The Gender Gap in Agricultural Productivity: The Role of Market Imperfections

This paper hypothesises that labour and credit market imperfections – by discouraging off-farm income-generating activities and restricting access to inputs, respectively – affect female farm productivity more deeply than male productivity. The paper develops a theoretical model, which decomposes the contribution of various market imperfections to the gender productivity gap. Empirically we show that agricultural labour productivity is, on average, 44 per cent lower on female-headed plots than on those managed by male heads. 34 per cent of this gap is explained by differences in labour market access and 29 per cent by differences in credit access.     

Cross-Country Disparity in Agricultural Productivity: Quantifying the Role of Modern Seed Adoption

Inequality of agricultural labour productivity across the developing world has increased substantially over the past 40 years. This article asks: to what extent did the diffusion of Green Revolution seed varieties contribute to increasing agricultural labour productivity disparity across the developing countries? We find that 22 per cent of cross-country variation in agricultural labour productivity can be attributed to the diffusion of high-yielding seed varieties across countries, and that the impact of such diffusion differed significantly across regions. We discuss the implications of these findings for policy directed at increasing agricultural labour productivity in the developing world.     

Disease,Microdams and Natural Resources in Tigray,Ethiopia: Impacts on Productivity and Labour Supplies

We examine the effects of water microdams and ensuing waterborne diseases on household decisions in Tigray, Ethiopia, where the government implemented a water resource development programme two decades ago. We find microdams increase productivity of both fuelwood collection and crop production, but the costs of these dams to households can be significant. In villages close to dams, disease prevalence is higher and all household labour categories spend more time sick, and more time is spent by male and female adults caring for sick family members. These can cost the household anywhere in the region of 150–250 Birr per season, depending on the type of labour diversion and the productivity of labour. Males are most significant here. Removing their time from production results in 40–60 per cent higher productivity and income losses compared to diversion of female labour. Sick households also spend significantly more money on health care, especially when male and female adults are sick.     

Unequal Laws and the Disempowerment of Women in the Labour Market: Evidence from Firm-Level Data

Institutions are defined as the set of rules that govern human interactions. When these rules are discriminatory, they may disempower segments of a population in the economic spheres of activity. In this study, we explore whether laws that discriminate against women influence their engagement in the economy. We adopt a holistic approach where we explore an overall measure of unequal laws also known as legal gender disparities and relate it to several labour market outcomes for women. Using data for over 59,000 firms across 94 economies, we find that unequal laws not only discourage women’s participation in the private sector workforce, but also their likelihood to become top managers and owners of firms. Suggestive evidence indicates that access to finance, property ownership, business registration, and labour market constraints are pathways by which legal gender disparities disempower women in the private sector.     

Privatised Firms and Labour Outcomes in Emerging Markets

A recent large firm-level dataset is analysed to compare labour indicators of privatised, private, and public firms around the world, in particular differences relating to wages, benefits, labour composition, education and training, unionisation, and quality of management. We find that labour productivity and the ratio of permanent to temporary workers increase after privatisation.     

Shedding Light on the Shadow Economy: A Nighttime Light Approach

Measuring the shadow economy is inherently difficult, but critical for understanding economic development. Using census data on formal and informal sectors in Cambodia, we document that 96.6 per cent of non-farm establishments do not formally register with the government, and their sales accounted for 76.6 per cent of total sales in 2011. Estimating their past sales from changes in nighttime light for 1993–2010, we find that both formal and informal firms increased their estimated sales. The share of informal sales increased from 68.8 per cent in 1993 to 76.6 per cent in 2011, suggesting that the informal sector increased quantitatively in both absolute and relative terms over time.     

The political economy of Indian planning

Peruvian statistics were examined to see if construction remained labour‐intensive during 1955–67. Data on output, employment, capital, and materials consumption were either lacking or had defects that made a direct comparison of trends impossible. But conclusions could be drawn from relative price and wage trends. If materials and capital had not been substituted for labour, average construction costs would have risen substantially more than they did. Our estimate was that by 1967 they would have been 25 per cent higher.

Evidence from a sample of firms, however, suggested that adoption of labour‐saving techniques cannot be tied simply to changes in wages compared with other costs. All eleven innovations studied, it is true, were markedly labour‐saving; but the rate of adoption did not closely follow wage changes. Adoption came most often during those less tense years when builders were neither overstrained with orders nor lacking credit and clients. One must conclude that both rising wages and innovations can limit employment expansion in relatively poor countries.

Since both agriculture and manufacturing have been unable to absorb the growing labour force of poor countries, economists have turned their attention to other sectors for supplementary employment expansion. One of these is construction. The construction sector creates not only jobs but builds capital goods with a desirable low import content. In association with carefully structured financial institutions, it may even generate savings. How much employment a given expansion of construction will provide depends on the production functions of the sector: their slopes and their potential shifts. One must find the changes in labour productivity that go with likely changes in volume, capital accumulation, trends in material supplies, and alternate technologies.

