rafmacalaba/datause-encoder-data huggingface dataset:
no differences in the effect size of transfers in cash versus transfers in-kind. Second, we examine whether the transfer and the type of transfer (in-kind or in cash) affect participation in the labor market and the choice between participating in agricultural and nonagricultural activities. We find that the transfer, irrespective of type, does not affect participation in labor market activities. However, we do find that the transfer has a significant impact on the time allocation of males between agricultural and nonagricultural activities. As with consumption, we find no differences in the effects of transfers in-kind or in cash on labor supply.

Our empirical findings also shed light on the debate about the potential equity and efficiency effects of redistributive policies. Consistent with the findings of Blundell and Pistaferri (2003), who argue that the food stamp program in the US provides effective partial insurance among low-income households, our combined estimates on the impact of the PAL program on labor supply and consumption suggest that the cash or in-kind transfers provided by the PAL program manage to mitigate market imperfections, such as the absence of credit and insurance markets, that lead to higher efficiency as well as equity.

The organization of the paper is as follows. Section 2 describes the PAL program and the data used. Section 3 summarizes the theoretical predictions about the different impacts of inkind and cash transfers on consumption and labor supply. Section 4 presents the econometric specification and discusses the results regarding the impact of PAL on food and total consumption, participation in the labor force participation and in particular on the decision to participate in agricultural and non-agricultural activities. Section 5 concludes.

# **2. A Brief Description of PAL and the Data**

The data we use are based on a longitudinal sample of 5,851 households in 206 poor rural localities from six southern Mexican states (Chiapas, Guerrero, Oaxaca, Quintana Roo, 6
that accounts for the self-selection of firms into export markets and their impact on trade volumes. Finally, no information on the distribution of firms in a given country is required to carry out estimates.

HMR use their analytical framework to develop a two-stage estimation procedure that generalizes the empirical gravity equation by taking into account the extensive margin (the decision to export from country _i_ to country _j_ ), and the intensive margin (the volume of exports from _i_ to _j_ , conditional on exporting). The first stage consists of a probit regression that explains the probability that country _i_ exports to country _j_ (selection equation), where the dependent variable is a dummy that is equal to one if country _i_ exports to country _j_ . The second stage consists of a gravity equation estimated in logarithmic form that explains the volume of exports from _i_ to _j_ (outcome equation) and incorporates a term based on estimates of the first-stage, known as the inverse Mills-ratio, to correct for the non-random prevalence of zero trade flows and intra-sector firm heterogeneity.

The two-stage procedure aims at correcting for two potential drawbacks prevalent in the estimation of gravity models. First, a standard selection bias can result from the necessity to drop observations with zero trade. Second, there is a potential bias due to unobserved firm level heterogeneity resulting from an omitted variable that measures the impact of the number of exporting firms, an aspect related to the extensive margin in the model. We follow HMR and implement a two-stage procedure to estimate our proposed gravity specification.

# **_Gravity Model Estimates_**

We estimate a gravity model that includes the above-mentioned trade cost indicators using data from Hoekman and Nicita (2008). The data set covers 104 importers and 115 exporters, including 22 African countries. Trade data correspond to 2006. Only for the few cases where 2006 data were not available, 2005 or 2004 data were used. Using Doing Business data on the regulations to start a business, we updated the entry costs indicator for fixed entry costs constructed by HMR to enlarge the coverage of the countries in the sample. This binomial indicator uses the sum of the relative costs for a pair of trading countries to identify high-fixed cost country pairs, in which the sum of costs is above the median for both countries. By construction, this variable reflects regulation costs that should not depend on a firm’s volume of exports to a given country, and satisfies the exclusion restrictions by being included in the first stage selection equation and excluded from the outcome equation in the second stage.<sup>13</sup>

> 13 In order to check the robustness of their findings, HMR also use a variable reflecting common religion among partners that provides the exclusion restriction used to help in the identification of the two-stage estimators.

