Publications
- Leveraging Unsupervised Machine Learning to Examine Women's Vulnerability to Climate Change (with Valerie Mueller and Alexis Villacis). Forthcoming in Applied Economic Perspectives and Policy.
We provide an application of
machine learning to identify the distributional consequences of climate
change in Malawi. We compare climate impact estimates based on drought
indicators established objectively from the k-means algorithm to
more traditional measures. Young women affected by drought were 5
percentage points more likely to be married by 18 than those living in
non-drought areas. Our approach generates robust results when varying
the number of clusters and definition of treatment status. In some
cases, we find the design using k-means to define treatment is
more likely to satisfy the assumptions underlying the
difference-in-differences strategy than when using arbitrary
thresholds. Projections from the estimates indicate future drought risk
may lead to larger declines in labor productivity due to women's
engagement in early age marriage than other factors affecting their
participation rates. Under the extreme Representative Concentration
Pathway (RCP) scenario, drought exposure encourages the exit of 3.3
million women workers by 2100.
Climate change severely
impacts critical facets of human capital across the life cycle. This is
particularly alarming as both the frequency and intensity of extreme
weather shocks continue to increase, and extremes appear to be the main
channel of causality. At the same time, human capital has a vital role
in driving effective climate change mitigation and adaptation. While
substantial progress has been made in recent years in assessing the
economic impacts of climate on economic outcomes, there has been
comparatively less advancement in evaluating its effects on human
capital. In this paper we provide a framework for analyzing the
multiple interlinkages between climate change and human capital. We
document the existing evidence on the impacts of climate change
damages, and the effects of climate change mitigation and adaptation,
on human capital across the life cycle. The framework distinguishes
between two channels through which human capital is affected: direct
effects on health, nutrition, and wellbeing, and indirect effects
through changes in economic systems, markets, and through damage to
infrastructure. These two channels call for different policy
interventions, focusing on the different stages of the life cycle. For
mitigation and adaptation, we find that while these are overall clearly
beneficial, they are also associated with significant human capital
costs for specific sectors and groups in society. Ignoring these costs
can only lead to worse outcomes, as it can lead to diminishing public
support for the required mitigation and adaptation responses.
This paper estimates the
long-term effects on human capital accumulation and subsequent labor
market outcomes of in utero and early childhood exposure to the civil
war in El Salvador (1980–92), the second longest and deadliest civil
conflict in Central America. Identification is obtained from spatial
and intertemporal variation in the intensity of the conflict drawn from
historical archive data comprising records of human casualties,
disappearances, and refugees. The results show that people born in
highly violent areas during the civil war saw a reduction in their
probability of being employed by 6 percentage points, and of getting a
high-skilled job by 5 percentage points, 20 to 30 years hence. The
civil war also reduced their education by 0.8 year, as well as their
enrollment and literacy rates. Subgroup analysis indicates that exposed
males and indigenous groups experienced the largest losses in human
capital and had weaker performance in the labor market.
Policy responses to COVID-19
affected the dynamic of economic growth and labor markets worldwide,
hitting economically harder on developing countries. These policies
involved economic lockdowns that included the shutdown of the main
statistical exercises, making it almost impossible to assess the
breadth and variety of their effects. Using a phone survey, this paper
examines the impact of the quarantine implemented in Venezuela on labor
market outcomes. The identification strategy exploits the exogenous
variation in the severity of the lockdown in different regions of the
country. The main result indicates a 16.5 percentage points reduction
in employment, while in regions with severe lockdowns the reduction has
been 13.8 p.p. larger. In particular, the self-employed and informally
employed were hard hit by the lockdown. To cope with this effect,
households sold their productive assets, reduced their savings, sought
for alternative income sources and looked for help from relatives. This
paper does not find a differential effect on the number of COVID-19
cases in more severe lockdown settings. Results are robust to
endogenous migration and alternative specifications.
COVID-19 has generated several
quarantines and economic lockdowns as the main public policy responses
that dramatically affected the dynamic of economic growth and labor
markets worldwide. These effects impact remittance inflows to
developing countries, in particular those coming from the US, which
affect poverty reduction paths in Latin America. Using data from the US
labor market and economic performance indicators of the US and
remittance recipient countries, this paper estimates the distributional
impacts of the change in remittances post-COVID-19 for the region that
most rely on remittances, Central America. Results suggest that after
COVID-19, remittance inflows are expected to decrease 14 % in the
region during 2020 and that effects are heterogeneous among countries:
El Salvador and Nicaragua are expected to be the most affected
countries while Panama is expected to be the least affected one. The
model allows to estimate impacts in other countries in Latin America
and the Caribbean. However, due to the lack of household survey
availability, this paper only explores the distributional impacts of
the change in remittance inflows in Central America. The expected
impacts on poverty are also heterogeneous. While poverty in El Salvador
is expected to increase by 6 % due to the change in remittances,
poverty in Guatemala is expected to increase by 1 %. Results are robust
to different specifications.
