Development / Public Economics Digest 发展经济学/公共经济学文献速递

We study the consequences of a large-scale reassessment of the health and working capacity of disability insurance beneficiaries in Hungary. Leveraging birthday and health cutoffs in the reassessment, we estimate employment responses to the threat of disability benefit loss and the actual termination or reduction of benefits. We show that due to the threat of benefit removal, many beneficiaries stopped working after the reassessment was announced but before it took place. Another group of beneficiaries lost their benefits and increased their labor supply significantly. Overall, the reassessment had a negative short-term and neutral medium-term impact on employment and earnings. Our results suggest that unintended responses to the threat of benefit loss operate as a substitution effect that can reduce labor supply even without binding formal earnings limits, and thus should be considered in the design of reassessments.

This paper proposes a new framework to study the distribution of current taxes and the effects of tax reforms. For current taxes, labor taxes are assigned to the corresponding workers, capital taxes to the corresponding asset owners, and consumption taxes to the corresponding consumers. Current taxes capture the wedges between pre-tax prices (relevant for production) and after-tax prices (relevant for the work, saving, and consumption decisions of households) as well as the direct equity effects of taxes while being silent about efficiency. Our method does not require structural assumptions, is internally consistent, and maximizes the comparability of tax progressivity and inequality over time and across countries. Applying this methodology to the United States, we find that the effective tax rate of the top 1% has declined from about 50% in the early 1950s to 32% in 2021. It is through the corporate tax that a high degree of tax progressivity was achieved in the middle of the 20th century. To analyze the distributional effects of tax reforms, mechanical changes in tax liability by income groups and aggregate revenue effects due to household (but not firms’) behavioral responses are sufficient statistics in the neoclassical optimal tax model of Diamond and Mirrlees (1971). The effects of taxes on pre-tax prices at the heart of classical tax incidence analysis are normatively irrelevant.

This paper examines the levels and dynamics of wealth inequality in Chile between 2007 and 2021, in a context where the private pension system is mandatory and government housing policies are centered on private ownership. We focus on two major macroeconomic events: the sharp increase in housing prices following the introduction of a value-added tax on new dwellings in 2016 and the large-scale liquidation of pension assets through early withdrawals during the recent pandemic. To do so, we construct a micro–macro consistent wealth distribution by extending existing methodologies to integrate administrative pension fund balances into household wealth surveys using machine learning techniques. Our results reveal pronounced wealth concentration: the top 1% hold roughly one-third of total private wealth—levels comparable to those observed in the United States—driven by their disproportionate ownership of financial assets. By contrast, the bottom 50% hold 7–9%, primarily through housing and pension assets, shares that exceed those reported in most European countries. We also document a modest decline in wealth inequality over the period, particularly after 2016. A counterfactual analysis suggests that this decline reflects the interaction of two opposing forces: housing appreciation, which predominantly benefited the bottom 90% of households, and pension withdrawals, which reduced wealth across the distribution while relatively increasing inequality. Our findings on levels, trends, and counterfactuals are robust across alternative methodological specifications.

In an instrumental variable framework, we define supercompliers as the subpopulation whose treatment take-up positively responds to eligibility and whose outcome positively responds to take-up. Supercompliers are the only subpopulation to benefit from treatment eligibility and, hence, are important for policy evaluation. We propose conditions for characterizing supercompliers, and show how estimation and inference can be conducted with instrumental variable regression. In two job training experiments, we demonstrate our machinery’s utility, particularly in incorporating social welfare weights into marginal value of public funds analyses. • Supercompliers take up treatment when eligible and benefit from treatment. • Supercomplier characteristics are identified by a Wald-type estimand. • Estimation and inference use standard IV regression. • Supercomplier profiles enable welfare-weighted MVPF calculations. • Two job training experiments illustrate the method’s utility.

