rafmacalaba/data-use-mentions-extended huggingface dataset:
# **1. Introduction**

What are the preferred policy responses of host country residents to large migration inflows, and to what extent are these preferences driven by contact with migrants as well as values such as humanitarianism? Forced migration has been central to recent electoral shifts in many host countries (Altındağ and Kaushal 2021; Campo et al. 2021; Dinas et al. 2019; Dustmann et al. 2019; Marbach and Ropers 2019; Rozo and Vargas 2021; Steinmayr 2021). It has also arguably contributed to the erosion of public trust in governments who are perceived to be ineffective in dealing with these inflows and raises questions about the role for policymaking in addressing public concern (Connor 2018; Jeannet et al. 2021; McLaren 2015).

A large body of work examines the patterns and determinants of immigration attitudes (Dinesen and Hjorth 2020), as well as public preferences for immigration levels (Citrin et al. 1997; Facchini and Mayda 2008; Scheve and Slaughter 2001). However, the control of inward flows is just one of several kinds of policies available to policymakers in response to migration. In reality, migration policies—either as proposed by political parties or implemented by governments—are multidimensional and comprise several elements. Existing observational surveys, typically measuring public support for single policy proposals in isolation from other topics that are also relevant for migration, provide limited insights on how host country citizens perceive these bundles of policies and distinguish among their constituent parts (Helbling et al. 2017; Helbling and Leblang 2019). Yet expressed public preferences potentially contribute to the ways that national and regional policymakers think about and act upon this issue, as implementing migration policies relies on a degree of public consent.

We address this problem by considering the case of Venezuelan migration to Colombia. Over the last decade, Venezuela has experienced a multifaceted humanitarian, economic and social crisis that has led to a large outflow of its citizens. Official figures from the R4V platform indicates that, by the end of October 2021,
variable in equation (1) rather than **levels** of each variable in each year. Such a first-differenced production function is shown below: where Δ denotes the difference between the level of each variable in a given year from the previous year.<sup>3</sup> By purging the data of the time-invariant level differences in productivity due to unobserved firm-level ability effects, this procedure turns the focus of the regression analysis to whether CIMO participation, θ , affects productivity growth.

To test the efficacy of this approach, the panel data sets from both STPS evaluation studies – the 1991-1993 and 1993-1995 samples plus the 1991-1995 sample of firms that appeared in both studies – were combined and the variables re-defined to ensure that they were comparable over time.<sup>4</sup> Tables 2 and 3 summarize several key outcome variables for the CIMO and control groups.

**Table 2.  Effects of CIMO Participation on Intermediate Outcomes**

|Variable|**Period**|**Effect (double**<br>**difference)**|**Prob.**|
|---|---|---|---|
|Mean private investment (per worker) in training|1991-1993|192.7|0.024|
|Mean private investment (per worker) in training|1993-1995|170.0|0.002|
|Share of firms withqualitycontrol mechanisms|1994-1995|23.1|0.000|

_Source_ : Own calculations based on STPS databases. _Note_ : All estimated effects are statistically significant.

Table 2 confirms the findings of the previous CIMO studies that the program improved intermediate outcomes of participating firms relative to the control group. In both the 1991-1993 and 1993-1995 periods, CIMO had a positive and significant effect relative to the control group in terms of raising training investments per worker; CIMO firms invested an average of 170-190 pesos more (in 1994 constant pesos) in training per worker than
increase to more than 80 or 100 percent of GDP never exceed 4 and 2 percentage points respectively. These predictions for foreign debt are, to a large extent, driven by the proposed intercept. Evaluating equation (3.3) at the estimated intercept implies very optimistic long run values of the endogenous variables: real GDP growth is 4 percent, the growth rate of the GDP deator in U.S. dollars is 5 percent, the ow of FDI is 3 percentage points of GDP, and the debt shock is -4.5 percentage points of

> 11Throughout this section, the data for the debt-to-GDP ratio and the endogenous variables are taken from the IMFWorld Bank May 2011 DSA (IDA and IMF, 2011).

