rafmacalaba/datause-encoder-data huggingface dataset:
employment is also positive (and even stronger), whilst the effect of immigrant population is negative in this case.

We now turn to the factors whose effects are less easily reconciled with either theoretical predictions or results found when analyzing the two parts of Europe separately. EPL strictness and tax wedge on labor are found to reduce informal dependent employment, other things equal. The EPL effect is not totally surprising, given the negative correlation between EPL and informal dependent employment in the raw data within the ―West & North‖ sample (Figure 1, right)<sup>28</sup> . As noted in Table 2, workers might _perceive_ a stricter EPL as enhancing job security, which makes formal jobs more desirable and reduces voluntary exit from the formal labor market. It is in principle possible that when all European countries are pooled together, this supply side effect has outweighed the EPL effect on the cost of formal labor. Another explanation is related to the fact that within both ―East & South‖ and ―West & North‖ samples, the low-EPL countries have above average income level: High market wage level works as a substitute for EPL, making formal labor too expensive.

The effect of tax wedge for low wage earners on employment informality is a priori ambiguous, but turned out to be highly significant and sizable negative. We propose the following explanations. First, there is a positive correlation between the tax wedge and the efficiency of the fiscal system across European countries. Countries with high tax rates are also the countries able and willing to enforce them – and vice versa. Indeed, Table 8 provides evidence that proportion of respondents expecting some punishment (fine or prison) for a person whose undeclared economic activity is detected, is positively affected by tax wedge (or tax rates), even when general law enforcement indicator is controlled.<sup>29</sup> Second, a cultural factor might be at work, too – if the tax morale is inherently higher in countries with high tax rates (see evidence in Torgler, 2010). Third, heavier tax burden creates a negative scale effect on [informal and formal] labor demand by formal enterprises, as well a negative income effect reducing demand for informally produced goods and services. Together, these effects (of which the first one is likely the strongest) overcome [labor and product market] substitution effects, as well as distrust effects in favor of informal labor.

# **6 Conclusions**

> 28 Moreover, although the EPL effect is positive in the ―East & South‖ models (see Section 3), its contribution to the explanatory power those models is rather small.

> 29 Fialova and O. Schneider (2011: Table 4) also find a negative impact of labor taxation on the share of labor force not contributing to the pension system in the sample of 26 European countries; they relate it to „improving quality of public services and provision of a better legal environment in high-tax countries‖; our explanation is similar in spirit but not identical.

28
two of the 10 most-cited articles in each of the _American Economic Review_ , the _Quarterly Journal of Economics_ , and the _Journal of Human Resources_ ; three of the ten most-cited articles in the _Journal of Development Economics_ , four of the ten most-cited papers in _Economic Development and Cultural Change_ , and _the_ most cited paper in _Demography_ .

Perhaps not unsurprisingly, the Bank’s books—for the most part—get cited less than journal articles. The most-cited book by far is Angus Deaton’s _The Analysis of Household Surveys: A Microeconometric Approach to Development_ , a book commissioned by the Bank’s research department to guide practitioners in the analysis of household survey data. Among the various Bank book series, the research department’s _Policy Research Report_ series fares best in terms of citations, but several other series, including the _Latin America and Caribbean Studies_ and the _Regional Sectoral Studies_ series also fare well. Surprisingly, the _World Development Report_ series fare less well, though they do get some citations. Of course, the intended audience for the WDRs only overlaps partially with the set of people who write in places that Google Scholar reaches. The same might be said of other high-profile series such as _Doing Business_ (which rarely gets cited in scholarly writings but gets over 7,000 hits in Google News) and _Global Economic Prospects_ .

The scholarly literature has ignored some 30% of Bank books and almost 50% of book chapters. Some of them may, of course, have had impact without ever getting cited in a document captured by Google Scholar. However, amongst Bank book series that seem to be targeted at similar audiences (going beyond the scholarly community) some of the series get cited quite heavily while some get cited very little and many never get cited at all. One suspects that uneven quality may be an issue here. Perhaps the Bank’s gradual shift in its publications portfolio toward peer-reviewed journal articles is no bad thing.

