This study explores the impact of a Smart Classroom (SCM) program on student performance in science subjects on a high-stakes national exam for lower-secondary school students in Rwanda. To do this, we leverage plausibly exogenous variations in program exposure resulting from the staggered implementation of the SCM reform across schools and students. Overall, the study finds a positive effect of the program on student performance. Specifically, we find that the SCM program has positive and significant effects on student performance in physics, biology, and geography, albeit small in magnitude. However, no effect was found for mathematics or chemistry. Our results also suggest that, while classroom technology can enhance learning, such effects may only be realized after a long exposure period.
Better understanding of inequality, including its relationship to governance and other key outcomes, is relevant both to academic researchers and to policy-makers.Nevertheless, efforts to establish causal relationships empirically remain hampered by the quality and availability of data, especially for Global South countries at the sub-national level.This paper draws on newly available data on income inequality in Viet Nam at the provincial level to show how unsupervised learning techniques might be used as tools in consideration of the relationship between inequality and governance.While previous empirical work in this area has largely used standard techniques such as regression analysis aimed at establishing causal relationships, this is often hampered by the quality and availability of data.Adopting a different approach, this paper applies K-means clustering and principal components analysis (PCA) to show how unsupervised learning techniques can provide relevant insight into structures and patterns in data.Using PCA, it identifies two groupings of provinces based on similarities in institutional quality measures.K-means analysis points to similar relative inequality levels but substantially different absolute inequality and income levels, suggesting two broad 'types' of provinces.The results are suggestive of the positive impact of initial inequality on institutions and that better quality of institutions might reduce inequality for some groups.In general, increased incomes might imply improved inequality and institutional quality outcomes in some cases.A final section considers key limits to such analysis, alongside extensions and further applications.
This paper explores two policy interventions in Zambia, a minimum wage hike in 2018 and an upward revision in the first kink in the progressive income tax schedule in 2017, to examine and compare the impact of minimum wage and tax kink changes on wages and the earnings distribution in the formal and informal sectors.The analysis builds on two thus far separate strands of literature that investigate the effects of minimum wages and bunching around tax kinks in developing countries using Zambian personal income tax data and data from the ILO Labour Force Surveys over the period 2012-21.Applying the idea that minimum wage effects, despite being targeted at the formal sector, may spill over into the informal sector to tax kinks, this paper proposes a new lighthouse effect-that is, the fact that tax kinks may serve as a reference point for wage setting in the uncovered informal sector.Results show that the minimum wage hike pushes the lower end of the earnings distribution rightward and produces significant and economically meaningful increases in wages in both the formal and informal sectors in Zambia.Interestingly, a hike in the first tax kink produces similar distributional effects and also significantly raises the wages of formal workers in the local earnings distribution around the kink.Combined with evidence of bunching of informal wages at the first and third tax kink, these results suggest that the new lighthouse effect is relevant in the case of Zambia, and underscores the need for policy-makers to take a holistic approach when formulating minimum wage and income tax policies that takes into account spillover effects into the informal sector.
Time-use statistics are sensitive to measurement error, especially errors that might be introduced based on whether the informant is reporting on herself or reporting on others in the household.In this paper, we use the nationally representative time-use survey in India and propensity score matching methods to investigate how self-and proxy reporting impact the reported time spent on various activities by men and women.Theoretically, we examine the mechanisms underpinning the differences in reporting and empirically test our hypothesis.Proxy informants tend to report higher time use for both men and women on employment activities (14-26 per cent) and lower time use on production for self-consumption, unpaid domestic work, and care work (5-33 per cent) as compared to self-reports.On average, female proxies differ more from self-reports when reporting about both men and women in their households as compared to male proxies.Investigating the mechanisms, we find that the self-proxy differences are not due to random error but are systemic.Information asymmetry between the self and proxy respondents plays a key role-spouses and self-proxy respondents with similar characteristics have smaller reporting differences than non-spouses and other respondents.Gendered perception of what activities are classified as work also play a key role in the differences.
