Three essays in development economics

This dissertation explores various topics in development economics. The first and second chapters examine the impact of the garment manufacturing industry on women's welfare in Cambodia. The first chapter studies the effects of minimum wage legislation in the garment sector. A sector-specific minimum wage, while designed to protect workers in one booming industry, might result in unintended consequences for other uncovered sectors. The garment sector in Cambodia is the only sector with a strongly enforced and monitored minimum wage. I study how changes in the garment minimum wage affect other low-skill, uncovered sectors. A labor search model predicts that, given the outside option channel for workers, the impact on the wage in the uncovered sector will be inverse-U shaped. Empirical results show that an increase in minimum wage compresses female wage distribution in the garment sector. There is evidence of positive spillovers to non-garment, low-skill sectors using a difference-in-difference framework. A substantial increase in the minimum wage causes an increase in the average female wage in the low-skill sector. The spillovers are stronger for individuals who live closer to the garment factories, or those in provinces where the garment sector is more present. As the minimum wage in the garment sector keeps increasing, the spillover effect diminishes and becomes negative. The second chapter examines the impact of the expansion of the garment industry in Cambodia in the 1990s on the education and marriage outcomes for young women. Using variation in the cohort age and the locations of the garment factories, I find that young girls who were between ages 5 to 16 and were exposed to the garment sector for two to eight years obtained more years of schooling. On average, the estimated coefficients show that the sector led to an increase of 0.11 to 0.28 years of schooling for girls in garment provinces who were exposed to new job prospects while still in school. I rule out the income effect channel and suggest that the increase in education found are due to the returns to education mechanism. Garment factories provide new job opportunities for girls, which increase the returns to schooling and induce them to obtain more education. The girls also tend to delay marriage and childbirth until a later age. The increase in marriage age is most likely a direct effect of women joining the workforce and delaying their marriage. The final chapter studies the impact of a bridge construction on the agricultural producer prices and production of farmers in the Mekong Delta of Vietnam. In this region, the availability and conditions of transportation to and from the farms play an important role in determining producer prices. Before the My Thuan Bridge was completed in 2000, the southern part of the Mekong Delta was accessible only by ferries, resulting in high transportation cost and traveling time for rice traders. I exploit the timing and location of the bridge to show that the improved infrastructure has a positive impact on producer prices of paddy rice. The construction of the bridge reduced traveling time and cost to farmers and traders on the southern side of the Mekong Delta. Farm-gate prices increased significantly in the southern side of the bridge after the construction, suggesting that the reduction in transportation cost was passed on to farmers. Besides the effects of the bridge on rice prices, household-level agricultural activity analyses indicate that there is a transition out of rice farming and into aqua-cultural farming for farmers living in the southern provinces of the bridge.

Keywords: Economics.
Advisor: Dupas Pascaline 
Fafchamps Marcel
Pistaferri Luigi