rafmacalaba/datause-encoder-data huggingface dataset:
POLICY RESEARCH WORKING PAPER 1939

# Summary findings

The literature on speculative attacks has been given new impetus by the collapse of the European currency arrangements beginning in 1992, by the Mexican peso crisis and after-effects in 1994, and most recently by speculative attacks across Asia.

One strand of this literature stresses the importance of imbalances in stocks of monetary and financial aggregates rather than traditional "flow" factors, arguing that massive, volatile capital flows have become a dominant feature of the global landscape, and that exchange-rate levels and current accounts have not proved convincing as proximate causes of crises.

Galindo and Maloney test two popular asset-based - models of speculative attacks Krugman and _-_ Rotemberg (1992) and Calvo and Mendoza (1995) especialLy their emphasis on the second moments of monetary aggregates.

Analyzing monthly panels of appropriate countries in three regions, they find evidence for the importance of money/reserve ratios predicted by both models, and their variance as predicted by Calvo and Mendoza.

But the variance of velocity does not appear to be important, casting some doubt on the KrugmanRotemberg target zone framework and the interpretation of the Calvo-Mendoza results.

- This paper a product of the Poverty and Economic Management Unit of the Latin America and the Caribbean Regionis part of a larger effort in the region to understand the determinants of macroeconomic instability. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Marta Cervantes, room I8-095, telephone 202-473-7794, fax 202-522-0054, Internet address mcervantes@worldbank.org. William Maloney may be contacted at wmaloney@worldbank.org. June 1998. (27 pages)

_The Policy Research Working Paper Series disseminates the findings of wore 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 view of the World Bank, its Executive Directors, or the countries they represent._ Produced by the Policy Research Dissemination Center
**_Energy demand models for policy_** **_<u>formulation</u>_**

# **SAGE [System for the Analysis of Global Energy Markets]**

This is the new tool developed and used by the US Department of Energy for analysing global energy situations. The analysis is reported in the International Energy Outlook. This is an integrated regional energy model that captures the technological richness of the energy sector to determine the energy consumption. In its standard version, it considers 42 end-use demands and the regional demand forecasts are made based on the demand trends, economic and demographic drivers, energy equipment stock and technological changes. The demand model considers 15 regions or countries of the world with special emphasis on large consumers.

The supply-side of the model considers the world oil market, gas market and other energy resources. Given the regional demand, the model determines the least-cost supply options to meet the demand taking end-use equipment and supply options into consideration. The analysis is done on a period-by-period basis (each period of 5 years) for 25/30 years.

# **A1.3.1.5 Electricity system models**

# **WASP [Wien Automatic System Planning]**

The WASP model developed by the International Atomic Energy Agency (IAEA) is a widely used tool that has become the standard approach to electricity investment planning around the world (Hertzmark, 2007). The current version, WASP-IV, finds the optimal expansion plan for a power generating system subject to constraints specified by the user. The programme minimises the discounted costs of electricity generation, which fundamentally comprise capital investment, fuel cost, operation and maintenance cost, and cost of energy-not-served (ENS)<sup>40</sup> (International Atomic Energy Agency (IAEA), 1998a). The demand for electricity is exogenously given and using a detailed information

> 40 Energy-not-served (ENS) or expected un-served energy is “the expected amount of energy not supplied per year owing to deficiencies in generating capacities and/or shortage in energy supplies” (International Atomic Energy Agency (IAEA), 1984).

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Policy Research Working Paper 7419

# **Abstract**

This study exploits a natural experiment to investigate the impact of land reform on the fertility outcomes of households in rural Ethiopia. Public policies and customs created a situation where Ethiopian households could influence their usufruct rights to land via a demographic expansion of the family. The study evaluates the impact of the abolishment of these pronatal property rights on fertility outcomes. By matching aggregated census data before and after the reform with administrative data on the reform, a difference-in-differences approach between reform and non-reform districts is used to assess the impact of the reform on fertility outcomes. The impact appears to be large. The study estimates that women in rural areas reduced their life-time fertility by 1.2 children due to the reform. Robustness checks show that the impact estimates are not biased by spillovers or policy endogeneity.