This study examines the effects of mining productivity shocks on the formal-informal duality in manufacturing and services.Using firm census data from 2014 for Ghana, we measure the rates of informality along extensive (unregistered firms) and intensive (registered firms hiring labourers 'off the books') margins.We find that the changes in the rates of informality along both margins across sectors following mining shocks are heterogeneous.We also find that the lack of duality between informal and formal firms across the development phases of mining is driven by increasing heterogeneity in productivity and skilled employment within informal and formal firms, and less by the incidence of firms sorting into the formal and informal sectors.The lack of duality was most noticeable among heavy manufacturing firms established after the start of oil and gas production in 2010, driven by more-productive newly established unregistered firms with lower labour and energy cost shares than newly established registered firms.
The documented under-representation of marginalized groups in business ownership and the labour market is a concerning issue.This study explores how caste disparities in small-firm entrepreneurship impact on firm performance in India, focusing on the informal sector.Our examination shows a significant productivity gap between firms owned by disadvantaged castes and others, including Other Backward Classes and Forward Castes, across the productivity distribution.The results of our decomposition exercise provide evidence for the importance of both differences in observables and returns to these observables in explaining the caste gap in productivity.This implies that even with improvements in firm attributes for Scheduled Caste or Scheduled Tribe businesses, the productivity disadvantage of firms owned by marginalized groups may persist.Pervasive market and non-market discrimination against marginalized groups suggests that the significant caste disparities in entrepreneurship and business performance will continue to impede the economy, presenting serious challenges for public policy.
Using a unique panel survey of final-year undergraduates at six of the largest universities in Mozambique, we study the wage premium associated with completing an undergraduate degree.Conditional on a very rich set of controls, including pre-degree earnings, objective measures of ability, and academic performance, we find heterogeneity in 'sheepskin effects' across different kinds of firms.We propose a simple model of wage-setting in which productivity is only partially observable in some firms and fully observable in others.In this setting, education serves both to enhance productivity and as a productivity signal.Consistent with the theory, positions where productivity is likely to be less observable offer larger sheepskin effects.
Using publicly available databases and drawing on a wide range of indicators, this paper reviews the institutional performance of Mozambique across seven broad categories: rule of law and judicial independence; voice and freedom of expression/association; political participation; accountability and transparency; political instability and violence, and external relations; state legitimacy and political leadership; and governance and state capacity.Overall, the selected indicators point to similar trends within each dimension and suggest limited progress during the last decades.Still, it is fundamental that these insights and the scores presented by the indicators are put into context, and that we understand the historical path of Mozambique, the internal and external factors at play, and the fact that it takes time for progress achieved to be reflected in this type of data.
Boston's high housing costs reflect a historic failure to build enough units to satisfy demand.Interest rates and construction costs have risen recently, and the flow of new market-rate residential housing projects has slowed.To spur more construction, the City of Boston is considering various policy options.Our committee was asked by Boston Mayor Michelle Wu to assess the market impacts of one of these options: real estate tax abatements.This report presents our analysis of the likely effects on the number of units constructed and the costs to taxpayers of various tax abatement alternatives.We do not recommend which policy, if any, the city should pursue; Boston officials are better positioned to assess whether the benefits of these policies warrant the costs to taxpayers.
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Frequent electricity outages threaten to impede the benefits of expanded access achieved by many developing countries in recent decades. A large literature documents these negative effects, however almost none consider labour market effects. This paper merges labour force survey microdata with high-frequency electricity supply and demand data to provide the first descriptive and causal estimates of the relationships between outages and labour market outcomes in South Africa, a country characterized by frequent, severe outages referred to as load shedding. We reveal negative associations with both employment and working hours, with the former being more pronounced. Both are not evident for low outage levels but increase with outage intensity. We document significant heterogeneity across firm sizes and industries, highlighting the vulnerability of workers in small firms. Using a Difference-in-Differences design, we exploit variation induced by a unique mitigation policy in Cape Town to show that outage mitigation significantly increases both employment and working hours, but more so the former, consistent with our descriptive estimates. We do not find heterogeneous employment effects by firm size, but highlight meaningful working hours effects for workers in small firms only, again highlighting their vulnerability. No evidence of heterogeneity across industries is found, and causal effects on hourly wages or monthly earnings could not be credibly identified. Overall, this study provides evidence of the negative labour market effects of power outages in developing countries, particularly for workers in small firms, on both the extensive and intensive margins.
