Research
Peer-reviewed publications
Journal of Development Economics, forthcoming
with Yoonyoung Cho and Rachel Heath
World Bank Research Working Paper 9064
After the tragic factory collapse of Rana Plaza in 2013, the direct reforms and indirect responses of retailers have both plausibly affected workers in the ready-made garment sector in Bangladesh. These reforms include a minimum wage increase, high profile but voluntary audits, and an increased reluctance to subcontract to smaller factories. This paper uses six rounds of the Labor Force Survey and adopts a difference-in-difference approach to evaluate the net effects of these changes on garment workers, compared with workers in other manufacturing industries and other plausible control groups. Although employers appear to have increased sick leave and some measures of safety at work, they simultaneously have reduced job security in the form of written contracts. The study also finds that, a few years after Rana Plaza, average hourly wages have fallen significantly for female workers. The results suggest that regulations that are initially aimed at helping workers can have unintended adverse effects on several dimensions of workers' outcomes.
Media coverage:
1478-1514
World Bank Research Observer, forthcoming
with Caglar Ozden.
World Bank Policy Research Working Paper 9996
Temporary migration is widespread globally. While the literature has traditionally focused on the impacts of permanent migration on destination countries, evidence on the effects of temporary migration on origin countries has grown over the past decade. This paper highlights that the economic development impacts, especially on low- and middle-income origin countries are complex, dynamic, context-specific and multi-channeled. The paper identifies five main pathways: (i) labor supply, (ii) human capital, (iii) financial capital and entrepreneurship, (iv) aggregate welfare and poverty, and (v) institutions and social norms. Several factors shape these pathways and their eventual impacts. These include initial economic conditions at home, the scale and double selectivity of emigration and return migration, and employment and human capital accumulation opportunities experienced by migrants while they are overseas, among others. Meaningful policy interventions to increase the development impacts of temporary migration require proper analysis, which, in turn, depends on high quality data on workers' employment trajectories. This is currently the biggest research challenge to overcome to study the development impacts of temporary migration.
[World Bank Research Working Paper 9500]
Review of International Economics, 30(5), 1478-1514, 2022
with Daniel Garrote-Sanchez, Mattia Makovec and Caglar Ozden.
World Bank Policy Research Working Paper 9500
[World Bank Research Working Paper 9500]
Journal of Human Resources, 55(2): 733-766, 2020
Using a rich data set of primary school students, this paper estimates the effects of immigrant concentration in the classroom on the academic achievement of natives. In contrast with previous contributions, it exploits rare information on age-at-migration to estimate separate spillover effects by duration of stay of immigrant classmates. To identify treatment effects, it uses cohort-by-cohort deviations in immigrant concentration within schools combined with attractive features of the Dutch school system. Overall, the paper finds no effect of the concentration of immigrant students on natives’ test scores. However, although immigrant students who have been in the country for some time have virtually no effect on natives, the analysis finds a small negative effect of recent immigrants in the classroom on natives’ test scores. The effect is significant only for language test scores, but insignificant for mathematics test scores. When significant, effect sizes are quite small compared to other educational interventions and classroom peer effects estimated in other contexts.
[World Bank Research Working Paper 8492]
"The Effect of Height on Earnings: Is Stature Just a Proxy for Cognitive and Non-cognitive Skills?" with H. Alderman, C. Mete and J. Giles.
Economics and Human Biology, forthcoming
World Bank Policy Research Working Paper 8254
While taller workers are regularly observed to earn more, there is debate concerning the independent contribution of stature to labor earnings. This study investigates the degree to which the association of height and earnings in Pakistan is independent of other cognitive and socio-emotional skills. We explore the relationship of height and earnings when a measure of cognitive ability and an index of socio-emotional capacity are included. Contrary to most studies, we also treat height as endogenous using two different approaches. We also investigate potential non-linearities in the effect of height. We find only a modest attenuation of the coefficient of height when additional indicators of human capital are included, suggesting that height provides independent information on labor productivity. However, only over the full sample is the height coefficient similar to previous evidence in the literature. Once we allow for non-linearities, height is associated with earnings only if the individual is taller than the median height. This contrasts with the results of the very few papers that explore a non-linear association. This lends some support to the role of status and confidence in the yet unresolved question as to the relative contribution of direct and indirect influence of height on earnings.
"Is Consanguinity an Impediment to Child Development?" with Cem Mete, John Giles and Harold Alderman
Population Studies, 74(2): 139-159, 2020
Marriages between blood relatives—also known as consanguineous unions—are widespread in North Africa, Central and West Asia, and South Asia. Researchers have suggested that consanguinity has adverse effects on child development, but assessing its impact is not straightforward, as the decision to marry a relative might be endogenous to other socio-economic factors. Using a unique data set collected in rural Pakistan, this paper assesses the extent to which consanguinity is linked to children’s cognitive and physical development. It exploits grandfathers’ land ownership (current and past) and maternal grandparent mortality to identify the effect of endogenous consanguinity on child development. Children born into consanguineous unions have lower cognitive scores, lower height-for-age, and a higher likelihood of being severely stunted. More importantly, adverse effects are greater after accounting for the endogeneity of consanguinity, suggesting that impacts on child development are substantial, and likely to be larger than suggested in previous studies.