Legal representatives play a prominent role in the Social Security Disability Insurance (SSDI) adjudication process, earning fees totaling $1.2 billion in 2019. Long ubiquitous in appellate hearings, legal representation has begun appearing more frequently at the beginning of cases, during the initial review. Using novel administrative data, we provide the first causal estimates of the impact of legal representation on SSDI case outcomes when representatives are engaged from the initial stage. To address selection into representation, we instrument for initial representation using geographic and temporal variation in the lagged share of appellate cases handled by private law firms (as opposed to public interest organizations or family). Among applicants on the margin, initial representation increases the probability of an initial award by 24 percentage points and reduces time to final decision by nearly a year. The increased awards are for applicants with the most severe, automatically qualifying conditions, indicating that representatives bring needed technical expertise to the initial filing. However, representation at the initial level reduces the probability that the case is ever appealed by 38 points, with two-thirds of this reduction coming from increases in initial allowances and one-third from fewer appeals following initial denials. We show that the benefits of initial representation are concentrated among people with mental diagnoses, while those with musculoskeletal diagnoses do not benefit. Our results suggest that representation leads to a reduction in application burdens and may improve target efficiency.

Current estimates of child labour often rely on questions such as, “How many hours did you work last week?” While biases in adult self-reports are well documented in high-income countries, there is limited evidence on the accuracy of children's responses in low- and middle-income countries (LMICs). Using data from nine LMICs, including China and India, this paper shows that time diaries report considerably more work hours than standard questionnaires. The gap is particularly large among younger children, with ratios of diary to questionnaire estimates exceeding five at ages 5–11 and remaining above two even among adolescents aged 15–17. This suggests that current estimates may substantially understate child labour. Moreover, certain forms of work – such as collecting water or firewood – appear to contribute to these measurement gaps.

This paper investigates the impact of environmental awareness on land transactions. We leverage the exogenous shock caused by the unexpected release of the environmental documentary Under the Dome in early 2015 in China, and use the birthplace of the interviewees in filmmaker's previous signature program as the instrument for exposure. We observe that the cities with more exposure to the documentary exhibit significant reduction in land transaction activities. Mechanism analysis indicates that after the release of documentary, residents awareness of air pollution increases substantially, accompanied by a notable rise in migration intention. This indicates the real impacts of environmental perception on household behavior and land transactions.

This paper incorporates firms' export-destination breadth into the skill-selection framework and shows that product quality shapes skill demand through a nonlinear demand-side mechanism, extending quality-valuation models that assume linearity. The theoretical model predicts an inverted U-shaped relationship between export-destination scope and product-quality upgrading, indicating a substitution between export scope and relative skill demand when product quality is below a critical threshold. Using firm-level data from Guangdong Province (2013–2015), we develop a segmented mediating-effect model that confirms both the classic task-specialization channel and the nonlinear influence of export-scope breadth on skill upgrading. Once product quality exceeds the identified threshold, higher export quality raises skilled-labor demand by narrowing firms' export-market ranges. We further show that vertical differentiation and trade costs are key channels driving export-scope adjustments. The study provides a comprehensive perspective on product-quality upgrading and the evolution of firms' skill structures in developing economies.

This paper provides the first evidence that children's economic preferences vary systematically with parental mental health. Using experimentally elicited measures of economic preferences from more than 4500 children in Bangladesh, we document that children of parents with indications of mental illness are less prosocial but more patient than their peers with mentally healthy parents. Attitudes towards risk remain unchanged. We discuss potential pathways through which parental mental health may influence the formation of children's preferences, documenting that children of parents with indication of mental illness assume greater responsibilities within the family, experience less parental involvement, and are exposed to a more adverse home environment.

This paper investigates whether irrigation mitigates migration intentions following drought in West Africa, addressing the limited focus on in situ adaptation within the climate – migration literature. We combine individual-level data from the Gallup World Poll with geo-referenced drought intensity and satellite-based estimates of irrigation coverage across 13 West African countries. Our findings show that drought increases migration intentions among rural households, especially in arid regions. Irrigation does not generally offset this effect, a finding robust to controls for conflict, remittances, aid, and alternative drought and irrigation measures. However, irrigation coverage becomes relevant under prolonged droughts and affects income groups differently: irrigation moderates drought-driven migration for the richest households but has no significant impact on other groups. Irrigation thus rarely substitutes for migration as an adaptation to drought, but instead reveals how in situ and mobility-based responses to climate stress are interlinked.

