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Category Archives: O1

Social Capital and Financial Development after Economic Shocks: Evidence from Italy after the Financial Crisis of 2007-2009

By Sujay Rao & Ethan Lampert

Like traditional forms of capital, social capital – an intangible measure of an individual’s social networks, trust in institutions, and participation in civic life – has implications for personal and financial behavior. Individuals from educated, well established backgrounds with fruitful family ties may be more amenable to opening new lines of credit or investing in stock markets due to their trust in and connectedness with society. But what happens after a major economic shock, such as the financial crisis of 2008? Using Italy as a case study and panel data from the Survey of Household Income and Wealth, we find that social capital has significant effects on an individual’s credit card usage, informal borrowing, and choice to invest in securities.

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Advisors: Professor Grace Kim, Professor Michelle Connolly, Professor Giovanni Zanalda | JEL Codes: G01, G2, O1, D1, D14

The Impact of Microfinance on Women’s Empowerment: Evidence from Rural Areas of Uganda

By Sonia Maria Hernandez

Microfinance is the practice of extending small collateral-free loans to underserved populations in developing areas with no access to credit. The Village Savings and Loan Association (VSLA) randomized access to microfinance treatment for women in rural areas of Uganda and tracked outcomes through surveys. This research determines the impact of microfinance by analyzing outcomes over five dimensions of women’s empowerment, including decision making power, community participation, business outcomes, emotional wellness, and beliefs about women. The strongest results showed that access to the VSLA program empowered women in terms of business outcomes and decision-making power. This leads to the conclusion that microfinance can more easily impact how a woman behaves within the household than change how a woman behaves within the community.

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Advisors: Professor Kent Kimbrough, Professor Lori Leachman | JEL Codes: O1, O12, O35

Evaluating Economic Impacts of Electrification in Zambia

By Aashna Aggarwal

Energy poverty is prevalent in Zambia. It is one of the world’s least electrified nations with 69% of its citizens living in darkness, without access to grid electricity. Zambian government has a goal to achieve universal electricity access in urban areas and increase rural electrification to 51% by 2030. With its main goal to improve the quality of life and wellbeing of Zambians. Electrification is expected to have positive impacts on health, education and employment play an important role to achieve wellbeing, however, previous studies and analysis of renewable energy programs have found different, context-dependent results. To evaluate the impacts of electrification in Zambia I have used the Living Conditions Monitoring Survey (LCMS) of 2015 and applied two different estimation techniques: non-linear regressions and propensity score matching. My study finds that firewood consumption significantly decreases with assess to electricity and education has positive outcomes on grade attainment. I negligible effects on wage earning employment outcomes respiratory health outcomes. Based on these results I conclude that access to grid electrification does have certain positive impacts but empirical evidence is not as strong as the theoretical claims.

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Advisors: Dr. Robyn Meeks and Dr. Grace Kim | JEL Codes: C31; C78; O13; Q40

Sister competition and birth order effects among marriage-aged girls: Evidence from a field experiment in rural Bangladesh

By Stephanie Zhong

Early marriage before the age of 18 is prevalent among adolescent girls in Bangladesh, but the timing of marriage is not uniform across daughters within a household, with some sisters marrying earlier than others. Using survey data from a novel field experiment from rural Bangladesh, I find that girls ages 10-21 with lower birth order tend to be married at a younger age, even when controlling for confounding nature of household size on birth order. Additionally, girls with younger sisters are more likely to be married and at a younger age than girls with younger brothers. The findings on dowry are inclusive.

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Advisors: Dr. Erica Field and Dr. Michelle Connolly | JEL Codes: D13, J13, O15

Endogeneity in the Decision to Migrate: Changes in the Self-Selection of Puerto Rican Migrants before, during, and after the Great Recession

By Aasha Reddy 

Migrants self-select on characteristics such as income. We use the U.S. Census’ ACS and PRCS to study changes in selection patterns of Puerto Rican migrants to the to the U.S. mainland (50 states) before, during, and after the Great Recession (2005 to 2016). We construct counterfactual income densities to compare incomes of Puerto Rican migrants to the mainland versus incomes of island residents under equivalent returns to skill. We examine where Puerto Rican migrants to the mainland tend to fall in the island’s income distribution and find that Puerto Rican migrants tend to come from the top 20% of the island’s income distribution. This pattern remained stable with little to no effect of the Great Recession on selectivity patterns.

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Advisors: William Darity and Michelle Connolly | JEL Codes: J15, J61, O15

What Fosters Innovation? A CrossSectional Panel Approach to Assessing the Impact of Cross Border Investment and Globalization on Patenting Across Global Economies

By Michael Dessau and Nicholas Vega

This study considers the impact of foreign direct investment (FDI) on innovation in high income, uppermiddle  income and lowermiddle income countries. Innovation matters because it is a critical factor for economic growth. In a panel setting, this study assesses the degree to which FDI functions as a vehicle for innovation as proxied by scaled local resident patent applications. This study considers research and development (R&D), domestic savings, imports and exports, and quality of governance as factors which could also impact the effectiveness of FDI on innovation. Our results suggest FDI is most effective as inward direct investment in countries outside the technological frontier possessing adequate existing domestic investment capital and R&D spending to convert foreign investment capital and technological spillover into innovation. Nonetheless, FDI was not a consistent indicator for innovation; rather, the most consistent indicators across this study were R&D and domestic savings. Differences amongst income groups are highlighted as well as their varying responses to our array of causal factors.

