rafmacalaba/datause-encoder-data huggingface dataset:
rather than worsening the credit conditions, striving to maintain relationships with good clients and preserve the propensity to save during the crisis period.

**Chart 11. Average lending and Central Bank (CB) bills interest rates**

<!-- Start of picture text --> 25.00<br>20.00<br>15.00<br>10.00<br>5.00<br>0.00<br>CB bills interest rate (in %, on annual basis)<br>Average lending interest rate on denar credits (in %, on annual basis)<br>2002/01 2002/04 2002/07 2002/10 2003/01 2003/04 2003/07 2003/10 2004/01 2004/04 2004/07 2004/10 2005/01 2005/04 2005/07 2005/10 2006/01 2006/04 2006/07 2006/10 2007/01 2007/04 2007/07 2007/10 2008/01 2008/04 2008/07 2008/10 2009/01 2009/04 2009/07 2009/10 2010/01 2010/04 2010/07 2010/10 2011/01<br><!-- End of picture text --> Source: NBRM

# **II. Macroprudential Regulations**

This section focuses on the macroprudential measures undertaken by the NBRM from 2004 to 2010. This seven-year time horizon encompasses the pre-crisis period (2004–2007), the crisis period (2008–2009), and the post-crisis period (2010). Within this period, the NBRM undertook four measures that have a macroprudential nature and were aimed (i) at reducing the systemic risk arising from the growth of the balance sheets and the risk-taking by banks and (ii) at enabling stable supply of banking services to the real economy:<sup>12</sup>

1. Regulation on foreign exchange lending

2. Amendments to the capital adequacy framework<sup>13</sup> 3. Prevention of high credit growth risk 4. Introduction of liquidity ratios The four tools used by the NBRM are microprudential instruments in their essence, recalibrated to limit the systemic risk and to promote resilience of the banking system. The main purpose of the employed instruments was to address the amplification of the banking-systemwide risk by the interactions with the real economy. Even though it is difficult to draw a clear line connecting the four instruments, most of them are price-based tools, intended to protect the banking system against buildup of credit risk due to high credit growth.

In addition to the above-mentioned measures, in the precrisis and the crisis period the NBRM exploited a number of other tools that had certain macroprudential benefits. These tools, such as the monetary policy instruments (official interest rates, foreign market interventions, and reserve requirements), which were explained in more details in section I, other tools that are not

> 12 The measures are listed chronologically, depending on the time of their introduction. 13

> These two measures have similar rationale and impact, which is why they will be presented jointly.

14
**Figure 24.  Predicted Wage vs. Vintage of Education. Latvia, 2002**

(upper panel: males, lower panel: females) <!-- Start of picture text --> 180<br>160 Higher education<br>140 Postsecondary<br>vocational education<br>120<br>Secondary education<br>100 (including technical)<br>Basic education or<br>80<br>less<br>60<br>0 5 10 15 20 25 30 35 40 45 50<br>years since graduating<br>140<br>Higher education<br>120<br>Postsecondary<br>100<br>vocational education<br>80 Secondary education<br>(including technical)<br>60 Basic education and<br>less<br>40<br>0 5 10 15 20 25 30 35 40 45 50<br>years since graduating<br>predicted wage, LVL<br>predicted wage, LVL<br><!-- End of picture text -->

**Firm loyalty pays off.** Specific experience can be proxied by job tenure – the number of years with the current employer. The average tenure of full-time employees in 2002 was 6 years (5 for men and 7 for women). Other things equal, an additional year of tenure increased wages on average by 1.2 percent. Of this increase, 0.7 percent represented a “reward”, in the sense that it remains after controlling for occupation and firm size. The remaining 0.5 percent can be attributed to promotions associated with longer tenure. Returns to tenure are higher in Latvia than in Estonia and Lithuania (respectively 0.5 percent and 0.3 percent per year with occupation controls, see OECD (2003a)). It is not clear whether higher returns to tenure are indicative of a somewhat slower pace of change, or are due to stronger trade unions than in neighboring countries. As in Estonia, Russian-speakers are estimated to have higher returns to tenure than ethnic Latvians. Surprisingly, the lowest payoff to tenure is found in the public sector. This is most likely due to the inflow of young well-educated people. During their first year in public sector firms employees earn only 7 percent less than otherwise similar workers with longer tenures.

**Temporary workers face uncompensated risks.** Another indicator of the strength of employment relationships is the type of contract. Temporary or seasonal workers earn 12 percent less than permanent

35
_Figure 18: Balance of responses on the positive and negative role of employment and wages in well‐being changes by place of residence_ <!-- Start of picture text --> 6<br>4<br>2<br>0<br>-2<br>-4<br>-6<br>-8<br>2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017<br>average Minsk Large cities Small cities Rural area<br>employment wage dynamics<br><!-- End of picture text --> Source: Authors’ estimates based on HSS data.

