rafmacalaba/data-use-mentions-extended huggingface dataset:
Policy Research Working Paper 5720

# **Abstract**

This paper incorporates morality—defined as lower utility from consuming goods obtained through appropriative rather than productive activities—into a simple static general equilibrium model in which agents choose whether to be producers or appropriators. The authors analyze the relationship between the _correlation_ between morality and human capital on the one hand, and aggregate economic performance on the other. They show that there is a main effect that tends to cause this relationship to be positive, and that there can be secondary effects that can either rein-force or oppose (or even overbalance) the main effect. They test the theory using the World Val-ues Survey as a source of proxies for morality. Using their preferred proxy, they find evidence that higher within-country correlation between morality and ability, holding constant the levels of morality and ability, increases per-capita income levels. Under the preferred specification, a one-standard-deviation increase in the correlation between morality and ability raises the log of per-capita income by about one-fourth of a standard deviation, equal to approximately $3,600 for the median income country in the sample. The results are robust to correcting for endogeneity and to changes in sample and specification. The results are mixed when the analysis uses alternative morality proxies, but the coefficient on the morality-ability correlation is still usually positive and statistically significant.

This paper is a product of the Human Development and Public Services Team, Development Research Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at sknack@worldbank.org or dbalan@ftc.gov.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished.
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As shown previously, even when laws are neutral, minorities tend to have less access to property because of de facto discrimination by property managers and owners. As a consequence, minorities tend to depend more on public housing. Survey results in Bulgaria reveal that the government has created a policy to address the issue. The National Roma Integration Strategy aims to improve the living conditions of neighborhoods with a high density of Roma people and other ethnic minorities. The strategy inLGBT individuals are at particular risk of targeted violence at the hands of private actors. Homophobic and transphobic violence has been recorded in all regions. Such violence may be physical (including murder, beatings, kidnappings, rape, and sexual assault) or psychological (including threats, coercion, and arbitrary deprivations of liberty). (UN Office of the High Commissioner for Human Rights 2012) cludes building public housing and undertaking other measures to increase the ability of Roma populations and other ethnic minorities to acquire public services and social protection floors, such as preventive maternal and child care, health services, health awareness and information, and health insurance for long-term unemployed persons.

In Morocco, Article 3 of the Associations Act, as amended in 2002, imposes indirect restrictions on the access to services for people belonging to religious minorities. According to that article, “An association that is founded for illegal purpose or goal contrary to the public morals or that may aim at violating the Islamic religion or the unity of the national soil or the royal regime or may call on all forms of discrimination will be invalid.”<sup>75</sup> Although Article 3 can be justified by the government’s need to restrict the operations of extremist religious groups, it is debatable whether such wide government discretion on the formation of religious associations in general is conducive to equal opportunity and the protection of religious freedom in the country.<sup>76</sup> Finally, public services and social protection can be enhanced by the work of NGOs locally. Data collection from the
# **1. Introduction**

Over the past decades, many countries in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) have undergone tremendous structural and policy changes. Large collectives and state farms, the building blocks of socialist agriculture, were transformed into more market-oriented structures but the process and result of doing so varied widely across countries. In a massive, quick, and equitable process of distributing plots to private households, Albania implemented what is arguably the region‟s most radical program in this respect. While the reform is acknowledged to have been critical to averting a food crisis in the early 1990s, it is also widely believed to have saddled the rural sector with three disadvantages. First, dismantling of communal infrastructure is seen to have led to neglect and deterioration of key public assets such as irrigation systems. Second, high levels of out-migration made the rural economy dependent on transfers and remittances but rarely translated into productive investment, given the lack of attractiveness of the agricultural sector, which is often viewed as a refuge for the sick, old, and poor (Miluka et al, 2010). Third, the notion of Albania‟s land ownership structure being too fragmented to allow realization of the country‟s full productive potential led experts to recommend government-sponsored programs to consolidate holdings.<sup>1</sup> An alternative perspective on the second and third issues is that these problems may be due to inadequacies in the land tenure arrangements.

This paper uses information from the 2005 Albania Living Standards Survey (LSMS) to explore the impact of fragmentation on productivity of land use and, in doing so, help advance the debate and derive policy-relevant conclusions. We focus on three issues that could be associated with fragmentation: First, cultivating many fragmented plots may reduce efficiency on land currently cultivated through, for example, higher transport- and setup-cost, or the inability to use machinery. To explore whether this is relevant in practice, we estimate a stochastic production frontier that includes
use of both routine and non-routine manual tasks, shifting the composition of employment towards lower-skilled workers.