Working Papers
"Temporary Migration for Long-term Investment” with Joseph-Simon Goerlach, Caglar Ozden and He Wang [Under review]
World Bank Research Working Paper 9740
In the presence of credit constraints, temporary migration becomes an effective strategy for workers to accumulate capital and finance self-employment activities back home. This paper studies temporary migration episodes as explicit components of workers’ life cycle decisions where they face high migration costs as well as credit constraints to entrepreneurial activities. Using data from a large-scale survey of temporary migrants from Bangladesh, we construct and estimate a dynamic model of various components of the temporary migration decision process as well as their activities after return. We, then simulate, the effect of changes in migration costs, interest rates and employment conditions on various decisions such as migration duration and savings levels. Our findings imply that changes in migration costs and conditions abroad have important dynamic repercussions on the labor trajectories of workers over their entire life cycle, including their self-employment patterns after their return. Vice versa, better access to credit for entrepreneurs at home actually lowers the extent and duration of migration.
Do Firms Exit the Formal Economy After a Minimum Wage Hike [Under review] with A. Acar Erdogan and M. Makovec
World Bank Research Working Paper 8749
This paper explores the effects of a large minimum wage hike on firm exits from the formal economy, and its associated impacts on employment and informality. It uses an exceptionally rich linked employer-employee dataset on the universe of formal firms and workers in a developing economy. Data on the full wage distribution in firms allows to precisely measure minimum wage exposure, and to estimate the causal effect of the hike in a difference-in-difference setting. The hike is found to significantly increase the destruction rate of formal firms. Effects are concentrated among small and low-productivity firms while exits of high-productivity firms are unaffected. The increase in firm exits is larger in industries with small profit margins, higher labor shares and stronger market competition. We also evidence negative effects on formal employment, which mainly originate from firm destruction rather than employment cuts in surviving firms. Corroborative evidence indicates that workers from exiting firms mostly transition into informal employment, instead of being jobless after the hike.
"What Explains the Gender Gap Reversal in Educational Attainment?" [Under review] with Ohto Kanninen
World Bank Policy Research Working Paper 8303
The reversal of the gender gap in educational attainment is becoming a global phenomenon. Its drivers, however, are not well understood and remain largely untested empirically. This paper develops a unified conceptual framework that allows to formulate and test two main hypotheses for the reversal. It introduces the tail hypothesis, which builds on the lower dispersion of scholastic performance among females observed globally. It also formalizes the mean hypothesis, which states that females’ average scholastic performance and returns to education have increased over time relative to males’. The paper theoretically shows that both hypotheses can explain the reversal in our framework. The parameters of the two hypotheses derived from the model are then estimated using educational attainment data from 1950 to 2010 in more than 100 countries. We find that both hypotheses strongly predict the gender gap dynamics in educational attainment when estimated separately. When jointly estimated, accounting for the tail hypothesis significantly increases the model’s predictive power. The contribution of the tail hypothesis to the gender gap reversal is particularly strong in developing economies, while the mean hypothesis appears to prevail in high-income countries.
Presented at:
"Occupational Hazards: Why Migrants Faced Greater Economic and Health Risks during the COVID-19 Pandemic" With Daniel Garrote-Sanchez, Mattia Makovec and Caglar Ozden
World Bank Policy Research Working Paper 9873
This paper investigates the economic and health risks arising from the COVID-19 pandemic for migrant workers in the European Union. It assesses migrants’ economic and health vulnerabilities using ex ante measures based on both supply and demand shocks. The analysis finds that immigrants were more vulnerable than native-born workers to both income- and health-related risks, and that this greater exposure stems from the occupations in which migrant workers are concentrated. Migrants work to a greater degree than native-born citizens in occupations that are less amenable to teleworking arrangements, and in economic sectors that experienced greater reductions in demand during the pandemic. This has led to an increase in both their income and employment risks. Immigrants from regions outside Europe were more vulnerable than those from within Europe or native-born workers. The paper shows that individual characteristics, such as educational attainment, age, and geographical location, fail to explain the native-migrant gap in exposure to economic and health risks posed by the pandemic. Limited language ability, the concentration of migrants in jobs with labor shortages among native-born workers, and a reliance on immigrant networks to find jobs all appear to play significant roles in migrants’ exposure to pandemic-related risks.
"The Effects of Subsidizing Social Security Contributions: Job Creation or Informality Reduction?" with Güneş Aşık, Jochen Kluve, Efşan Nas Özen, Metin Nebiler and Ana Maria Oviedo
World Bank Policy Research Working Paper 9904
This paper evaluates the impact of an employment subsidy scheme covering employers’ social contribution costs on registered employment in small firms in Turkey. It utilizes a rich, firm-level administrative data set with monthly frequency, which allows for closely following the dynamics of registered employment in firms before and after the implementation of the subsidy. The empirical approach utilizes the geographically targeted implementation of the subsidy to estimate its effects using a difference-in-difference specification. The paper finds that the subsidy scheme had a sizable and positive impact on registered employment in small firms. The results are robust across specifications and to the choice of the control group. Positive effects on formal employment are also fairly constant and sustained over time. Corroborative evidence suggests that the positive effects on registered employment are mainly driven by the formalization of existing workers as opposed to new job creation. Therefore, the results indicate that social security contribution subsidies in small firms can be effective in reducing informality in contexts where informal employment remains common.