Domestic outsourcing is known to reduce worker wages, but its effect on employment security — a key dimension of job quality — has not been studied. Using Brazil's comprehensive employee–employer linked data, we find that outsourcing reduces exit from formal employment among cleaners and security guards during their first few years of tenure. The observed reduction in employment hazard is larger in cities with greater volatility in labor demand. The reduction is not attributable to differences in worker characteristics or differential exposure to local labor market shocks. The estimates suggest that outsourcing had larger positive effects on the net present value of worker earnings than implied by wage differentials alone. The patterns are consistent with a search-theoretic model in which outsourcing eases reassignment across firms.

This paper examines how the assassination of mayors affects local government capacity, leveraging quasi-random variation in the success of assassination attempts against Mexican mayors. Compared to municipalities with failed attempts, tax collection falls by 29% and public expenditures shift from essential services to construction investments in municipalities with successful assassinations. The evidence is most consistent with institutional disruption from the sudden loss of mayors, rather than the violent act itself. These effects attenuate when control municipalities also experience mayoral absence. In addition, there is suggestive evidence that effects are amplified in municipalities with mayors possessing weaker political connections. In contrast, changes in security environments, municipal personnel composition, non-political violence, economic activity, demographics, and electoral dynamics do not account for the observed patterns. The results highlight how the loss of decision-makers in violent environments undermines local state capacity.

This paper explores how female political leaders impact environmental outcomes and climate change policy actions using data from mixed-gender mayoral races in Brazil. Using a Regression Discontinuity design we show that, compared to male mayors, female mayors significantly reduce greenhouse gas emissions, with particularly strong effects in the Amazon—one of the world’s most critical regions for climate mitigation. These reductions are driven by declines in emissions intensity (CO2e/GDP) in the Land Use sector, without affecting local economic activity, and are largely explained by lower deforestation. We then examine the mechanisms underlying these effects. In Amazon municipalities, female mayors place greater emphasis on environmental issues in their campaign proposals, are more likely to invest in environmental initiatives, and increase the enforcement of environmental regulations. Together, these results point to differences in policy priorities and in their implementation as key channels through which female political leadership improves environmental outcomes.

In 2021, the Chinese government introduced a highly restrictive policy that sharply limited minors’ access to online video games, eliminating play from Monday through Thursday and allowing only one hour per day on Fridays, weekends, and statutory holidays. Using nationally representative survey data and a difference-in-differences design, I find that the policy sharply reduced minors’ gaming engagement and overall Internet use, reflecting substantial but incomplete compliance. However, these behavioral changes did not produce detectable short-run improvements in academic performance, nor clear evidence of an increase in study time. The health-related evidence is more limited, with no clear physical-health gains and suggestive indications of reduced mental well-being. Complementary evidence from city-level administrative data and a regression kink design likewise shows no robust effects on exam outcomes, suggesting that while the 2021 ban effectively curtailed online activity, its downstream benefits for learning were not realized.

The discourse on human trafficking often depicts migrants as deceived victims, while alternative accounts view trafficking as a constrained migration strategy. We contribute to this debate using original survey data from two cross-sectional waves (2021 and 2023) covering more than 2700 respondents in Edo State, Nigeria. A substantial share of respondents reports a willingness to migrate via traffickers despite awareness of the risks of forced labor. A list experiment provides suggestive evidence of underreporting of trafficking approval, particularly among women, likely reflecting stigma surrounding sex work. We examine the determinants of trafficking approval through an aspirations–capabilities framework. Willingness to migrate via traffickers is highest among individuals with strong migration aspirations but limited capabilities. In contrast, exposure to anti-trafficking campaigns has little effect. Respondents are generally well-informed about the potential risks and returns associated with trafficking and do not exhibit cognitive biases such as motivated reasoning. Overall, our findings suggest that trafficking is not primarily driven by ignorance, but instead reflects a constrained choice shaped by limited legal migration options and structural barriers.

