Journal Issue: World Bank Economic Review, Volume 39, Issue 1
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Volume
39
Number
1
Issue Date
2025-02
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
The Temptation of Social Networks under Job Search Frictions
(Published by Oxford University Press on behalf of the World Bank, 2025-02-07) Matsuda, Norihiko; Nomura, Shinsaku
This paper presents descriptive
evidence that although social networks help find jobs, the
jobs found through social networks tend to be mismatched.
The paper uses nationally representative matched
employer-employee data in Bangladesh that includes direct
measures of match quality. Less educated and seemingly
poorer workers are more likely to have found their jobs
through social networks. Compared to workers at the same
occupation level in the same firm who were matched through
formal channels, those matched through social networks found
their jobs quicker but had lower match quality and earned
less. The mechanism, suggested by a theoretical model, is as
follows: even when social networks are connected to
mismatched jobs, workers can be tempted to use social
networks to find mismatched jobs for fear of finding
nothing. This temptation is more potent for less skilled and
poorer workers because costly formal channels are less
rewarding and affordable for them.
Too Hard, Too Easy, or Just Right
(Published by Oxford University Press on behalf of the World Bank, 2025-02-07) Castro, Juan F; Villacorta, Lucciano
This study proposes a novel way of
modeling the heterogeneous effects of schooling based on the
notion that learning is maximized when the skill of the
child matches the complexity of the learning experiences at
school. It offers direct evidence about the importance of
this match using longitudinal information on test scores and
schooling attained by children from Peru, India, and
Vietnam. Using data from Peru, it also finds that the
relation between the effect of schooling and early childhood
skill can follow an inverted-U shape. Increasing early
childhood skill will raise the productivity of the school up
to the point where it matches school complexity. Further
increases in child skill, however, will reduce the
productivity of schooling as they will widen the mismatch.
If one relates the quality of schools to the amount of
learning they produce, this framework predicts that quality
gains can be achieved by reducing these mismatches.
Strangers and Foreigners
(Published by Oxford University Press on behalf of the World Bank, 2025-02-11) Bertocchi, Graziella; Dimico, Arcangelo; Tedeschi, Gian Luca
This study explores the factors that
shape natives’ attitudes toward citizenship acquisition for
foreigners. The hypothesis is that, in Sub-Saharan Africa,
the slave trade represents a deep determinant of
contemporary attitudes toward citizenship through a
proximate determinant: the level of trust. Accordingly,
individuals belonging to ethnic groups with higher exposure
to historical slave exports are more likely to exhibit a
sense of distrust toward strangers and are consequently more
likely to oppose citizenship laws that favor the inclusion
of foreigners. The findings indicate that individuals with
higher levels of trust toward other people do exhibit more
favorable attitudes regarding the acquisition of citizenship
at birth for children of foreigners, that these attitudes
are also negatively related to the intensity of the slave
trade, and that the underlying inverse relationship between
trust and the slave trade is confirmed. Other factors such
as conflict, kinship tightness, and witchcraft beliefs,
which could also influence attitudes toward citizenship
through the channel of trust, do not yield the same distinct
pattern of associations as observed with the slave trade.
Free Trade and Subnational Development
(Published by Oxford University Press on behalf of the World Bank, 2025-02-11) Cruzatti C, John
This paper delves into the
subnational relationship between free trade agreements
(FTAs) and human development worldwide. Utilizing a
difference-in-differences and an event-study approach with
high-spatial-resolution land-cover data and a comprehensive
time series of national-level FTA indicators for 207
countries, the study quantifies the effects of FTAs on
subnational development. The findings indicate a small
negative impact of FTAs on the Human Development Index but a
notable positive impact on economic activity, with urbanized
regions benefiting the most. Unequal and more vulnerable
regions grapple with declining human development indicators.
The depth of FTAs does not sway these outcomes. These
patterns raise questions about the inclusivity and equitable
distribution of the benefits of trade liberalization. While
prior literature has examined the national implications of
FTAs, this paper provides insight into the subnational
repercussions of FTAs. It emphasizes the role of inequality
in hindering holistic developmental benefits from FTAs.
The Impact of Weather Shocks on Violent and Property Crimes in Jamaica
(Published by Oxford University Press on behalf of the World Bank, 2025-02-11) Wright, Nicholas A.; Stewart, Aubrey M.
Developing countries face the most
significant exposure to the adverse effects of climate
change. However, as temperature and rainfall patterns
change, we do not understand their impact on these countries
and the mitigation strategies that may be needed. In this
paper, we utilize administrative panel data to examine the
effects of weather shocks on violent and property crimes in
Jamaica. We find strong evidence that a one
standard-deviation increase in the daily temperature (2â—¦C)
increases violent crime by 3.67 percent due to an increase
in the number of murders (3.44 percent), shootings (7.53
percent), and cases of aggravated assault (6 percent).
However, our results suggest that temperature changes have
no statistical impact on property crime. In addition, we
find that a one-standard-deviation increase in rainfall (2
mm) reduces crimes such as shootings (1.53 percent),
break-ins (2.27 percent), and larcenies (3.85 percent).
Still, it has a minimal impact on other categories of crime.