29
**Table 5.  US Imports: Value of Preferences, 2003**

||**Assum**|**ing Full Ut**|**ilization**||**Inco**|**rporating A**|**ctual Utilizat**|**ion**|
|---|---|---|---|---|---|---|---|---|
||**Value**<br>|**Value**|**_Non-Ag_**|**_Ag_**|**Value**<br>|**Value**|**_Non-Ag_**|**_Ag_**|
|**_Beneficiaries of:_**|_(% of Total_<br>_Exports to US)_|_(% of D_|_utiable Export_|_s to US)_|_(% of Total_<br>_Exports to US)_|_(% _|_of Dutiable Exp_|_orts to US)_|
|**All Preference Programs**|||||||||
|**_All Beneficiaries_**|2.0|3.0|2.8|0.2|1.5|2.3|2.1|0.2|
|**_All LDC Beneficiaries_**|2.0|2.2|2.1|0.1|1.8|1.9|1.9|0.0|
|**CBERA-only & GSP**|||||||||
|**_All beneficiaries_**|0.4|0.5|0.5|0.0|0.4|0.4|0.4|0.0|
|**_St Vincent &Gren._**|4.4|5.3|5.2|0.1|4.3|5.3|5.2|0.1|
|**_Dominica Is_**|3.5|5.3|4.4|1.0|3.4|5.2|4.3|0.9|
|**_Antigua Barbuda_**|1.0|5.1|4.4|0.7|0.2|0.8|0.1|0.6|
|**CBTPA & GSP**|||||||||
|**_All beneficiaries_**|8.7|12.7|12.0|0.7|6.0|8.8|8.0|0.7|
|**_Haiti_**|17.3|18.1|18.0|0.1|12.3|12.9|12.8|0.1|
|**_Belize_**|8.2|17.5|4.8|12.7|7.8|16.5|3.8|12.7|
|**_El Salvador_**|15.3|16.1|16.0|0.1|10.1|10.7|10.5|0.1|
|**_Honduras_**|14.2|16.1|15.7|0.4|11.2|12.7|12.2|0.4|
|**_Guatemala_**|12.4|15.6|14.3|1.3|5.1|6.4|5.1|1.3|
|**_Nicaragua_**|11.9|14.6|14.2|0.4|4.7|5.7|5.3|0.4|
|**_Guyana_**|2.5|12.5|11.2|1.4|2.2|11.3|10.0|1.3|
|**_Dominican Rep_**|9.8|12.2|11.8|0.4|7.9|9.9|9.5|0.4|
|**_Costa Rica_**|4.2|9.9|7.1|2.9|3.5|8.2|5.4|2.9|
|**_Jamaica_**|3.1|9.9|8.3|1.7|4.5|8.8|7.1|1.6|
|**_St Lucia Is_**|5.2|6.8|6.7|0.1|1.2|1.6|1.5|0.1|
|**_Barbados_**|2.6|5.6|1.1|4.5|2.4|5.1|0.6|4.5|
|**ATPA & GSP**|||||||||
|**_All beneficiaries_**|2.7|3.8|3.0|0.8|2.2|3.1|2.3|0.8|
|**_Bolivia_**|5.5|7.9|7.8|0.1|5.2|7.5|7.4|0.1|
|**_Peru_**|5.2|6.2|5.3|0.9|4.8|5.7|4.8|0.9|

35
**Political Prioritization of Early Childhood Education during the COVID-19 Pandemic:**

**A Comparative Policy Analysis of Low- and Middle-Income Countries**

Michelle J. Neuman, Results for Development and University of Pennsylvania Shawn Powers, World Bank JEL Codes: P16, H52, I25, I28 _Key words_ : Political economy, early learning, ECD, COVID-19, Ethiopia, Jamaica, Liberia, Pakistan _<mark>The authors gratefully acknowledge the collaboration of ELP Systems Research teams on whose fieldwork this paper was based; the key informants who contributed time, information, and insights; and UK Foreign, Commonwealth, and Development Office (FCDO) for funding this work.</mark>_
disasters, including the emergency supplies needed in case of a disaster.<sup>16</sup> They also maintain and provide information to households on emergency shelters and other community level emergency preparation systems.<sup>17</sup>

# **4. Findings**

# **4.1 Preparedness to cope with disaster**

We now proceed to examine three well-established factors that contribute to households’ ability to cope with a disaster: possession of emergency supplies, discussion of measures to cope with disaster risks within the household, and community level resources to mitigate the impact of disasters.