This paper provides new evidence on the within-city relocations of polluting sources. We focus on industrial land use, which can create long-lasting effects on pollution distribution. The research design exploits the first comprehensive air-pollution prevention plan in China creating within-city variations on incentives to relocate polluting sources. Using a triple-difference model, we find that after the regulation, the locations of land leased by polluting firms in the cities receiving more stringent regulation are farther away from monitoring stations. Mechanism analysis shows this shift is partly due to the demand side, but primarily driven by land supply decisions: local governments provide new polluting land parcels in more distant areas of the city. We show that the welfare gains from improved air quality are partly offset by losses in production due to remote locations.

Agricultural extension programs often train a subset of farmers and rely on social networks for knowledge dissemination. We evaluate this approach through a two-stage experiment of an agronomy training program among Rwandan coffee farmers. The first stage randomized trainee concentration at the village level; the second randomly selected participants within villages. The program increased knowledge and self-reported adoption of the taught practices. It also reshaped farmers’ social networks by creating new social ties primarily among co-trainees. At first glance, the intervention appeared modestly effective, with treated farmers exhibiting higher yields than control applicants within the same village, although this difference is not statistically significant. However, knowledge did not diffuse, and control farmers with more treatment friends at baseline reduced audited adoption and input use. Villages with high trainee concentrations showed suggestive evidence of negative spillovers, consistent with reallocation of labor and other shared inputs toward treated farmers, as formalized in a simple model in which social ties shape access to inputs. Relative declines in the yields of control farmers in these villages account for treatment-control differences, raising concerns both about this dissemination strategy and estimates that fail to consider potential negative spillovers.

Bureaucrats are often granted autonomy in hiring decisions to shield state organizations from political interference. However, we show that bureaucrats can exploit such discretion to engage in forms of favoritism that undermine organizational performance. We study this phenomenon in the context of the Mexican federal judiciary. On average, the arrival of a judge at a circuit results in the hiring of 0.05 relatives to key staff positions within the following year, and 0.2 relatives when using an alternative dataset that covers a more complete set of occupations. Both estimates are likely to represent lower-bounds of the true effect. These related hires tend to be negatively selected in terms of educational attainment and are associated with a decline in court productivity, suggesting that appointments are driven by rent-seeking rather than efficiency considerations. Notably, nepotistic hiring is concentrated among judges who have been sanctioned for administrative offenses and those assigned to courts located in their state of birth.

China's declining female labor force participation (LFP) stands in stark contrast to the global "quiet revolution" of rising women's economic engagement. This paper offers a novel explanation for this unique trend through the long-term unintended effects of population control policies, which have distorted sex ratios in both marriage and labor markets. Using a cohort difference-in-differences strategy, we find that the introduction of China's One-Child Policy (OCP) significantly reduced women's LFP by 12 percentage points relative to their male counterparts. The widening gender gap in LFP is primarily driven by male-biased sex ratios resulting from the OCP. Specifically, women exposed to more skewed sex ratios exhibit higher marriage and fertility rates, improved husband quality, greater intra-household bargaining power, extended leisure time, and fewer ambition-related psychological traits. The crowding-out effect of labor market distortions on the gender gap in LFP plays a secondary role. These insights explain the continuing decline in female labor supply and the enlarging gender gap in LFP in China.

This study examines whether land reform can constrain predatory behavior by local state agents and, in turn, enhance regime support and policy compliance among the general population. We offer empirical evidence from China's land titling reform that provided rural households with legal land certificates. Exploiting the staggered rollout of the reform across counties beginning in 2011, we find that land titling significantly increased political trust toward the government. Although the reform did not generate significant economic returns, it empowered rural residents to pursue legal protection against land expropriation, thereby limiting the discretionary authority of local officials. Additional analyses suggest that the reform led to greater participation in government-initiated social security programs and a decline in engagement with local elections.

We argue that women's desired fertility has become the binding constraint in low-fertility contexts: once fertility desires fall below policy ceilings, removing quotas alone cannot generate a substantial rebound. We test this hypothesis using China's Universal Two-Child (UTC) policy adopted in January 2016, an abrupt nationwide relaxation following decades of the One-Child Policy (OCP). Drawing on nationally representative data from the 2017 China Fertility Survey and exploiting eligibility variation created by the UTC policy, we find that the policy increased births by only 0.023 per eligible woman in 2016–2017, driven almost exclusively by women who desired two or more children. County-level evidence from the 2020 population census data further shows that fertility in 2016–2020 rose primarily in places with higher average desired fertility. These results indicate that declining fertility desires—not administrative birth quotas—now constrain fertility in post-OCP China.

