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Center for Global Development
and The Paul H. Nitze School of Advanced International Studies present
a Massachusetts Avenue Development Seminar (MADS)*
Featuring Dean Karlan
Department of Economics, Yale University
With discussant David McKenzie Development Research Group, The World Bank
Tuesday, February 17, 2009
12:00pm--1:30pm Lunch will be served
at Center for Global Development
1800 Massachusetts Avenue, NW, Third Floor, Washington, DC
Closest Metro: Dupont Circle (Red Line)
Abstract: We work with a lender to randomize approvals of individual liability microenterprise loans to marginal applicants in the metropolitan Manila area of the Philippines. We then use an extensive follow-up survey to measure impact on borrowing, business outcomes, and household outcomes. Preliminary evidence suggests that expanding access to microcredit had an effect on borrowing, despite the presence of various borrowing options in the market. The average applicant who was "treated"-- randomly approved for a loan they normally would not have gotten -- shifted their borrowing from informal to formal sources. There is also evidence that the treated applicants who were most credit constrained ex-ante increased their total borrowing. We then examine the effects of these changes in borrowing composition on levels on household economic activity, household subjective well-being, business investment, business size, political participation and business profitability.
*The Massachusetts Avenue Development Seminar (MADS) series is an effort by the Center for Global Development and The Paul H Nitze School of Advanced International Studies to take advantage of the incredible concentration of great international development scholars in the Metro Washington, DC area. The series seeks to bring together members of this community and improve communication between them.
In a recent paper, Kate Ambler and coauthors studied the impact of one-season cash transfers for agricultural investment in Senegal and Malawi, using data from a randomized control trial (RCT) in each country. They found evidence that transfers reduced both the number of decision makers and female decision making in Senegal in the short-run, particularly for measures directly related to agriculture. However, the effects disappeared two years after the transfers. Conversely, the authors find transfers in the Malawi program led to robust transitory increases in these measures, seeing a greater impact related to the number of decision makers in the household persisting after two year period. Join us for the latest CGD Invited Research Forum to discuss these opposing findings on the effects of cash transfers on household decision making.
Indian agriculture remains vulnerable to the vagaries of weather, and the looming threat of climate change may expose this vulnerability further. Using district-level data on temperature, rainfall and crop production, Siddharth Hari’s paper first documents a long-term trend of rising temperatures, declining average precipitation and increase in extreme precipitation events. One key finding is that the impact of temperature and rainfall are felt only in the extreme: when temperatures are much higher, rainfall is significantly lower, and the number of “dry days” greater is than normal. He also finds that these impacts are significantly more adverse in unirrigated areas (and hence rainfed crops) compared to irrigated areas. Can policy makers react to the challenges of climate change and find ways to get “more crop for every drop?"
Estimating intergenerational mobility in developing countries is difficult because matched parent-child income records are rarely available and education is measured very coarsely. In particular, there are no established methods for comparing educational mobility for subsamples of the population when the education distribution is changing over time.
In their recent paper, Sam Asher and coauthors present new methods and new administrative data to overcome this gap, and study intergenerational mobility across groups and across space in India. They find that the intergenerational mobility for the population as a whole has remained constant since liberalization, but cross-group changes have been substantial. Rising mobility among historically marginalized "Scheduled Castes" is almost exactly offset by declining intergenerational mobility among Muslims, a comparably sized group that has few constitutional protections. These findings contest the conventional wisdom that marginalized groups in India have been catching up on average. The paper also explores heterogeneity across space, generating the first high-resolution geographic measures of intergenerational mobility across India, with results across 5600 rural subdistricts and 2300 cities and towns.