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Advisor: Lori Leachman | JEL Codes: A10, B22, C82, E00, E02, O10, O11, O30, O31, O32, O33, O34, O43

Effect of Slum Redevelopment on Child Health Outcomes: Evidence from Mumbai

By Suhani Jalota

As the population of urban poor living in slums increases, governments are trying to relocate people into governmentprovided free housing. Slum redevelopment affects every part of a household’s livelihood, but most importantly the health and wellbeing of younger generationsThis paper investigates the effect of slum redevelopment schemes on child stunting levels. Data was collected in fortyone buildings under the slumredevelopment program in Mumbai. The study demonstrates through a fixed effect regression analysis that an additional year of living in the building is associated with an increase in the heightforage Zscore by 0.124 standard deviations. Possible explanations include an improvement in the overall hygienic environment, sanitation conditions, indoor air pollution, and access to health and water facilities. However, anecdotal evidence suggests that water contamination, loss of livelihood and increased expenses could worsen health outcomes for residents. This study prompts more research on the health effects of slum redevelopment projects, which are becoming increasingly common in the rapidly urbanizing developing world. 

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Advisor: Erica Field, Michelle Connolly | JEL Codes: O12, O14, O17, O18, O22 | Tagged: Urban infrastructure, Microeconomic Analyses of Economic Development, Child health, Informal settlements, Project Analysis

The Effects of Global Oil Price on Government Investment the Nigerian Agricultural Sector

By Chuka Obiofuma

Nigeria’s heavy dependence on oil makes it a prime target for the resource curse. The occurance of this phenomenon in Nigeria could mean that there is capital flight from the agricultural sectors of the economy when the oil sector increases in profitability. This would disproportionately hurt the poor of Nigeria who depend on agriculture for their livelihood. This work investigates whether or not the Nigerian government, the largest investor into the Agricultural sector, tends to increase or decrease its investment in the agricultural sector as global oil prices rise. Using data from the years 1978-2014, the results of this paper show that as oil prices increase so too does the Nigerian government’s investment in its agricultural sector.

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Advisor: Alison Hagy, Gale Boyd | JEL Codes: I28, O13, Q43 | Tagged:  Agriculture, Energy, Government Policy

Variations in Turkey’s Female Labor Market: The Puzzling Role of Education

By Rachael Anderson

Although Turkey ranks among the world’s 20 largest economies, female labor force participation in Turkey is surprisingly low.  Relative to other developed countries, however, the proportion of Turkish women in senior management is high.  One explanation for these contrasting pictures of Turkey’s female labor force is education.  To better understand how women’s education and household characteristics explain variations in Turkey’s female labor market, I use annual Turkish Household Labour Force Survey data from 20042012 to estimate five probabilities: the likelihood that a woman (1) participates in the labor force, or is employed in an (2) agricultural, (3) blue collar, (4) lower white collar, or (5) upper white collar job.  I find that labor force participation is relatively high among female primary school graduates, who are most likely to work in agricultural and blue collar jobs.  Highly educated married women are the most likely group to participate in upper white collar jobs, and families favor sending single daughters over wives to work during periods of reduced household income.

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Advisor: Kent Kimbrough, Timur Kuran | JEL Codes: C51, J21, J23 | Tagged: Employment, Labor-force Participation, Occupation Women

The Impact of Micro-Banking on Health: Evidence from Self-Help Group Involvement and Child Nutrition

By Madeline Mckelway

Low income is only one nancial problem that poor families in developing countries face; impoverished households must also face irregularity of their low incomes. Self-help groups (SHGs) can enhance consumption stability by relaxing savings and credit constraints. In this study, I investigate the extent to which SHGs improve a particular dimension of household wellbeing: child nutrition. I analyze households aliated with the SHGs started by the People’s Education and Development Organization (P.E.D.O.) in rural Rajasthan, India. Children who had greater levels of exposure to household SHG membership at a young age have healthier anthropometric statuses than their siblings who had relatively less. This relationship does not appear to be driven by events coinciding with SHG involvement or by the tendency for certain children, who were also exposed to SHGs, to receive better nutrition than their siblings. These endings suggest that SHGs could improve child nutrition.

Honors Thesis

Dataset

Advisor: Erica Field, Michelle Connolly | JEL Codes: O1, O12, O15, O16, O22 | Tagged: Microeconomic Analyses of Economic Development; Human Resources for Economic Development; Financial Markets in Economic Development; Project Analysis

Questions?

Undergraduate Program Assistant
Jennifer Becker
dus_asst@econ.duke.edu

Director of the Honors Program
Michelle P. Connolly
michelle.connolly@duke.edu