This paper examines the impact of a substantial minimum wage increase in Uruguay — a middle-income developing economy — on labor market outcomes. Using administrative data and a difference-in-differences approach, we study the effects of a 2005 reform that raised the real minimum wage by 80 percent within a year. We find large and persistent wage gains for low-paid workers, with no statistically significant effects on employment or hours worked. Beyond labor market outcomes, we document a temporary decline in compliance with the statutory wage floor, particularly among smaller firms, followed by a gradual strengthening of enforcement. Overall, our results highlight how enforcement capacity and institutional features shape the effects of minimum wage reforms in developing economies.

This study examines the impact of academic freedom reform on university graduates’ creativity using a large, multi-decade, cross-country sample. We construct a novel creativity index based on occupational task data and analyze how reforms in an individual’s home country affect their creativity after immigrating to the United States. Exploiting variation in reform timing across countries, we find that academic freedom reform significantly enhances graduates’ labor market creativity. Results are robust to multiple DID estimators, alternative specifications, placebo tests, and IV methods, as well as approaches addressing potential biases. Effects are particularly pronounced for developing countries, environments with decentralized governance, and low corruption. Reforms appear to boost creativity by encouraging higher educational attainment, facilitating entry into high-tech and research-oriented fields, and promoting managerial and professional roles. Our findings underscore the economic value of academic freedom and its potential as a policy instrument for nurturing student creativity.

Large and persistent productivity differences are observed across firms in rich and poor countries. Standard cross-country comparisons implicitly assume firms fully utilize their installed capital. We document that firms frequently operate below capacity, particularly in low-income environments where supply-side constraints like access to electricity limit firms' ability to produce and deliver output. We develop a simple model showing that when capital is underused, conventional measures of total factor productivity (TFP) conflate true productivity and utilization. Using unique panel data from Ethiopia in which firms report both actual and full-capacity production, we show that true productivity is about 40 percent higher than standard TFP measures for firms in the lowest quartile of capacity utilization, with negligible bias near full capacity. Using World Bank Enterprise Survey data covering over 80 countries, we find that accounting for capacity utilization narrows measured TFP gaps between rich and poor countries by approximately 15 percent.

We study the labor market and macroeconomic effects of carbon taxation in the energy sector in emerging economies. We build a macro-search model with pollution externalities, endogenous green-energy adoption, salaried-firm entry, and endogenous self-employment. The carbon tax increases green technology adoption in the energy sector and the share of green energy. Under a baseline revenue recycling scheme that transfers the carbon tax revenue to households, the tax raises energy prices, leading to a reduction in salaried firm and job creation, and an increase in self-employment and labor force participation that ultimately generate welfare and GDP losses. Additional model experiments show that the presence of self-employment as a distinct employment category significantly amplifies these losses. However, endogenous green technology adoption can drastically limit the magnitude of these losses. Using the carbon tax revenue to support green energy investment can deliver a decline in energy prices and net welfare and output gains while reducing self-employment.

This study investigates the effects of exposure to violent conflict on trust among young adults in Ethiopia, using novel individual-level conflict data collected via audio computer-assisted self-interviewing. Overall, we find that greater exposure to violence decreases trust towards individuals living in the same neighbourhood but has no significant effect on generalized trust or trust in individuals from other neighbourhoods. The decline in local neighbourhood trust is pervasive across men and women and across ethnic groups, and is observed for both direct personal victimization and indirect exposure through family, friends, and witnessed events. We also find that low levels of exposure to violence may foster higher local trust, whereas higher levels of exposure lead to substantial declines. Finally, conflict exposure is significantly associated with deteriorations in mental health, lower perceived neighbourhood safety, physical displacement, and greater food insecurity, pointing to potentially plausible channels through which violent conflict may weaken trust within local communities.