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# **1. Introduction**

The informal sector provides livelihoods and jobs to millions of individuals around the globe. According to ILO (2018), about 70 percent of the labor force in the emerging and developing economies is employed in the informal sector. Despite this contribution, there is concern that competition from informal sector firms may impede job creation among formal sector firms. A systematic and rigorous analysis of the issue, however, is lacking. The present paper attempts to fill this gap in the literature by estimating the relationship between competition faced by formal sector firms from informal sector firms (henceforth, informal competition) on the formal firms’ growth rate of employment. It does so by using firm-level survey data for SMEs in the formal manufacturing sector of a large cross-section of mostly developing countries. Consistent with the “parasite” view of informality, we find that higher informal competition significantly lowers employment growth among formal firms. The decline is much larger in countries where the cost of operating in the formal vs. the informal sector is higher and the benefits lower. As expected, there is no significant impact of informal competition on the large formal sector firms.

In his celebrated study, Farrell (2004) pointed out that the negative impact of informal competition on the functioning of the formal firms is one of the three key problems with the informal sector. In the related literature, there are two prominent perspectives on how informality impacts the formal firms. These are the “parasite” view and the “dual economy” view (La Porta and Shleifer 2008, 2014). The dual economy view asserts that formal and informal firms are fundamentally different. Informal labor is a by-product of poverty and failure to find good jobs in the formal sector. Informal businesses are small, inefficient, of subsistence nature, and their productivity is too low to allow them to compete and survive in the formal sector. Thus, there is 2
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2000 and continued its upward movement through 2001-03. This was not the case of only two other exceptions to the general trend of increasing significance of parts—Latvia and Lithuania. The share of parts was consistently falling through 1999-03 in spite of a 20 percent average annual growth per year over 2000-03. Exports of final products simply grew faster.

Second, like most other CEEC-10 and SEE-participants of ICT networks, Bulgarian firms have been shifting towards specializing mostly in assembly operations. For most of them, the share of final products in ICT exports has significantly increased indicating the shift towards final production. Countries that succeeded in expanding exports of final products have also increased imports of IT parts. So has Bulgaria, which provides indications of the emergence of similar pattern of specialization in assembly operations. On the other hand, countries whose firms remain mostly outside ICT supply chains, i.e., from Albania, Croatia, and Macedonia, tend to produce parts rather than final products.

**D** **_._** _Other forms of outsourcing: exports of parts and other engineering products together with parts_

The ‘producer-driven’ network analysis, confined to immediate inputs and final products of IT and automotive products, does not capture all intra-product trade. Some additional insights into developments in this trade can be obtained by examining specialization patterns in Bulgaria’s trade with the EU in parts and engineering intermediate and final products not covered by network trade analysis. The list of products includes two groups: products defined explicitly as parts in four-digit SITC 7. Rev. 2 and SITC 8 (e.g., parts of clocks, cameras, and other optical equipment) hereafter referred to as ‘other parts;’ and ‘other parts and products’ including also machinery equipment products together with respective parts (e.g., hydraulic motors and parts, electrothermic appliances and parts).

How does Bulgaria score on this count? Two observations can be derived from data reported in Table 33. First,
ineligible” households in each village. Hence, in a typical village with one TASAF II group funded to run an income generating activity, the sample size was 14. There were 1,544 households that completed the household survey in the 100 villages. The household survey contained detailed consumption data at the household level, limited consumption data at the individual level, as well as collecting information on distance to the village center, the education of the household head, asset ownership, participation in village meetings, whether household members hold political office in the village, and blood relationships between household memberships and village elites.

There are 2,542 wards in 119 districts in mainland Tanzania. The poverty mapping data is unavailable for 86 of these wards. Out of these, the ward councilor elections were uncontested in 10
the tax burden falls disproportionately on medium-sized firms in developing countries – small firms often stay informal to avoid taxes and large firms are influential enough to obtain special treatment. Given the country context, it is often medium-sized firms that employ labor, both skilled and unskilled, in large quantities and thus a high tax burden could strongly and negatively affect employment growth.

Similarly the model suggests that a 1 percent increase in licensing fees (measured at the firm level) negatively affects employment growth in equal measure. License fees and lengthy license procedures are often barriers to entry and expansion, slowing economy-wide growth (Rodrik and Subramanian 2004). Djankov et al (2002) find that countries with heavier regulations (including high licensing fee burdens) suffer from higher corruption and larger informal economies. Similarly, Klapper et al (2004) find that high costs of entry negatively affects entrepreneurial growth across a variety of industries. According to the 2014 Doing Business Survey, Ethiopia ranks 166 (out of 189 economies) with regard to the ‘starting a business’ indicator, and licensing fees are used in the model as a proxy for entry regulations in Ethiopia.