All these questions will get imprecise answers without good statistics on output, labour, capital, and materials, both unit prices and volume. If output varies in composition and in the relative quality of components, problems of weighting and aggregating arise. Because of the sector's ? instability and footloose nature, data on construction remain inferior compared with other sectors even in the most advanced and statistics‐rich countries. Can one make anything of the sorts of data available in poor countries where the sector must play its most crucial role?

In this article, using rather limited data, we note with considerable alarm that steady labour intensity and corresponding employment expansion cannot be taken for granted. Where daily wages are but a fraction of hourly American wages, and where interest rates are a multiple of American rates, the more lavish use of materials and machinery compared with labour can nevertheless begin early.

Peru is the country selected for our study. During 1955–67 Peru had a relatively high national output growth rate of 5.6 per cent together with a moderate rate of inflation of about 9 per cent. Except for the devaluation years of 1958 and 1967, flourishing exports of fishmeal, copper, cotton, and sugar helped carry this rate of growth. Lima was one of the continent's fastest‐growing cities in population and building, particularly in squatter barriadas. But in the 1960s commercial conduction also grew at more than a 15 per cent compound rate, measured in square metres built, according to some estimates.1 During 1964–68, construction had high priority under President Fernando Belaunde, a professional architect. More U.S. foreign aid for housing (direct and guaranteed private loans) went to Peru in absolute terms during this period than to any other country. We shall analyse the consequences by examining (1) trends in relative costs, (2) relative output and import trends, and (3) data about receptivity to innovations in a sample of firms.     

Vital Democracy: A Theory of Democracy in Action

Scottish citizens benefit from 19 per cent more public spending per head than English citizens. The ‘Barnett formula’ is slowly reducing the gap, but very little is known about the countries' relative needs and hence about how far the present gap is defensible: the aim of this paper is to throw some light on the countries' relative needs. We begin with the complex formulae that the Westminster government uses to assess the spending needs of English local authorities, and we use these English formulae to assess the needs of Scottish local authorities for three major blocks of local services. These formulae suggest that Scotland needs 6.4 per cent more per head than England for environmental, protective and cultural services, 8.1 per cent more for highway maintenance, and between 24.3 per cent and 35.3 per cent more for fire services. We also combine these results with those of two other papers concerned with local education and social services to show that these English formulae put Scotland's per capita needs for local government services as a whole at about 6 per cent above England's. However, we then compare the relative needs of Scottish local authorities as assessed by the English formulae with their relative needs as assessed by the Scottish needs formulae that are currently used by Holyrood, and we find major differences. This suggests either that at least one country uses seriously flawed formulae to assess needs, or that the two countries have different conceptions of need.     

Releasing Constraints to Growth or Pushing on a String? Policies and Performance of Mexican Micro-Firms

Using firm-level data from Mexico, this paper investigates the firm characteristics associated with participation in credit markets, access to training, tax payments and membership in business associations. We find that firms which participate in these institutions exhibit significantly higher profits. Moreover, firms that borrow from formal or informal sources and those that pay taxes are significantly more likely to stay in business but firms that received credit exhibit lower rates of income growth. These results persist when firm characteristics that are arguably correlated with unobserved entrepreneurial ability are controlled for. Our findings suggest that the significant within-country differences in firm productivity observed in developing economies are due in part to market and government failures that limit the ability of micro-firms to reach their optimal sizes.     

Computer Usage and Labour Regulation in India's Retail Sector

Abstract

A recent survey of 1,948 retail stores in India conducted by the World Bank's Enterprise surveys shows that 19 per cent of all stores use computers. In the state of Kerala, the figure is as high as 40 per cent. Using this survey, we estimate the effect of computer usage on labour employment. Our findings show that this effect depends on the stringency of the underlying labour laws. Stricter labour laws magnify the labour displacing effect of computers significantly.     

The Labour Market Impacts of Immigration to Developing Countries: Evidence from a Registration Campaign in Thailand

Little is known about the labour market impact of immigration to developing countries, because most immigration to developing countries is poorly measured. We use an unusual dataset from a campaign to register irregular migrants to study how immigration has affected wages, employment, and internal migration in Thailand. We allow for endogenous migration, whereby immigrants are disproportionately attracted to areas with higher wages. Our results suggest that immigration sufficient to increase Thailand's total labour force by one per cent would reduce Thai wages by approximately half a per cent. This effect is stronger than is generally found in developed countries. We find no evidence that immigration has reduced Thai employment rates or has affected internal migration by Thais.     

Short-term Labour Migration from the Republic of Armenia to the Russian Federation

Abstract

We explore the determinants of short-term labour migration from Armenia to Russia based on a unique panel dataset. A dynamic switching regression model with endogenous switching is applied. Our evidence pinpoints migration experience, the expected individual income gap from migration, low job opportunities in Armenia and the possibility of diversifying income risks as the most important determinants. Family ties turn out to be insignificant. The hypothetical income gap is about 280 per cent. Several explanations are provided for the fact that some individuals do not migrate in spite of a large income gap.     

