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Research interests
My research
interests are mainly in the areas of Development Economics and Labor
Economics. Below is a brief overview of my current and past research work.
Click here
to view my dissertation (Labor Markets
in Transformation: Case Studies of Latin America) in fulltext.
Ongoing
projects are listed in blue, past
work in black.
Rural development and labor market
transformation
About two-thirds
of the 1.4 billion people in the World living in extreme poverty (on less
than 1.25 dollar per day) live in rural areas. Poverty alleviation means
finding more productive sources of income in rural areas for some and
migration to regions with better economic opportunities for others. A
majority of people living in rural areas in developing countries have
agriculture as their main source of income. As part of economic development,
however, the role of agriculture tends to shrink. The non-agricultural part
of the economy absorbs more of the resources, even though agriculture tends
to continue to grow, in absolute terms. This shift in resources from
agriculture to non-agricultural activities is not only a move of economic
activity from rural to urban areas. This sectoral
shift in activities happens in rural areas as well; the rural non-agricultural sector absorbs a growing share of the
rural labor force in developing countries.
Related
research:
1. Modelling the Distributional
Impacts of Agricultural Policies in Developing Countries: The Development
Policy Evaluation Model (DEVPEM), with Jonathan Brooks, Mateusz Filipski, and Ed
Taylor, paper presented at the
Global Forum on Agriculture, OECD Headquarters, Paris, 29-30
November 2010. Brief summary. Power Point presentation.
Summary: This paper is an early
output of a two-year project by the Development Division at the OECD Trade
and Agriculture Directorate, concerned with the role of agricultural policies
in rural development in low- and middle-income countries. As part of this
project we have developed what we call the DEVPEM (Development Policy
Evaluation Model). The model is essentially a rural computable general
equilibrium (CGE) model, consisting of six household groups, designed to take
into account household heterogeneity, market failures (transaction costs and
missing markets), and the dual role of the farm household as a producer and
consumer of food. Using RIGA household data
from FAO and the World Bank, we simulate the welfare and distributional
effects of a set of agricultural policy instruments, including market price
support, input subsidies, cash transfers, and the elimination of transaction
costs through investment rural public goods. A tentative conclusion is that,
even though a second-best solution, input subsidies in the form of vouchers
could be a relatively effective instrument to raise welfare for farm
households of various sizes. This conclusion, however, rests on the
assumption that prices of inputs (i.e. seeds and fertilizer) are exogenous
such that leakages to input suppliers thereby are small.
New working papers:
Modelling the Distributional
Implications of Agricultural Policies in Developing Countries.
OECD Food, Agriculture, and Fisheries Working Papers, No 50, OECD Publishing.
The Development Policy
Evaluation Model (DEVPEM): Technical Documentation. OECD Food,
Agriculture, and Fisheries Working Papers, No 51, OECD Publishing.
2. How Important are Locational
Characteristics for Rural Non-agricultural Employment? Lessons from Brazil, with Steven Helfand, in World
Development 38(5), 2010. (dissertation version here).
Summary: By paying particular
attention to the local economic context, this paper analyzes the factors that
influence rural non-agricultural employment and earnings. The empirical
analysis is based on the Brazilian Demographic Census, allowing for
disaggregated controls for the local economy. Education stands out as one of
the key factors that shape employment outcome and earnings potential. Failure
to control for locational effects, however, can lead to biased estimation of
the importance of individual and household characteristics. The empirical
results show that local market size, distance to population centers, and
other proxies for transactions costs play an important role in shaping
non-agricultural employment prospects and earnings. (Copyright 2009 Elsevier
Ltd.)
3. Earnings Differentials in the Rural Labor Market:
Does Non-Agricultural Employment Pay Better?, Working paper 2008:7,
Department of Economics, Lund University and Chapter 3 in Labor Markets in Transformation: Case
Studies of Latin America, Lund Economic Studies 155 (doctoral
dissertation at the Department of Economics, Lund University).
Summary: Rural non-agricultural employment
(RNAE) is being increasingly emphasized as a potential pathway out of rural
poverty for people who are unable to secure their income in agriculture.
Although average earnings in the rural non-agricultural sector are higher
than in agriculture, it is unclear whether income prospects are
systematically better in non-agricultural activities than in agriculture.
This paper tests for existence of earnings differentials between agricultural
and rural non-agricultural employment, while controlling for worker and
household characteristics. A theoretical farm household model is proposed
that predicts that there will be no sectoral
earnings differential for unskilled labor, whereas skilled labor will be
better off in the non-agricultural sector. Based on Peruvian household data,
the empirical findings do not support the notion that unskilled workers would
earn a higher income by switching from agriculture to RNAE. Instead it tends
to be the relatively well educated who might benefit from higher returns to education
in RNAE than in agriculture, consistent with the predictions of the
theoretical model.
4. Is the
Non-agricultural Sector Able to Mitigate Poverty? Panel Data Evidence from
Developing Countries. In this recently initiated project, Steven Helfand (University of California, Riverside) and I
re-visit the question about the viability of the rural non-agricultural
sector as a pathway out of poverty.
Summary: Non-agricultural
employment constitutes an important and growing share of rural household
income in developing countries. Recent empirical evidence suggests that rural
households derive 40-60 percent of their income from non-agricultural sources
in Africa, South Asia, and Latin America. While rural households with high
non-agricultural income shares tend to be better off than agricultural
households, there is mixed evidence on the extent to which rural
non-agricultural employment is a viable exit path out of poverty for the
rural poor. Despite the increasing share of non-agricultural income sources
among rural households, rural poverty continues to be a major social burden
in the developing world. In Latin America, countries such as Bolivia,
Colombia, Guatemala, Honduras, Peru, and Nicaragua still have rural poverty
headcount ratios exceeding 70 percent. In this paper we seek to shed new
light on the rural non-agricultural (RNA) sector and its potential to serve
as a poverty exit path, by studying household panel data from multiple
countries.