26
although these coefficients are not statistically significant once I control for those characteristics that most differ between the two groups of households. Indeed, the inclusion of control variables seems to amplify the difference in adult goods consumption revealed in table 8 and to reduce the difference in terms of food consumption.

**Table 9.** OLS Estimation. Household Level.

|||**Shares of h**<br>|**ousehold incom**<br>|**e spent on:**<br>||
|---|---|---|---|---|---|
||(1)<br>Food|(2)<br>Education|(3)<br>Health|(4)<br>Durables|(5)<br>Adult|
|**A. No controls**||||||
|Migrant mother|-0.206**|-0.036|-0.034|-0.024|0.057***|
||(0.096)|(0.029)|(0.023)|(0.018)|(0.017)|
|Size of household|-0.402***|-0.078***|-0.105*|-0.004|-0.019|
||(0.104)|(0.023)|(0.062)|(0.005)|(0.020)|
|Observations|337|337|337|337|337|
|R<sup>2</sup>|0.053|0.019|0.033|0.001|0.045|
|**B. Controls included**||||||
|Migrant mother|-0.104|-0.012|-0.019|-0.024|0.062***|
||(0.079)|(0.022)|(0.019)|(0.019)|(0.017)|
|Size of household|-0.032|-0.036|-0.080|0.000|0.000|
||(0.099)|(0.031)|(0.052)|(0.006)|(0.019)|
|Observations|337|337|337|337|337|
|R<sup>2</sup>|0.376|0.097|0.064|0.003|0.078|

**Notes:** Controls are rural household, years of education of mother, log total household expenditure. Standard errors robust to village level clustering in parenthesis. *** p <0.01, ** p <0.05, * p <0.1

If households from which mothers migrate are on average poorer, more rural and less educated than households from which fathers migrate (table 4), the OLS coefficient associated with common goods will likely be downward biased. For this reason, in order to control for the possibility that households from which mothers migrate differ from those from which it is the father who leaves, I proceed to estimate equation (14) by two-stage least squares (TSLS).

Table 10 shows the results of the first stage regression: columns (1)–(3) use the measures of expected returns and risk of migration portfolios constructed according to equations (1) and (2). The signs confirm the existence of a trade off between expected returns and expected risk and acknowledge the amplifying effect of risk aversion. Moreover, more risk averse households tend to prefer female migration thus confirming the idea, suggested in Lauby and Stark (1988) and de la Briére et al. (2002), that female migration is perceived as a “safer” investment than male migration. Columns (4)–(6) then use only the _destination side_ of the migration portfolios; this is done to reduce the number of instruments and their potential collinearity and hence increase the power of the first stage 20
evidence from village studies. In Gujarat, for example, the consequences of the green and 'white' (dairying) revolutions have been shown to be more equitable and pro-poor in former _ryotwari_ villages than in former _zamindari_ villages (Singh 1985). The evidence from Orissa also suggests that land records tend to be more accurate in _ryotwari_ areas as compared with _zamindari_ areas (Mearns and Sinha 1998).

# **Table 2 Typology of states by tenure system and agricultural growth rate**

|_Tenure system, State_|_Average annual growth_<br>_in agricultural_<br>_production, 1970-94 (°/)_|
|---|---|
|**_Zamindari_(57% cultivated area)**||
|Uttar Pradesh (except Avadh & Agra)|1.9|
|Bihar|1.5|
|Orissa|2.6|
|West Bengal|4.4|
|Rajasthan|1.1|
|Andhra Pradesh (Telengana)|X|
|**_Ryotwari_**(38%**cultivated area)**||
|Karnataka|2.7|
|Gujarat|2.0|
|Tamil Nadu|1.6|
|Kerala|0.7|
|Maharashtra|2.7|
|Madhya Pradesh (60% area)|1.6|
|Andhra Pradesh (except Telengana)|2.7|
|Assam_|-0.4|
|Rajasthan (Jaipur & Jodhpur)|_|
|**_Mahalwari (5%_cultivated area)**||
|Punjab|4.5|
|Haryana|2.4|
|<br>Madhya Pradesh (40% area)|1.6|
|Orissa (9% area)|_|
|Uttar Pradesh (Avadh & Agra)||
|**All-India**|2.1|