At only about 12 percent, the share of households responding that they own any emergency supplies is lowest in Haiti (Figure 3). This should not come as a surprise both because Haiti is the poorest of all five countries in the sample and because, at the time of the interviews, Haiti was going through a period of significant political turmoil. It is reasonable to assume that high poverty levels and political disarray are important factors behind limited ability to cope with negative shocks. More generally, there is a clear country-level income gradient in possession of emergency supplies. In the two wealthiest countries in our sample, Dominica and Saint Lucia, nearly six in ten households (59 and 58 percent respectively) own at least one emergency supply. In Belize and Suriname, the share of households owning emergency supplies is 43 and 28 percent respectively. The causal relation between income and preparedness to deal with disasters may run in two directions. Higher income may enable countries to better prepare for disasters caused by natural hazards, for instance through the purchase of emergency supplies. And, vice versa, better preparation for disasters may reduce their often-high economic costs and thus contribute to economic growth.<sup>18</sup> Households in Belize, Dominica, Saint Lucia, and Suriname were asked which emergency supplies they own (see Table 2). This question was not included in the Haiti survey. Emergency supplies commonly mentioned by households include packaged food, flashlights,

> 16 See, e.g., the website of Belize’s and Saint Lucia’s National Emergency Management Organizations: <u>https://site.nemo.org.bz/preparedness-guidelines/assemble-disaster-kit/</u> and https://nemo.gov.lc/Tips/To-DoChecklist. (last accessed on April 30, 2024).

> 17 - See, e.g., https://nemo.gov.lc/Shelter <u>Listing. (last accessed on April 30, 2024).</u>

> 18 Prior evidence supports the hypothesis that catastrophic meteorological events have a negative impact on economic growth (Hsiang and Jina, 2014).

11
Nuclear Energy Agency (NEA)/International Energy Agency (IEA). 2005. “Projected Costs of Generating Electricity. 2005 Update.” Nuclear Energy Agency, IEA, OECD, Paris. Neij, L. 2008. “Cost Development of Future Technologies for Power Generation – A Study based on Experience Curves and Complementary Bottom-Up Assessment.” Energy Policy 36: 2200-2210.

- OECD (Organisation for Economic Co-operation and Development) and IEA. 2008. “Global Renewable Energy Policy and Measures.” Retrieved from <u>http://www.iea.org/textbase/pm/?mode=re, May 26, 2008.</u>

- Oswald, J., M. Raine, and H. Ashraf-Ball. 2008. “Will British Weather Provide Reliable Electricity?” _Energy Policy_ 36(8): 3202-3215.

Owen, O.D. 2004. “Environmental Externalities, Market Distortions and the Economics of Renewable Energy Technologies,” _The Energy Journal 25 (3)_ : 127-156.

Pitt, L., G.C. van Kooten, M. Love, and N. Djilali. 2005. “Utility-Scale Wind Power: Impacts of Increased Penetration.” Paper No. IGEC-097 in _Proceedings of the International Green Energy Conference_ , 12-16 June, Waterloo, Ontario, Canada.

- Prescott, R., G.C. van Kooten, and H. Zhu. 2007. “Potential for Wind Energy Meeting Electricity Needs on Vancouver Island,” _Energy & Environment_ 18(6): 723-746.

Reiche, K., A. Covarrubias, and E. Martinot. 2000. “Expanding Electricity Access to Remote Areas: Off-Grid Rural Electrification.” In _WorldPower 2000_ (pp. 52-60), ed. G. Isherwod. Isherwood Production, London, UK.

Renewable Energy Industry. 2008. “Worldwide Wind Energy Tops 100,000 Megawatts for the First Time in 2008.” Retrieved from <u>http://www.renewable-energy-industry.com/ business/press-releases/newsdetail.php?changeLang=en_GB&newsid=2834, June 25,</u> 2008.

Roth, I.F. and L.L. Ambs. 2004. “Incorporating Externalities into a Full Cost Approach to Electric Power Generation Life-Cycle Costing,” _Energy_ 29: 2125-2144.

Scott, D.S. 2007. _Smelling Land. The Hydrogen Defense against Climate Catastrophe._ Canadian Hydrogen Association and Natural Resources Canada, Ottawa, ON. Sovacool, B.K. 2007. “Coal and nuclear technologies: creating a false dichotomy for American energy policy,” _Policy Science_ 40: 101-122.

31
> - 10 -

settlement price used to close out all open positions upon expiration of the contract is determined by the exchange on the last trading day based on a poll of banks in London to determine spot LIBOR. Thus, the underlying is an average of rates quoted by banks. The sampling and polling procedure followed by the exchange to determine the final settlemcnt price is designed to avoid all possibility of manipulation of the LIBOR rate prevailing on that date (e.g., by rejecting the two highest and lowest LIBOR quotes).

