Paper: Balboni, Bandiera, Burgess, Ghatak & Heil (2021)

QJE: "Why do People Stay Poor?"
== Summary ==
=== I. Introduction ===
[THIS SETTING SEEMS V CONSISTENT WITH THE THEORY OF CONVEX PRODUCTION TECHNOLOGIES, BECAUSE THEY POINT OUT THERE ARE BASICALLY 2 JOBS?]
Most of the world's poor are employed, but have low earnings. Why are they in low-earning jobs? Two views: 
# Everyone has the same opportunities, but the poor have traits that make them unsuitable for other occupations
# There are differences in opportunities. The poor have different opportunities so that their choice of low-earning jobs is a consequence of them being born poor. That is, there is a wealth threshold below which people are stuck in a poverty trap.Why necessarily wealth threshold? Can't this also work if people have basically zero wealth but it is based on incomes?
The core objective of this paper is to distinguish between these two views empirically. 
Findings:
# The dynamics of assets accumulation follow the S-shaped pattern characteristic of a poverty trap. They estimate a threshold of $504 PPP, slightly more than the median cow value of $488 PPP. This value is around the point with the lowest density between the bimodal asset distribution, consistent with the poverty trap story that pushes those near this point outward in opposite directions.
#
=== II. Background and Data ===
=== III. Framework and Method ===
==== III.A. Framework ====
==== III.B. Method ====
=== IV. Poverty Traps in the Short Run ===
==== IV.A. Heterogeneous Thresholds ====
==== IV.B. Identification Checks ====
=== V. Poverty Traps in the Long Run ===
=== VI. Quantifying Misallocation ===
==== VI.A. Simple Model of Occupational Choice ====
==== VI.B. Model Calibration ====
==== VI.C. Model Estimation ====
==== VI.D. Simulating Policy Counterfactuals ====
=== VII. Implications for Policy ===
=== VIII. Conclusions ===
== Questions ==
* If poverty traps are real, as I guess will be the result in this paper, then why do we not find that microfinance tends to help people out of the trap? What is the particular trap that would be at play in this paper? Do we expect microfinance to alleviate this one? Are there microfinance papers that we would expect to be applicable to the same setting/mechanism/situation? Does this pose a puzzle? If so, can we think about an RCT design that investigates it?
* Is there a way to ask the opposite question to this paper? "How do people exit poverty?" Is there good work on this is developing countries? Based on their paper, how do you answer this question?
* Isn't the amount of assets people have pre-transfer in this experiment possibly highly endogenous? Can you really interpret the fact that those with more assets pre-transfer have more permanent effect on incomes as a 'poverty trap'?
** If the transfer (T) is smaller than the 'poverty trap exit threshold' (H) in theory the people with pre-transfer wealth (W) < H-T will not exit poverty/show the type of dynamics of growing income/wealth.
** Now, the pre-transfer wealth, W, is possibly endogenous to certain factors like ability to save, forward lookingness, discount factor, etc.
** If it is found that those with higher initial wealth seem to escape the poverty trap while those with lower initial wealth don't, it is unclear whether it is a person-related trait/characteristic thing, or that new wealth W' > H.
** How big is the difference in 'poverty exit/outcomes' between people just on either side of W + T < H and W + T > H? What is the difference is their assets in practice? Does it make sense in terms of mechanisms that these people are able to utilize their transfer much more, or are they basically people in the same situation where the one group is just a bit more forward-looking/financially responsible??
* Q: who in this paper seems to be escaping the poverty trap? To what extend is this explainable by data on observable person characteristics and type of moves? (what is the exit event, and who makes it?
* Q: if its not a poverty trap, what sort of explanation would there be for the bimodal distribution of assets? It's compelling that there shouldn't be many people around the threshold of a poverty trap.
* d