Journal Issue: World Bank Economic Review, Volume 35, Issue 2
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Volume
35
Number
2
Issue Date
2021-05-01
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Mobilization Effects of Multilateral Development Banks
(Published by Oxford University Press on behalf of the World Bank, 2020-02-20) Broccolini, Chiara; Lotti, Giulia; Maffioli, Alessandro; Presbitero, Andrea F.; Stucchi, Rodolfo
This study uses loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed effects, the paper shows evidence of positive and significant mobilization effects of multilateral lending on the size of bank inflows. The number of lenders and the average maturity of syndicated loans also increase. These effects are present not only on impact but last for up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects, and the results are robust to numerous tests controlling for the role of confounding factors and unobserved heterogeneity. Finally, the results are economically sizable, indicating that MDBs can mobilize about seven dollars in bank credit over a three-year period for each dollar invested.
Teaching with the Test
(Published by Oxford University Press on behalf of the World Bank, 2019-11-02) De Hoyos, Rafael; Ganimian, Alejandro J.; Holland, Peter A.
This article examines the impact of two strategies for using large-scale assessment results to improve school management and classroom instruction in the province of La Rioja, Argentina. In the study, 104 public primary schools were randomly assigned to three groups: a diagnostic-feedback group, in which standardized tests were administered at baseline and two follow-ups and results were made available to schools; a capacity-building group, in which workshops and school visits were conducted; and a control group, in which tests were administered at the second follow-up. After two years, diagnostic-feedback schools outperformed control schools by 0.33 standard deviations (σ) in mathematics and 0.36σ in reading. In fact, feedback schools still performed 0.26σ better in math and 0.22σ better in reading in the national assessment a year after the end of the intervention. Additionally, principals at feedback schools were more likely to use assessment results in making management decisions, and students were more likely to report that their teachers used more instructional strategies and to rate their teachers more favorably. Combining feedback with capacity building does not seem to yield additional improvements, but this could be due to schools assigned to receive both components starting from lower learning levels and participating in fewer workshops and visits than expected.
Free Primary Education, Fertility, and Women’s Access to the Labor Market
(Published by Oxford University Press on behalf of the World Bank, 2020-01-03) Chicoine, Luke
This article investigates the causal relationship between women’s schooling and fertility by exploiting variation generated by the removal of school fees in Ethiopia. The increase in schooling caused by the reform is identified using both geographic variation in the intensity of its impact and temporal variation generated by the timing of the implementation. The model finds that the removal of school fees led to an increase in schooling for Ethiopian women and that each additional year of schooling led to a reduction in fertility. An investigation of the underlying mechanisms linking schooling and fertility finds that the decline in fertility is associated with an increase in labor market opportunity and a reduction in women’s ideal number of children.
Intimate Partner Violence
(Published by Oxford University Press on behalf of the World Bank, 2019-11-07) Bhalotra, Sonia; Kambhampati, Uma; Rawlings, Samantha; Siddique, Zahra
This study examines the association of unemployment variation with intimate partner violence using representative data from thirty-one developing countries, from 2005 to 2016. It finds that a 1 percent increase in the male unemployment rate is associated with an increase in the incidence of physical violence against women by 0.50 percentage points, or 2.75 percent. This is consistent with financial and psychological stress generated by unemployment. Female unemployment rates have the opposite effect, a 1 percent decrease being associated with an increase in the probability of victimization of 0.52 percentage points, or 2.87 percent. That an improvement in women's employment opportunities is associated with increased violence is consistent with male backlash. The study finds that this pattern of behaviors emerges entirely from countries in which women have more limited access to divorce than men.
Inequality, Poverty, and the Intra-Household Allocation of Consumption in Senegal
(Published by Oxford University Press on behalf of the World Bank, 2020-02-12) De Vreyer, Philippe; Lambert, Sylvie
Intra-household inequalities have long been a source of concern for policy design, but there is very little evidence about their effects. The current practice of ignoring inequality within households could lead to an underestimation of both overall inequality and poverty levels, as well as to the misclassification of some individuals with regard to their poverty status. Using a novel survey for Senegal in which consumption data were collected at a disaggregated level, this paper quantifies these various effects. In total, two opposing effects, one on mean and one on inequality, compensate each other in terms of the overall poverty rate, but individual poverty statuses are affected. Intra-household consumption inequalities account for 14 percent of inequality in Senegal. This study has also uncovered the fact that household structure and organization are key correlates of intra-household inequality and individual risk of poverty.
Estimating Treatment Effects with Big Data When Take-up is Low
(Published by Oxford University Press on behalf of the World Bank, 2019-12-14) Lara Ibarra, Gabriel; McKenzie, David; Ruiz-Ortega, Claudia
Low take-up of interventions is a common problem faced by evaluations of development programs. A leading case is financial education programs, which are increasingly offered by governments, nonprofits, and financial institutions, but which often have very low voluntary participation rates. This poses a severe challenge for randomized experiments attempting to measure their impact. This study uses a large experiment on more than 100,000 credit card clients in Mexico. The study shows how the richness of financial data allows combining matching and difference-in-difference methods with the experiment to yield credible measures of impact, even with take-up rates below 1 percent. The findings show that a financial education workshop and personalized coaching result in a higher likelihood of paying credit cards on time, and of making more than the minimum payment, but do not reduce spending, resulting in higher profitability for the bank.
