Issues on African Development I
Friday, Jan. 5, 2018 2:30 PM - 4:30 PM
- Chair: Willene A. Johnson, Komaza, Inc
The Effect of Women’s Representation in Parliament and the Passing of Gender Sensitive Policies
AbstractThis paper employs data from 159 developing countries to examine whether countries that have a higher share of women in parliament are more likely to pass gender sensitive laws. We find that all else equal, developing countries that have a higher share of women parliamentarians are more likely to pass comprehensive laws on sexual harassment, rape, divorce and domestic violence. The results are robust. They holds for Ordered Probit, Ordered Logit as well as ordinary least squares (OLS). The results also holds for 4 sample groups: 159 developing countries, 48 African countries, 43 countries in Sub-Saharan Africa (SSA) and 111 developing countries outside SSA.
Informally Yours! Social Protection and Informality: Evidence from South-Africa
AbstractSocial protection has emerged as a key policy instrument to alleviate poverty and vulnerability in many developing countries. It has evolved into different forms of mechanisms in terms of focus and targeting population, coverage and scope, and ways of mobilization and utilization of resources. Still many individuals do not benefit from social protection in developing countries due to government lack of resources. Therefore an employment in the formal sector is highly seeked for its potential security benefits. This paper uses a biannual rotating panel over the period 2001-2004 from the Labour Force Survey in South Africa to study the effect of levels of informality in the sector of employment on levels of social protection. Social protection and informality are measured as three points ordinal scales: non covered, partially covered and fully covered for the former, and fully informal, partially informal and fully formal for the latter. We use a multinomial logit Markov chain specification with unobserved heterogeneity to account for the dynamics of transition across levels. We find that working in the partially and fully informal sectors decreases the probability to benefit from partial or full social protection coverage. In order to study the link between past experiences in the informal sector and discrimination in terms of social protection, we consider the effects of different transitions from the informal sector on social protection offered by the employer. We find that employees with previous work experience in the informal sector are less likely to benefit from social protection. Moreover, duration in the informal sector accentuates this decline in probability once individuals are in the formal sector. This reveals the existence of a scarring effect of informal sector employment. We also show that there is a heterogeneity depending on the distribution of wage inequality between the formal and informal sectors.
International Ownership and Firm Performance in Africa
AbstractEmpirical evidence suggests that international ownership of local firms supports firm performance and growth through various channels such as financing, technology transfer, and improved access to international markets. The relationship between firm performance and international ownership have been well explored for firms in developed economies but this is not the case for firms in developing economies, especially in Africa. Largely due to lack of relevant cross-country financial data, existing literature on African firms has presented some survey-based evidence on firm performance while evidence based on detailed financial information remains lacking. This paper aims at filling this research gap. We identify African firms operating in the formal sector and examine the impact of ownership structure on firm performance. We use cross-sectional financial data covering about 22,000 companies in 51 African countries for the years 2006 to 2014. Our results reveal a clear ownership-specific pattern. More specifically, international ownership is found to have a significant positive association with firm performance.
Gender Disparities in Employment and Earning in Africa: Evidence From Swaziland
AbstractIn this paper we provide first systematic evidence on the gender disparities in the labor market in Swaziland, drawing on the country’s first two (2007 and 2010) Labor Force Surveys. We find that even though the global financial crisis had a less severe effect on the labor market outcomes of women than those of men, women continue to have lower employment and labor force participation rates. Utilizing the Heckman probit selection model shows that while women account for a disproportionate share of the self-employed, they are more often than men involved in low-productivity activities and rely less on formal finance. We conclude with policies that could help Swaziland – and other middle- income countries in Sub-Saharan Africa – narrow these disparities and embark on a more inclusive growth path.
Inclusive Finance for SMEs in South Africa and Its Impact on Growth and Inequality
AbstractQuantifying the effect of financial constraints to firms is essential in our understanding of firms’ economic contribution to growth and inequality. Using a micro-founded general equilibrium model and firm-level data from the World Bank Enterprise Surveys, this paper analyses the effect of relaxing financial constraints on investment in entrepreneurial talent, and macro-economic variables like GDP, total factor productivity (TFP) and inequality. We focus on three dimensions of financial inclusion: access, depth and intermediation efficiency to calibrate the model to South Africa. Results show that relaxing participation and collateral constraints increases GDP by up to 3 percentage points and TFP by up to 2 percent. Inequality reduces by 1 – 3 percentage points, driven by both the extensive and intensive margins. In a regime of low initial intermediation costs, relaxing financial constraints might lead to an increase in monitoring costs due an influx of high risk talented but constrained entrepreneurs. Conversely, constrained entrepreneurs might refrain from borrowing and maintain a low leverage ratio to avoid being monitored, if intermediation costs are initially high. Overall welfare gains are attributed to an increase in the proportion of talented but constrained entrepreneurs, who take advantage of the relaxed financial constraints.
- O1 - Economic Development
- D1 - Household Behavior and Family Economics