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Improving the Quality of Survey Estimates from Longitudinal Studies: An Application to LSMS Panel Surveys
(Washington, DC: World Bank, 2025-01-10) Falorsi, Piero; Righi, Paolo; Ponzini, Giulia
Longitudinal surveys are an invaluable source for analyzing the current state of and changes in human populations over time. However, maintaining the accuracy of estimates from a panel sample becomes more difficult as the length of the panel survey increases. Key concerns are the lack of sample representativeness, due to the sample erosion caused by deaths and movers and the impact of new births, and migration flows. Moreover, sample fatigue introduces an increasing measurement error. Correct design, implementation, and use of a panel survey considers a set of methods to deal with these problems at different stages of the statistical process: the sampling design, the data collection, and the estimation. This paper focuses on the case of panels with a rotating sample design. This case represents a powerful hybrid solution for facing the impact of panel dynamics on sample representativeness. Empirically, the paper focuses on the estimation procedures. Using data from the Uganda National Panel Survey, the longest Living Standards Measurement Study panel survey, it experimentally evaluates the suggested technique. In summary, the findings show that the calibrated generalized weight share method base estimator yields individual-level statistics that appear to be more accurate than those produced by the current Uganda National Panel Survey estimator. Additionally, the calibrated generalized weight share method base cross-sectional estimates on the transition matrix show a generally higher degree of stability when the sample is changed compared to the current Uganda National Panel Survey estimates.
Mapping Returns of Private Equity Investments in Emerging Markets
(Washington, DC: World Bank, 2025-01-10) Mölders, Florian; Salgado, Edgar
This paper fills a gap in research on private equity investments in emerging markets and developing economies. It provides descriptive evidence and examines the distribution of returns across sectors such as finance, technology, and resource-intensive industries like mining, where significant variation exists. Using data from the International Finance Corporation, the analysis finds that return distributions exhibit "fat tails", with a notable presence of investments yielding extremely high returns alongside others generating little or no return, highlighting the importance of diversification. The analysis reveals that firm-specific factors account for the largest share of return variability, with country and sector factors playing a smaller role. Gross domestic product growth and real exchange depreciation are significantly related to returns, with median elasticities of 0.35 and -0.67, respectively.
The Changing Landscape of Africa’s Growth
(Washington, DC: World Bank, 2025-01-10) Calderon, Cesar; Dabalen, Andrew; Qu, Ayan
This paper examines the main features of real growth per capita of Sub-Saharan Africa over the past six decades, before uncovering the sources of growth—including those of growth miracles. Three distinct growth phases before the recent “lost decade” are observed. The swinging pattern of income per capita shows that the region has not converged with most benchmarks and is not resilient to shocks, although resilience has improved since the beginning of the twenty-first century. Furthermore, growth across countries in the region is heterogeneous and falls into three broad groups. Analysis of the sources of growth suggests that the region underperforms on duration during episodes of expansions/recessions, and the contribution of total factor productivity remains small, although it has improved over the past two decades. A few countries in the region, for example, Botswana, Ethiopia, and Mauritius, have sustained growth for decades, on par with the world’s best performance. These exceptional “growth miracles” are distinguished by a common set of factors that explain how such miracles start and are sustained: leadership, economic diversification, market expansion, and investment for the future.
Did Program Support for the Poorest Areas Work?: Evidence from Rural Viet Nam
(Washington, DC: World Bank, 2025-01-10) Dang, Hai-Anh H.; Deininger, Klaus; Nguyen, Cuong Vjet
This paper investigates the impact of a large-scale poverty alleviation program targeted at the 62 poorest districts in Viet Nam. The analysis of multiple data sets spanning the past 20 years uses a regression discontinuity design with district fixed effects. The findings do not reveal significant program effects on household welfare (as measured by per capita income and poverty) or local economic development (as measured by nighttime light intensity and establishment of new firms). However, the findings show that the program facilitates a shift from farm to nonfarm employment and significantly increases the share of nonfarm income for rural households. A possible explanation for the positive effects on nonfarm employment is the improved access to credit that the program provides to participating households. The findings also show that the program increases household access to electricity, public transfers, educational subsidies for students residing in the program districts, and health care utilization, possibly through improving the availability of commune health care centers.
Understanding the Challenges and Constraints of Bhutanese Youth in Accessing Employment Opportunities
(Washington, DC: World Bank, 2025-01-09) Choki, Tshering; Etang, Alvin
Youths are a vital part of the economic workforce, but they face unique challenges and opportunities in a rapidly changing world. Despite being tech-savvy and socially conscious, many youths struggle to access the labor market due to lack of experience, job opportunities, and job security. Youth and female unemployment is a major issue globally, impacting economic welfare and growth. Addressing this can improve productivity, stability, and social cohesion. Studies show that youth unemployment in Bhutan is particularly high, with female youths being more vulnerable due to limited resources, education, and workplace discrimination. The 2022 National Labor Force Survey reveals a significant rise in youth unemployment, with females at 7.9 percent and males at 4.4 percent. The agriculture sector remains a key economic activity, employing 49.2 percent of the labor force. This study aims to understand the challenges and constraints faced by women and youth in accessing employment opportunities.