Sources: Sharma (1992a) for tenure systems; Fan, Hazell and Thorat (1998) for agricultural production data

# POLITICAL ECONOMY OF LAND REFORMS

Land was made a 'state subject' by the Government of India in 1935. As a result, under the Indian Constitution, land reform is the responsibility of individual states, although central guidance is offered at federal level. The nature of the legislation, the level of support or otherwise from existing or new institutional arrangements, and the degree of success in implementation have varied significantly from state to state. Annex 1 summarizes some key features of land 9
virtually all banks are trying to attract SMEs and more competition is expected in the future as banks get more involved in this segment. But despite being competitive, banks in most surveyed countries see the sector as far from saturated and thus see profitable growth prospects. Several factors seem to be driving these patterns, suggesting that these new developments are not simply a cyclical phenomenon, associated with the recent period of credit buoyancy, but that they reflect structural changes and are, hence, part of a long-term trend. Factors that seemed important prior to the completion of the questionnaire-based surveys (like the institutional and macroeconomic policy environments) do not appear to be binding constraints for banks pursuing businesses with SMEs in the countries under study. Nonetheless, these factors seem to limit the range of products that banks offer and may become binding as banks try to deepen their relation with SMEs through more complex products, including long-term lending. In the rest of the section, we document these findings in more detail.

Bank involvement with SMEs is significant in all the countries under study (Figure 1). Almost all the banks interviewed have SMEs among their active and important clients. Even the very few banks that did not work with SMEs at the time of the interview planned to enter the segment. Many of the interviewed banks—particularly in Argentina and Chile—have matched the identification of the SME sector as a strategic one with significant investments, organizational reforms, and active recruitment (mainly over the past 2 to 3 years) in order to penetrate systematically and broadly the SME market. This is a clear indication that the rising significance of SMEs to banking business is unlikely to be a simple reflection of a cyclical upturn in credit markets.

17
Bamieh, Omar, Matteo Fiorini, Bernard M. Hoekman, Adam Jakubik, 2017. “Services Input Intensity and US Manufacturing Employment. Responses to the China Shock.” EUI Working Paper RSCAS 2017/39 Borchert, Ingo, Batshur Gootiiz, and Aaditya Mattoo, 2012. “Guide to the Services Trade Restrictions Database”, World Bank Policy Research Working Paper 6108.

Buera, Francisco J., Joseph P. Kaboski, and Yongseok Shin. 2011. "Finance and Development: A Tale of Two Sectors." _American Economic Review_ 101(5): 1964-2002.

Debaere, Peter, Holger Görg, and Horst Raff, 2013. “Greasing the wheels of international commerce: how services facilitate firms’ international sourcing.” _Canadian Journal of Economics_ 46(1):78–102.

Dietzenbacher, Eric, Bart Los, Robert Stehrer, Marcel Timmer, and Gaatzen de Vries, 2013. "The Construction of World Input-Output Tables in the WIOD Project", _Economic Systems Research_ 25: 71-98.

Donnelly, William A., Kyle Johnson, Marinos E. Tsigas, and David Ingersoll, 2004. “Revised Armington Elasticities of Substitution for the USITC Model and the Concordance for Constructing a Consistent Set for the GTAP Model,” USITC Office of Economics Research Note No. 2004-01-A.

Fernandes, Ana M., and Caroline Paunov, 2012. “Foreign Direct Investment in Services and Manufacturing Productivity: Evidence for Chile,” _Journal of Development Economics_ 97(2): 305-21.

Francois, Joseph, Mirian Manchin, and Patrick Tomberger, 2013. “Services Linkages and the Value Added Content of Trade,” World Bank Policy Research Working Paper No. 6432.

