Three essays in development economics [electronic resource]
Keywords: Economics

This dissertation consists of three essays. "The Effects of Child Care Provision in Mexico". In 2007, seeking to increase female labor force participation and more generally ease burdens on working women, the Mexican government introduced one of the most ambitious child care programs in an emerging economy: Estancias Infantiles para Apoyar a Madres Trabajadoras (EI). EI covers 90\% of the cost of enrolling a child under the age of four at a formal child care center. The program is intended to benefit women who are looking for work, in school, or working ---with the exception of those who already have access to child care because their job is covered by Mexico's social security system (IMSS). The roll-out of EI was so aggressive that by 2010 it enrolled 340,000 participants, more than double that of the 25-year-old IMSS child care program. However, EI was also rolled-out unevenly, owing to idiosyncratic variation in how quickly local offices processed applications from child care centers. I exploit the variation in the program's availability across time, across municipalities, and between eligible families and very similar ineligible ones. The essence of my approach is difference-in-difference-in-differences, but I extend this method in several ways --most importantly by adapting the Synthetic Control Method to my repeated cross-section data so that the ineligible comparison group is highly credible. Most of my results are intention-to-treat effects but I also show pseudo treatment-on-the-treated effects in which I assume that all the effects flow through families in which EI-eligible women significantly reduced how many hours they spent caring for their own children. I find that EI increased women's probability of working and reduced the time they devoted to child rearing. EI caused women to obtain more stable jobs, and it increased their labor incomes. EI also had effects ---probably unintended--- on men. Affected husbands spent less time on child rearing and housework, and they were more likely to switch to a better-paid job. However, husbands of EI-eligible women who were initially unemployed were less likely to re-enter the labor force. "Business Literacy and Development: Evidence from a Randomized Trial in Rural Mexico" (with Giacomo De Giorgi and Jesse Cunha). Women in developing countries often earn income through small enterprises such as making and selling food and craft items or re-selling wholesale goods. Several previous studies have established that women's returns in these enterprises are low, often lower than those of male-run small enterprises in the same area. One possible explanation for this finding is that women have especially deficient basic business skills. Working with an NGO, we devised a randomized controlled trial in which female entrepreneurs were given 48 hours of training, over six weeks, on topics such as measuring costs, setting prices, maximizing profits, marketing, and handling the legal issues that arise in a small business. We find that the entrepreneurs who were randomly assigned to treatment earn higher profits, have larger revenues, and serve a greater number of clients. We also find that they are more likely to use formal accounting techniques and know how profitable they are. Furthermore, these effects do not appear to be transitory, as positive treatment effects persist into the medium term, two and a half years after the training. "The Temporal and Spatial Dynamics of Violence in Mexico" (with Alberto Diaz-Cayeros, Beatriz Magaloni, Gustavo Robles, and Jorge Olarte). In 2006 the Mexican government launched an aggressive campaign to weaken drug-trafficking organizations (DTOs) and organized crime. Since then, homicide rates have increased and more than 47,000 deaths related to drug-trafficking have occurred. Seeking to reduce the power of DTOs, the government has captured many kingpins or (\emph{capos}) and their lieutenants. It is theoretically unclear whether this tactic of "beheading" the DTOs should increase or decrease drug-trafficking-related violence. On the one hand, captures of capos and lieutenants raise DTOs' operating costs and thereby discourage their activities. On the other hand, the beheading tactic creates a vacuum of power that may trigger battles among competing DTOs or lieutenants competing for a capo's position. Such battles may cause homicides beyond the rank and file of DTOs. In this paper, we analyze whether government interventions have increased homicide rates and whether the violence spills over spatially. We compare the effect of the beheading tactic to alternative interventions such as seizures of drugs, weapons, and vehicles and marijuana and poppy-seed eradication. To estimate effects that are credibly causal, we use an empirical strategy that combine difference-in-difference and Synthetic Control Group methods.