This paper is a product of the Agriculture and Rural Development 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 dali1@worldbank.org, kdeininger@worldbank.org and niels.kemper@uni-mannheim.de.

_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
Johnson, N., M. Strubegger, M. McPherson, S.C. Parkinson, V. Krey, P. Sullivan (2017) A reduced-form approach for representing the impacts of wind and solar PV deployment on the structure and operation of the electricity system, _Energy Economics_ Volume 64. 651-664.

Kriegler, Elmar, Nils Petermann Volker Krey, Valeria Jana Schwanitz, Gunnar Luderer, Shuichi Ashina, Valentina Bosetti, Jiyong Eom, Alban Kitous, Aurélie Méjean, Leonidas Paroussos, Fuminori Sano, Hal Turton, Charlie Wilson, Detlef P. Van Vuuren (2015) Diagnostic indicators for integrated assessment models of climate policy, _Technological Forecasting & Social Change_ 90 45–61 Luderer, G., V. Bosetti, M. Jakob, M. Leimbach, J. Steckel, H. Waisman, O.Edenhofer (2012), On the economics of decarbonization — results and insights from the RECIPE project, _Climate Change_ . 114 (1) 9–37 Luderer, G., R.C. Pietzcker, C. Bertram, E. Kriegler, M. Meinshausen, O. Edenhofer (2013) Economic mitigation challenges: how further delay closes the door for achieving climate targets, Environ. Res. Lett., 8 p. 034033, 10.1088/1748-9326/8/3/034033 Luderer, G. M. Leimbach, N. Bauer, E. Kriegler, L. Baumstark, C. Bertram, A. Giannousakis, J. Hilaire, D. Klein, I. Mouratiadou, M. Pehl, R. Pietzcker, F. Piontek, N. Roming, A. Schultes, V.J. Schwanitz, J. St refler (2015) Description of the Remind Model (Version 1.6) (SSRN Scholarly Paper No. ID 2697070), Social Science Research Network, Rochester, NY Luderer, G. et al., 2017: Assessment of wind and solar power in global low-carbon energy scenarios: An introduction. Energy Economics, 64, 542–551 Marcucci, A., S. Kypreos, and E. Panos, 2017: The road to achieving the long-term Paris targets: Energy transition and the role of direct air capture. Climatic Change, 144(2), 181–193, doi:10.1007/s10584- 0172051-8 McCollum, D.L. et al., 2018: Energy investment needs for fulfilling the Paris Agreement and achieving the Sustainable Development Goals. _Nature Energy_ , 3(7), 589–599, doi:10.1038/s41560-018-0179-z Mendelsohn, R, W Nordhaus, and D Shaw (1994), ‘The Impact of Global Warming on Agriculture: A Ricardian Analysis’, American Economic Review 84(4): 753-71.

Mercure, J. F., Pollitt, H., Viñuales, J. E., Edwards, N. R., Holden, P. B., Chewpreecha, U., Salas, P., Sognnaes, I., Lam, A., & Knobloch, F. (2018). Macroeconomic impact of stranded fossil fuel assets. Nature Climate Change, 8(7), 588– 593.

<mark>Mercure, J.-F., Knobloch, F., Pollitt, H., Paroussos, L., Scrieciu, S. S., & Lewney, R. (2019). Modelling innovation and the macroeconomics of low-carbon transitions: Theory, perspectives and practical use.</mark> _<mark>Climate Policy</mark>_ <mark>,</mark> **<mark>19</mark>** <mark>, 1019– 1037.</mark> Messner, S. and M. Strubegger (1995) User's Guide for MESSAGE III, IIASA Working Paper WP-95-069 39
# **1. Introduction**

