Rishabh Sinha

Working Papers

Regulation and rivalry: How price controls reshape formal-informal competition in Central Asia

This paper examines how price regulation of formal firms affects competition from informal providers, an underexplored channel in the literature on regulation in developing economies. Using establishment-level data from five Central Asian countries and machine learning-augmented propensity score matching, I estimate the impact of price controls on perceived informal competition. Consistent with the segmented market view, regulation has no significant effects in Tajikistan, Turkmenistan, or Uzbekistan. In contrast, regulation significantly reduces informal competition in Kazakhstan and the Kyrgyz Republic, supporting the overlapping market hypothesis but with an effect that qualitatively contradicts standard predictions. Heterogeneity analyses show that these effects are most pronounced in industries with high substitutability and markets without state-owned enterprises. These findings contribute new evidence to the segmented-versus-overlapping markets debate and highlight the need to refine overlapping market frameworks to account for the variations in how price regulation influences informal–formal dynamics. From a policy perspective, the results underscore how regulatory design influences the relative competitiveness of formal firms in different contexts: an issue central to decent work, fiscal capacity, and long-term growth.

[Paper] [Executive Summary]

The health trade-offs of rural structural transformation: Evidence from longitudinal data in Bangladesh

Objectives/Background: The reallocation of labor from agriculture to non-agriculture is a defining feature of structural transformation and has long been associated with higher incomes and improved living standards. However, little is known about the health consequences of such transitions at the individual level, particularly within rural settings where non-agricultural jobs often remain informal and physically demanding. This study examines the relationship between occupational transitions out of agriculture and functional health outcomes among rural adults in Bangladesh, with a focus on gender differences and variation by duration of exposure to non-agricultural work.Results: Exiting agriculture was associated with a modest but meaningful increase in reported functional health limitations. Among all individuals who transitioned to non-agricultural work, the probability of reporting difficulty standing, walking, or carrying a load increased by 1.8–2.7 percentage points (pp). These effects were concentrated among women, who experienced statistically significant increases in all outcomes (2.5–3.2 pp), while effects for men were small and not statistically distinguishable from zero. Stratified analyses by timing of exit suggest that effects on standing and walking were larger among earlier exits, while carrying-related difficulty was more pronounced among recent exits, potentially reflecting short-run adjustment costs.

[Paper] [Supplementary Files]

Borrow or build? The R&D impact of foreign technology adoption in a developing economy

Can firms in developing economies innovate by licensing foreign technology, or does licensing merely substitute for domestic R&D? Using establishment-level data from Vietnam, this study examines the relationship between technology licensing and domestic R&D activity. Employing propensity score matching with machine learning estimators, the analysis finds that licensing foreign technology increases the probability of R&D activity by around 15 percentage points. To explain this complementarity, I propose a framework based on resource and product mismatches: domestic establishments must undertake R&D to adapt licensed technologies designed for foreign factor endowments and consumer preferences. The results provide strong evidence for the product mismatch mechanism. Licensing establishments serving local markets exhibit higher R&D engagement than those operating in international markets, where adaptation needs are lower. While point estimates suggest that resource mismatches may also drive adaptation efforts, the evidence lacks statistical precision. These findings challenge the view that licensing is a passive shortcut to technological advancement. Instead, they reveal it as a catalyst for innovation, forcing firms to rework and refine the technologies they bring in. The study carries implications for policymakers seeking to accelerate technology diffusion and productivity growth in developing economies.

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Partisanship turning counterintuitive: The role of selective enforcement

This paper examines the causal link between political position-taking and social distancing compliance during the COVID-19 pandemic, with India as the focal case study. While existing research has identified strong correlations between partisan affiliation and adherence to health directives, the potential for reverse causality—where political leaders align their stance with their base's preexisting behaviors—complicates these findings. India offers a unique context for analysis, as Prime Minister Narendra Modi's early advocacy for social distancing occurred before any observable partisan gap in compliance. Using an event study approach, I examine variations in social distancing practices across Indian states and union territories, grouped by political alignment with Modi. Contrary to expectations, regions aligned with Modi did not follow social distancing guidelines more rigorously than non-aligned regions, with non-aligned areas seeing a more pronounced increase in time spent at home. The paper proposes a theory of selective enforcement as a potential explanation for this counterintuitive outcome, wherein supporters of Modi in regions with lower perceived benefits from social distancing were less likely to comply due to partisan-driven leniency. These findings highlight the context-dependent nature of political influence on public health behaviors, challenging the generalizability of partisan effects observed in other settings.

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What explains Latin America's low share of industrial employment?

