Three essays in development economics: applications to agriculture, education, and expectations

Montoya Castano, Alejandro

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https://hdl.handle.net/2142/120370 Copy

Description

Title

Three essays in development economics: applications to agriculture, education, and expectations

Author(s)

Montoya Castano, Alejandro

Issue Date

2023-04-19

Director of Research (if dissertation) or Advisor (if thesis)

Arends-Kuenning, Mary

Doctoral Committee Chair(s)

Arends-Kuenning, Mary

Committee Member(s)

• Lyons, Angela
• Herrera-Almanza, Catalina
• Medeiros, Marcelo Cunha

Department of Study

Agr & Consumer Economics

Discipline

Agricultural & Applied Econ

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

Development Economics, Education, Labor, Colombia, Brazil, Bangladesh

Abstract

This dissertation presents three essays in development economics, each one of them for a different low- and middle-income country. Each chapter analyzes factors that could influence the demand or supply of labor and focuses on a setting with significant levels of inequality. The first chapter, conducted with my advisor Mary Arends-Kuenning, analyzes whether an intervention that targets the poorest households in Bangladesh has effects on parents’ expectations about the occupations of their children. In this sense, we analyze potential long-run effects of this intervention on the labor supply and whether these effects reinforce traditional gender roles. The second chapter, developed with Thiago Arruda de Oliveira, switches to the analysis of labor demand, by exploring whether the rapid expansion of soybean production in the agricultural frontier in Brazil is linked to the creation of formal jobs. Because this area of analysis is characterized by significant income inequalities and a large informal sector, we seek to contribute to the literature about the socioeconomic effects attributed to this expansion. Finally, the third chapter analyzes students’ ranking and their effects on different indicators that measure academic performance in a large public university in Colombia. Like the first chapter, the analysis is centered on the labor supply and introduces some elements from psychology. The chosen university is of particular importance, as it allows low-income students to have access to quality education at negligible costs. It also faces inefficiencies, as it has high rates of expulsion and students remain enrolled for longer than expected without receiving a diploma, which affects their transition to the labor market. The next paragraphs provide a detailed summary of each chapter. The first chapter analyzes the unintended effects of a randomized control trial in Bangladesh that targets the ultra-poor on the expectations that parents have about their children's occupations. Because significant aspirational gaps exist between poor and wealthy households, as well as between boys and girls, this chapter analyzes whether a graduation-type program can reduce these gaps. As the intervention is a composite of different services including the transfer of a productive asset, training, coaching, and a monthly stipend, among others, this research explores some of the potential channels that could explain changes in expectations, namely substitution and wealth effects, and changes in the perception of education. Further, it analyzes whether higher expectations are linked to better educational outcomes. The results show that the intervention only seems to reduce the aspirational gaps for boys, whereas for girls the intervention could be reinforcing traditional gender roles. The results also point to the importance of the coaching component in these types of interventions. The second chapter explores causal effects of the soybean expansion in Brazil on formal jobs. Recent literature shows ambiguous socioeconomic effects of the expansion of soybean in Brazil. However, these studies are descriptive in general and fail to establish causality. Therefore, the estimated effects cannot be attributed only to the expansion. The adoption of soybeans is an endogenous process, which hinders the estimation of causal effects. This chapter estimates the causal effects of this expansion on formal employment at the municipal level. The novel empirical strategy relies on the use of Synthetic Control Matching and the definition of a control group composed by municipalities that do not produce soybeans but meet the geographical conditions to do so. Previous studies use as control group municipalities that are not well suited for agriculture. This analysis focuses only on the municipalities that comprise the Brazilian agricultural frontier. The results show that the expansion led to increases in formal jobs in agriculture but did not have any effects on other sectors. There are also significant heterogeneities among the municipalities regarding the magnitude of the effects. Using tools from the regional economics literature, the estimations also point to possible economies of specialization in the region. The third chapter analyzes ranking effects in a large public university in Colombia on various college outcomes measured at different times. In particular, it focuses on three questions: first, whether students who were at the top of their classes in high school react in the same way as average (or bottom-ranked) students do when both experience low performance in the first semester of college; second, whether studying with higher performing peers translates into better academic outcomes, as shown by the tradeoff between studying with high performing peers and ranking effects; and third, whether students who receive an academic probation in the first semester of college perform differently than students with similar grades. The results show that changes in rankings do not seem to have any negative effect for students, as higher high school rankings are usually correlated with better educational outcomes, independent of students’ performance in the first semester. This finding is in line with previous research about the long-lasting effects of students’ rankings. Likewise, students enrolled with higher performing peers experience significant decreases in their performance. Receiving an academic probation does not translate into significantly better academic performance. The calculation of rankings and competitiveness of cohorts could provide useful tools for colleges to analyze which students might be at risk of low academic performance.

Graduation Semester

2023-05

Type of Resource

Thesis

Copyright and License Information

Copyright 2023 Alejandro Montoya Castano

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