**Infrastructure** : The infrastructure variables (transport, electricity) and business environment variables (taxes, licensing) are constructed using firm-level data from the LMMIS data set. The variables is averaged across firms at the level of industries and cities, and over time.

Transport costs negatively affect firm employment growth, after controlling for firm

> 12 The total number of hours taken to pay taxes has increased from 212 hours in 2004 to 306 hours in 2014.

24
The persistence term (ρ+1), which is expected to be below but not too far from 1, controls the dynamics of the steady-state (Solow) income and growth path.<sup>12</sup> Taking first differences of equation (2) leads to: which highlights that innovations (Δ) in X have an effect on the subsequent growth spell, but that the effect on income _growth_ is not permanent but transitory (and fades out via the persistence parameter [ρ+1]), while it is permanent on income _levels_ , again consistent with the Solow model.

Given the nature of income data at several parts of the distribution, estimating equation (1) is preferred over estimating equation (2). Direct reverse causality can be limited in this case (see below for a more detailed discussion): the growth rate after _t_ should not influence other variables at time _t_ .<sup>13</sup> Estimating equation (1) is also preferred over estimating equation (3), as the latter would lead to a greater loss of observations because of the first differences. Furthermore, equation (1) makes it clearer that the explanatory variables in _X_ can generally be seen as enabling factors for subsequent income generation, which makes it appealing for the underlying question analyzed here.<sup>14</sup> Overall, the estimated parameter _b_ from (1) will give us an indication on how important that variable is for generating subsequent income increases.

# **_Econometric Issues_**

As all panel studies, our estimations could face endogeneity issues. The endogeneity bias may arise from measurement errors, omitted variables or potential reverse causality between the dependent variable, income growth, and our variables of interest. It is possible, for instance, that as income grows, a larger share of the population becomes better educated or lives longer. The use of country fixed effects and the consideration of initial income would try to capture relevant initial conditions and variables that could
intervention. We find that the intervention positively affects school readiness outcomes for children with mothers who are less educated, especially girls. The intervention increases the prevalence of some home activities as well as measures of community support for school readiness.

# _Data_

Two sources of data are used to evaluate the school readiness intervention. First, community monitoring data were collected in treatment and control communities about their activities and support of early childhood care and education (ECCE). Information was collected about whether the community had meetings about ECCE, whether there was a community education committee, whether the committee had met, what type of support it received, whether there were playgroups or a preschool, and health services and activities, among others. Respondents included district officers, town officers, education committee members if one existed, and parents. However, because the purpose of the questionnaire was to monitor community support for playgroups in treatment communities and for ECCE more broadly in control communities, the questionnaires administered to treatment and control communities differ. Eight variables were identified as being relevant to the objectives of the intervention and compatible between the two questionnaires, these are the following: whether a preschool exists in the community, whether there is a play group including a CPBA, whether communities support ECCE services by encouraging parents, fundraising or by providing material resources, whether the community has an education committee, whether the community has a health center where the district nurse is located or centered, and whether the community has an education committee which includes the district nurse as a member.

The second set of data is the Tonga Early Human Capabilities Instrument (TEHCI) survey that measures school readiness for children aged 3 to 5 across a range of developmental domains. The survey was developed in 2013 by defining school readiness based both on the international evidence of the cognitive, socio-emotional and physical development needed to succeed in a school environment but also on Tongan values identified through consultations and workshops. The instrument measures development across eight developmental domains: physical 12
admit the possibility that trade reform could have adverse long-run consequences for employment. Turning to the empirical evidence, however, there is no support for such a view. Marquez and Pages-Serra (1998) suggest that firm-level declines in employment per unit of output (increased efficiency) are offset by increases in firm sizes or numbers. IADB (2004), in a review of ten countries’ household data, suggest that trade liberalization increased employment and left unemployment unchanged—i.e., increased participation.