We expand existing research by
estimating the impact of exposure to conflict on children’s health
outcomes using geographic information on households’ distance from
conflict sites—a more accurate measure of shock exposure than the
traditional approach using regional-level information—and compare the
impact of exposure in utero versus after birth. The identification
strategy relies on exogenous variation in the conflict’s geographic
extent and timing. Using multiple waves of survey data from Ethiopia
and Eritrea, we find that conflict-exposed children have significantly
lower height-for-age. With GPS information that enables accounting for
households’ distance from the conflict sites, negative impacts of
conflict exposure are two to three times larger than if exposure is
measured at the imprecise regional level. Results are robust to
addressing potential exposure misclassification due to migration
happening between the war and the survey collection date.
In the wake of the Venezuelan crisis, Colombian migrants are
gradually returning to their place of birth. Since 2016, however, there
has been a massive spike of immigration to Colombia attributable to
inflows of the Venezuelan-born. Using high-frequency administrative
data, we estimate the impacts of the recent labor supply shock–driven
by the economic predicament in Venezuela–on the employment, income, and
poverty outcomes of native Colombians. We employ an instrumental variables
approach to account for the selection of immigrants into locations with
more or less desirable employment conditions and amenities.
Conservative estimates indicate a 1-percent increase in immigration
from Venezuela causes a 3-percent average wage decline in host
communities. Focusing on the immigration of the Venezuelan-born alone,
wage effects rise to 5 percent, increasing poverty rates 2 percentage
points. A dual-pronged approach is warranted to promote the economic
assimilation of Venezuelans while protecting the job security of
Colombians.
This paper investigates the effects of multiple weather shocks
on household welfare in Mozambique, as well as some of the coping
responses and price mechanisms at play. The analysis employs a
triple-difference strategy that exploits variation in the shocks across
space, time, and cropping cycles. The findings demonstrate high levels
of vulnerability across various weather risks. Experiencing a
cyclone, flood, or drought leads to a drop of up to 25-30 percent in
per capita food consumption and around 0.4 fewer meals per day per
person. Poverty increased by 12 and 17.5 percentage points in two of
the three events analyzed. Human capital accumulation, as measured by
school participation and morbidity, is disrupted. Households follow
risk-coping strategies, such as increasing the labor supply of their
children or selling assets, which entail partial protection in the
aftermath of the shock at the cost of lower income growth in the
future. In disentangling the channels, the paper shows that maize
prices exhibit higher volatility in food markets that are spatially
close to the most affected areas. The results are robust to several
robustness checks,
including analysis of bias from selective migration, and indicate that household welfare and economic mobility in low-income environments are constrained by uninsured weather risks.
including analysis of bias from selective migration, and indicate that household welfare and economic mobility in low-income environments are constrained by uninsured weather risks.
Disasters
can have long lasting effects, but understanding the breadth, variety
and longevity of their effects can be challenging. This paper examines
the long term effects and subsequent intergenerational transmission of
exposure in childhood to the natural disasters that have occurred in
Latin America in the last 100 years. The identification strategy
exploits the exogenous variation in geographic location, timing and
exposure of different birth cohorts to natural disasters. This study
measures individuals' exposure to each disaster based on their
geographic location at birth to avoid any bias in the estimates due to
possible selective migration caused by each disaster. The main results
indicate that children in utero and young children are the most
vulnerable to natural disasters and suffer the most long-lasting
negative effects. These effects include less human capital
accumulation, worse health and fewer assets when they are adults.
Effects are found to have a non-linear relationship with the level of
development of each country. Furthermore, the results provide evidence
of the intergenerational transmission of shocks, indicating that
children born to mothers who had been exposed to natural disasters also
have less education and increased child labor.
Over
the past years, a greater number of studies has been conducted to
evaluate and measure the impacts of shocks in early childhood.
Additionally, there has been a growing concern among economists and
policy makers about how negative conditions experienced early in life
may have persistent effects or long lasting effects. In this context,
the present investigation estimates the long-run effects of shocks in
early childhood and their intergenerational transmission. In
particular, we estimate the long-run effects of the 1970 Ancash
earthquake on human capital accumulation for the affected and
subsequent generations 37 years after the shock. We exploit the
localized nature of the earthquake and the exogenous timing of this
event to capture a child’s exposure and identify the effect of the
earthquake on welfare. The main finding of this paper shows that in
utero males exposed to the earthquake completed on average 0.5 years
less schooling than their unaffected cohorts, while exposed females
completed 0.8 years less schooling. Surprisingly, children whose
mothers were affected at birth by the earthquake have 0.4 less years of
education while those whose fathers were affected by the earthquake at
birth suffer no effects on their educational achievement. The
evaluation of other outcomes also suggests that the level of welfare of
affected individuals was negatively impacted in the long run.
