Students in low-income contexts often lack guidance in their career decisions, which can lead to a misallocation of educational investments. We report on a randomized field experiment conducted with 1715 students in rural Cambodia and show that a half-day career guidance workshop designed to support adolescents in developing occupational aspirations on average increased educational investments. We document substantial heterogeneity in treatment effects by baseline student performance. While the workshop increased schooling efforts of high-performing students, treated low-performing students reduced their educational investments. We develop a simple model that explains this treatment effect heterogeneity by baseline performance.
This paper studies the impact of child migration on outcomes of elders who stay behind: consumption, economic participation, health, and mental health. Exploiting variation from the preexisting ties between provinces interacted with the time-varying intensity of regional migration deregulation, we find that increased incentives for internal migration in China resulted in more remittances to rural households, boosting consumption and reducing farm work among the elderly who stay behind. The paper also shows improved healthcare utilization and physical health in these non-migrating elderly populations. However, child migration came with a potential downside: the modest decline in the mental well-being of elderly individuals, possibly due to a lack of informal care and companionship from migrated children. These findings show how internal migration impacts the health and economic wellbeing of elderly individuals in developing countries. (JEL I15, J18, O18, P25, P36, R23)
Improving public service quality is a central challenge in developing countries. A common policy tool is to transfer expertise and protocols to lower-tier institutions, with the expectation that such spillovers improve both current performance and long-term innovative capacity. We study this policy logic using a Chinese reform that mandated knowledge transfer from elite to lower-tier hospitals. Our analysis combines a novel measure of lower-tier hospitals’ alignment with elite hospitals’ clinical practice, developed with a large language model applied to clinical texts and prescription decisions, with measures of physicians’ exploratory activity based on academic publications. Using a difference-in-differences design, we find that the policy increased practice alignment at targeted hospitals by 0.29 standard deviations, yielding immediate efficiency gains. At the same time, this gain in exploitation was accompanied by a decline in exploration: physician academic output fell, with publication counts declining by 7% and citation impact by 13%. Our findings highlight that policies promoting existing knowledge can close practice gaps and improve care efficiency, while also creating a potential trade-off with professionals’ incentives to generate new knowledge.
We show that product and service quality serve as a hidden margin of adjustment to minimum wage hikes in hyper-competitive digital markets. Leveraging granular transaction data from 2628 Tmall stores in rural China from 2015 to 2020, combined with household surveys and firm-level data, we exploit staggered city-level minimum wage increases and find that in the short run, firms neither reduce employment nor significantly raise prices. Instead, they systematically degrade quality, as evidenced by worse product ratings, slower logistics, and poorer customer service, starting within two quarters and persisting over time. The reduction in intermediate inputs compromises product quality, while cuts to outsourced IT services undermine service quality by weakening operational efficiency. Crucially, this decline is driven by high-quality incumbents, whereas low-quality firms show no change but are more likely to exit the market following the shock. These results reveal a trade-off between labor income and consumer welfare, a cost that is invisible in traditional labor market evaluations but central to a complete welfare assessment.
A defining feature of many Community-Driven Development (CDD) interventions in wartorn countries is their pursuit of transformative objectives, seeking to (re)shape local decisionmaking institutions in the process. In recent years, there has been a push to overhaul CDD approaches, with a focus on more realistic objectives aimed at providing infrastructure and building capacity of existing local institutions. We investigate, through a large-scale field experiment involving 400 communities in eastern Congo, the effects of a CDD program that embodied this new focus. Our strategy allows us to identify causal impacts of the CDD intervention, in its basic form consisting of a US$100,000 envelope to finance an infrastructure project with an emphasis on ‘local content’, as well as when augmented with a complementary conflict mitigation component. While the intervention successfully delivered visible infrastructure projects, we find no detectable effects on social cohesion, (violent) conflict, or economic welfare. We conclude discussing policy implications.
This research demonstrates how securing land property rights can mitigate frictions in rural land rental markets, specifically in the form of landlord-tenant disputes. By combining a comprehensive data set of land rental dispute records, farm-level panel data, and complete agricultural firm registration data, we find that rental disputes decreased following China's land titling reform. We corroborate this finding by distinguishing between property rights-related disputes (e.g., ownership ambiguity, boundary issues, or expropriation) and contractual enforcement disputes (e.g., rent collection). Further analysis reveals that the effect is particularly pronounced in rental agreements between farmers and agricultural firms, especially those involving non-local entities.