In a macroeconomic study, Kee and Hoon (2005) show that increasing openness lay behind much or all of a dramatic decline in the natural rate of unemployment in Singapore. Between 1966 and 2000, over which period the openness ratio, (X+M)/GDP, increased from 224 percent to 298 percent, the relative prices of export goods increased and there was a rapid accumulation of capital in the export sector. Both phenomena increased the marginal product of labor (and hence the wage) in terms of nontradeables and expanded overall employment fourfold (as population doubled). The direct effects of the accumulation were larger than those of relative prices, although the latter, which is the natural consequence of trade liberalization, is probably the exogenous driver variable. Kee and Hoon show their results are robust to whether either or both are exogenous or endogenous.<sup>6</sup> Rodrik (1995), on the other hand, argues for Korea and Taiwan that their investment booms were exogenous (government-led) and that these induced the export growth, the price changes being too small to produce such strong export growth themselves. Even if this is true, however, openness was still a critical component of the policy mix, for without openness the import of capital goods (and, subsequently, intermediates) would have been impossible, as would the huge growth of exportables output, for without access to world markets with huge potential demand, the expansion would have induced strongly declining prices.

These cases demonstrate strong macroeconomic
indicators for durable goods held by the household (television, radio, refrigerator, motorbike, car, bicycle, electricity) as a proxy for wealth. Indeed, the wealth quintiles provided in the DHS can be misleading as a measure of wealth, particularly for African countries: there is generally too little variation in the lowers three quintiles and differences in living standard are difficult to distinguish in those quintiles. Religious affiliations have been regrouped into three categories, Catholic (Roman Catholic Church), Protestant (Evangelical, Methodist, Anglican, Adventist, Pentecostal, other Christian) (the omitted variable in the regressions) and no religion. Finally, in the empirical analysis, we also include two variables capturing individual preferences to spend time away from the household of origin. The first one is a continuous variable indicating the number of nights male respondents have spent away from the household. The second one is a dummy capturing whether the husband lives in the household or not.

# **4. Methodology and potential sources of bias**

The goal of the empirical section is twofold. First, we assess whether individuals working in the mining sector have a higher probability of being HIV positive and if women, with a partner employed in the mines, are at higher risk of being infected with HIV. Second, we test whether miners and miners’ partners are more likely to report risky sexual behaviors compared to individuals with other types of jobs. We run two separate sets of regressions. The first set of equations uses the probability of being HIV positive as the dependent variable. The second one considers sexual behaviors, which are assumed to have an influence on the risk of HIV infection, such as abstinence, extra marital sex and condom usage, as dependent variables. Sexual behavior 10
the training program than entrepreneurs with low ex‐ante financial literacy. The effects on profits are also positive for this sub‐group, showing an increase in profits due to the training of 54 percent, though only statistically significant at the 15 percent level.

Next, we study treatment effects on external finance. We use detailed administrative data from Partner to study the effect of the training on default rates, propensity to refinance, and terms for new loans. Although we do not identify average treatment effects on default rates, we find that our treatment group was significantly more likely to refinance its existing loans with Partner. This restructuring can take the form of a lower interest rate or longer loan term. Further, we find treatment firms that take on new loans were significantly more likely to negotiate larger number of installments, controlling for loan amount. These results are again consistent with the notion of larger up‐front capital investment, a concept that was central to our business training program.

Overall, our results have important policy implications for business promotion and growth. First, our results clearly indicate that lack of business acumen is not the primary constraint to business survival. Hence, business training programs alone are likely not the panacea for promoting new business growth in emerging markets. Our second set of results, however, shows that business training indeed is a strong complement to achieving such growth. In particular, we find business training can provide the necessary motivation and entrepreneurial 6
Policy Research Working Paper 5605

# **Abstract**

The nature of the microeconomic frictions that transform sudden stops in output collapses is not only of academic interest, but also crucial for the correct design of policy responses to prevent and address these episodes and the lack of evidence on this regard is an important shortcoming. This paper uses industrylevel data in a sample of 45 developed and emerging countries and a differences-in-differences methodology to provide evidence of the role of financial frictions for the consequences of sudden stops. The results show that, consistently with financial frictions being important, industries that are more dependent on external finance decline significantly more during a sudden stop, especially in less financially developed countries. The results are robust to controlling for other possible mechanisms, including labor market frictions. The paper also provides results on the role of comparative advantage during sudden stops and on the usefulness of various policy responses to attenuate the consequences of these shocks.

This paper is a product of the Macroeconomics and Growth 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 author may be contacted at craddatz@worldbank.org.

_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. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team