Since 2000, wage inequality in Mexico has declined (Figure 1). Campos et al. (2014) decompose the change observed in wage inequality into changes in _returns_ to human capital (formal education and work experience) and changes in human capital _endowments_ . Their findings suggest that the endowment effect has been unequalizing, while the wage structure effect is equalizing and larger.<sup>2</sup> A decline in the relative wages of skilled workers can occur if one or more of the following situations exists: the wages of the low-skilled grow faster than the wages of the skilled; the wages of the low-skilled increase while the wages of the skilled workers decline; or the wages of the low-skilled workers decline more gradually than the wages of skilled workers. As illustrated in Figures 2 and 3, the average hourly wage of college-educated workers declined during the entire period, while the wages of the rest of the workers rose from 2000 to 2008. As a result of the global financial crisis, all wages declined from 2009 onwards but those of college-educated workers fell at a faster pace (Figure 3).<sup>3</sup>

**Figure 1. Wage Inequality of All Workers**

<!-- Start of picture text --> A. Gini coefficient of hourly wages B. Relative supply and relative wages of<br>college-educated workers<br>Year - Quarter Year - Quarter<br>Males Females Relative Supply Relative Wages<br>.45 40<br>20<br>.4<br>0<br>Gini<br>.35<br>Proportional Change (%) -20<br>.3 -40<br>2000q2 2001q2 2002q2 2003q2 2004q2 2005q2 2006q2 2007q2 2008q2 2009q2 2010q2 2011q2 2012q2 2013q2 2014q2 2015q2 2000q2 2001q2 2002q2 2003q2 2004q2 2005q2 2006q2 2007q2 2008q2 2009q2 2010q2 2011q2 2012q2 2013q2 2014q2 2015q2<br><!-- End of picture text --> Notes: Authors’ calculations using quarterly Labor Force Surveys from 2000 to 2015. Estimations consider all individuals with a positive number of hours worked and valid wages, ages 23-65. Panel B shows the proportional change with respect to 2000:2 of the relative supply of workers (share of individuals with college) and relative wages (log of hourly wage of workers with college education) with respect to rest of workers. This paper aims to establish whether there is evidence in support of a degraded tertiary effect. Sample includes men and women.

2 Even though there was significant educational upgrading and the distribution of the education stock became more equal, these changes were unequalizing because of the so-called “paradox of progress” (see Bourguignon et al. 2005). Depending on the convexity of returns and the point of the education equalization process at which the country finds itself, a reduction in the inequality of educational attainment may lead to a rise in earnings inequality. Indeed, as Gasparini et al. (2011) point out, the ‘paradox of progress’ has been a pervasive phenomenon in Latin American labor markets in the last couple of decades.

3 This result contrasts with what the literature finds in more advanced countries, which shows an increase in inequality mainly due to wage increases of high-skilled workers (Autor et al. 2008; Goos and Manning, 2007).
registration (Figure 17). LE-SE either do not see the benefit from registering (52 percent) or do not have information about how to register (43 percent). HE-SE also identify a lack of information (37 percent) and seem to focus on the costs and benefits, citing that they do not see the benefit of registering (35 percent). A smaller share (12 to 22 percent) of respondents cite inspections and the need to pay bribes as a reason for not registering. The findings are aligned with the idea that formality can be considered a factor of production that business owners will “purchase” when the benefits outweigh the costs.<sup>59</sup>

**Figure 17: Reason for not Registering with Authorities, by Informal Firm Type**

<!-- Start of picture text --> 48%<br>Lack of information about the process of registration 37%<br>43%<br>44%<br>No benefit from being registered 35%<br>52%<br>22%<br>Inspections and meetings with government officials 13%<br>19%<br>21%<br>Bribes registered businesses need to pay 12%<br>16%<br>35%<br>Taxes registered businesses need to pay 23%<br>33%<br>0% 10% 20% 30% 40% 50% 60%<br>employer self-employed (high education) self-employed (low education)<br><!-- End of picture text --> Source: Own elaboration based on IES. Notes: Weighted average including Mozambique, Zambia and Zimbabwe.

> 59 For example, Levenson and Maloney (1998) find that firms become formal when the perceived benefits that registration buys (access to finance, lower risk of fines, etc) exceeds the monetary and transaction costs of registering. De Mel et al. (2010) finds that it is the recurrent costs of being registered, rather than the startup costs, that employers consider when making the choice to register.