The Effect of Food Price Changes on Child Labour: Evidence from Uganda

Most people in developing countries spend up to 60 per cent of their income on food, even though the majority of them are farmers. Hence, a change in food prices affects both their revenue as well as expenditure, and it may thereby affect their labour market decisions. Using the Uganda National Panel Survey and monthly regional food prices, this paper examines the effect of changes in food prices on child labour. The empirical evidence shows that an increase in food prices is linked to an increase in the probability and the intensity of child labour. We find the effect of food price increases to be smaller among landowning households, which is consistent with the view that landowning households can better compensate for price shocks. The empirical results suggest that periodic shocks in food prices may have longer lasting effects on economic development in developing countries through the channel of child labour.     

Firm Sponsored Training and Productivity in Morocco

Using a sample of around 500 large and small firms covering six industries in Morocco, the article investigates the relationship between a firm's training decision in 1999 and labour productivity in subsequent years. The analytical framework allows output to depend on unobserved-time-invariant firm characteristics and assumes that technical progress depends on training. Controlling for unobserved heterogeneity among firms and correcting for potential self-selection and endogeneity bias, the estimation shows that the intensity of training has a significant and positive impact on productivity in small and medium enterprises. The finding is robust to the introduction of various control variables.     

Local technological capability and productivity spillovers from FDI in the Uruguayan manufacturing sector

This article examines intra‐industry spillovers from FDI in Uruguayan manufacturing plants in 1988, to determine whether differences in the technology gap between locally‐owned plants and foreign affiliates have any impact on the relation between local productivity and foreign presence. We find a positive and statistically significant spillover effect only in a sub‐sample of locally‐owned plants with moderate technology gaps vis‐à‐vis foreign firms. Our interpretation is that there are firm‐specific differences in the ability to absorb spillovers, and that these may explain some of the contradictory findings of earlier spillover studies.     

The Feminisation of Agriculture with Chinese Characteristics

The objectives of this article are to assess whether or not the feminisation of agriculture is occurring in China, and if so, to measure its impact on productivity. To meet these objectives, we rely on three data sets that allow us to explore who works on China's farms and the effects of the labour allocation decisions of rural households on productivity. We find that since the late 1990s, the role of women has increased in both the supply of farm labour and in the duties that they take on in the management of farms. While this expansion is important, we further demonstrate that when women do a majority of farm work or manage the farm, their farms are equally efficient as farms managed by men.     

Tariffs and Firm Performance in Ethiopia

We use data on Ethiopian manufacturing firms and commodity-level data on tariffs to examine the effects of trade liberalisation on firm performance. We distinguish the productivity gains that arise from reducing final goods tariffs from those that arise from reducing tariffs on intermediate inputs. We find no evidence that output tariff reduction improves productivity, but we find large positive effects of input tariff reductions. These are robust to alternative productivity measures, treating tariffs as endogenous, and various generalisations of the model. We conclude that policy measures designed to facilitate access to inputs produced abroad may lead to productivity gains.     

Foreign Direct Investment Spillovers and Productivity Growth in Indonesian Garment and Electronics Manufacturing

Inflows of foreign direct investment generate externalities that spill over to domestic firms and raise their productivity. This article examines the extent of spillover effects of foreign direct investment for firms in the highly disaggregated garment (ISIC 3221) and electronics industries (ISIC 3832) in Indonesia. Both are export-intensive industries, but differ greatly in technological sophistication and labour intensity. Changes in both the productivity level and rate of growth in each industry are decomposed into the effects of technological change, technical efficiency change and scale efficiency change and then the impacts of spillovers on each component and on total productivity are estimated. The findings suggest that foreign direct investment generates a positive effect on total productivity change, technical efficiency change, technological change, and scale efficiency change in the garment industry. In contrast, foreign direct investment contributes significantly negatively to total productivity, technological change and scale efficiency change, but has no significant effect on technical efficiency change in the electronics industry.     

Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam

Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between households’ and entrepreneurs’ social networks and business performance. We address two related questions. The first question asks if we can find evidence of a differentiated effect of employment of members of the family versus hired workers on the business performance. A second question tackles the respective effects of various dimensions of social networks on business technical efficiency. The hypothesis is that, beyond the channel of labour productivity, entrepreneurs that are confronted with an unfavourable social environment may produce less efficiently and realise a lower output than what could be possible with the same amount of resources. We find evidence of a marginal productivity differential between family and hired labour and highlight results consistent with the presence of adverse social network effects faced by households running a business, in particular ethnic minorities. We also stress the importance of professional networks for successful entrepreneurship.     

A note on interregional trade in New Zealand

This paper attempts to test the hypothesis that given the presence of economies of scale which enable regions with larger firms to export more to regions with smaller firms, it is possible to rank a regions's exports according to the extent to which the scale of their production exceeds the national average. Data are utilized covering New Zealand's highly protected manufacturing sector. A rank correlation, significant at the 5 per cent level of probability, emerges between x_i and s_i in twelve of the thirteen regions considered; x_i being per capita value added in the i‐th industry divided by per capita value added in the nation for the i‐th industry and s_i being the average size of firm in the i‐th industry divided by the average size of firm in the nation for the i‐th industry. Such a result suggests that Heckscher‐Ohlin theorizing is of limited use in explaining regional trade flows.