejac015","url":null,"abstract":"\u0000 Drawing from a robust identification strategy and household panel data collected before and after households were exposed to the Boko Haram conflict, this paper addresses the question of whether resilience capacity is an important factor in mitigating household risks of food insecurity due to conflict shocks. Using the non-parametric difference-in-differences framework, the paper identifies that the shocks negatively affect food security, but resilience capacity attenuates the effects. While resilience actively protects households from the adverse stressors, the paper observes that the pillars of resilience were also significantly decimated by the conflict, thereby weakening households’ long-run capacity to withstand future shocks. The results are prescriptively unchanged after adjusting the operating spatial distance of exposure or switching the measure of conflict exposure to conflict intensity represented as battle fatalities. These estimates align well with the various hypotheses of the resilience approach to sustainable development. It is, therefore, recommended that conflict intervention programs incorporate rebuilding resilience, which might help restore households’ ability to overcome future shocks.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44643463","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we test whether fiscal rules can act as a constraint on the ability of incumbent politicians to generate political business cycles using fiscal and monetary expansions, to improve their re-election prospects. Using data on fiscal rules for a sample of thirty-two African countries, fourteen of which have a budget balanced rule, our results show that stringent fiscal rules can indeed dampen political cycles. In particular, we find that prior to a presidential election, there is a statistically significant increase in money growth, but that increase is on average 50% less in countries with fiscal rules compared with countries with no rule. Our results hold even when we control for institutional quality, developmental assistance or electoral competitiveness. Moreover, we find evidence of political cycles in African dictatorships, which we argue potentially reflect African dictators’ strong desire to reduce the occurrence of civil unrest during elections.
{"title":"Tying One’s Hand: The Effect of Fiscal Rules on the Political Business Cycle in Africa","authors":"C. Strong","doi":"10.1093/jae/ejac014","DOIUrl":"https://doi.org/10.1093/jae/ejac014","url":null,"abstract":"\u0000 In this paper, we test whether fiscal rules can act as a constraint on the ability of incumbent politicians to generate political business cycles using fiscal and monetary expansions, to improve their re-election prospects. Using data on fiscal rules for a sample of thirty-two African countries, fourteen of which have a budget balanced rule, our results show that stringent fiscal rules can indeed dampen political cycles. In particular, we find that prior to a presidential election, there is a statistically significant increase in money growth, but that increase is on average 50% less in countries with fiscal rules compared with countries with no rule. Our results hold even when we control for institutional quality, developmental assistance or electoral competitiveness. Moreover, we find evidence of political cycles in African dictatorships, which we argue potentially reflect African dictators’ strong desire to reduce the occurrence of civil unrest during elections.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"1 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43957734","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"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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