Working Papers
Changing households’ investments and aspirations through social interactions: Evidence from a randomized transfer program in a low-income country (with Renos Vakis)
This paper analyzes the role of social interactions in determining households’ responses to an asset transfer program. It analyzes whether investments and accumulation patterns are affected by the proximity to female leaders who themselves were also beneficiaries of the transfer program. We identify the role of female leaders through the randomized assignment of leaders and other beneficiaries to three different interventions within each community. This allows identifying the role of social interactions for the heterogeneity of program outcomes. We find large social spillover effects on human and physical capital accumulation and aspirations. Finally, we explore various mechanisms through which the social dynamics might play a role and investigate the relationship with the change in aspirations.
Can Conditional Cash Transfer Programs Compensate for Delays in Early Childhood Development? (with Norbert Schady and Renos Vakis): pdf
This paper analyzes the impact of a randomized conditional cash transfer program on cognitive development in early childhood in rural Nicaragua. We first show that children have very large delays along various dimensions, including language acquisition, memory, and social skills, and that these delays are related to household consumption levels. We then show that the program had significant effects on cognitive outcomes. Program impacts are largest for older pre-school aged children, who also have more delays. We analyze how the program affected several key inputs into early childhood development, and show evidence suggesting that program impacts are not due to the cash component of the program only. The expenditure patterns of beneficiary households are significantly different from those in control households, indicating that households do not spend the cash received through the program in the same way as other income. In particular, we show that the program caused a significant upward shift in the food Engel curve, as well as increases in the food shares devoted to animal proteins, fruits and vegetables. In addition, children in households who benefited from the program received more early stimulation, even after accounting for the increase in overall expenditure levels. It appears that treated households allocate resources differently than control households with similar consumption levels, which helps explain the catch-up effect in cognitive development outcomes.
Leveling the Intra-household Playing Field: Compensation and Specialization in Child Labor Allocation (with Ximena Del Carpio) :pdf
This paper analyzes changes in the allocation of child labor within the household in reaction to exogenous shocks created by a social program in Nicaragua. The paper shows that households that randomly received a conditional cash transfer compensated for some of the intra-household differences, as they reduce child labor more for older boys who used to work more and for boys that were further behind in school. The results also show that households that randomly received a productive investment grant targeted at women, in addition to the basic conditional cash transfer benefits, show an increased specialization of older girls in nonagricultural and domestic work, but no overall increase in girls’ child labor. The findings suggest that time allocation and specialization patterns in child labor within the household are important factors to understand the impact of a social program.
Seasonal Migration and Early Childhood Development (with Renos Vakis)
This paper provides unique evidence of the positive consequences of seasonal migration for investments in early childhood development. We analyze migration in a poor shock-prone border region in rural Nicaragua where it offers one of the main household income diversification and risk coping strategies. IV estimates show, somewhat surprisingly, that mother’s migration has a positive effect on early cognitive development. We attribute these findings to changes in income and to the intra-household empowerment gains resulting from mother’s migration, which offset potential negative ECD effects from temporary lack of parenting. This paper, hence, illustrates how increased opportunities in seasonal migration due to higher South-South mobility might positively affect early childhood development and as such long-term poverty reduction.
Land Titles and Conflicts in Guatemala
This paper analyzes the impact of formal property rights on plot use and credit access in 20 communities in Guatemala, and shows how these impacts differ depending on the community conflict context. The paper proposes a new instrument based on detailed information about the geographic location of the plots and historical titling processes to address the endogeneity concerns that are common in the property rights literature. The paper sheds light on whether the effect of land titles on plot use and credit access varies with the prevalence of conflicts and different types of conflict resolution mechanisms. The findings suggest that these factors might be crucial to understand the potential impacts on plot use of possible titling programs.
Ethnic Divisions, Contract Choice, and Search Costs in the Guatemalan Land Rental Market
This paper shows how ethnic diversity in a context of weak property rights enforcement can result in market segmentation. The paper analyzes how contract enforcement problems affect the joint decision of partner and contract choice by landlords in the land rental market in Guatemala. The empirical method allows partner choice to be determined not only by the characteristics and relative scarcity of the specific landowner and tenant, but also by the characteristics of other potential tenants. The results show that landowners without formal title are more likely to restrict their partners to tenants from the same ethnic group. Partner choice is found to be less important for renting with interlinked land-labor contracts.