# 4.2. Reported coping strategies

Respondents who were faced with a reduction in their well‐being, were asked what coping strategies they used in order to adapt to the new circumstances. The most common strategy is reducing expenditures. During the crisis, 79 percent of those experiencing a reduction in well‐being (29 percent of the population overall) had to cut expenditures.<sup>5</sup> Strategies, related to the search of possibilities of increasing income were employed by only 8.6 percent of those who faced a well‐being reduction in 2016 (3.2 percent of total population). They were more common at the beginning of the crisis (employed by 4.2 percent of the population and 12.4 percent of those suffering a worsening of well‐being), as employment possibilities were not that scarce, and again became more common with the onset of the economic recovery in 2017. Other strategies, including reliance on help from relatives or the state, are generally not common, and households did not increase their reliance on these coping strategies during the crisis.

Households vulnerable to the risk of poverty appear to rely to a greater extent on coping strategies related to the search of opportunities for additional earnings than the average household (Figure 19). Pre‐crisis, in 2014, 19.7 percent of those in the vulnerable group tried to increase their income from employment or self‐ employment to compensate their worsened well‐being. The narrowing labor market opportunities during the recession meant that they had to rely more on expenditure reduction than on active coping strategies, which for low income households can affect their ability to satisfy basic needs and may aggravate their living conditions. Households vulnerable to poverty had to rely also on help from relatives much more often than the average household.

> 5 For comparison, 71 percent of those experiencing a reduction in well‐being in 2014, and 15 percent of the population overall reported a reduction in expenditures before the recession.

16
<!-- Start of picture text --> Government revenue/GDP, difference to the baseline in percentage points Government deficit/GDP, difference to the baseline in percentage points<br>28 —— Scenario 1: Carbon tax and debt repayment 3.0 —— Scenario 1: Carbon tax and debt repayment<br>24 —— Scenario 2: Carbon tax and reduction in direct taxes —— Scenario 2: Carkon tax and reduction in direct taxes<br>;<br>20 —— Scenario3: Ca tax and an increase in hh. transfers 25 —— Scenario3: Caren tax and an increase in hh. transfers<br>1612 s.\ : 2015 7<br>08<br>04 a 10 i<br>0.0 _-ae IN,I, ———<br>0.408 ieSS— 0.50.0 /i ws:a———nt =<br>10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40<br>Carbon tax revenue/total revenue, in percent Direct tax revenue/total revenue, in percent<br>20 —— Scenario 1: Carbon tax and debt repayment 30 —— Scenario 1: Carbon tax and debt repayment<br>—— Scenario 2: Carbon tax and reduction in direct taxes —— Scenario 2: Carbon tax and reduction in direct taxes<br>10 Scenario3: Carbon tax and an increase in hh. transfers Scenario3: Carbon tax and an increase in hh. transfers<br>——s i 25 \ | Baseline<br>-102 20 || \<br>15 | | SS = Le<br>-20 |] : Pf<br>-30 10 __e| ~ ,<br>-50 Oo<br>10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40<br><!-- End of picture text -->
greater consumption in the future. We do not, however, allow for cross country di¤erences in life expectancy or in inequality as in the Jones and Klenow paper. In our approach the cross-country di¤erences in welfare are summarized solely in terms of productivity and capital endowments and not in terms of consumption and leisure.

A comparison of welfare across countries requires either assuming that their respective representative agents possess the same utility function, or making the comparison from the perspective of the representative agent in a reference country. We will in any case assume that the discount factor, �, is the same in each country. These assumptions suggest that it is more reasonable to focus on a subset of countries that are relatively homogenous and this is exactly what we will do by using core OECD countries in our empirical illustration.

Let us go back to a modi...ed version of equation (5) and assume we have taken the log-linear expansion around the US steady state: If preferences are common across countries, vt<sup>i,can be interpreted as the normalized lifetime utility</sup> of an individual in country i. Alternatively, vt<sup>i,canbethoughtofrepresentingnormalizedlifetime</sup> welfare of a US individual when facing the sequence of prices, initial endowments, pro...ts and Xt of country i.

In both cases, using the log-linearized version of the budget constraint in equation (10) expanded around the US steady state, we can obtain (proceeding in a way parallel to the one used in the previous section):<sup>10</sup> De...ne the productivity term obtained using US shares as PR ~~i~~ t+s<sup>=</sup> �s<sup>us</sup> c<sup>log C</sup> t<sup>i</sup> +s<sup>+ sus</sup> i<sup>log</sup> NIt<sup>i</sup> t<sup>i</sup> <u>++ss</u> � �

> 10 When vti<sup>representsthenormalizedutilityofandindividualfromcountryi;itisobviousthat(22)followsfrom</sup> (10). When vt<sup>iisnormalizedutilityoftheUSindividualwhenfacedwiththepricesequenceandtheendowments</sup> of country i, the result still holds. It does not follow that the US individual will choose the quantities of country i unless the utility function is identical across countries. However,after expanding the budget constraint around the US steady state, the algebraic sum of the terms in prices for the US individual facing country i prices and endowments equals the algebraic sum of the terms in the quantities for the individual from country i. Hence (22) holds in this case too.