Computing gains and losses. The _dollar value of a tick_ (or basis point change in the underlying LIBOR) for the eurodollar contract is $25. This amount is given by the dollar gain or loss from a basis-point change on a ninety-day deposit (i.e., notional principal amount times the day-count factor according to the money-market convention times a basis point, or $1,000,000 x 00/360 x .0001 = $25). Accordingly, the daily gain (loss) from a long eurodollar position is equal to $25 times the basis-point decrease (increase) in the underlying LIBOR rate in that day (or against the final exchange-determined settlement rate upon expiration) times the number of contracts held. Conversely, the daily gain (loss) for the short is equal to $25 times the basis-point increase (decrease) in the LIBOR rate. This profit/loss gives rise to variation margin.

Trading of eurodollar contracts. Eurodollar contracts are now traded at the CME in Chicago, at LIFFE in London and at SIMEX in Singapore. Thus, eurodollar contract trading is _de-facto_ available 24 hours. The eurodollar contracts on CME and SIMEX are identical (except for trading hours), and are in fact completely interchangeable and can be mutually offset. The eurodollar contract on LIFFE, on the other hand, settles at a different time of day and uses a slightly different polling sample and procedure to determine the settlement price, and hence is not exactly identical to (though it is certinly a close substitute of) the other two.

# (b) Other money market futures contracts

Non-dollar international bank deposit futures. Contracts on three-month bank deposits exist for most major currencies at one or more exchanges, including the yen, deutschemark, pound sterling, French franc, Swiss franc and Italian lira. These contracts have very similar characteristics to the eurodollar contract as specified above, except for the notional principal value (and, correspondingly, the tick value) which is denominated in each currency and may or may not be equal to one million. The underlying rate may be that of a euro (i.e., offshore) deposit or of a domestic deposit (as is the case with the British "short sterling" and French PIBOR contracts). Note that day count conventions on money markets may chang. (either actual/360 or actual/365), and so the formulae given below for eurodollars might need to be changed accordingly in other market.
2

# I. **Introduction**

For a variety of reasons, it is generally accepted that government health expenditures should disproportionately benefit the poor (cf. e.g. O'Donnell et al. 2007). In practice, in most developing countries the opposite is the case, although there are exceptions such as Malaysia, Sri Lanka and Thailand (cf. van de Walle 1995; Castro‐Leal et al. 1999; Sahn and Younger 2000; Filmer 2003; O'Donnell et al. 2007).

This paper examines the implications of a key assumption that is made when imputing subsidies in benefit incidence analysis (BIA), namely that the unit cost of a government‐provided service bears no relation to the out‐of‐pocket payments paid by the patient. An alternative— and arguably more plausible—assumption is that larger out‐of‐pocket payments for a given unit of utilization reflect more (or more costly) services being delivered. Fees in many government‐ run health systems are not flat‐rate but rather vary according to the quantity and costliness of the tests, procedures, and drugs being administered.

The paper explores theoretically (in section II) and empirically (in section III, using data from Vietnam) the implications of assuming that the unit cost of care for a particular unit of utilization is proportional to or linearly related to the out‐of‐pocket payments paid by the patient. The more general linear case subsumes the constant‐cost and proportionality assumptions as special cases, but also subsumes another interesting special case where general revenues subsidize a basic unit of care and additional costs are met dollar‐for‐dollar by additional fee payments. The paper finds that if fees are more pro‐rich than utilization, the proportionality assumption yields the most pro‐rich distribution of subsidies, and the constant‐ cost assumption the least pro‐rich distribution. The linear cost assumption produces a
**INFORMALITY IN LATIN AMERICA AND THE CARIBBEAN**<sup>*****</sup>

Norman V. Loayza, Luis Servén, and Naotaka Sugawara _The World Bank_

**_JEL_** _classification: K20_ , K30, H11, O40, O17. _Keywords:_ Regulation, government performance, economic growth, informal economy.