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# year.

The interaction term between the increase in the share of exports and i is statistically significant, but its magnitude is not large. One concern about this variable is that there could be a great deal of variation in the export share that has little to do with the mechanisms described by the theory. There is also concern about possible endogeneity. Itis quite possible that high income growth fuels high growth in trade rather that vice versa. Table 6 reports an attempt to gauge the importance ofthese two possible effects. It reports a two stage least squares regression that uses independent indicators of openness as instruments for EX_DIFF. These instruments include membersh **i** p na trade union for developed countries (EEC and EFTA) and a set of indicators for openness of less developed countries reported in the 1987 World Development report. The first stage regressi **o** fn EX_DIFF on these instruments is sensibly behaved. The Rf is around .3. EEC countries had greater growth in the export share than did EFTA countries, and the ranking of the openness given by the World Bank corresponds with that in the regression.

Whether EX_DIFF is entered on its own or as an interaction term in the reported result, the effect of using two stage least squares is to increase the magnitude of its coefficient by3 or 4 fold. Now, a increase in the share of exports of 10% (e.g. from 107 to 20%) causes an increase in the marginal product of capital of about a 4% (e.g. from 10% to 14%.) The coefficient on the Latin American dummy falls slightly, but remains significant, a hint that trade performance is part of what distinguishes this area. Otherwise, the results from Table 6 are very elose to those from Table 5.

In the estimates of equation 13 reported in Tables 5and 6, the theory suggests that measures of labor force growth and growth in human capital should enter as well. Attempts to find an effect using (admitted weak) proxies for these
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concept with a firm analytical foundation in PPP theory.' In essence, a PPP measure based on the **GDP** deflator is advocated since each country's own pattern of production provides the ideal source of weights to construct its price measure for PPP computation.

**"** See Lawrence H. Officer, "The Relationship Between Absolute and Relative Purchasing Power Parity,* Review of Economics and Statistics, Vol. **60,** November **1978, pp. 562-568**
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# 5. Concluslion

Increasing the statutory minimum wage rate can seem an attractive policy for politicians keen to enhance their popularity amongst the poor. Political pressure for an increase in the minimum agricultural wage rate in Maharashtra led to its doubling in mid-1988. Subsequently, there has been concern in government circles and the development community about the consequences for the state's famous "Employment Guarantee Scheme". The view one takes of the Maharashtra experience also has implications for the design of other schemes of this sort, such as the proposed national EGS.

Historically, statutory minimum wage rates in rural areas have been virtually impossible to enforce, and the agricultural wage rate has often been belcw the minimum wage rate. In theory at least, EGS gives the government a policy instrument for enforcing a minimum wage rate, as the guarantee should be a credible threat in the labor market. However, unless the politicians are also willing to foot the bill, the need for budgetary rastraint will create pressure for a relaxation of the "guarantee". If so, the poverty alleviation impact of an increase in the minimum wage ea.e may be quickly dissipated; some will get higher wages, but others will have to go without. Under these - - circumstances, it is quite possible for poverty by any reasonable measure to increase after the imposition of a higher wage rate for relief work (Ravallion, 1990a).

Our comparison of the budgetary aggregates and related statistics on EGS reveals that average monthly expenditures actually fell after the increase in the statutory minimum wage rate. This is attributable to two main factors: i) After an initial adjustment period of a few months, we find that the real average EGS wage rate increased by only one-third, despite the initial
# **3.3 Firm Growth**

Without growth, the contribution of the manufacturing sector to economic development and poverty reduction will be modest. The firm surveys have taught us a lot about why some firms grow and other do not. From a policy point of view, a better understanding of the relationships between growth and certain firm characteristics is important, since it can offer guidance as to what type of firms are likely to be relatively successful and good at creating jobs in the future. Identification of such firms would clearly be informative to policy makers. The relationship between firm size and growth is of particular interest in the context of African manufacturing, since most firms in Africa are very small. How realistic is it to hope that some of these firms will grow and become successful large firms in the future? The relation between firm age and growth is also important. For example, if young firms grow quickly, policy measures aimed at encouraging entry may have significant growth effects in the short and medium term.