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Policy Research Working Paper 4963

# **Abstract**

This paper aims to estimate the global aggregate of disaster impacts during 1960 to 2007 using Social Accounting Matrix (SAM) methodology. The authors selected 184 major disasters in terms of the size of economic damages, based on the data available from the International Emergency Disasters and MunichRe (NatCat) databases for natural catastrophes. They estimate the losses and total impacts including the higher-order effects of these disasters using social accounting matrices constructed for this study. Although the aggregate damages based on the data amount to US$742 billion, the aggregate losses and total impacts are estimated at US$360 billion and US$678 billion, respectively. The results show a growing trend of economic impacts over time in absolute value. However, once the data and estimates are normalized using global gross domestic product, the historical trend of total impacts becomes statistically insignificant. The visual observation confirms the inverted ‘U’ curve distribution between total impact and income level, while statistical analyses indicate negative linear relationships between them for climatological, geophysical, and especially hydrological events.

This paper—a joint product of the Global Facility for Disaster Reduction and Recovery Unit, Sustainable Development Network Vice Presidency, and the International University of Japan—is part of a larger effort in the Network to disseminate the emerging findings of the forthcoming joint World Bank-United Nations’ Assessment of the Economics of Disaster Risk Reduction. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at okuyama@iuj.ac.jp and ssahin@worldbank.org, respectively. We are grateful to Apurva Sanghi, Reinhard Mechler and participants of the seminar at the World Bank held on this topic for their suggestions and constructive comments.

_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
See Artuc (2012) for the derivation of the equations above. Using the value functions, we can easily derive gross flows of workers (thanks to McFadden (1973)). The probability of a type _s_ worker to move from sector _i_ to sector _j_ is equal to The equations (9) and (6) are pivotal for our estimation strategy.

# **Aggregate Economy**

To be able to simulate workers’ response to trade shocks, we need to define labor demand equations, more specifically _wt_<sup>_i,s_</sup> = _W_<sup>_i,s_</sup> ( _ξt_ ). In this section, we define production functions and derive wage equations from them. Note that the equations we derive in this section are only required for simulations, and they do not play any role in the main estimation strategy.

The number of type _s_ workers in sector _i_ at time _t_ is defined as _L_<sup>_i,s_</sup> _t_<sup>.Then, the distribution</sup> of workers at time _t_ + 1 can be expressed as We assume that any 61 years old worker moving up to the next age group is retired, he receives a lump-sum payment and exits the labor force, and is replaced by a 26 years old worker.

The production functions are Cobb-Douglass and they require skilled labor, unskilled labor, capital and intermediate inputs from all sectors. Some of the output is consumed by workers and some of it is used as input for production. In each sector, there is a large number of competitive employers offering workers their marginal product. We assume that 11
that attitudes to and experiences of IPV differ between religious and cultural groups<sup>2</sup> (Odimegwu and Okemgbo 2003; <mark>Antai and Antai 2008;)</mark> . IPV is still widely condoned in Nigeria with 35 percent of women and 25 percent of men believing a husband is justified in beating his wife for any of the five reasons asked about in the survey<sup>3</sup> (NPC 2014).

Table 1: Women who have ever experienced physical or sexual violence by a husband or partner in Nigeria, by location and region, percent.

||**National**|**Urban**|**Rural**|**North-**<br>**Central**|**North-**<br>**East**|**North-**<br>**West**|**South-**<br>**East**|**South-**<br>**South**|**South-**<br>**West**|
|---|---|---|---|---|---|---|---|---|---|
|**2008**|18|18|19|26|17|7|24|39|14|
|**2013**|16|18|15|21|21|6|20|28|20|

Source: 2008 and 2013 Nigerian Demographic and Health Survey reports Between 2008 and 2013, a time period that corresponds to the onset of the BH insurgency, the national rate of IPV fell from 18 to 16 percent. However, this progress was uneven and in two regions, North East and South West, IPV prevalence rates increased. The BH insurgency was focused in northeast Nigeria and so the rise in IPV could be associated with conflict but equally could be driven by other factors that create variation in IPV prevalence rates in different locations in Nigeria. Our paper examines whether the conclusion that conflict has led to increased IPV can be supported by further analysis of the DHS data and we set out below some background to the conflict and identify the locations where communities were most impacted.