This paper examines the long-term economic and cultural impacts of the postbellum migration of Southern white individuals to Brazil. Following the U.S. Civil War, thousands of individuals from the former Confederacy settled in a relatively poor region of São Paulo, contributing to its transformation into one of Brazil’s wealthiest areas. I show that these migrants, though a small group, played a significant role in regional industrialization, particularly in cotton and textile industries, and in the mechanization of agriculture. Some of the migrants’ cultural traits, such as Protestantism and English language use, persisted over time, largely due to the physical infrastructure they established. Unlike similar migrations within the U.S., I find no evidence of persistent legacies in terms of politics or racial inequality, emphasizing the role of local infrastructure in shaping the economic and cultural outcomes of immigration.
This paper studies the effects of the Green Revolution, one of the largest development projects in the late 20th Century, on individualism. We use a difference-in-differences approach to investigate how rapid technological and organizational changes in traditional agriculture reshaped cultural norms in Indonesia, where Green Revolution rollout was largely driven by centralized government interventions. Regions with greater exposure to Green Revolution policies experienced significant and persistent increases in individualism (as measured by a higher prevalence of infrequent names) decades after the end of the program. Results are not driven by pre-trends and hold across a battery of robustness checks. We further document suggestive, correlational evidence of a persistent fall in community funding for public goods, a key measure of collective action. Our findings suggest that technical change can lead to rapid and persistent changes in culture.
We study how the Trans-Regional Jurisdiction reform (TRJ) affects corporate investment. The reform moves administrative lawsuits to courts outside the defendant government's home jurisdiction, which limits local government influence over the courts. We use a stacked difference-in-differences design that draws on the staggered rollout of the reform across cities. We find that the reform raises corporate investment by about 28.7 percent of the sample mean. Complementary evidence shows that the reform improves court outcomes for firms, has stronger effects where pre-reform trust in local institutions is higher, and is associated with lower institutional transaction costs and financing constraints. The effect is larger for firms with more irreversible investment, lower state ownership, and better access to finance. The reform also leads firms to acquire more land and take on more risk, although part of the higher investment appears as overinvestment. These results show how a focused judicial reform can change firm behavior where legal institutions are weak.
When sampled individuals are not found at home, many surveys rely on a proxy respondent: another knowledgeable household member. We study the effect of proxy reporting on the measurement of labor income in Mexico. For identification, we use the panel structure of the Mexican labor force survey and compare workers’ reported earnings when they report them themselves to their reported earnings when another household member does the reporting. We find that male workers’ monthly earnings are 7.2% lower when reported by a proxy, whereas female workers’ earnings are only 1.8% lower. We provide evidence that this gender gap reflects both compositional effects, linked to men’s higher earnings, and household informational asymmetries, partly driven by men’s greater propensity to hide income from other household members. Finally, we study the implications of using proxy respondents and find that it can lead to an underestimation of the gender wage gap by 25%.
Research and policy debates on population aging typically assume that immigration matters only through immigrants’ own fertility and its impact on total population size, ignoring effects on natives’ fertility. We study this margin in the context of the large inflow of Syrian refugees into Türkiye after 2011. Using an instrumental-variables strategy, we provide evidence that greater local exposure to refugees increases native fertility. Drawing on complete birth histories from the Demographic and Health Surveys, we find that the response operates primarily through earlier entry into motherhood and is concentrated among younger women. The result holds across three independent datasets, including administrative birth registers, and is mirrored in women’s stated ideal number of children. Examining potential mechanisms, we find the evidence most consistent with improved household economic security and find no support for channels operating through housing costs or the use of paid childcare.