Ramachandran and Shah (1999) analyze firm growth (in terms of employment) in a RPED-sample of firms from Kenya, Zimbabwe, Zambia, and Tanzania. They draw on the learning model proposed by Jovanovic (1982), modeling firm growth as a function of firm age and firm size variables, plus various variables for entrepreneurial characteristics. They find that firm size and firm age are negatively correlated with firm growth. Sleuwaegen and Goedhuys (2002) obtain a similar result for firms in Côte d’Ivoire, as do Mazumdar and Mazaheri (2003) based on a pooled sample from Cameroon, Côte d’Ivoire, Ghana, Kenya, Tanzania, Zambia and Zimbabwe. Thus, the finding common across these studies is that growth is systematically higher among small and young firms than among large and old firms.

The negative relationship between size and growth suggests an important role for small firms in the development process, in that this is where we should expect to see most of the growth. It is important to recognize that this result may be spurious, however. The problem, dubbed by Davis, Haltiwanger and Shuh (1996) as the “The Regression Fallacy”, arises whenever there are transitory fluctuations in size or whenever there are transitory measurement errors in observed size. The resulting bias in the estimated relationship between initial size and growth is negative, hence failure to address this problem can produce a picture of the growth of small firms that is too good. In view of this, the conclusion drawn by Sleuwaegen and Goedhuys (2002) that 20
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|Survey<br>|Title in full<br>|Core topics<br>|No. of countries<br>|History<br>|Data collection<br>method<br>|Sample size<br>|Further<br>information on<br>data and access<br>|
|---|---|---|---|---|---|---|---|
|MCSS|Multi-Country<br>Survey Study on<br>Health and<br>Responsiveness|Adult health state descriptions,<br>health conditions, screening,<br>health state valuations, health<br>system responsiveness, adult<br>mortality|60 countries of all income<br>levels and worldwide, 35 in<br>HEFPI (postal surveys<br>excluded, several countries to<br>be added)|2000-2001|Face-to-face<br>interviews,<br>telephone<br>interviews,<br>postal survey|Typically<br>600-6,000<br>adults|http://apps.who.i<br>nt/healthinfo/syst<br>ems/surveydata/i<br>ndex.php/catalog/<br>mcss/about|
|MICS|Multiple<br>Indicator Cluster<br>Survey|Population, health, and<br>nutrition, with a focus on<br>reproductive, maternal and<br>child health|108 LMIC with completed<br>surveys, 89 with available<br>data, 73 in HEFPI (MICS 5 to<br>be added, a number of earlier<br>wave surveys to be added)|Ongoing since<br>1995, first<br>HEFPI data<br>from 1999|Face-to-face<br>interviews,<br>physical<br>measurements|On average<br>11,000<br>households<br>in MICS 5<br>wave|http://mics.unicef.<br>org/|
|STEPS|Stepwise<br>Approach to<br>Surveillance|Adult non-communicable<br>disease-related health status<br>and health behaviors|111 LMIC, 94 in HEFPI<br>(subnational surveys<br>excluded, several to be added)|Ongoing, dating<br>back to 2001|Face-to-face<br>interviews,<br>physical<br>measurements,<br>biochemical<br>measurements|Typically<br>1,000-<br>10,000<br>adults|http://www.who.i<br>nt/ncds/surveilla<br>nce/steps/en/|
|WHS|World Health<br>Survey|Health expenditure, health<br>insurance coverage, adult<br>health state descriptions,<br>health state valuation, risk<br>factors, chronic conditions,<br>mortality, health care<br>utilization, health systems<br>responsiveness and social<br>capital.|70 countries of all income<br>levels and worldwide, all in<br>HEFPI|2002-2004|Face-to-face<br>interviews|Typically<br>between<br>1,000 and<br>8,000<br>adults|http://www.who.i<br>nt/healthinfo/sur<br>vey/en/|

All surveys (we use) are nationally representative household surveys