Boko Haram (BH) carried out its first known terrorist activity in the Northeastern state of Borno, Nigeria in 2009.<sup>4</sup> BH’s activities were initially focused mostly in Northeastern Nigeria but from 2014 onwards its terrorist activities spread to the neighboring countries of Cameroon, Chad and Niger (UNHCR 2018). Between 2009 and 2017, <mark>the Armed Conflict Location and Events Database (ACLED) reports 2,378 conflict events</mark><sup>5</sup> <mark>across Nigeria with BH as an actor. During this period, the Northeastern states of Borno, Yobe and Adamawa experienced the highest number of conflict events associated with the BH insurgency with 1,678, 219 and 179 events respectively.</mark> The insurgency is responsible for large-scale forced migration and an unprecedented regional and

> 2Ethnicity is often used as a proxy for culture because it entails social norms that determine behaviors as well as the gender roles and power dynamics within the household and community as well as women’s contribution to household decision-making (see Oyediran and Isiugo-Abanihe 2005).

> 3 Reasons include: arguing with him, refusing sex, burning the food, neglecting the children, or going out without telling him.

> 4 Armed Conflict Location & Event Data Project (ACLED). https://www.acleddata.com/, accessed March 10, 2018.

> 5 BH events in the ACLED are defined as any incidents including riots, clashes, protests, riots or battles where BH is an actor.

4
that local access to knowledge and human capital significantly affect entry by knowledgebased firms, whereas Colombo and Grilli (2010) note that the founder’s human capital is a key driver of post-entry growth of high-tech start-ups.

Turning our attention to DCs and taking into account that entrepreneurship and selfemployment are often carried out within the informal sector of the economy in this context, the impact of education is controversial. In fact, higher education augments the managerial capabilities necessary to run a business enterprise, but it also increases the outside option for salaried employment in the formal sector of the economy. This is most likely the reason why van der Sluis, van Praag, and Vijverberg (2005), in their comprehensive survey, found that in the majority of DCs, education reduces the likelihood of entering self-employment as contrasted with wage-earning employment.

In contrast, Goedhuys and Sleuwaegen (2000) ran logit estimations on data concerning the owners of 141 manufacturing firms in Côte d’Ivoire and found that the probability of being an entrepreneur is strongly stimulated by both apprenticeship and formal education, with the positive effect of education steadily increasing from lower to higher levels of education. Similarly, Ghani, Kerr, and O’Connell (2011), using cross-sectional establishment-level surveys of manufacturing and services companies in Indian districts, conclude that higher education in a local area significantly increases the supply of entrepreneurs. However, this relationship becomes non-significant when the informal manufacturing sector is taken into account. This is an interesting outcome that confirms that education may render the choice of being a wage earner preferable to entering selfemployment in the informal sector (often characterized by “defensive entrepreneurship”).<sup>15</sup> The evidence concerning the relationship between education and the post-entry performance of new businesses in DCs may also appear controversial on the surface. For example, Kantis, Angelli, and Koenig (2004) show that secondary school attainment yields 17
years ahead. For example, current projections are for the average central government deficit of developing countries to decline from about 3 percent of GDP in 1994 to about 2 percent by 1996. 6 An improved public sector saving performance should contribute to higher overall saving. 7 As **in** investment, the rise **in** saving is expected to be the largest in East Asia. Over the last ten years, gross national saving in the region averaged a high 33 percent of GDP, having risen from 27 percent in the previous ten years. Declining youth dependency ratios, combined with the virtuous circle of high investment, high growth and high saving that has been much in evidence in East Asia in the past two decades, are likely to boost the average regional saving rate to 36-37 percent of GDP over the next ten years. Saving rates are also expected to rise in other developing country regions, albeit more moderately and from much lower levels. Saving rates in Latin America and Sub-Saharan Africa, averaging about 17 and 15 percent of GDP, respectively, are among the lowest in the developing world (Chart 8), and have declined over the past decade or so. Provided the macroeconomic and incentive-system reforms now underway remain on track, saving rates in these regions are expected to recover some of the lost ground, averaging up to two percentage points of GDP higher over the next ten years than at present.

Domestic financing of prospective increases in investment in developing countries will be facilitated by a shift in the composition of investment toward the private sector. Again, East Asia provides an example. As noted, a major driver of investment in East Asian countries in coming years will be their vast needs for infrastructure development to support continued rapid industrialization. It is

> 6 IMF(1995a).

> Empirical evidence has tended to reject the notion of a one-to-one offset between public and private saving-the so-called Ricardian equivalence. Most studies find the offset to be little more than onehalf. See, for example, Corbo and Schmidt-Hebbel (1991), Edwards (1995) and IMF (1995a).

12