Cross-border traders face a choice between official and unofficial border crossings.The latter allow them to evade taxes, but expose them to other risks, such as bribes, fines, and arrest.We investigate the perceptions of cross-border traders about the risks of trading officially vs unofficially at the border between Kenya and Uganda.We find that traders overestimate the risks of trading officially relative to the same risks when trading unofficially.In reality, the measured risks of trading through the official border are lower.
This paper leverages a novel panel dataset covering the histories of 306 chiefs and 256 episodes of village governance and taxation by armed groups in 106 villages in eastern DRC in order to analyse the relationship between the governance of armed groups and the power of rural chiefs. The paper devises a strategy to measure chiefs’ power, as well as the governance and taxation arrangements established by armed groups along several dimensions. We find that, when chiefs are powerful, armed groups are less likely to adopt direct rule and more likely to adopt indirect rule governance arrangements. We also find that the use of direct rule increases with an armed group’s tenure.
This paper evaluates the efficacy of the Secondary Market Corporate Credit Facility, a program designed to stabilize the U.S. corporate bond market during the COVID-19 pandemic. The program announcements on March 23 and April 9, 2020, significantly reduced investment-grade credit spreads across the maturity spectrum—irrespective of the program’s maturity-eligibility criterion—and ultimately restored the normal upward-sloping term structure of credit spreads. The Federal Reserve’s actual purchases reduced credit spreads of eligible bonds 3 basis points more than those of ineligible bonds, a sizable effect given the modest volume of purchases. A calibrated variant of the preferred habit model shows that a “dash for cash”—a selloff of shorter-term lowest-risk investment-grade bonds—combined with a spike in the arbitrageurs’ risk aversion, can account for the inversion of the investment-grade credit curve during the height of turmoil in the market. Consistent with the empirical findings, the Fed’s announcements, by reducing risk aversion and alleviating market segmentation, helped restore the upward-sloping credit curve in the investment-grade segment of the market.
Using highly disaggregated customs-transaction-level data, we study the importer price effects of tariffs in the context of preferential trade agreements for South African imports of frozen bone-in chicken.We focus first on the firm-level impact of tariffs on import prices.Findings suggest no pass-through effect from changes in tariffs but our quantity analysis contradicts this, indicating adjustments consistent with higher landed prices.We reconcile this by considering the impact of the extensive margin with the inclusion of zero trade values and find that firms are less likely to trade with higher-tariff origins.Specifically, firms are less likely to continue importing higher-priced varieties from MFN origins in the context of higher most-favoured-nation tariffs.The findings emphasize the importance of varieties, defined as firm-origin combination, in import price analyses.We then move on to more aggregated analysis.After controlling for varieties, tariff pass-through to import prices is virtually complete (91 per cent).We find robust evidence that preference-partner countries take advantage of their tariff preference rent to increase prices.Lastly, we investigate the impact of other trade policy measures on importer prices.Restrictive trade measures such as anti-dumping, safeguards, and avian flu bans constrain imports effectively, through increasing prices of continuing varieties and the exit of varieties as they become prohibitively expensive.Liberalization events such as the US tariff rate quota have the opposite effect.These effects are large and more binding than most-favoured-nation tariffs-not surprising, as the other measures are more targeted and impose higher costs on specific foreign exporters and origins.Policy-makers should be cognisant of these dynamics when setting trade policy, particularly where structural impediments exist for local producers and when South African consumers' disposable income is increasingly constrained.
