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Browsing by Subject "development economics"

Now showing 1 - 3 of 3
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    Essays on Contract Theory and Institution Design
    (2018-06) Dixit, Shiv
    This collection of essays uses tools in dynamic contracting theory to address issues in development economics, public finance, and monetary economics. Chapter 1 studies how contractual frictions interact with the amount of risk people choose to bear. Though the framework is general, I use it to examine preventive healthcare expenditure. In particular, I develop a dynamic contracting model in which differences in information and commitment technologies can account for variations in immunization rates over time and across countries. I document four salient facts regarding Diphtheria, Pertussis and Tetanus (DPT) vaccination rates: (i) lower immunization in countries with greater costs of contract enforcement, (ii) higher volatility in immunization in countries with larger informal sectors, (iii) less persistence in immunization relative to aggregate income, and (iv) negative skewness in the distribution of immunization over time. These patterns cannot be explained by efficient immunization in a frictionless economy. However, dynamic contracts subject to ex-post one-sided commitment and hidden income can rationalize these facts. This analysis shows that weak provision of public goods, such as the inefficacy of the judicial system and the degree of informality, can spillover to weak provision of preventive healthcare. A model estimated using U.S. data reveals that a health monitoring technology is welfare enhancing in the long-run, generating an increase of 4.3% in certainty equivalent consumption of the policyholder and 0.6% in the insurer’s surplus. Using the consumption neutrality of the efficient risk choice, I also devise a test to show that the hypothesis of limited commitment cannot be rejected in the data. Chapter 2 explores the rules that governments can impose on themselves to control time-inconsistent preferences. In particular, I show that labor laws can be used to curtail socially suboptimal rates of labor taxation. The standard approach towards a positive theory of labor laws is one in which labor laws are used as a redistributive tool. In Guesnerie and Roberts (1987) or Lee and Seaz (2012), for instance, a single entity can manipulate both instruments–the labor law as well as taxation–to alleviate income inequality in risk-averse populations. Consistent with presidential-congressional type regimes like the U.S. that have more dispersed legislative proposal powers, I develop a model in which a benevolent constitutional planner can restrict the allocation space of a heterogeneously skilled population prior to the stochastic determination of fiscal policy. Elected officials maximize the objective of their constituencies by devising tax systems that favor idiosyncratic gains from redistribution. The equilibrium constitution limits cross-sectional dispersion in hours worked ex-ante to discipline taxation ex-post. A model calibrated to key moments of the U.S. presidential elections and the Lorenz Curve is consistent with two empirical findings from cross-country data: a positive correlation between maximum workweek limits and skill dispersion, and a negative correlation between minimum wage laws and the proportionality of electoral voting systems. Chapter 3 examines the surprise discontinuation of 86% of currency in circulation in India on 8 November 2016. Demonetization, as it was coined, served as a tax on illicit wealth. Traditional models of money assume that the marginal social cost of printing fiat currency is zero, justifying the optimality of the Friedman rule. However, in an environment where the degree of hidden income is alleviated by the dearth of cash, demonetization could be efficient. To implement this policy, the Reserve Bank of India imposed non-discriminatory transfer limits, which I argue are too blunt to insure against idiosyncratic income risk. I propose a set of instruments that provide a better hedge against these shocks–transfer limits dependent on reported household income. I isolate conditions under which state-contingent transfer limits are monotonic in reported endowments and promised values. A model calibrated to the Indian income process reveals that long-run gains in the surplus of the central bank upon switching to a state-contingent monetary policy from a non state-contingent one are 28.5% of aggregate income.
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    Essays on Health and Education in Underprivileged Populations in Low- and Middle-Income Countries
    (2019-12) Lee, Jongwook
    This dissertation consists of three independent essays on health and educational issues in underprivileged populations, such as children and elderly people, in low- and middle-income countries. The first essay is the first study that investigates the effects of providing eyeglasses on academic performance for school-age children in Vietnam using a randomized controlled trial. In the first essay, I find that school-age children have limited access to eye health care services in Vietnam, and providing eyeglasses improves children’s academic performance. The second essay examines the impact of cataract surgery on quality of life and poverty in rural Malawi. The evidence shows that cataract surgery increases surgery recipients’ health-related quality of life and their household living standards not only in the short term but also in the medium term. In the third essay, I analyze the effect of early childhood malnutrition on human capital development in Ethiopia. The results find no significant evidence of a link between early childhood malnutrition and cognitive and non-cognitive skills development in the presence of weak instruments.
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    Three Essays on the Impacts of Climate Change
    (2022-07) Djoumessi Tiague, Berenger
    In this dissertation, the focus is on the impacts of natural disasters and extreme air pollution on household and individual welfare as well as mitigative strategies. In Chapter 1, I study the impacts of large-scale floods in Tanzania on households’ value of crop production, income, expenditures, and life satisfaction. I use three-year nationally representative panel microdata from Tanzania combined with satellite flood data and I analyze the impacts of the shocks using a kernel weighting difference-in-differences approach. I find a 34 percent decrease in the value of crop production for households living in affected villages or clusters two years after the shocks. I find no effects on total expenditures or child nutrition, but a significant negative effect on self-employment income and a persistent decrease in life satisfaction. Finally, access to safety nets or transfer income, and to forest in a village appears to have important mitigating effects. In chapter 2, I look at how women outcomes (i.e., intimate partner violence, fertility preferences) and children’s outcomes (i.e., mortality and nutrition) are affected after households across Sub-Saharan Africa get exposed to large floods. Combining nationally representative Demographic and Health Surveys with satellite flood data, I find that women living in flooded clusters experience an overall decline in emotional violence by 0.04 percentage points, but no effect on physical violence from their partner. Fertility preferences change as women decrease their ideal number of kids by 5.3%. Child mortality also increases but only for children that are 6 months old or less. The results across subgroups show that only the poorest households experience an increase in physical violence, as well as when both partners work in agriculture. The drop in fertility preferences is concentrated among women with little to no education. The decrease in female economic empowerment, increase in partner’s alcohol consumption, and household wealth appear to be important mediating factors. The results should be taken with caution given the violation of parallel pre-trends and the presence of heterogeneous treatment effects. Chapter 3 investigates another type of environmental shock, air pollution. I estimate the effects of exposure to ambient air pollution on daily health-related behaviors, weekly labor supply, and productivity at the workplace among US individuals. Using an individual fixed-effects regression approach, I examine how daily changes in outdoor air quality influence the time spent on daily health-related activities. I find that only when the air quality index becomes very unhealthy or hazardous, there is a 21% decrease in the minutes spent on outdoor sports and exercise activities, and a 260% increase in minutes spent watching TV. The increase in physical inactivity can have long-term negative health consequences. I also implement an instrumental variable (IV) strategy using wind direction and atmospheric boundary layer height as exogenous shocks to satellite-based aerosols to understand how changes in air pollution affect weekly labor supply and productivity. I find that increase in the total aerosol optical depth (AOD) leads to no overall change in labor supply decisions, both on the decision to go to work and the weekly worked hours. There are also no overall significant effects on labor productivity proxied by weekly earnings. The effects across subgroups also suggest differential effects in avoidance behaviors across the income distribution, age groups, occupations, race, and ethnicity, especially when the air quality is very unhealthy or hazardous.