Journal Issue: World Bank Economic Review, Volume 36, Issue 4
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Volume
36
Number
4
Issue Date
2022-11-01
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Income and Wealth Inequality in Hong Kong, 1981–2020
(Published by Oxford University Press on behalf of the World Bank, 2022-10-08) Piketty, Thomas; Yang, Li
The objective of this paper is to better understand the evolution and institutional roots of Hong Kong's growing economic inequality and political cleavages. By combining multiple sources of data (household surveys, fiscal data, wealth rankings, national accounts) and methodological innovations, two main findings are obtained. First, he evidence suggests a very large rise in income and wealth inequality in Hong Kong over the last four decades. Second, based on the latest opinion poll data, business elites, who carry disproportionate weight in Hong Kong's Legislative Council, are found to be more likely to vote for the pro-establishment camp (presumably to ensure that policies are passed that protect their political and economic interests). This paper argues that the unique alliance of government and business elites in a partially democratic political system is the plausible institutional root of Hong Kong's rising inequality and political cleavages.
Nowcasting Global Poverty
(Published by Oxford University Press on behalf of the World Bank, 2022-10-06) Mahler, Daniel Gerszon; Aguilar, R. Andrés Castañeda; Newhouse, David
This paper evaluates different
methods for nowcasting country-level poverty rates,
including methods that apply statistical learning to
large-scale country-level data obtained from the World
Development Indicators and Google Earth Engine. The methods
are evaluated by withholding measured poverty rates and
determining how accurately the methods predict the held-out
data. A simple approach that scales the last observed
welfare distribution by a fraction of real GDP per capita
growth performs nearly as well as models using statistical
learning on 1,000 plus variables. This GDP-based approach
outperforms all models that predict poverty rates directly,
even when the last survey is up to five years old. The
results indicate that in this context, the additional
complexity introduced by applying statistical learning
techniques to a large set of variables yields only marginal
improvements in accuracy.
Keep It Simple
(Published by Oxford University Press on behalf of the World Bank, 2022-09-22) Batista, Cátia; Fafchamps, Marcel; Vicente, Pedro C
SMS information campaigns are
increasingly used for policy. A field experiment is
conducted to study information sharing through mobile phone
messages. Subjects are rural households in Mozambique who
have access to mobile money. In the baseline intervention,
subjects receive an SMS containing simple instructions on
how to redeem a voucher for mobile money. They can share
this non-rival information with other exogenously assigned
subjects unknown to them. Few participants redeem the
voucher. They nonetheless share it with others and many
share information about the voucher they do not use
themselves. The voucher is shared more when no information
is provided on the receiver. When partial information is
provided, no evidence is found of more sharing with subjects
who have similar characteristics. Treatments are introduced
to increase the cost of sending a message, shame those who
do not send the voucher to others or allow subjects to
appropriate the value of the voucher. All these treatments
decrease information sharing. To encourage information
diffusion among strangers, the best is to keep it simple.
Telescoping Error in Recalled Food Consumption
(Published by Oxford University Press on behalf of the World Bank, 2022-09-14) Abate, Gashaw T.; de Brauw, Alan; Gibson, John; Hirvonen, Kalle; Wolle, Abdulazize
Telescoping errors occur if survey
respondents misdate events from outside the reference period
and include them in their recall. Concern about telescoping
influenced the design of early Living Standards Measurement
Study (LSMS) surveys, which used a two-visit interview
format to bound food consumption recall. This design fell
out of favor although not for evidence-based reasons. To
measure the extent of telescoping bias on food consumption
measures, a survey experiment was conducted in Addis Ababa,
Ethiopia, randomly assigning households to either a
two-visit bounded recall or a single visit unbounded recall.
The average value of reported food consumption is 16 percent
higher (95 percent CI: 7.4–25.9) in the unbounded single
visit recall relative to the two-visit bounded recall. Most
of the error is explained by difference in reported spending
on less frequently consumed, protein-rich foods, so apparent
food security indicators based on household diet diversity
are likely overstated with unbounded recall.
Direct Shock Experience vs. Tangential Shock Exposure
(Published by Oxford University Press on behalf of the World Bank, 2022-08-31) Stein, Wiebke; Weisser, Reinhard A.