Francois, Joseph, and Julia Woerz, 2008. “Producer Services, Manufacturing Linkages, and Trade,” _Journal of Industry, Competition and Trade_ 8: 199-229.

Grubel, Herbert G., 1988. “Direct and Embodied Trade in Services,” in C. H. Lee and N. Seiji (eds), 1988, _Trade and Investment in Services in the Asia-Pacific Region_ , Westview Press, Boulder Co, pp. 53-76.

Hertel, Thomas W. (ed.), 1997. _Global Trade Analysis: Modeling and Applications_ , Cambridge, Cambridge University Press.

Heuser, Cecilia, and Aaditya Mattoo, 2017. “Services Trade and Global Value Chains,” Chapter 6 in David Dollar and Zhi Wang (eds.), Measuring and Analyzing the Impact of GVCs on Economic Development, World Bank, Washington, D.C.

26
||**Tabl**|**e 1: Base reg**|**ression resu**|**lts**|||
|---|---|---|---|---|---|---|
|Dependent variable:_Female_<br>_Workers_|**(1)**|**(2)**|**(3)**|**(4)**|**(5)**|**(6)**|
|Exports (%, cell average)|0.169***|0.180***|0.166***|0.171***|0.191***|0.160***|
||(0.058)|(0.057)|(0.060)|(0.061)|(0.064)|(0.054)|
|No. of Workers (logs)||0.547**|0.714***|0.753***|0.916***|0.926***|
|||(0.244)|(0.258)|(0.280)|(0.293)|(0.294)|
|GDP per capita (logs)||14.162***|14.390***|16.082***|15.807***|5.808|
|||(5.166)|(5.369)|(5.393)|(5.801)|(5.811)|
|Herfindahl-Hirschman Index|||-6.588*|-5.237|-9.126**|-6.158*|
||||(3.459)|(3.504)|(4.085)|(3.700)|
|Age of Firm (logs)|||-0.524|-0.913***|-0.689*|-0.843**|
||||(0.359)|(0.341)|(0.364)|(0.360)|
|Foreign Ownership|||-0.940|-0.181|0.006|0.085|
|(proportion)|||||||
||||(0.845)|(0.879)|(0.969)|(0.961)|
|Female Ownership Y:1 N:0||||6.169***|5.972***|5.939***|
|||||(0.615)|(0.650)|(0.651)|
|Skills Obstacle (0-4)||||0.625***|0.699***|0.656**|
|||||(0.228)|(0.270)|(0.270)|
|How Much Of An Obstacle:||||-0.031|0.022|-0.007|
|Transport?|||||||
|||||(0.193)|(0.209)|(0.209)|
|Firm Purchased Fixed Assets||||-0.955*|-1.096*|-1.061*|
|Y:1 N:0|||||||
|||||(0.526)|(0.560)|(0.557)|
|Power Outages (days)|||||-0.176**|-0.155**|
||||||(0.070)|(0.068)|
|Courts Obstacle (cell|||||0.100|-0.486|
|average)|||||||
||||||(0.777)|(0.743)|
|Crime Losses Y:1 N:0|||||-0.603|-0.657|
||||||(0.667)|(0.669)|
|Firm Inspected Y:1 N:0|||||-0.824|-0.879|
||||||(0.606)|(0.606)|
|How Much Of An Obstacle:|||||-0.209|-0.251|
|Tax Rates|||||||
||||||(0.231)|(0.229)|
|How Much Of An Obstacle:|||||<br>0.012|<br>0.031|
|Labor Regulations?|||||||
||||||(0.301)|(0.301)|
|Population (logs)||||||-38.758***|
|||||||(10.891)|

39
curative services was well above 100 percent. The share of recurrent expenditures devoted to nonwage expenses such as medical supplies has also declined steadily, from about 28 percent in the 1970s to 20 percent in the late 1980s. Only limited user charges were in effect until 1989. Moreover, inadequate maintenance-a systemic problem-affects rural health facilities in particular. A survey in 1981 showed that less than half of Kenya's rural facilities had a reliable water supply and 65 to 70 percent .- re unacceptably run down.

