Rural Labor Markets in Transition and Developing Countries

Paper Session

Sunday, Jan. 8, 2017 3:15 PM – 5:15 PM

Sheraton Grand Chicago, Michigan AB
Hosted By: Association for Comparative Economic Studies
  • Chair: Hartmut Lehmann, University of Bologna, IZA, DIW and WDI

Coerced Labor in a Global Supply Chain: How Higher Commodity Prices (Don’t) Transmit to the Poor

Alexander Danzer
,
Catholic University of Eichstatt-Ingolstadt and IZA
Robert Grundke
,
University of Munich and IOS Regensburg

Abstract

We investigate the economic fortunes of coerced vs. free workers in a global supply chain. To identify the differential treatment of otherwise similar workers we resort to a unique exogenous labor demand shock. By capitalizing on Tajikistan’s geographic variation in the suitability for cotton production combined with a surge in the world market price of cotton in 2010/11, we identify the wage pass-through in two types of firms: randomly privatized small farms and not yet privatized large parastatal farms, which command political capital to coerce workers. The expansion in land attributed to cotton and subsequent higher harvest labor demand increased wages for free pickers on entrepreneurial private farms, but did not increase wages of coerced workers on large parastatals. The results provide evidence for the political economy of labor coercion and for the dependence of the economic lives of many poor on the competitive structure of local labor markets.

Pathways From School to Work in Rural Areas of the Developing World

2. Giuseppe Dachille
,
University of Rome Tor Vergata and UCW
Furio Camillo Rosati
,
University of Rome Tor Vergata, UCW and IZA

Abstract

This paper uses micro data from the ILO-STWT surveys to provide novel evidence on the duration, end point and determinants of the transition from school to work in a sample of 23 low and middle-income countries around the world. The paper estimates the probability of transiting to a job, the duration of the transition and transition to jobs of different qualities. It analyze the main correlates of the transition path with a focus on gender, education, school leaving age and working during education. The negative effects of low levels of human capital and high levels of population growth on job finding rates, seems to be at least in part offset by widespread poverty and lack of unemployment insurance, leading to overall faster transitions in low income economies compared to middle income economies. By lowering reservation wages and speeding transitions these latter forces lead overall to worse matches, as measured by the probability of attaining stable employment in the long-run.<br />

The impact of non-cognitive skills, risk attitudes and trust on rural-to-urban migration: Evidence from Ukraine

Sinem Ayhan
,
Institute for the Study of Labor
Ksenia Gatskova
,
IOS Regensburg
Hartmut Lehmann
,
University of Bologna, IZA, DIW and WDI

Abstract

This paper studies the impacts of non-cognitive skills together with attitudes towards risk and trust on the decision to migrate from rural to urban areas. It makes use of a four-wave panel of Ukrainian Longitudinal Monitoring Survey for the period between 2003 and 2012. We use Five Factor Model of personality structure in the evaluation of non-cognitive skills. Our results suggest that non-cognitive skills such as openness to new experience and willingness to take risk, which help reduce the perceived cost of migration, increase the probability of migration. On the other hand, conscientiousness and extraversion are found to be negatively associated with migration propensity. The effects are significant and mainly driven by movements into cities. Our results are robust to several sensitivity checks taking into account reverse causality and (time-invariant) unobserved heterogeneity.

The Georgian Great Depression and the Transformation of the Agricultural Sector

Adam Pellillo
,
La Salle University
Norberto Pignatti
,
Tbilisi State University

Abstract

In the early 1990s, Georgia experienced one of the sharpest declines in economic activity in recent history, with GDP per capita falling by more than 70 percent between 1990 and 1994. In this paper, we assess how Georgia’s agricultural sector was transformed during this time period and how this transformation shaped the challenges facing those working in the sector today. We also evaluate the evolution of entrepreneurship in the agricultural sector, from the kolkhoz era to today’s agricultural cooperative movement. Lastly, we put forth new evidence regarding the factors associated with entrepreneurship in the agricultural sector in Georgia
Discussant(s)
Robert Grundke
,
University of Munich and IOS Regensburg
Hartmut Lehmann
,
University of Bologna, IZA, DIW and WDI
Richard Pomfret
,
University of Adelaide
Furio Camillo Rosati
,
University of Rome Tor Vergata, UCW and IZA
JEL Classifications
  • J2 - Demand and Supply of Labor
  • P2 - Socialist Systems and Transitional Economies