Development Economics

What are the microeconomic drivers of growth? How can we support people to permanently lift themselves out of poverty? How can entrepreneurship transform the lives of young people across developing countries? How do regulations and infrastructure affect development?

Robin Burgess' work has revolved around finding routes to getting people out of poverty traps, with a particular focus on how interventions getting people into better jobs can achieve this. Given the young age structure in many developing countries, the extent to which young people are matched to more productive jobs will have a fundamental influence on the path of development.

 

Why Do People Stay Poor?

With Oriana Bandiera, Clare Balboni, Maitreesh Ghatak and Anton Heil

The Quarterly Journal of Economics, 137 (2): 785-844

Published paper   Online Appendix   Oriana's Slides

Press Coverage: VoxDev (Clare's Video),   Of Dollars and Data,   VoxDev (Maitreesh's Video),   LSE Research for the World Magazine  

Abstract

There are two broad views as to why people stay poor. One emphasizes differences in fundamentals, such as ability, talent or motivation. The other, the poverty traps view, differences in opportunities which stem from access to wealth. To test between these two views, we exploit a large-scale, randomized asset transfer and an 11-year panel on 6000 households who begin in extreme poverty. The setting is rural Bangladesh and the asset is cows. The data supports the poverty traps view - we identify a threshold level of initial assets above which households accumulate assets, take on better occupations (from casual labor in agriculture or domestic services to running small livestock businesses) and grow out of poverty. The reverse happens for those below the threshold. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated in the work they do at baseline and that the gains arising from eliminating misallocation would far exceed the program costs. Our findings imply that large transfers which create better jobs for the poor are an effective means of getting people out of poverty traps and reducing global poverty Read more...

econimate video
Conference Presentation
 

The Search for Good Jobs: Evidence from a Six-Year Experiment in Uganda

With Oriana Bandiera, Vittorio Bassi, Imran Rasul, Munshi Sulaiman and Anna Vitali

Resubmitted, Journal of Labor Economics

Draft  

Press Coverage: J-PAL blog    

Abstract
Developing countries face the challenge of aiding large cohorts of labor market entrants find good jobs. How to do so is complicated by job seekers differing in their skills, information and traits. We present results from a six-year field experiment studying job search behavior among youth in urban labor markets in Uganda, who at baseline, are unskilled yet optimistic over their job prospects. We engineer heterogeneity across workers through the offer of vocational training, and job assistance to meet with potential employers. Vocational training leads to measurable improvements in skills, while job assistance alters information workers have on their prospects, as call back rates from employers are low. Search behavior varies across the skills distribution: relative to controls, skilled youth become even more optimistic, search more intensively, and direct search towards better firms. The additional provision of job assistance to skilled youth causes them to revise down their beliefs, search less intensively and over lower quality firms. These differential search strategies impact long run outcomes: skilled workers without job assistance have higher employment rates and spell durations, and match to higher quality jobs and firms. Fixed traits across workers such as their cognitive ability and self-evaluation determine search strategies and outcomes because they interlink with how youth respond to the low call back rates from job assistance. Overall, our study provides insights on sources of worker heterogeneity driving labor market inequalities and inefficiencies, and on the design and targeting of labor market programs. Read more...
 

Tackling Youth Unemployment: Evidence from a Labor Market Experiment in Uganda

With Livia Alfonsi, Oriana Bandiera, Vittorio Bassi, Imran Rasul, Munshi Sulaiman, and Anna Vitali

Econometrica, 2020, 88(6): 2369-2414

Published Paper   Online Appendix  

Microeconomic Insights article

Press Coverage: J-PAL   VoxDev Video  

Abstract
We design a labor market experiment to compare demand- and supply-side policies to tackle youth unemployment, a key issue in low-income countries. The experiment tracks 1700 workers and 1500 firms over four years to compare the effect of offering workers either vocational training (VT) or firm-provided training (FT) for six months in a common setting where youth unemployment is above 60%. Relative to control workers we find that averaged over three post-intervention years, FT and VT workers: (i) enjoy large and similar upticks in sector-specific skills, (ii) significantly improve their employment rates, and, (iii) experience marked improvements in an index of labor market outcomes. These averages, however, mask differences in dynamics: FT gains materialize quickly but fade over time, while VT gains emerge slowly but are long-lasting, leading VT worker employment and earning profiles to rise above those of FT workers. Estimating a job ladder model of worker search reveals the key reason for this: VT workers receive significantly higher rates of job offers when unemployed thus hastening their movement back into work. This likely stems from the fact that the skills of VT workers are certified and therefore can be demonstrated to potential employers. Tackling youth unemployment by skilling youth using vocational training pre-labor market entry, therefore appears to be more effective than incentivizing firms through wage subsidies to hire and train young labor market entrants. Read more...
Video