We study how the announcement of a foreign military intervention, which improves expectations about the state’s future functioning, can raise citizens’ willingness to participate in state-building processes. We analyze the impact of the 2012 United Nations Security Council resolution that authorized intervention in Mali to reunify the country and restore democracy during a profound institutional crisis on individuals’ attitudes toward the state. By exploiting the randomness of the foreign intervention announcement relative to the timeline of the Afrobarometer interviews conducted in South Mali, we document that individuals interviewed in the days after the announcement report more optimistic beliefs about the country’s future level of democracy than individuals interviewed immediately before, with the same characteristics, region, and ethnic group. Consistent with a prospective-beliefs channel, respondents interviewed after the announcement report higher tax morale and more favorable tax-related attitudes across a broad range of outcomes. While optimism about future democracy increases widely, the increase in tax morale appears concentrated in areas with low state capacity, limited ethnic diversity, and individuals who do not perceive discrimination against their ethnic group. Our results indicate that foreign military interventions can enhance perceptions of state-building and the benefits of participation.
IZA DP No. 14839 NOVEMBER 2021 Formalized Employee Search and Labor Demand* Firms often use social networks to find workers, limiting the pool of potential applicants. We conduct a field experiment subsidizing firms’ formal vacancy posting. The subsidies increase non-network employee search and shift vacancies towards high-skilled positions. Post-treatment, firms continue searching for high-skilled workers despite reverting to network-based search. This change in skill requirements does not increase vacancy posting or hiring, suggesting substitutability between workers of different skill levels. Finally, we experimentally show that information asymmetries about applicants’ skills do not limit firms’ formal search. Our results highlight that exposure to different labor market segments can permanently change firms’ labor demand. JEL Classification: D22, J23, J46, C93
We estimate productivity spillovers from Japanese cotton-spinning firms in China (known as Zaikabo) to local Chinese cotton-spinning mills based on plant-level data for 1925 to 1938. In order to capture the important role of distance in facilitating such spillovers we geo-localised the plants. Our results provide clear evidence for positive spillovers from Zaikabo to local Chinese mills, which go hand-in-hand with an upgrade in production technology towards greater use of capital. Spillovers are very localised, being strongest within a radius of up to 10 km around the Zaikabo and particularly strong for mills in Shanghai. Exploiting information on the workforce composition of the Japanese affiliates, we find suggestive evidence of a skilled-labour channel: spillovers tend to be larger from Zaikabo employing higher shares of skilled labour. We also find some evidence in line with the idea that these gains are larger for Chinese mills with higher initial productivity, consistent with a role for absorptive capacity. Our paper is the first to document FDI productivity spillovers in a historical context and to characterise the channels through which they operate.
This study examines the industrial preferences of local governments in China through the lens of land allocation. We analyze industrial land transactions from 2007 to 2019, a period marked by both expanding industrial policy and intensifying land market competition. Using a border discontinuity design that compares land transactions near county borders, we separate local government preferences from firm demand. We find systematic industrial favoritism: localities offer deeper price discounts to industries aligned with their existing specialization. This favoritism persists over time, is more pronounced in industries with substantial unrealized agglomeration potential, and is stronger in regions with well-developed market institutions. We further show that local governments comply with upper-level industrial policy only when it aligns with their own specialization. Together, these findings point to a bottom-up process in which local governments use land allocation to attract firms that reinforce local industrial strengths through agglomeration spillovers.
We examine the intergenerational impact of China’s 1950s adult literacy campaign, one of the largest anti-illiteracy efforts in history, reaching 150 million people. While direct effects on adult literacy remain debated, we document significant long-term benefits for the next generation’s education. Using an original dataset compiled from county gazetteers and the population census, we find a notable increase in educational attainment for children whose parents were more strongly exposed to the campaign. We attribute these results to extensive government propaganda that likely shifted population attitudes toward education. Our findings suggest that education campaigns can be a viable strategy in developing countries for improving human capital.
This paper examines how poor in utero conditions caused by severe typhoons affect psychological well-being later in life. We exploit variation in the timing and location of severe typhoon landfalls. Our design compares individuals with higher expected fetal exposure in landfall counties to those with no such exposure. A one-unit increase in expected in utero exposure raises the likelihood of an adult mental illness diagnosis by 2.2 percentage points, or 11 percent relative to the mean. The incidence of mood disorders such as depression and the use of antidepressants has risen by more than 50 percent. The adverse effects are concentrated among women. In a fully interacted model, we reject equality of the male and female effects for our main outcomes. This gender gap is not driven by differential healthcare-seeking behavior. We discuss several non-mutually exclusive mechanisms that could generate a genuinely female-concentrated effect, including sex-specific fetal programming and mortality selection