Third, regarding the interplay between technology and trade, Poole et al. (2017) for Vietnam show that the increase in the use of non-routine manual and routine tasks as a result of an increase in exports is smaller in areas where technology access is larger, providing evidence that technological progress is associated with a reduction in the demand for routine tasks. Artuç et al. (2018) find that Mexican exposure to U.S. automation reduces exports from Mexico to the United States, reduces manufacturing employment in areas where the initial share of jobs susceptible to automation in the United States was larger, and increases unemployment and informal employment. All these impacts are larger for unskilled than for skilled workers and for male than for female workers.

# **3. Data Sources and Definitions of Variables**

In this paper we combine several data sets covering the period 2005-2015. First, we use information from the August wave of the Indonesian National Labor Force Survey (Sakernas). During this period, the survey was representative at the province level and covered all 33 provinces of the country. Starting in 2011 the Sakernas survey changed the weighting scheme. This change leads us to separate the analysis in two sub-period: 2005-2010 and 2011-2015. Using the Sakernas survey we construct aggregate labor market indicators that we use as outcome variables in our econometric analysis: the labor force participation, employment and unemployment rates for the working age population (15 years old and more) and for different population sub-groups (men and women, and low- and high-educated workers). We also calculate the share of each occupation in total province-industry-year employment that we use as inputs to construct our skills measures (see below). Finally, we use the Sakernas survey to generate variables used as controls in the econometric analysis. These variables include the age composition of the population and the share of urban population in each province and year, and the composition of industrial employment
# **2 Contribution and Related Literature**

This paper is related to three strands of literature. First and foremost, we contribute to the literature looking at the economic impact of opening the domestic economy to foreign investors. The existing research finds positive effects of such financial liberalization on aggregate economic outcomes including domestic investment (Henry 2000a), economic growth (Bekaert, Harvey, and Lundblad 2005; Gupta and Yuan 2009; Levchenko, Ranci`ere, and Thoenig 2009), and international trade (Manova 2008; Defever and Suedekum 2014) while also raising concerns about potential adverse effects in terms of more volatile capital flows (Broner and Ventura 2016) and increased vulnerability to financial crises (Reinhart and Rogoff 2009).<sup>1</sup> More recently, the researchers started to look beyond the aggregate outcomes and explore the structural changes brought by foreign investors to recipient economies (e.g., Bekaert et al. 2007; Gopinath et al. 2017; Larrain and Stumpner 2017; Varela 2018).<sup>2</sup> One of the main challenges in this research is to capture the full structural impact of foreign investors relevant for a broad group of countries.

For one thing, the empirical work on allocative consequences of financial liberalization faces a trade-off between the cross-country coverage and comparability of the available data on the one side and their disaggregation level on the other side. Researchers thus often have to choose between utilizing disaggregated firm-level data and maximizing the number of countries across different stages of financial and economic development in their sample.<sup>3</sup> The framework of international trade allows us to use highly disaggregated

> 1 Papers examining the impact of financial liberalization on the outcomes in financial markets include, e.g., Bekaert and Harvey (2000), Henry (2000b), Kaminsky and Schmukler (2008).

> 2 Related research examining the impact of domestic financial development on allocation of physical capital includes, e.g., Wurgler (
in Tanzania, the findings may have implications for how a major global development agency approaches state capacity building projects around the world.

The essential design feature is to provide incentives to local governments to undertake verifiable actions that the project regards as essential for state capacity. These actions include showing 1This statement is both axiomatic in economics as well as one that has recently been supported by rigorous evidence. Modern economics starts with the assumption that state capacity exists to protect property rights, maintain law and order, enforce contracts, and collect the tax revenues needed for these public services (Dincecco & Katz, 2016; Acemoglu, García-Jimeno, & Robinson, 2015; Besley & Persson, 2011) One strand of empirical work finds a robust positive correlation between tax to GDP ratios, and other measures of state capacity, with economic development (Acemoglu, 2005; Besley & Persson, 2009; Dincecco & Katz, 2016). Another strand finds persistent differences in income and prosperity across places which have a history of strong state institutions versus those that do not (Bandyopadhyay & Green, 2016; Gennaioli & Rainer, 2007; Michalopoulos & Papaioannou, 2013).