Insecurity of Property Rights and Matching in the Tenancy Market (with Alain de Janvry and Elisabeth Sadoulet)
This paper analyzes the effects of insecure property rights over land on the functioning of the land rental market in the Dominican Republic. It shows that insecurity of property rights not only reduces sharply the level of activity on the land rental market, but also causes market segmentation. A principal-agent framework is used to model the landlord’s utility maximization, where he takes into account the risk of losing the land when it is not traded within a narrow local circle of confidence. Using data collected with a methodology that enables to characterize the entire market, we show that insecure property rights lead to matching in the tenancy market along socio-economic lines and hence severely limit access to land for the rural poor. Simulations suggest that improving tenure security would increase the total area rented to the poor by 63%. While a small fraction of this gain is achieved via formal titling, most is obtained through reducing conflicts over land and enhancing protection of property rights. Results also show the importance of minimum working capital endowments for the poor in gaining access to land in the rental market.
Property Rights Imperfections, Asset Allocation and Welfare: Co-ownership in Bulgaria (with Liesbet Vranken, Nivelin Noev, and Jo Swinnen)
This paper analyzes how imperfections of property rights affect allocation of assets and welfare, using micro-survey data from Bulgaria. Co-ownership of assets is widespread in many countries due to inheritance. Central and Eastern Europe offers an interesting natural experiment to assess the effects of such rights imperfections because of the asset restitution process in the 1990s. Bulgaria is particularly interesting because of the prominence of the co-ownership problem (about half of all land plots are co-owned), because of the strong fragmentation of land, and because of legislation providing an instrument to separate out chosen (endogenous) versus forced (exogenous) forms of co-ownership. We find that land in co-ownership is much more likely to be used by less efficient farm organizations or to be left abandoned, and that it leads to significant welfare losses.
Increasing Inequality and Civil Conflict in Nepal
This paper investigates the relationship between relative deprivation and the escalation of the civil conflict in Nepal. Poverty in Nepal decreased substantially between 1995 and 2003, which seems puzzling given the political instability and the raise and strengthening of the insurgency. We hypothesize that increasing differences in welfare among different groups - i.e., relative deprivation as opposed to absolute deprivation - can help explain this puzzle. The hypothesis is tested with data from 2 national-representative household surveys, matched with information regarding mass abductions by the Maoists, obtained from an extensive search of newspaper articles. The identification strategy relies on the fact that the months following finalization of the second round of data collection were characterized by a geographical escalation of the conflict. The paper shows that households with relatively large land holdings have gained disproportionally from recent growth, resulting in relative deprivation of the (near) landless. Recruiting by Maoists through abduction of young people is found to be more important in districts where inequality between the landed and the landless had increased.
Completing the Land Reform in West Bengal? An ex-ante evaluation
This paper provides an ex-ante evaluation of a program that would grant ownership rights to sharecroppers with protected user rights in West Bengal. Using a non-parametric regression framework, it compares outcomes of two types of beneficiaries of the original West Bengal land reform, i.e. households that received land in ownership versus households that received only secure user rights. Both types of beneficiaries are the product of the same reform legislation that was implemented during the same period and using similar methods, which motivates the comparison. The paper estimates the expected gains from granting ownership and draws lessons regarding optimal targeting of the proposed policy.
Rural-Urban Poverty Differences in Transition Countries (with Jo Swinnen)
This paper uses new poverty data based on household level surveys to analyze changes in rural poverty and rural-urban poverty differences in 23 transition countries of Central and Eastern Europe and the Former Soviet Union. The paper presents a series of hypotheses to explain differences across countries and changes over time.
Comparing a Direct with an Indirect Approach to Collecting Household Level Data: Who tells the truth?
This paper aims at validating the use of key informants to collect household level information, and at testing the extent to which private information is public at the level of the community. Selected key informants from the communities were asked to answer detailed questions about characteristics of all the individual community members and their plots. In addition the same set of questions was asked to the heads of a random sample of households themselves. I analyze the differences between the two types of respondents and their potential sources using regression and error analysis. I distinguish between different types of variables, and test for consistency, attribution error by the key informants, and strategic answering by the household heads.