> * For valuable comments and suggestions, we are grateful to Ibrahim Elbadawi, Pablo Fajnzylber, Fausto Hernández, Ana María Oviedo, Jamele Rigolini, Jaime Saavedra, and Klaus Schmidt-Hebbel.  This paper draws from Loayza and Sugawara (2009), “The Informal Sector in Mexico: Basic Facts and Explanations,” _El Trimestre Económico_ ; and Elbadawi and Loayza (2008), “Informality, Employment, and Economic Development in the Arab World,” _Journal of Development and Economic Policies_ . The views expressed in this paper are those of the authors and do not necessarily reflect those of the World Bank, their Boards of Directors, or the countries they represent.
Overall, the effect of the Islamic inheritance law on the actual proportion of sons and family size is less pronounced than its effect on son and fertility preferences. The contrast between the effects on ideal and actual outcomes indicates that preferences cannot be fully put into practice. A possible explanation is that at low fertility levels, a demand for sons is more difficult to implement without recurring to pre-natal sex selection. If the differential fertility stopping rule is such that restrictions on family size are more tightly enforced than the demand for boys, moderately low total fertility and moderately balanced sex ratios would be observed. In Indonesia, pre-natal sex selection and abortion are limited.<sup>11</sup> Furthermore, since the late 1960s, Indonesia has an aggressive population policy that promotes two-child families and enforces the use of modern and permanent contraceptive methods (IUD, ligations).<sup>12</sup> This may have significantly limited the couples’ ability to implement their son preference using DSB strategies.

An additional contrast is that between the estimated effects of the inheritance exclusion rule at the family level and the aggregated outcomes in Indonesia. A moderate influence on the sex composition and the number children ever born to Muslim couples was detected. However, Indonesia stands out as a country with balanced sex ratios (1015 males per 1000 females of all ages) and moderately low fertility rate (2.6 children per woman in 2007).<sup>13</sup> Several factors contribute to this difference. To begin with, not all couples have incentives for son-preference. The Islamic inheritance law is binding neither for non-Muslim couples, nor for men who have no brothers, nor for couples who had no exposure to the pre-reform inheritance rule. In addition, it is know that DSB has no aggregate effect on the population sex composition and that it does not cause a noticeable increase in aggregate fertility rates. Across all parities the sex of a child is random and

> 11 In Indonesia abortion is generally illegal; however, abortion is common. According to estimates derived from a sample of health care facilities, the annual abortion rate in Indonesia is 3.7 abortions for every 100 women of reproductive age. In Asia as a whole it is 2.9. Abortion clients are often married adults with unmet need for contraception. (Guttmacher Institute 2008, Utomo et al. 2001).

> 12 A defining feature of the program has been the use of targets rather than a change in attitudes (Hull and Hull 1997, Cammack and Heaton 2001). The targets have encouraged compulsory measures, including the practice of forced long-term contraception and sterilization. In the 1970s, the military was recruited to get as many women as possible fitted with IUDs. In subsequent decades, couples have been coerced by a combination of bribes, threats, and punishments. (Warwick 1986, Hafidz et al. 1992).

> 13 The sex ratio at birth and under 5 years old are slightly less balanced (1221 and 1076), as it would be expected (DHS 2007).

20
19 to a set of macroeconomic variables described as well in the previous section. Finally, ��� refers to the firm-level error term. The coefficient � is the parameter of interest that captures the impact of structural reforms on firm-level productivity. We expect a positive sign in line with the expectation that structural reforms raise firm-level productivity in developing countries.

Combining equations (3) and (4), the baseline model could be written as follows: ��� ����� is the random part of the model with ��� the country-specific error term. The multilevel model has the advantage of capturing both between and within country effects of structural reforms. In addition, we include country, sector, and year fixed effects to control for some potentially important omitted variables, differences in demand conditions<sup>18</sup> and survey differences. The standard errors are clustered at the country-level in all specifications.<sup>19</sup> In the section below, we discuss the key findings from a sample of 10,822 firms across 37 countries over the 2006-14 period.

# **IV.   ESTIMATION RESULTS**

# **A.   Package and pace of reforms**

# **Aggregate index of reforms**

Baseline results are reported in Table 3. All estimates are standardized and can be compared across structural reforms. Column (1) reports the estimates with the average reform index. We find that the aggregate structural reform index has a positive impact on labor productivity growth. The associated coefficient is positive and statistically significant at the 1 percent level. A one standard deviation increase in the reform index is an improvement of 0.284 percentage

> 18 This accounts for the short-term economic recovery effects as some countries might begin the IMF programs in a near-crisis condition with a weak macroeconomic environment. From a sluggish economy, domestic demand may be restored as a result of the program. The year fixed effects help to distinguish between the impacts of structural reforms from the effects of economic recovery. The findings are robust using different combinations of country, sector, and year fixed effects.

> 19 The findings are robust clustering the standard errors at the country-sector and country-sector-year levels respectively.