To meet the increase in demand in the face of tight resources, the govemment has sought to mobilize additional resources and to ensure that facilities are used more efficiently. In December 1989, the govemment introduced outpatient and inpatient user charges at all public sector facilities except dispensaries; in July 1990 it introduced reforms to the national hospital insurance fund, a parastatal covering primarily wage eamers and their families. User chargers were accompanied by waivers based on ability to pay, and incentives to facilities to be able to keep part of the revenue they generated. The reforms to the insurance fund made contributions proportional to income and increased the coverage.

After the imposition of user charges, attendance at facilities fell, but they soon returned to their previous levels-with one important exception: attendance increased at dispensaries and health centers, and declined at hospitals. This was a desirable outcome. However, public concern about the continued inadequacy of facilities and the perceptions that the waiver system was not functioning properly forced the government to reduce or suspend some charges three months later. This withdrawal reduced cost-sharing revenues by about 50 percent and eliminated the incentive to 53
56

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- Tyebjee, Tyzoon T. and Bruno, Albert V. "The Entrepreneurs Search for Capital." Journal of Business Venturina, 1985.

Venture Capital Journal. Var<sup>4</sup> ous issues.

- Venture Economics. -Venture Capital Yearbook. (various years). Wellesley Hills, MA.

Venture Economics Canada Limited. 1988.

- Wagner, W. H. and Lau, S.C. "The Effect of Diversification on Risk.' Financial Analysts Journal 26, November-December 1971.

- Wells, W.A. "Venture Capital Decision-Making." Unpublished doctoral dissertation, Carnegie-Mellon University, Pittsburgh, 1974.

- Wetzel, William, E., Jr. "Informal Risk Capital in New England" In Babson College EntreDreneurshio Research Conference Proceedinas. Edited by the Center for Entrepreneurial Studies of Babson College. Wellesley, 1981.
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21
workers in the rural nontraded and urban informal sectors and skilled workers in the formal sector decrease. On the other, all households face lower transfer receipts from the government, mainly as a direct consequence of the drop in government domestic credit, but also because of lower tax revenues resulting from the fall in aggregate demand. This impact of lower transfer receipts counteracts any wage gains, leading to falls in household income and lower consumption levels.

Consumption-based poverty headcount indices show that poverty decreases only in the formal unskilled labor group in the short run. Nevertheless, poverty is unchanged for all groups in the long run. Turning to income-based poverty headcount indices, we observe that poverty decreases in the formal unskilled labor group in both the short and the long run. The economy-wide income-based poverty headcount index increases less than its consumption-based counterpart in the short run, whereas both indices are unchanged in the long run. Poverty gap indices, both consumption and income-based, show that poverty at the aggregate level increases both in the short and the long run. However, they also indicate that the increase in poverty is greater in the short run than in the long run. Hence, all four poverty indices show that poverty changes, as a result of the domestic credit shock, are relatively small in the long run.

Both consumption- and income-based Gini coefficients indicate that the domestic credit shock has a negative effect on income distribution, both in the short and the long run. However, Theil indices generally imply that income distribution becomes more equal with the domestic credit shock. Thus, the effect of the shock on income distribution is ambiguous.

# 6.3 Debt Reduction and Expenditure Reallocation

An important policy experiment for highly-indebted low-income countries involves debt relief and fiscal adjustment. We analyze three different deficitneutral scenarios that differ in the allocation of the savings resulting from a permanent, 5 percent reduction in the stock of public external debt.<sup>43</sup> The first scenario (which we take as our benchmark) corresponds to the case in which savings are allocated to an increase in lump-sum transfers to households, in proportion to their initial shares. The next two scenarios focus

> 4 3 Because we assume that contracted foreign public sector debt has infinite maturity, debt service consists of interest payments only.

68
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