- Heat Exposure and Youth Migration in Central America and the Caribbean (with Javier Baez, Valerie Mueller and Chiyu Niu). Forthcoming in The American Economic Review (P&P)
Evidence
documenting the linkages between migration and climate at regional
scale is limited. Knowledge on the matter is particularly important for
Central America and the Caribbean, a region of the world characterized
by exceptionally high (internal and international) migration rates and
substantial exposure to disasters. We link individual-level information
from multiple censuses for seven countries with georeferenced climate
data at the province level to measure the impact of heat exposure on
internal mobility. Our results imply that a 1-standard deviation
increase in heat would affect the lives of 7,314 and 1,578 unskilled,
young (15-25) women and men, respectively. The total effect is slightly
smaller than observed in our previous work which focuses on
displacement from droughts and hurricanes, but could increase with
climate change. Of notable importance is youth facing heat waves are
more likely to respond by moving to urban centers than when exposed to
disasters endemic to the region. Additional research is warranted over
the welfare implications of these choices in the long term and the
interventions available to minimize distress migration.
- Droughts augment youth migration in Northern Latin America and the Caribbean (with Javier Baez, Valerie Mueller and Chiyu Niu). Published in Climatic Change
While
evidence on the linkages between migration and climate is starting to
emerge, the subject remains largely under-researched at regional scale.
Knowledge on the matter is particularly important for Northern Latin
America and the Caribbean, a region of the world characterized by
exceptionally high migration rates and substantial exposure to natural
hazards. We link individual-level information from multiple censuses
for eight countries in the region with natural disaster indicators
constructed from georeferenced climate data at the province level to
measure the impact of droughts and hurricanes on internal mobility. We
find that younger individuals are more likely to migrate in response to
these disasters, especially when confronted with droughts. Youth
exhibit a stronger inclination towards relocating to rural and small
town settings, motivated possibly by opportunities for nearby off-farm
employment and financing limitations for urban transport and living
expenses. Migration decisions are mediated by national institutional
arrangements. These findings highlight the importance of social
protection and regional planning policies to reduce the vulnerability
of youth to droughts in the future and secure their economic
integration.
This
paper addresses an important source of variation within democracies —
the degree of institutionalization. The concept of institutionalization
describes the extent to which politics takes place, and is believed to
take place, via formal political institutions. Countries vary in their
degree of institutionalization, hence, in the degree to which political
actors pursue their goals via conventional politics or via “alternative
political technologies”. This paper postulates that if politics is
conducted largely outside of formal channels, the structure of the
formal channels should not matter much as a determinant of policy
outcomes. To address this issue this paper proposes a new index of
institutionalization and with it revisits seminal work regarding the
impact of constitutions on public spending. The findings show that the
effect of constitutional rules on policy outcomes is conditional on the
degree of institutionalization.
We
approach the problems of measuring the dimensionality of welfare and
that of identifying the multidimensionally poor, by first finding the
poor using the original space of attributes, and then reducing the
welfare space. The starting point is the notion that the `poor'
constitutes a group of individuals that are essentially different from
the `non-poor' in a truly multidimensional framework. Once this group
has been identified through a clustering procedure, we propose reducing
the dimension of the original welfare space using recent blinding
methods for variable selection. We implement our approach to the case
of Latin America based on the Gallup World Poll, which contains ample
information on many dimensions of welfare.
To respond to climate change effectively, human capital needs to be at the heart of policy responses. This policy note demonstrates the impacts of climate change across the lifecycle and provides a framework of policy and program interventions to protect, build, and use human capital to minimize climate change impacts and create opportunities for more sustainable and inclusive development on a livable planet. By demonstrating the scope of impacts of climate change on people and people’s potential to contribute to climate action, the note also makes a case for prioritizing human capital investments as part of countries’ Nationally Determined Contributions (NDCs) and other climate strategies.
Climate change severely impacts human capital across the life cycle. This is alarming because the frequency and intensity of extreme weather shocks are increasing. At the same time, human capital plays a vital role in driving effective climate change adaptation and mitigation policies. People need support in adapting to the climate changes that are already taking place and in building resilience to future climate change. This policy note presents evidence on the links between climate change and human capital by documenting the impacts of climate change. It also describes how people are adapting to actual and expected climate shocks. Mitigation and adaptation policies are generally beneficial, but they are also associated with human capital costs, especially in specific sectors and among specific groups in society, particularly the poor. The policy note indicates a possible way forward through the design and implementation of solutions that put people at the center of the adaptation and mitigation agenda. It proposes policies to protect, build and utilize human capital across the life cycle and create a virtuous circle that can deliver positive outcomes for both people and the planet.