Brazil - Scoping Note on Reassessing and Updating Brazil’s Financial Consumer Protection Regime
(Washington, DC: World Bank, 2025-01-09) World Bank
This document highlights major advancements in financial inclusion, especially with the PIX payment system. However, financial consumers are increasingly at risk from fraud, scams, over-indebtedness, and mis-sold bundled insurance products. It calls for a structured approach to reforming the legal and institutional framework to better protect consumers. The document outlines the current financial sector landscape, existing FCP framework, and roles of regulatory bodies. It stresses the importance of cooperation, integration, and information sharing among authorities and recommends immediate steps, including developing a problem statement, terms of reference, and a roadmap for reassessment.
Financial Inclusion and Economic Development: A Review of the Data and Evidence
(Washington, DC: World Bank, 2025-01-09) Ansar, Saniya; Klapper, Leora; Singer, Dorothe
This paper reviews the impact of financial inclusion on economic development outcomes. It highlights the benefits of financial inclusion, including greater savings, improved resilience to economic shocks, and higher levels of economic empowerment, among others. It looks deeper into both the effects of financial inclusion on marginalized groups, like women and the poor, while also examining the impacts of different types of financial instruments, like digital payments and financial accounts. The paper further explores the role that government payment programs and regulatory actions can play in inducing greater financial inclusion, highlighting the need for more policies, products, and incentives to promote greater adoption of financial services for sustainable development.
Informality and the Life Cycle of Plants
(Washington, DC: World Bank, 2025-01-09) Sarıkaya, Furkan; Tamkoç, M. Nazim; Torres, Jesica
This paper documents the life cycle of formal and informal plants using five waves of the Mexican establishment census. Formal plants begin operations with three times more workers than informal plants and exhibit faster growth rates. Throughout their life cycle, formal establishments more than double their size, while informal plants increase their size by only 77%. A general equilibrium model is developed to quantify the aggregate economic losses stemming from these growth rate disparities. In the model, plants grow through productivity investments, and informality emerges from incomplete enforcement. In equilibrium, informal plants exhibit flatter life cycle profiles to avoid detection and taxation. Model parameters are calibrated to match key properties of plant size distribution and the life cycle of plants in Mexico. Quantitative results indicate that a revenue-neutral full enforcement increases aggregate output and the overall growth rate by sixteen and twenty-five percent relative to the benchmark, respectively.
Trade Barriers or Catalysts? Non-Tariff Measures and Firm-Level Trade Margins
(Washington, DC: World Bank, 2025-01-09) Fiankor, Dela-Dem Doe; Kassa, Woubet; Lartey, Abraham
This paper empirically examines how standards and technical regulations affect export margins in three African countries at the firm level. The approach involves combining detailed customs transaction data at the firm-product level with bilateral information on non-tariff measures within a gravity model of trade framework. The findings show standards and technical regulations have no impact on the extensive margin of firm-level trade. However, they do diminish trade at the intensive margin in both the agriculture and manufacturing sectors. Small firms are more affected at the intensive margin compared to medium and large firms, and similarly, final goods are more affected compared to inter-mediate goods. Moreover, in the manufacturing sector, firms with initially higher product quality experience a reversal of the trade-reducing effect of standards and technical regulations, whereas in the agriculture sector, this effect is less pronounced for their counterparts. The results also suggest that African exporting firms face equivalent impacts in both regional and global markets.
Does Competition from Informal Firms Encourage the Formal Firms to Obtain Quality Certificates?
(Washington, DC: World Bank, 2025-01-09) Amin, Mohammad; Nogueira, Caroline
This study investigates the impact of competition from informal or unregistered firms on the likelihood of formal manufacturing small and medium-size enterprises obtaining internationally recognized quality certificates. The sample includes 16 countries in Latin America and the Caribbean, one of the regions with the highest levels of informality in the world. The study uncovers a positive impact, with a one standard deviation increase in informal competition leading to an increase in the probability of having a quality certificate by 2.9 to 3.6 percentage points across the different specifications. This effect is large, given that only 10.4 percent of small and medium-size enterprises have a quality certificate. These findings are consistent with the “legalist” model of informality, whereby the positive impact of informal competition on the likelihood of having a quality certificate is significantly larger in countries where the business environment is less favorable to operating in the formal versus informal sector due to factors such as the weaker rule of law and greater regulatory burden on formal firms. The paper provides several layers of checks against omitted variable bias, reverse causality, and measurement errors. The findings also show that, as expected, there is no statistically significant impact of informal competition on the likelihood of having a quality certificate among large manufacturing firms.