Mitigation of Long-Term Human Capital Losses from Natural Disasters
(Published by Oxford University Press on behalf of the World Bank, 2020-03-24) Herrera-Almanza, Catalina; Cas, Ava
The detrimental effects of natural disasters on human capital during childhood are well-documented. However, little is known about whether, and to what extent, these impacts can be mitigated in the long term. This study analyzes whether a school infrastructure program can mitigate the adverse effects of extreme weather shocks on long-term children's education and labor market outcomes. This article uses a triple difference model that exploits the geographic variation of super-typhoons combined with the age-cohort exposure to, and spatial variation of, a secondary school infrastructure program in the Philippines. This study finds that the school infrastructure program almost entirely mitigated the negative effect of typhoons on educational attainment. These differential effects of the program on education among typhoon-affected children are also associated with their higher likelihood of working in a high-skilled occupation, in the non-agricultural sector, and of migrating overseas.
Increasing Financial Inclusion in the Muslim World
(Published by Oxford University Press on behalf of the World Bank, 2020-05-12) Karlan, Dean; Osman, Adam; Shammout, Nour
Low utilization of household credit in developing countries may be partially due to religious considerations. In a randomized marketing experiment in Jordan, this paper estimates the effect of sharia-compliant loan features on demand for credit. To comply with Islamic law, the sharia-compliant product uses a bank fee rather than an interest payment structure, while keeping the rest of the product features very similar. Sharia-compliance increased the application rate for loans from 18 percent to 22 percent, an increase in demand that is equivalent to a 10 percent decrease in interest rates. This study also randomly varied the price of the sharia-compliant loan and finds that less religious individuals are twice as elastic with respect to price as the more religious. By comparing reasons for refusal across treatment groups, this paper estimates that survey measures that try to assess the importance of religious objections to conventional credit overestimate the importance of this type of objection by a third.
Beneficiary Views on Cash and In-Kind Payments
(Published by Oxford University Press on behalf of the World Bank, 2020-02-24) Hirvonen, Kalle; Hoddinott, John
Economists often default to the assumption that cash is always preferable to an in-kind transfer. Do beneficiaries feel the same way? This paper addresses this issue using longitudinal household data from Ethiopia, where a large-scale social safety net intervention (PSNP) operates. Even though most payments are made in cash, and even though the (temporal) transaction costs associated with food payments are higher than payments received as cash, most beneficiaries stated that they prefer their payments only or partly in food. Higher food prices induce shifts in stated preferences toward in-kind transfers. More food-secure households, those closer to food markets and to financial services are more likely to prefer cash. Though shifts occur, the stated preference for food is dominant: In no year do more than 17 percent of households prefer only cash. There is suggestive evidence that stated preferences for food are also driven by self-control concerns.
The Profits of Wisdom
(Published by Oxford University Press on behalf of the World Bank, 2019-12-24) Bardasi, Elena; Gassier, Marine; Goldstein, Markus; Holla, Alaka
Business training programs in low-income settings have shown only limited impacts on firm revenues and profits, particularly for female entrepreneurs. A randomized design was used to compare the impacts of two types of business training programs targeting women with established small businesses in urban Tanzania. The basic version relied on in-class sessions to strengthen the participants’ managerial and technical skills. In the enhanced version, training was supplemented by visits from business coaches to the sites of participants’ activities, as well as other services tailored to their individual needs. The basic training had no impact on business practices or outcomes. The enhanced training positively impacted the adoption of new practices but had no effects on revenue or profits. However, the average masks large heterogeneous effects: only more experienced entrepreneurs benefited from the program. This finding suggests that more careful targeting can improve the impact of business training programs.
Religion and Sanitation Practices
(Published by Oxford University Press on behalf of the World Bank, 2019-10-26) Adukia, Anjali; Alsan, Marcella; Babiarz, Kim; Goldhaber-Fiebert, Jeremy D.; Prince, Lea
In India, infant mortality among Hindus is higher than among Muslims, and religious differences in sanitation practices have been cited as a contributing factor. To explore whether religion itself is associated with differences in sanitation practices, this study compares sanitation practices of Hindus and Muslims living in the same locations using three nationally representative data sets from India. Across all three data sets, the unconditional religion-specific gap in latrine ownership and latrine use declines by approximately two-thirds when conditioning on location characteristics or including location fixed effects. Further, the estimates do not show evidence of religion-specific differences in other sanitation practices, such as handwashing or observed fecal material near homes. Household sanitation practices vary substantially across areas of India, but religion itself has less direct influence when considering differences between Hindus and Muslims within the same location.
What Aspects of Formality Do Workers Value? Evidence from a Choice Experiment in Bangladesh
(Published by Oxford University Press on behalf of the World Bank, 2020-01-06) Mahmud, Minhaj; Gutierrez, Italo A.; Kumar, Krishna B.; Nataraj, Shanthi
This study uses a choice experiment among 2,000 workers in Bangladesh to elicit willingness to pay (WTP) for job attributes: a contract, termination notice, working hours, paid leave, and a pension fund. Using a stated preference method allows calculation of WTP for benefits in this setting, despite the lack of data on worker transitions, and the fact that many workers are self-employed, which makes it difficult to use revealed preference methods. Workers highly value job stability: the average worker would be willing to forgo a 27 percent increase in income to obtain a one-year contract (relative to no contract), or to forgo a 12 percent increase to obtain thirty days of termination notice. There is substantial heterogeneity in WTP by type of employment and gender: women value shorter working hours more than men, while government workers place a higher value on contracts than do private-sector employees.