Poverty in Malawi is high, persistent, and exhibits important heterogeneity across the country. In the last decade, while some people escaped poverty, others fell into poverty, in part due to recurring climate shocks. Weak economic growth and a continuous increase of the population have contributed to the stagnation of the farm sector. Slow growth of the nonfarm sector, which was unable to absorb the surplus of labor resulting from the population growth, also contributed to the deceleration of migration to urban areas..
The note, which serves as a gender background paper for the 2021 Malawi Poverty Assessment, is structured as follows. It first presents the data and empirical strategy. Chapter two presents poverty data and discusses the intersection of poverty and gender. Poverty by household composition is essential for understanding gendered differences in poverty. From there, chapter three explores gender disparities in economic opportunities, following the analytical framework cited earlier. The authors will then move to potential drivers of economic outcomes: endowments (chapter four) and agency (chapter five). The last section offers conclusions.
Behavioral Insights for Development: Cases from Central America brings together a set of experiences that applied behavioral insights to different areas of public policy—in some cases through randomized control trials, and in others using surveys or behavioral games. These experiences collectively show the promise of public policies that are informed by a better understanding of what drives individual behavior. This chapter uses behavioral insights to analyze subsidy reforms in El Salvador, this time using a different methodology: a set of economic behavioral games designed to evaluate the willingness of individuals to accept subsidy reforms that would affect them directly
This book lays out a range of policy and implementation actions that are needed for countries in sub-Saharan Africa to meet the challenge of improving learning while expanding access and completion of basic education for all. It underscores the importance of aligning the education system to be relentlessly focused on learning outcomes and to ensuring that all children have access to good schools, good learning materials, and good teachers. It is unique in characterizing countries according to the challenges they faced in the 1990s and the educational progress they have made over the past 25 years. The authors review the global literature and contribute their extensive new analyses of multiple datasets from over three dozen countries in the region. They integrate findings about what affects children's learning, access to schooling, and progress through basic education. The book examines four areas to help countries better align their systems to improve learning: completing the unfinished agenda of reaching universal basic education with quality; ensuring effective management and support of teachers; targeting spending priorities and budget processes on improving quality; and closing the institutional capacity gap. It concludes with an assessment of how future educational progress may be affected by projected fertility rates and economic growth. The primary audience for this book are policy makers in Africa, practitioners, and partners concerned about building the knowledge capital of sub-Saharan Africa.
The magnitude of the Venezuelan exodus represents an unprecedented crisis in recent Latin American and Caribbean history. Over 4 million Venezuelans have fled their country, escaping economic, social, and political turmoil that has drastically impacted the economy, citizen security, and living standards. This crisis has plunged the Venezuelan population into poverty, depriving them of access to basic health, education, and infrastructure services. By August 2019, approximately 871,000 Venezuelans had arrived in Peru since early 2017. Media coverage has highlighted both positive and negative aspects of this migration, shaping public perceptions. However, there remains limited understanding of the situation and its implications for Peru's development. Given the complexity of this recent and variable situation, rigorous analysis is essential to inform public policy agendas regarding the challenges and opportunities presented. By drawing on international experiences, particularly in labor market dynamics and fiscal impacts, this study aims to provide insights into the social, economic, and sectoral implications of the Venezuelan exodus for Peru. Through quantitative and qualitative data analysis, including surveys, administrative records, and institutional assessments, the study seeks to inform a development-focused policy agenda, offering recommendations to enhance humane migration management and capitalize on the potential of migrant integration.
The primary objective of this analysis is to determine the social, sectoral, and economic impacts of sustained migration from Venezuela on Colombia, particularly in key receiving municipalities. This unprecedented migration is significantly affecting receiving areas, exacerbated by the migrants' challenging socio-economic conditions. Consequently, migration is exerting significant pressures on institutions, service provision systems, labor markets, and social dynamics in these areas. In this context, the report provides policy and programmatic options for effective management, informed by international best practices.
This chapter reviews recent methods to quantify the dimensionality of welfare and its relation to deprivation. We discuss two alternative strategies based on factor analytic methods and on variable selection after cluster analysis. Unlike latent variable methods, variable selection strategies are immediate to interpret and resample, since they choose variables originally in the data set. The advantages and disadvantages of both strategies are discussed as well as some recent empirical applications of these methods. The methods discussed in this chapter are shown to be able to summarize an initially large list of variables into a few new variables (as in factor analytic methods) or a subset of the original ones (as in feature selection / cluster methods), that can serve the purpose of characterizing the poor. These methods can assist the conceptual search for relevant dimensions of welfare, or provide confirmatory analysis of alternative, likely multidisciplinary studies aimed at isolating relevant factors for poverty analysis.
