Islam, Asif M.

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Islam, Asif M.

Development Economics, Enterprise Analysis Group

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Development Economics, Enterprise Analysis Group

Last updated September 12, 2023

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Human Capital Accumulation at Work: Estimates for the World and Implications for Development

(World Bank, Washington, DC, 2021-09) Jedwab, Remi ; Romer, Paul ; Islam, Asif ; Samaniego, Roberto

In this paper, the authors: (i) study wage-experience profiles and obtain measures of returns to potential work experience using data from about 24 million individuals in 1,084 household surveys and census samples across 145 countries; (ii) show that returns to work experience are strongly correlated with economic development—workers in developed countries appear to accumulate twice more human capital at work than workers in developing countries; (iii) use a simple accounting framework to find that the contribution of work experience to human capital accumulation and economic development might be as important as the contribution of education itself; and (iv) employ panel regressions to investigate how changes in the returns over time correlate with several factors such as economic recessions, transitions, and human capital stocks.
Data Transparency in the Middle East and North Africa

(World Bank, Washington, DC, 2023-03) Islam, Asif M. ; Islam, Asif M.

Data transparency about critical economic issues may be key to driving growth and enhancing trust in government in the Middle East and North Africa. Several knowledge products and technical analyses on the region have been greatly constrained by the lack of availability of detailed data, and the relatively outdated nature of many available datasets. The goal of this study is to ascertain the state of data systems in the Middle East and North Africa region. Through analysis of several indicators, with their limitations in mind, the study uses descriptive analyses and uncovers six stylized facts of the region: (i) developing economies in the Middle East and North Africa have poor data ecosystems, largely due to the prevalence of conflict; (ii) developing economies in the Middle East and North Africa as a group have experienced the largest deterioration in data systems over time; (iii) data systems in richer economies in the Middle East and North Africa region underperform relative to their income peers; (iv) Gulf Cooperation Council economies underperform in data openness, especially online access, despite having the resources for online features; (v) the regulatory framework for data (data infrastructure) is poor throughout the region, especially in Gulf Cooperation Council economies; and (vi) the dispersion of source data scores – a measure of availability and timeliness of micro data – in the region suggests that national statistical offices in the region could learn from each other. Furthermore, the study summarizes data availability and timeliness for specific macro, micro, and public health indicators for countries across the region. The need for forging a social contract for data is discussed, as well as the role international institutions can play through a statistics compact for the region.
The Labor Productivity Gap between Formal Businesses Run by Women and Men

(Taylor and Francis, 2020-09-20) Islam, Asif ; Gaddis, Isis ; Palacios López, Amparo ; Amin, Mohammad

This study analyzes gender differences in labor productivity in the formal private sector, using data from 126 mostly developing economies. The results reveal a sizable unconditional gap, with labor productivity being approximately 11 percent lower among women- than men-managed firms. The analyses are based on women’s management, which is more strongly associated with labor productivity than women’s participation in ownership, which has been the focus of most previous studies. Decomposition techniques reveal several factors that contribute to lower labor productivity of women-managed firms relative to firms managed by men: Fewer women-managed firms protect themselves from crime and power outages, have their own websites, and are (co-)owned by foreigners. In addition, in the manufacturing sector, women-managed firms are less capitalized and have lower labor costs than firms managed by men.
Middle East and North Africa Economic Update, April 2020: How Transparency Can Help the Middle East and North Africa

(Washington, DC: World Bank, 2020-04-09) Arezki, Rabah ; Lederman, Daniel ; Abou Harb, Amani ; El-Mallakh, Nelly ; Fan, Rachel Yuting ; Islam, Asif ; Nguyen, Ha ; Zouaidi, Marwane

Due to the dual shocks of the spread of the virus and lower oil prices, World Bank economists expect output of MENA to decline in 2020. This is in sharp contrast to the growth forecast of 2.6 percent published in October 2019. The growth downgrade of 3.7 percentage points is arguably a measure for the costs associated with the dual shocks of Covid-19 and the oil price collapse. These numbers are tentative. The true impact depends on future developments of the dual shocks, policy and society’s response, which depends on the transparent use of health and economic data. We recommend a two-step approach: It might be desirable to focus first on responding to the health emergency and the associated economic contraction. Fiscal consolidation and structural reforms associated with the persistent drop in oil prices and pre-existing challenges are also very important, but with proper external support, can wait until the health emergency subsides. Nevertheless, the MENA region has challenges that predate the crisis – it has been growing far slower than its peers. Had MENA’s growth of output per capita been the same as that of a typical peer economy over the past two decades, the region’s real output per capita would be at least 20% higher than what it is today. A large part of MENA’s low growth is arguably due to a lack of transparency. MENA is the only region that dropped in data transparency and capacity since 2005. We estimate that this has cost MENA 7-14 percent in GDP per capita losses since 2005. Lack of transparency hinders credible analyses of many important issues, two of which are highlighted in the report. First, lack of data transparency hampers credible analyses on the region’s debt sustainability – an important issue to examine after the crisis. MENA countries vary greatly in their debt reporting standards. World Bank economists and other external analysts do not have access to vital information about many types of public debt. Second, the unemployment and informality numbers in the region are debatable since MENA countries rely on varying definitions of employment with little harmonization across the region or with respect to international standards. This affects analyses of unemployment and informality.
Gendered Laws, Informal Origins, and Subsequent Performance