With extreme weather events on the
rise, the question of how witnessing adverse weather events
may affect individuals’ perception, and consequently their
subjective well-being, gains in relevance. To identify
events that have been witnessed, i.e., tangential exposure
to a weather shock, satellite-based data on flooding is
linked to an extensive household panel survey from rural
Southeast Asia. Contrasting direct shock experience with
tangential shock exposure, we find that mere proximity to a
potentially adverse shock, without reporting any actual
direct shock experience, could be sufficient to reduce
subjective well-being. This effect is not only restricted to
the present but can also impinge on expected future
well-being dynamics. Eventually, such a persistent effect
from witnessing a weather shock may have further
politico-economic repercussions, for instance, by altering
support for redistribution policies.
The Lasting Labor-Market Effects of Cash Transfers
(Published by Oxford University Press on behalf of the World Bank, 2022-09-16) Tondini, Alessandro
Can unconditional cash transfers have
long-term benefits for women’s employment in developing
countries This study exploits discontinuous exposure to the
South African Child Support Grant for mothers whose children
were born one year apart to identify the short- and
long-term effects of a positive income shock of roughly $400
($650 PPP in 2010). In the short term, there is a
considerable increase in the probability of being active and
looking for a job. Five years after receiving the transfer,
mothers who benefited for one year are as likely to be
employed as those who never received it; the type of
occupation is also similar, other than a small decrease in
work in the agricultural sector. Overall, the grant appears
to facilitate job search for single mothers in the presence
of high search costs, but does not significantly change job prospects.
Fertility Following Natural Disasters and Epidemics in Africa
(Published by Oxford University Press on behalf of the World Bank, 2022-08-08) Norling, Johannes
This paper uses dozens of large-scale
household surveys to measure average changes in fertility
following hundreds of droughts, floods, earthquakes,
tropical cyclones, other storms, and epidemics in Africa
between 1980 and 2016. Droughts are the largest and
longest-lasting type of disaster on average, and fertility
decreases by between 3.5 and 6.8 percent in the five years
after droughts. Fertility changes are smaller or less clear
after other types of disasters. Comparisons between
countries, rather than within countries, drive these
findings. There is substantial geographic heterogeneity in
the direction and magnitude of the changes in fertility
after disasters, driven by characteristics of the disasters
and survey respondents. Fertility decreases especially after
more recent droughts and in areas prone to drought.
Fertility also decreases after longer floods. Fertility
decreases after epidemics for women near the start and end
of their childbearing careers, but increases for women in
their late twenties and early thirties.
The Timing of Elections and Neonatal Mortality
(Published by Oxford University Press on behalf of the World Bank, 2022-10-08) Bhattacharjee, Shampa
This paper uncovers evidence of
political cycles in developmental outcomes in the Indian
context. Comparing children born to the same mother, it
shows that children born 0-11 months before scheduled state
legislative assembly elections have a significantly lower
risk of neonatal mortality. The effect of being born just
before elections is higher in politically more competitive
regions. The paper provides some evidence of the channels
behind this result. The usage of prenatal care increases
before elections and mothers of children born before
elections are more likely to have antenatal checkups and
tetanus injections during pregnancy. Components of antenatal
checkups, like the probability of having a blood test or an
abdominal examination during pregnancy, also increase before
elections. The improvement in child health outcomes before
elections seems to be driven by a transfer of resources from
non-election to election years rather than an overall
improvement in child health outcomes.
Roads and Jobs in Ethiopia
(Published by Oxford University Press on behalf of the World Bank, 2022-09-22) Fiorini, Matteo; Sanfilippo, Marco
Does improving roads affect jobs and
structural transformation A novel geocoded data set covering
the universe of Ethiopian roads matched with individual data
allows the relationship between improvements in road
infrastructure and labor-market outcomes over the 1994–2013
period to be identified. At the district level, greater
market access due to better roads correlates with the
process of structural transformation in Ethiopia.
Improvements in market access are related to reductions in
the share of agricultural workers and increases in that of
workers in the services sector, but not in manufacturing.
Heterogeneity in this relationship exists across industries,
gender, education level, and age cohorts. Patterns of
internal migration and changes in economic opportunities can
help rationalize these findings.