I develop and test a novel theory of polygamy that incorporates an empirical feature previously overlooked: Co-wives interact in a senior-junior hierarchy. In equilibrium, single, monogamous, and polygamous households emerge. Optimal female sorting generates co-wives’ inequality: High-skilled women become senior wives in polygamous households with wealthy men and low-skilled juniors. Monogamous couples are in the middle of the attractiveness distributions. Three sets of nonparametric tests using various data sets confirm the model’s predictions.

This paper examines how the Paycheck Protection Program (PPP) supported employment during the COVID-19 period by distinguishing between its short-term liquidity and broader funding effects. Using county-level data, we show that delays in loan disbursement had prolonged negative impacts only on the smallest urban businesses. To identify the causal impact of funding itself, we develop an instrument based on the pre-pandemic payroll share in small establishments. Instrumental-variable and firm-level analyses reveal that PPP funding improved business survival and employment recovery substantially and broadly, with an estimated cost of roughly $89,000 per job-year, consistent with other large-scale fiscal interventions.

This paper studies the effects of public childcare expansion for children under age three in Germany on mothers’ child penalties. Exploiting county-level variation in the expansion, we find that a 20-percentage-point increase in childcare coverage rate reduces earnings penalties by 4.5 percentage points. This accounts for about 56% of the total 8-percentage-point decline in earnings penalties over the reform period. Early childcare increases employment and days worked, especially in full-time and non-marginal positions. It also raises daily wages and increases the likelihood that mothers work in higher-paying firms and occupations. These effects persist beyond the early childcare eligibility period. We further identify two key contextual factors explaining the positive effects of early childcare: the initial level of child penalties and reliance on informal care. In settings with high child penalties and limited alternatives, early public childcare can yield substantial lasting benefits for mothers’ careers.

How does the tax treatment of entrepreneurial activity affect the decision to start a business? We study this question in the context of a major tax reform in Poland that introduced a flat tax for business owners, leaving the taxation of employees unchanged. Using a difference-in-differences approach and data on the universe of Polish taxpayers, we find that a 1 percentage point increase in the tax differential at the top of the income distribution leads to a 0.9% increase in the share of self-employed five years after the reform. The increase is primarily driven by transitions from employment to self-employment, in particular, solo self-employment (self-employment without dependent workers). Moreover, the transitions occur in industries with a high human-capital component. Altogether, we find that high-income taxpayers respond strongly to the increased attractiveness of self-employment by starting a business, that such behavior shows considerable persistence, that it accumulates over time, and much of it is likely to reflect income reclassification rather than genuine entrepreneurial activity.

We evaluate the impacts of an online digital skills bootcamp for youth in Peru. Using a randomized experiment and combining administrative records on formal employment with survey data, we find that the program significantly increases the probability of working in entry-level technology jobs two years post-training. While some bootcamp courses yield positive impacts on formal employment and income, others show no significant effects — resulting in null average impacts overall. Evidence suggests that these differences may be driven by selection into training tracks and limited local labor demand for certain digital skills. Men seem to experience larger formal gains, while women appear more likely to transition into informal flexible jobs. A cost-benefit analysis suggests that selected tracks yield positive net returns.

This paper examines the impact of an export market expansion created by the US-Vietnam Bilateral Trade Agreement (BTA) on competition among manufacturing firms in Vietnam’s local labor markets. Using a nonparametric production function approach, we measure distortionary wedges between equilibrium marginal revenue products of labor (MRPL) and wages. We find that the median manufacturing firm pays workers 59% of their MRPL. Following the BTA, which significantly reduced US import tariffs for Vietnamese products, firms in industries exposed more to the tariff reductions saw faster employment growth and faster declines in their MRPL-wage wedge. We find that the BTA permanently decreases labor market distortion in manufacturing by 3.4%, and the effect concentrates on domestic private firms with a magnitude of 4.9%. We exploit information on the gender composition to estimate the MRPL-wage wedges separately for men and women. We find that the median distortion is 26% higher for women relative to men, and the decline in distortion for women, amounting to more than 12%, is the driver of the overall reduction in labor market distortion attributable to the BTA. Our theory and empirics suggest that the entry of FDI firms combined with differential aggregate labor supply elasticities explains these results.