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Cover of Working Paper 466

Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective - Working Paper 466

10/15/17

Our central question is whether African countries can break into global manufacturing in a substantial way. Our results suggest that for any given level of GDP, labor is more costly for firms that are located in Sub-Saharan Africa. However, we also find that there are a few countries in Africa that, on a labor cost basis, may be potential candidates for manufacturing—Ethiopia in particular stands out.

Cover of Working Paper 465

Norms and Reform: Legalizing Homosexuality Improves Attitudes - Working Paper 465

10/13/17

This analysis examines the relationship between legal reform and social norms surrounding homosexuality. First, about a fifth of the variation in individual preferences can be explained at a country level. Second, using a difference-in-differences strategy, legalizing homosexuality improves how individuals view the tone of their communities. Third, we provide further evidence supporting a legal origins argument by examining former colonies. We conclude that adopting legal reform can improve societal attitudes.

Cover of Working Paper 464

Different Strokes for Different Folks: Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Different Levels of Skills - Working Paper 464

10/11/17
Manoj Mohanan , Grant Miller , Katherine Donato , Yulya Truskinovsky and Marcos Vera-Hernández

A central issue in designing performance incentive contracts is whether to reward the production of outputs versus use of inputs: the former rewards efficiency and innovation in production, while the latter imposes less risk on agents.

cover of working paper 463

Testing for Repugnance in Economic Transactions: Evidence from Guest Work in the Gulf - Working Paper 463

10/6/17

Workers from poor countries can find enormous economic opportunity by working temporarily in a rich country. But agencies that fight global poverty do little to facilitate guest work. This may be because guest workers are perceived to typically suffer negative side effects that outweigh the benefits. This paper uses a natural experiment to test several perceptions of harmful side-effects on Indian guest workers in the Gulf. The research shows little evidence that the harmful side-effects often ascribed to guest work are typical and systematic, though this does not contradict the occurrence of many individual cases of harmful side-effects.

Cover of Working Paper 461

Evaluating Evaluations: Assessing the Quality of Aid Agency Evaluations in Global Health - Working Paper 461

8/18/17
Julia Goldberg Raifman , Felix Lam , Janeen Madan Keller , Alexander Radunsky and William Savedoff

We assessed the methodological quality of global health program evaluations from five major funders between 2009 and 2014. We found that most evaluations did not meet social science methodological standards in terms of relevance, validity, and reliability. Nevertheless, good quality evaluations made it possible to identify ten recommendations for improving evaluations, including a robust finding that early planning is associated with better quality.

Violence, Development, and Migration Waves: Evidence from Central American Child Migrant Apprehensions - Working Paper 459

7/27/17

This paper studies the relationship between violence in the Northern Triangle and child migration to the United States. It finds that one additional homicide per year in the region, sustained over the six-year period of study—that is, a cumulative total of six additional homicides—caused a cumulative total of 3.7 additional unaccompanied child apprehensions in the United States. The explanatory power of short-term increases in violence is roughly equal to the explanatory power of long-term economic characteristics like average income and poverty.

Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya - Working Paper 457

6/21/17
Nicholas Barton , Tessa Bold and Justin Sandefur

Public employees in many developing economies earn much higher wages than similar private-sector workers. These wage premia may reflect an efficient return to effort or unobserved skills, or an inefficient rent causing labor misallocation. To distinguish these explanations, we exploit the Kenyan government’s algorithm for hiring eighteen-thousand new teachers in 2010 in a regression discontinuity design. Fuzzy regression discontinuity estimates yield a civil-service wage premium of over 100 percent (not attributable to observed or unobserved skills), but no effect on motivation, suggesting rent-sharing as the most plausible explanation for the wage premium.

Working Paper 455 (revised) cover

The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results - Working Paper 455

5/22/17

An influential strand of research has tested for the effects of immigration on natives’ wages and employment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detrimental impacts on workers with less than high school.

Gender Matters in Economic Empowerment Interventions: A Research Review - Working Paper 456

5/22/17

A review of the recent evaluation evidence on financial services and training interventions questions their gender neutrality and suggests that some design features in these interventions can yield more positive economic outcomes for women than for men. These include features in savings and ‘Graduation’ programs that increase women’s economic self-reliance and self-control, and the practice of repeated micro borrowing that increases financial risk-taking and choice. Subjective economic empowerment appears to be an important intermediate outcome for women that should be promoted and more reliably and accurately measured. Lastly, whenever possible, results should be sex-disaggregated and reported for individuals as well as households.

Identification as a National Priority: The Unique Case of Peru - Working Paper 454

5/11/17
William Reuben and Flávia Carbonari

Peru is a remarkable example of a country that established civil identification as a national priority in response to the need to re-integrate the state after a serious insurgency. The approach has combined the creation of an autonomous civil registration and identification agency and the use of performance-based financing to expand coverage to poor, remote, communities and to help integrate civil registration with the national ID.

Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion - Working Paper 451

4/3/17
We study a natural experiment that excluded almost half a million Mexican ‘bracero’ seasonal agricultural workers from the United States, with the stated goal of raising wages and employment for domestic farm workers. We reject the wage effect of bracero exclusion required by the model in the absence of induced technical change, and fail to reject the hypothesis that exclusion had no effect on US agricultural wages or employment. Important mechanisms for this result include both adoption of less labor-intensive technologies and shifts in crop mix.

Expanding Global Liquidity Insurance: Myths and Realities of the IMF’s Precautionary Credit Lines - Working Paper 449

2/28/17

This paper addresses four misconceptions (or ‘myths’) that have likely played a role in the limited utilization of the IMF’s two precautionary credit lines, the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). These myths are 1) too stringent qualification criteria that limit country eligibility; 2) insufficient IMF resources; 3) high costs of precautionary borrowing; and 4) the economic stigma associated with IMF assistance. We show, in fact, that the pool of eligible member states is likely to be seven to eight times larger than the number of current users; that with the 2016 quota reform IMF resources are more than adequate to support a larger precautionary portfolio; that the two IMF credit lines are among the least costly and most advantageous instruments for liquidity support countries have; and that there is no evidence of negative market developments for countries now participating in the precautionary lines.

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