This paper investigates the determinants of low industrial employment shares in Latin America. The analysis broadens the scope of the investigation beyond the established focus on comparative advantage and international trade by examining the role of labor market distortions, sectoral input-output linkages, and factor intensities in production technology. The cross-country differences in industrial employment are assessed using a transparent open-economy accounting framework followed by a multi-sector equilibrium model of structural transformation with trade. The findings from the former indicate that labor market distortions, rather than trade shares, are central to explaining why Brazil and Mexico allocate a smaller proportion of their workforce to industry. The equilibrium model corroborates these results, revealing that these countries experience further contraction in industrial employment shares when their productivity profiles are counterfactually changed to match those of more highly industrialized nations. This result arises because the two countries exhibit a comparative advantage in industrial production, contrary to the assumption implicit in the trade-based explanation. Further experiments suggest that, without substantial sectoral imbalances in productivity growth, these economies are unlikely to see significant expansion in their industrial bases as GDP per capita increases. These findings are likely to extend to other Latin American economies. Therefore, policymakers should prioritize resolving labor market distortions to promote industrialization.

[Paper] [Short Slides]

When political instability stifles growth in stable regimes: Insights from India's Emergency

Political economy theory posits that political instability can impede economic growth. Existing empirical investigations of this mechanism often treat regime instability and within-regime instability as independent dimensions, thereby overlooking their interrelated nature. This study addresses this identification problem by analyzing the economic repercussions of political instability within stable regimes. During India's 1975 Emergency, one dimension of instability was dormant, allowing for causal identification. Estimates derived from the synthetic control method indicate that the Emergency resulted in a substantial and sustained adverse impact on India's economy. Absent the Emergency, the GDP per capita ten years after its imposition would have been more than 70 percent higher. Falsification tests confirm the specificity of these effects on the Emergency. Damaging effects extended to other developmental metrics. For instance, life expectancy in 1985 would have been four months higher absent the Emergency. These findings challenge the prevailing notions that political instability within stable regimes yields negligible economic impact.

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Are lockdowns more effective than voluntary measures in checking mobility during a pandemic?

Authorities extensively used mandates (lockdowns) to foster distancing and check the spread of COVID-19. Using data from India, this study shows that their impact relative to the voluntary measures undertaken by people is not quantitatively significant. The analysis period includes a 14-hour voluntary Janta Curfew (JC) and the ensuing mandatory lockdown. The lockdown did not lead to substantial reductions in mobility relative to the JC. The effectiveness of lockdowns in driving home isolation waned over time due to offsetting changes in people's behavior. Therefore, the analysis cautions against using mandates as the first defense to facilitate social distancing, even in developing countries.

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Distortions in intermediate markets and structural transformation in Latin America

The paper evaluates the concern of low industrial employment share in Latin America in favor of growth in the services share. A standard model of structural transformation with inter-sectoral linkages is extended to allow for the substitution of inputs sourced from different sectors. Barring a couple of instances, the elasticity of substitution is estimated to be less than one across sectors and countries. Sector-biased productivity growth and distortions in intermediate and labor markets determine the allocation of resources. Distortions in intermediate markets play a quantitatively vital role in determining the sectoral allocation of labor. Changes in distortions, particularly in the use of services inputs, can raise industrial shares and bring them closer to the peaks achieved by other countries in the past.

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Closer, but no cigar: Intergenerational mobility across caste groups in India

This paper compares the intergenerational mobility of educational and occupational attainment of men from disadvantaged groups (Scheduled Castes (SC) and Scheduled Tribes (ST)) in India with the intergenerational mobility of men outside these groups during 1983-2009. Although there has been a modest convergence in mobility rates of non-SC/ST and SC/ST men in educational attainment, there has been no significant convergence in the mobility rates of occupational attainment. Upward mobility of SC/ST men remains much lower compared to non-SC/ST men. Additionally, the former are more susceptible than the latter to moving down the intergenerational ladder. The mobility gap varies over a large range across states, but the cross-state variation has declined, with convergence being higher in states with larger gaps initially. The paper finds no evidence of higher convergence in states with higher economic growth. As such, policies that focus on growth may not necessarily deliver convergence in outcomes across social groups.

[Paper]

Intergenerational occupational mobility and labor productivity

The paper documents that intergenerational occupational persistence is significantly higher in poor countries even after controlling for cross-country differences in occupational structures. I posit that high occupational persistence in poor countries is symptomatic of underlying talent misallocation. Constraints on education financing forces sons to choose fathers' occupations over the occupations of their comparative advantage. A version of Roy (1951) model of occupational choice is developed to quantify the impact of occupational misallocation on aggregate productivity. I find that output per worker drops by a factor of three relative to the benchmark US economy for the country with the highest level of occupational persistence.

[Paper]

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