(World Bank, Washington, DC, 2021-08) Hyland, Marie ; Islam, Asif

This research explores the relationship between laws that discriminate on the basis of gender and the probability that a female-owned business begins operating in the informal sector. This is achieved by tracing the origins of formal businesses surveyed in the World Bank Enterprise Surveys and merging this with information on the level of legal equality between genders as measured by the Women, Business and the Law database. In addition, the research explores whether starting a business informally has any differential effect on subsequent firm performance depending on the gender of the owner(s). The results show that gender discriminatory laws increase the likelihood that firms with female owners will begin operations in the informal sector; as expected, this does not hold for enterprises that are solely owned by men. Furthermore, the research provides evidence that firms that began operations informally have poorer performance years later—a relationship that exists both for firms with female owners and for firms fully owned by men. The results show notable variation by region.
Data Transparency and Long-Run Growth

(World Bank, Washington, DC, 2020-12) Islam, Asif Mohammed ; Lederman, Daniel

For centuries states have engaged in collecting data to serve various interests. In modern times, a data gap has emerged between developing and developed economies, with the latter having more advanced data systems. The authors explore the effects of data transparency on longrun growth for a sample of mostly developing economies. Data transparency is defined as the timely production of credible statistics as measured by the Statistical Capacity Index. The paper finds that data transparency has a positive effect on real gross domestic product per capita, implying a statistically significant impact on transitional growth to a higher potential level of gross domestic product per capita. The estimates indicate an elasticity of the magnitude of 0.03 percent per year, which is much larger than the elasticity of trade openness and schooling in the estimation sample. The empirics employ a variety of econometric estimators, including dynamic panel and cross-sectional instrumental variables estimators, with the latter approach yielding a higher estimated elasticity. The findings are robust to the inclusion of several factors in addition to political institutions and exogenous commodity-price and external debt-financing shocks.
Mobile Money and Investment by Women Businesses in Sub-Saharan Africa

(World Bank, Washington, DC, 2020-07) Islam, Asif ; Muzi, Silvia

This study connects two important findings in Sub-Saharan Africa. First, digital technologies such as mobile money have become widespread and have increased investment by businesses, especially in East Africa. Second, women-owned business in the region significantly lag their male counterparts in capital investments. Using data for 16 Sub-Saharan African economies, the study connects the two findings by exploring whether mobile money use by women-owned firms increases their investment. The findings indicate that the positive relationship between mobile money use and investment is largely driven by women-owned firms and is statistically insignificant for men-owned firms. Potential channels of these effects are explored. Women-owned firms that use mobile money to transact with suppliers are more likely to invest. Mobile money also seems to facilitate greater provision of customer credit and generally greater demand for more credit by women-owned firms. Such patterns are not observed for men-owned firms.
Perceptions, Contagion, and Civil Unrest

(World Bank, Washington, DC, 2020-09) Abi-Nassif, Christophe ; Islam, Asif Mohammed ; Lederman, Daniel

This paper investigates the empirical relationship between citizens' perceptions of economic and political conditions and the incidence of nonviolent uprisings. Perceptions are measured by aggregating individual-level data from regional barometer surveys. The main results show that negative perceptions of political conditions -- proxied by the share of the population that is generally dissatisfied with the way democracy works -- have a significant positive effect on the number of protests and strikes. Negative perceptions of economic conditions do not seem to be significantly related to the latter. This generally holds across a large sample of countries and is particularly the case for Western and Central European countries as well as high-income countries. In developing economies, however, social protests appear to be driven by dissatisfaction with economic and political conditions. The heterogeneous effects of perceptions on uprisings across geography and income groups, however, are not robust and susceptible to changes in estimators and model specification. In particular, the international contagion of protests eliminates this international heterogeneity, implying that the incidence of uprisings in nearby countries tends to generate protests at home through its effect on perceptions related to political conditions in high-income countries. Overall, the effect of perceptions about political conditions, along with protest contagion, is robust to the inclusion of numerous control variables that capture actual economic conditions and the quality of governance across countries. The results are also robust to the use of seemingly valid instrumental variables, alternative count-data estimators, and sample composition.
Taming Private Leviathans: Regulation versus Taxation

(World Bank, Washington, DC, 2021-01) Arezki, Rabah ; Islam, Asif ; Rota-Graziosi, Gregoire

This paper explores the interplay between concentration of wealth and policies, namely regulation and taxation. The paper exploits variation in exposure to international commodity prices. Using a global panel data set of the net worth of billionaires, the results point to a positive relationship between commodity prices and the concentration of wealth at the top. Regulation especially pertaining to competition is found to limit the effects of commodity price shocks on the concentration of wealth, while taxation has little effect. Moreover, commodity price shocks crowd out non-resource tax revenue, hence limiting the scope for income transfers and redistribution. The results are consistent with the primacy of ex ante interventions over ex post ones for addressing wealth inequality.
Discriminatory Environment, Firms' Discriminatory Behavior, and Women's Employment in the Democratic Republic of Congo

(World Bank, Washington, DC, 2020-04) Hyland, Marie ; Islam, Asif ; Muzi, Silvia

This paper contributes to better understanding firms' discriminatory behavior in the presence of gender-based legal discrimination and its linkages with labor market outcomes for women in a developing country setting. Using data collected through the World Bank Enterprise Surveys in the Democratic Republic of Congo, the paper documents the existence of nonnegligible employer discrimination and limitations in women's autonomy in the presence of a discriminatory environment. Interestingly, these are more pervasive outside the capital city, Kinshasa, which suggests that cultural norms or differences in regulation enforcement may be at play. The paper also finds that firms' discriminatory behavior harms women's labor market outcomes, in their representation among the upper echelons of management and participation in the overall workforce. The negative relationship between restrictions from discriminatory behaviors and female employment is particularly strong in the manufacturing sector.