2Qualitative discussion of whether World Bank projects build state capacity is provided in de Janvry & Dethier (2012) and in Stern, Dethier, & Rogers (2005). Some previous studies have examined the cross-country relationship between World Bank projects and subsequent state capacity, finding a suggestive positive relationship for highly rated projects (Hanson & Sigman, 2019). A recent paper, Erman et al. (2021), uses a fixed effects identification strategy and administrative data on municipal revenues to examine the impact of a project in Mozambique. They find that project municipalities increased own revenue collection over time more than non-project municipalities. In contrast, as we report below, not only do we find no impact of the project in Tanzania on local tax payment and attitudes, but also a striking illustration of how context matters for project design. While the project in Tanzania had initially targeted own-source revenues as a
gender and raion disaggregated employment data on employment in various industries.<sup>26</sup> It is likely that a comparison of pre-and post- war employment rates of males and females by industry would provide us with a distorted view anyway. Possible differences (if found) could not be entirely attributed to shifts in male and female employment due to conflict, but rather to the destruction of various industries during the war or changes in the industrial orientation due to transition processes. Further, if women entered “male” occupations, we should expect female wages to be higher in the more affected regions. However, the results presented above do not indicate that female wages differ across regions or birth cohorts.

The top industries where men and women found employment in 2007 demonstrate that women tend to work in “female” and men in “male” occupations (Appendix Table 3). On average, the top three industries, with about 60% of total male employment in Tajikistan, for men are “Agriculture, hunting, forestry” (29.4%); “Sale, maintenance and repair of motor vehicles and motorcycles, retail sales of automotive fuel” (16.5%) and “Construction” (14.4%). For women, the top three industries of employment are “Agriculture” (53.0%), “Education” (14.4%) and “Sale, maintenance and repair of motor vehicles and motorcycles, retail sales of automotive fuel” (8.1%), with about 76% of female employment. If we look at employment by industry and cohort, then we can see that women and men from the younger cohorts in the more affected areas are more likely to work in agriculture than older cohorts who live in the same areas (31.1% vs. 22.7% for men and 61.4% vs. 48.4% for women). This could be a reflection of the lower labor market
/to No_|_n-wealthy _|_Family Mem_|_bers_|
|Treatment|0.001|-65.533|0.012***|2.983|0.000|-69.394|
||(0.005)|(56.269)|(0.004)|(39.763)|(0.005)|(49.065)|
|Mean in control|0.078|264.466|0.017|104.067|0.076|160.399|
|Adjusted R-squared|0.014|0.015|0.009|0.000|0.013|0.009|
|Observations|13464|13464|13464|13464|13464|13464|

**Source:** Author’s analysis based on original survey data. **Notes:** The table reports ITT estimates based on specification (1) estimated with OLS. The sample includes observations from ultra-poor households surveyed at the midline and endline surveys. All specifications control for the baseline level of the outcome, survey wave and subdistrict (strata) fixed effects. Standard errors are clustered at the BRAC branch office level (unit of randomization). All monetary values are measured in Bangladeshi Takas, deflated to 2007 prices using the annual CPI index published by the Bank of Bangladesh. In 2007, 1USD=69BDT nominal and 1USD=18.5BDT at PPP. *** (**) (*) indicates significance at the 1% (5%) (10%) level. **The dependent variables in Panel A refer to transfers received from or given to wealthier households who live outside the village but are part of the first-degree family (parents, siblings, children, parents-in-law or siblings-in-law) network of the respondent. The relative wealth of the network members is self-declared by the respondent at baseline. In contrast, the dependent variables in Panel B refer to transfers received
# **Do Cognitive and Noncognitive Skills Explain the Gender Wage Gap in MiddleIncome Countries? An Analysis Using STEP Data**

Namrata Tognatta<sup>1</sup> Alexandria Valerio<sup>2</sup> Maria Laura Sanchez Puerta<sup>3</sup>