Working Papers

  1. The Search for Good Jobs: Evidence from a Six-Year Experiment in Uganda
    Oriana Bandiera, Vittorio Bassi, Robin Burgess, Imran Rasul, Munshi Sulaiman and Anna Vitali
    2023, Resubmitted, Journal of Labor Economics.
    Link to working paper

Published Papers

  1. Social Incentives, Delivery Agents and the Effectiveness of Development Interventions
    Oriana Bandiera, Robin Burgess, Erika Deserranno, Ricardo Morel, Imran Rasul and Munshi Suleiman
    2023, In: Journal of Political Economy Microeconomics, 1 (1)
    Link to publication
  2. Technology and Development
    Menna Bishop, Robin Burgess and Celine Zipfel
    2022, In: Introduction to Development Engineering edited by Temina Madon, Ashok Gadgil, Richard Anderson, Lorenzo Casaburi, Kenneth Lee, and Arman Rezaee, published by Springer. Pages 17-57.
    Link to publication
    3. Link to book
  3. Why Do People Stay Poor?
    Clare Balboni, Oriana Bandiera, Robin Burgess, Maitreesh Ghatak, and Anton Heil
    2022, In: The Quarterly Journal of Economics, 137 (2): 785-844
    Link to publication
  4. Microfinance and Diversification
    Oriana Bandiera, Robin Burgess, Erika Deserranno, Ricardo Morel, Imran Rasul, Munshi Sulaiman and Jack Thiemel
    2022, In: Economica, 89, S239–S275
    Link to publication
  5. Tackling Youth Unemployment: Evidence from a Labour Market Experiment in Uganda
    Livia Alfonsi, Oriana Bandiera, Vittorio Bassi, Robin Burgess, Imran Rasul, Munshi Sulaiman, and Anna Vitali
    2020, In: Econometrica, 88 (6): 2369–2414.
    Link to publication
  6. Women’s Empowerment in Action: Evidence from a Randomized Control Trial in Africa
    Oriana Bandiera, Niklas Buehren, Robin Burgess, Markus Goldstein, Selim Gulesci, Imran Rasul, and Munshi Sulaiman
    2020, In: American Economic Journal: Applied Economics, 12 (1): 210–259.
    Link to publication
  7. Labor Markets and Poverty in Village Economies
    Oriana Bandiera, Robin Burgess, Narayan Das, Selim Gulesci, Imran Rasul, and Munshi Sulaiman
    2017, In: The Quarterly Journal of Economics, 132 (2): 811–870.
    Link to publication
  8. Intentions to Participate in Adolescent Training Programs: Evidence from Uganda
    Oriana Banderia, Markus Goldstein, Imran Rasul, Robin Burgess, Selim Gulesci, and Munshi Sulaiman
    2010, In: Journal of the European Economic Association, 8 (2): 548–560.
    Link to publication
  9. The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India
    Philippe Aghion, Robin Burgess, Stephen Redding, and Fabrizio Zilibotti
    2008, In: American Economic Review, 98 (4): 1397–1412.
    Link to publication
  10. The Policy Origins of Poverty and Growth in India
    Timothy Besley, Robin Burgess, and Berta Esteve-Volart
    2007, In: Delivering on the Promise of Pro-poor Growth: Insights and Lessons from Country Experiences, edited by Timothy Besley and Louse J. Cord, published by the World Bank. Pages 59–78.
    Link to book
  11. Banking for the Poor: Evidence from India
    Robin Burgess and Rohini Pande and Grace Wong
    2005, In: Journal of the European Economic Association, 3 (2): 268–278.
    Link to publication
  12. Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment
    Robin Burgess and Rohini Pande
    2005, In: American Economic Review, 95 (3): 780–795.
    Link to publication
  13. Can Labor Regulation Hinder Economic Performance? Evidence from India
    Timothy Besley and Robin Burgess
    2004, In: The Quarterly Journal of Economics, 119 (1): 91–134.
    Link to publication
  14. Toward a Microeconomics of Growth
    Robin Burgess and Anthony J. Venables
    2004, In: Accelerating Development: Annual Bank Conference in Development Economics, edited by François Bourguignon and Boris Pleskovic, published by The World Bank and Oxford University Press. Pages 105–139.
    Link to book
  15. Halving Global Poverty
    Timothy Besley and Robin Burgess
    2003, In: Journal of Economic Perspectives, 17 (3): 3–22.
    Link to publication
  16. Modernisation and Son Preference
    Robin Burgess and Juzhong Zhuang
    2000, LSE Research Online Documents on Economics, Number 2115.
    Link to working paper

Other Papers

  1. Community Networks and Poverty Reduction Programmes: Evidence from Bangladesh
    Oriana Bandiera, Robin Burgess, Selim Gulesci, and Imran Rasul
    2009, LSE STICERD Research Paper No. EOPP015.
    Link to working paper