Better Roads, Better Off? Evidence on Upgrading Roads in Tanzania
(Published by Oxford University Press on behalf of the World Bank, 2025-02-12) Dumas, Christelle; Játiva, Ximena
Spatial isolation is considered to be
one of the main determinants of poverty. Therefore, many
transport investments are undertaken with the stated
objective of poverty reduction. This paper evaluates the
effect of a Tanzanian program that rehabilitated 2,500 km of
major roads on rural livelihoods. The analysis uses a large
set of variables describing household behavior to provide a
complete picture of the adjustments. The identification
combines a household fixed effects strategy with propensity
score matching. Some damaging effects of the program are
found on the rural population in the two years following the
intervention: the price of rice decreases; households
reallocate labor away from agriculture and provide more wage
work, but the increase in wage income does not compensate
for the loss in agricultural income. Nor do households seem
to be benefiting from the fall in the price of rice at the
consumption level. These results are consistent with rural
households facing increased competition due to reduced
transportation costs.
Do Factory Jobs Improve Welfare? Experimental Evidence from Ethiopia
(Published by Oxford University Press on behalf of the World Bank, 2025-02-12) Abebe, Girum; Buehren, Niklas; Goldstein, Markus
This study explores the impact of a
light-touch job-facilitation intervention that supported
young female job seekers during the application process for
factory work in a newly constructed industrial park in
Ethiopia. Using data from a panel of 687 job seekers and
randomized access to the support intervention, the study
finds that treated applicants are more likely to be employed
and have higher earnings and savings eight months after
baseline, although these impacts are short-lived. Four years
later, the effects on employment and income largely
dissipated. The results suggest that young women face
significant barriers to engaging in factory work in the
short run that a simple job-facilitation intervention can
help overcome. In the long term, however, these jobs do not
offer a better alternative than other income-generating opportunities.
The Gendered Impact of Digital Jobs Platforms
(Published by Oxford University Press on behalf of the World Bank, 2025-02-12) Jones, Sam; Sen, Kunal
This study examines the impact of
digital labor-market platforms on job outcomes using a
randomized encouragement design embedded in a longitudinal
survey of Mozambican technical-vocational college graduates.
We differentiate between platforms targeting formal jobs,
where jobseekers direct their search, and informal tasks,
where clients seek workers. Our analysis reveals
statistically insignificant intent-to-treat and complier
average treatment effects for headline employment outcomes
in the full sample. Notably, while the average male
moderately benefits from platform usage, women do not.
Instead, they are less responsive to the encouragement
nudge, and female treatment compliers report higher
reservation wages and lower job searches. This suggests
digital platforms can inadvertently perpetuate gender
disparities in labor markets.
Child Labor Bans, Employment, and School Attendance
(Published by Oxford University Press on behalf of the World Bank, 2025-02-13) Kozhaya, Mireille; Flores, Fernanda MartÃnez
This paper investigates the effect of
a unique child labor ban regulation on employment and school
enrollment. The ban, implemented in Mexico in 2015,
increased the minimum working age from 14 to 15, introduced
restrictions to employing underage individuals, and imposed
stricter penalties for violation of the law. Our
identification strategy relies on a DiD approach that
exploits the date of birth as a natural cutoff to assign
individuals into treatment and control groups. The ban led
to a decrease in the probability of working by 1.2
percentage points, resembling a 16 percent decrease relative
to the pre-reform mean, and an increase in the likelihood of
being enrolled in school by 2.2 percentage points for the
treatment group. These results are driven by reduced
employment in paid work and the manufacturing and services
sectors. The effects have been persistent for several years
after the ban.
Minimum Wage Policy and Poverty in Indonesia
(Published by Oxford University Press on behalf of the World Bank, 2025-02-13) Merdikawati, Nurina; Al Izzati, Ridho
This paper investigates whether the
minimum wage policy significantly reduced poverty in Java
Island, Indonesia, between 2002 and 2014. Its identification
strategy exploits variation in minimum wages over time
within pairs of geographically proximate districts. The
study finds that the minimum wage has a distributional
impact on wage workers just below the 20th percentile up to
those in the middle of the wage distribution, with no
overall loss of employment. However, the minimum wage policy
has no distributional impact on per capita household
expenditure and a limited effect on changes in poverty status.
Can Discussions about Girls’ Education Improve Academic Outcomes? Evidence from a Randomized Development Project
(Published by Oxford University Press on behalf of the World Bank, 2024-02-13) Cotton, Christopher S.; Nordstrom, Ardyn; Nanowski, Jordan; Richert, Eric
This article evaluates the impact of
facilitated discussions about girls’ education on education
outcomes for students in rural Zimbabwe. The staggered
implementation of components of a randomized education
project allowed for the causal analysis of a dialogue-based
engagement campaign. This campaign involved regular
discussions between trained facilitators and parents,
teachers, and youth about girls’ rights, the importance of
attending school, and the barriers girls face in pursuing
education. The campaigns increased mathematics performance
and enrollment in the year after implementation. There was
no similar improvement in literacy performance during this
period. Longer-term data on the broader project suggest that
additional education-focused interventions did not further
increase mathematics performance and enrollment beyond what
can be attributable to the dialogue campaigns alone.