# **JEL Classification codes** : J710, J24, I26

**Key Words** : Gender Wage Gap, Skills, Cognitive Skills, Noncognitive Skills

1 Namrata Tognatta. The World Bank. Education Specialist, Education Global Practice. E-mail: <u>ntognatta@worldbank.org</u> 2 Alexandria Valerio. The World Bank. Lead Education Specialist, Education Global Practice. E- mail: <u>avalerio@worldbank.org</u> 3 Maria Laura Sanchez Puerta. The World Bank. Senior Economist. Jobs Grouo, Social protection and Labor Global Practice. E-mail: msanchezpuerta@worldbank.org Helpful peer reviewer comments were received from Josefina Posadas (Senior Economist) from the World Bank Group Social Protection and Labor, Yevgeniya Savchenko (Economist) from the Poverty Global Practice, and Dileni Gunewardena (Professor of Economics) at the University of Peradeniya in Sri Lanka. Claudia Costin (Senior Director Education Global Practice), Amit Dar (Director Education Global Practice), Luis Benveniste (Practice Manager, Global Engagements, and Education Global Practice), and Harry Patrinos (Practice Manager, East Asia and the Pacific Education Global Practice) provided overall technical and management support. Claire Miller (Consultant, World Bank) provided research and writing assistance, and Marc DeFrancis (DeFrancis Writing & Editing) edited the report.

The report received financial support from the Skills and Information, Communication and Technology (ICT) Trust Fund from the government of the Republic of South Korea.
and 148 clients were randomly allocated into treatment group 2, while the remaining 148 acted as the control group.

We performed a stratified randomization, using information from Partner’s database and from a baseline survey conducted in April and May 2009. In the baseline, we collected information on measures of financial and business knowledge, education, and risk aversion, as well as business employment, assets, expenditures, sales, profits, and use of external finance.

The randomization was stratified by gender, sector (Farming & Livestock, Services, and other), above and below the median of the business knowledge/financial literacy score in the baseline questions, and a dummy for whether profits were missing in the data. Within strata, we sorted by baseline profits and randomly allocated clients to our three experimental groups within each sequence of three observations.

The implementation of the business training was carried out soon after the baseline, between June and December 2009. An exit test to measure business and financial knowledge was administered at the end of the training to all participants. Finally, a telephone‐based follow‐up survey was conducted in May and June 2010, one year after the baseline survey. For the follow‐ up, we were able to track down and interview 396 out of the 445 individuals in our study. The attrition rate was relatively low, and uncorrelated with our treatment.

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# **5 Calibration**

First, I calibrate the model in order to match the U.S. plant size distribution by assuming that the U.S. is free of distortions and bribery. Then, I also calibrate this model to match Türkiye’s plant-size distribution as well as the bribery payments of different size groups as observed in the Enterprise Surveys.

For the U.S., I use a version of the model where population and technology parameter grow at a constant rate. I borrow the following parameters from Guner _et al._ (2008): population and technology parameter growth rates are set to 0.011 and 0.0255, _ν =_ 0.41, _β =_ 0.94, _δ =_ 0.04 and _γ =_ 0.80. Then I assume a composite lognormal-Pareto distribution for the distribution of managerial ability, _F_ ( _z_ ). The composite lognormal-Pareto distribution is characterized by three parameters: a standard deviation of the lognormal distribution, _σ_ , a shape parameter of the Pareto distribution, _s_ , and a threshold value for distributions, _zT_ .<sup>10</sup> These parameter values are found to match the mean size for plants, the fraction of plants with 1– 49 employees, and the proportion of workers in big plants in the US. Tables 4 and 5 display the calibrated parameter values and the model performance.

For the calibration of the Turkish economy, I borrow some of the parameters from the literature which are calculated using National Income and Product Accounts. I choose the share of capital, _αγ =_ 0.34, depreciation, _δ =_ 0.055 and discount rate, _β =_ 0.93 consistent with Torul & Öztunalı (2018), Atesagaoglu _et al._ (2017) and Atiyas & Bakı ̧s (2014). Similar parameter values are used in the Penn World Tables to make cross-country comparisons.

Guner _et al._ (2008) estimate the span of
It is critical that states and cities that have taken the policy initiative to provide property tax or stamp duty discounts take the step of assessing the impact of these initiatives. To accurately assess the impact of incentives, it is important that these jurisdictions synthesize and track gender-disaggregated data, both on property ownership and on property-related tax revenues. In brief, the key conclusions emerging from the paper are:

- Using the tax system on its own does incentivize women’s property ownership but can be more effective when coupled with other policies (home loan concessions, for example), but further research is needed to document this and see what might be the main driver.

- A key challenge is lack of and use of sex-disaggregated data; this needs to be part of reforms in this area going forward.

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