A two-page
discussion of the role of the rural non-agricultural sector in poverty
alleviation is provided in an article entitled "Rural Non-farm Jobs - a Pathway out of Poverty?", in Poverty in Focus, Number 16,
December 2008, pp. 24-25.
Informal labor markets and regional
governance
A sizeable share of the urban labor force in
developing countries tends to be employed in the informal sector. Brazil is
no exception in this respect. According to the Demographic Census of 2000,
about 45 percent of the adult urban labor force has some form of informal
employment as their principal occupation. The defining characteristic of
informal employment is usually that it is not regulated in any formal
employment contract, and therefore is not subject to labor market
regulations. To the worker, this implies being outside most of social
security arrangements, while faced often with low compensation and poor
working conditions. For businesses, being informal constrains the ability to
raise financial capital and to enforce complex contracts, which is likely to
restrict their prospects of growing. To the economy as a whole, wide-spread
informality means difficulties in collecting tax revenues for the provision
of public goods and services. Recent empirical evidence even suggests that
informality affects economic growth negatively, controlling for other country
characteristics.
Related research:
5.
Informal Employment and the Role of Regional
Governance, in Review of Development Economics, 15(3), 2011.
Summary: The aim of this paper is
to provide and explanation to why the degree of informal employment may vary
substantially between different regions within a country. In Brazil, 45% of
workers in the urban labor force are employed informally. The degree of informal
employment, however, varies substantially across regions, with some cities
having 20% and others having 80% or more of their labor force in the informal
sector. The hypothesis assessed here is that the quality of local governance
– or government effectiveness – affects the decisions of workers
and businesses whether to participate in the formal or the informal sector.
The empirical analysis, based on data from 5500 Brazilian municipalities,
shows that informal employment is lower in regions with better governance,
higher average education, and with a relatively large manufacturing sector. Endogeneity concerns are addressed as part of a series of
robustness checks of the results.
6.
Government
Effectiveness and Regional Variation in Informal Employment, forthcoming in Journal
of Development Studies.
(Working paper version available here)
Summary: This paper analyses
the role of government effectiveness in the determination of informal employment.
A theoretical model is developed, in which local governance and worker skill
level are assumed to influence the decision of the worker whether to seek
employment in the formal or informal sector. The model is assessed
empirically using data from Brazil, where almost half of the urban labor
force is employed informally. The empirical analysis supports the predictions
of the model and suggests that informal employment is lower in regions with
better governance and higher average education.
Labor market issues in Sweden and United States
7.
What Accounts for Intra-Industry Wage Differentials?
Results from a Survey of Establishments, with David Fairris, in Journal
of Economic Issues, 42(1), 2008.
Summary: This paper utilizes an
original establishment survey in a select few low-wage industries in Los
Angeles to draw conclusions about the existence of and explanations for
intra-industry wage differentials. We explore differences in average
establishment wages but also in the starting wage of the largest low-wage
occupations in establishments. Well over 50 percent of the variation in
average establishment wages occurs across establishments within industries
and 60 percent or more of the starting occupational wages of establishments
occurs both within industries and occupations. Differences in the skills of
workers account for a portion of the variation in intra-industry average and
intra-occupational starting wages, but so too do institutional factors such
as unions, rent sharing, monitoring difficulty, and recruitment difficulty.
(Copyright 2008, Journal of Economic Issues)
8.
Employment and Non-employment: A Study of the
Swedish Labor Market, with Lars Pettersson, chapter 8 in Globalization and the Welfare State, edited by Bo Södersten, Palgrave-Macmillan, 2004.
Summary: The unemployment rate is
the dominating key indicator for the current state of the labor market. We
argue that the unemployment rate misses important elements of exclusion from
the labor market. We define the rate of non-employment as the share of the
working-age population who does not have a job and study the evolution of
this indicator from the early 1970s to the early 2000s. We show that the
non-employment fell sharply from 25 percent in the mid-1970s to less than 15
percent in the late 1980s. During the economic recession of 1991-1993,
however, the rate of non-employment rapidly increased to above 25 percent.
The number of jobs that were ‘lost’ in the recession of the early
1990s was only partially reflected in the unemployment rate. A large number
of people (almost 300,000) left the labor force for early retirement or
long-term sick leave.
9. Tillväxt utan jobb?, kapitel 3 i Den problematiska tryggheten – välfärdsstaten under
tre decennier, Bo Södersten (red), SNS Förlag, 2006.
Detta bokkapitel diskuterar det faktum att svensk ekonomi växte med i
genomsnitt nästan 3 procent per år mellan 1994 och 2004, eller
cirka 30 procent under perioden som helhet, medan antalet sysselsatta endast
ökade med 0,6 procent per år. Kapitlet inleds med den normativa
frågeställningen huruvida vi överhuvudtaget
”borde” jobba mer - i ett land som redan har en av de högsta
sysselsättningsgraderna i Europa. Anledningar till att vi kan
förvänta oss att ekonomin växer snabbare i kronor än i
arbetstillfällen diskuteras. Kapitlet avrundas med att belysa politiska
medel för att stimulera sysselsättning bland grupper som står
utanför arbetsmarknaden.
10. Hur är det ställt med svensk glesbygd? Regional variation i arbetsmarknadsutfall
och ohälsa, kapitel 18 i Den
orädde debattören: en vänbok till Bo Södersten på
80-årsdagen den 5 juni, Mats Lundahl (red), Ekelids
Förlag, 2011. (Kapitlet i slutlig arbetsversion här)
Updated: August 12,
2011.
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