• Does migration affect schooling decisions for children back home?


    Really nice paper presented by Taryn Dinkelman in the development seminar at TSE:

    “What are the long run effects of labor migration on human capital? Evidence from Malawi”
    Circular labor migration is a core feature of low-income labor markets. Yet, evidence on how this migration affects education investments in sending communities is limited due to lack of high quality data and challenging identification issues. This is especially true in Africa, where children can substitute for migrant adult labor. In this paper, we estimate the net effect of international migration on human capital accumulation of children by exploiting two large migrant labor shocks in sending communities in Malawi. An international mine labor treaty signed in 1967 initiated a 300% increase in the flow of Malawians to South Africa. Seven years later, a mining plane crash prompted the Malawian government to halt and reverse this expansion until 1977. Our strategy compares differences in long run human capital accumulation across high and low shock areas, among cohorts eligible and ineligible for primary school during the shock years. We construct measures of district-level exposure to this rapid expansion and contraction of foreign employment and earnings using historical locations of mining recruiting stations. We match this spatial variation in migration costs to cohort-specific education outcomes from newly digitized 1977 and 1998 Census data. Both shocks to migration had large, positive impacts on education. Age eligible cohorts exposed to the shocks attained 10 to 15% more schooling and the share with any primary schooling rose by 5 to 8%. Neither school supply-side interventions nor internal migration dynamics account for our results. However, these long run effects are only apparent in districts without agricultural estates, where child labor is less substitutable for missing male labor.

    Full paper here.

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  • Seminars in Santiago, Chile


    Following the workshops in Brazil, I also visited Chile, and I gave a couple of talks at Universidad de Chile, Facultad de Economía y Negocios.

    On Thursday 27, I presented the paper “Road Access and the Spatial Pattern of Long-term Local Development in Brazil” (with Julia Bird), in the regular seminar. Then on Friday 28, I gave a public lecture (in Spanish) entitled “Instituciones electorales, información, y calidad de las políticas económicas“.

    It was also the opportunity to meet again old friends, some of whom I had not seen in more than 15 years, and see some of the changes that the country has been going through in the recent past. This visit was at the invitation of Eduardo Engel, who came back recently from Yale to Chile. On top of academic activities, he is currently doing very interesting work to provide policy advice to the new Chilean government, through the fundation Espacio Público.

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  • Workshops on procurement and concessions in Sao Paulo and Rio de Janeiro


    On March 21-22, and 24-25 respectively, I took part in two workshops in Brazil:

    - The “Workshop on Public Procurement and Concession Design: Theory and Applications”, hosted by the Sao Paulo School of Economics – Fundação Getulio Vargas (FGV). (Program)

    - The “Workshop on Regulatory Environment and Institutions in Public Procurement”, hosted by Graduate School of Economics (EPGE) – Fundação Getulio Vargas (FGV) – Rio de Janeiro. (Program)

    It was the opportunity to meet many friends working on these topics (a set of pictures from the Sao Paulo workshops can be seen here), the organization was splendid, and the overall level of contributions outstanding. Here are some links to papers on some of the running themes of these two workshops (reflects my specific interests, and my ability to find a link to the paper, not a ranking of papers!):

    On bidding strategies in procurement:

    Strategic Bidding and Contract Renegotiation

    Efficacy of a Bidder Training Program: Lessons from LINC

    On procurement, regulation, and efficiency:

    Moral Hazard, Incentive Contracts and Risk: Evidence from Procurement

    Knowledge Spillovers in Cost-Reduction Incentives

    Procurement and Accidents: Bidding for Judgment Proofness, and the Limited Liability Curse

    Theoretical contributions on contracts:

    A Theory of Contracts with Limited Enforcement

    Long-Term Procurement under Uncertainty: Optimal Design and Implications For Renegotiation And Tender Procedures

    Finally, a couple of papers on the effects of the US stimulus plan:

    Highway Procurement and the Stimulus Package: Identification and Estimation of Dynamic Auctions with Unobserved Heterogeneity

    Government Spending and Job Creation in the Highway Construction Industry: Evidence from Texas

    Note: see also this previous post on the stimulus issue.

    I guess we are all looking forward to the second edition!

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  • SEED Development Economics Workshop at Stanford University


    On Wednesday, March 5th, 2014, I’ll present the paper below in the SEED Development Economics Workshop at Stanford University.

    Road Access and the Spatial Pattern of Long-term Local Development in Brazil
    Julia Bird and Stéphane Straub

    This paper studies the impact of the rapid expansion of the Brazilian road network, which occurred during the 1960s to the 2000s, on the growth and spatial allocation of population and economic activity across the country’s municipalities. It addresses the problem of endogeneity in infrastructure location by using an original empirical strategy, based on the “historical natural experiment” constituted by the creation of the new federal capital city Brasília in 1960. The results reveal a dual pattern, with improved transport connections increasing concentration of economic activity and population around the main centers in the South of the country, while spurring the emergence of secondary economic centers in the less dense North. The spatial impacts on GDP and population roughly balance, meaning that the effects on GDP per capita are minimal. Over the period, roads are shown to account for half of pcGDP growth and to spur a significant decrease in spatial inequality.












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  • Paraguayan political firms column, on Vox.lacea


    In April 2008, the Paraguayan Associación Nacional Republicana (ANR), locally known as the Colorado Party, was defeated in the presidential election by a coalition of opposition parties and social organizations led by a former Catholic bishop, Fernando Lugo. This was a dramatic and largely unanticipated change in a country in which the Colorado Party had enjoyed a monopoly in political power for 61 years, including the 35 years of the Stroessner dictatorship (1954-1989) and the 19 years elapsed since the 1989 coup. For six decades, the Colorado Party had systematically channeled public resources to a subset of citizens by distributing public employment and procurement contracts to the benefit of party members and supporters of the regime… (read the rest here)

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  • Regulation and the capital structure of transport concessions


    The paper I wrote with Alex Moore (LSE) and Jean-Jacques Dethier, on the link between regulation and the capital structure of transport concessions is out in the Journal of Regulatory Economics.

    We examine the capital structure of regulated infrastructure firms. We develop a model showing that leverage, the ratio of liabilities to assets, is lower under high-powered regulation and that firms operating under high-powered regulation make proportionally larger reductions in leverage when the cost of debt increases. We test the predictions of the model using an original panel dataset of 124 transport concessions in Brazil, Chile, Colombia and Peru over 1992–2011. For each concession we have data on the regulatory regime, annual financial performance and contract renegotiations. We begin by demonstrating that, although pervasive, contract renegotiations do not fundamentally alter the regulatory regime. Importantly, firms are not systematically able to renegotiate when in financial difficulty, implying that price cap contracts remain high-powered in practice. We use this result for our main empirical work, where we find broad support for our theoretical predictions: when the cost of debt increases, firms operating under high-powered regulation make proportionally larger reductions in leverage.

    Here is the World Bank working paper version.

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