Extractive Industries, Production Shocks and Criminality: Evidence from a Middle-Income Country [draft] (joint with Sebastian Axbard, and Jonas Poulsen)
Abstract: The role of extractive industries for development is highly debated. A large literature focusing on countries with weak institutions has shown that such industries can spur conflict and war by providing appropriable resources. This study investigates whether this relationship holds true later in the development process. More specifically, we examine whether the extensive mining industry in South Africa affects local property and violent crime. To estimate the causal effect, our empirical strategy exploits local production changes caused by fluctuations in international mineral prices. In contrast to earlier studies, we find that an increase in mining activity lowers the local crime rate. Several tests suggest that this effect is driven by better income opportunities, affecting the opportunity cost of engaging in criminal activity. In order for this effect to materialize, local institutional quality needs to be sufficiently high. If such conditions are met, the appropriation channel emphasized in the earlier literature is dominated by the change in opportunity costs of crime.
Media coverage: Development Impact, Fight Entropy
Local Industrial Shocks and Endogenous Gender Norms [newest version available upon request]
This paper was previously circulated as Local Industrial Shocks, Female Empowerment and Infant Health: Evidence from Africa’s Gold Mining Industry (2014).
Abstract: Does industrial development change gender norms? This is the first paper to explore the causal local effects of a continent-wide exogenous expansion of an industry on the formation of gender norms. The paper uses the recent rapid increase in industrial gold mining—plausibly exogenous to local characteristics—in Africa as a quasi-experiment. The identification strategy relies on temporal and spatial variation in a difference-in-difference analysis. Using a large sample of women living within 100 km of any gold mine, I show that the establishment of an industrial scale mine changes gender norms: justification of domestic violence decreases by 19%, women are 23% less likely to list constraints to healthcare access for herself. Alongside these changes, service sector employment increases with 31%. I exclude that the effects are driven by increased schooling attainment. However, women gain better access to media. The findings are robust to different assumptions about trends, distance, and migration, and withstand a novel spatial randomization test. The results support the idea that entrenched norms regarding gender can change rapidly in the presence of economic development.
Press release: University of Gothenburg
Media coverage: Women in Mining, Global Witness
Video summary: Video from the World Bank, November 2014. The session was chaired by Jeffrey Thindwa, World Bank Practice Manager, Governance. Discussants: Kristina Svenson, World Bank Senior Operations Officer, Energy and Extractives, and Lucia Hanmer, World Bank Lead Gender Economist.
[Click here for 2014 version of the paper]
Local Industrial Shocks and Infant Mortality: Evidence from Africa’s Gold Mining Industry [draft]
Abstract: Reaching the sustainable development goals for infant mortality by 2030 in Sub-Saharan Africa is a significant policy challenge. Industrial development, especially in rural and underdeveloped areas, will be important in its achievement. The extractives sector, which dominates foreign direct investment in the region, can spur local economic growth but is associated with the release of pollutants — arsenic, cyanide and lead — with known adverse health effects. This paper explores how the risk of infant mortality changes with local industrial development spurred by the recent expansion of large-scale gold mining across Sub-Saharan Africa. It tracks birth and survival rates of 37,000 children born within 100 km of an industrial gold mine. The opening of a new large gold mine reduces infant mortality by between 55 to 79 deaths per 1000 births —more than a 50% reduction— within the area 10 km from the mine. The local drop in mortality rate happening within a couple of years is more than twice the drop experienced in Singapore during the period of high sustained economic growth in the 1950s and the 1960s, and more than the average reduction in infant mortality in Sub- Saharan Africa since the 1970s. The results are robust to migration, different distances and across model specifications. The findings illustrate that even a polluting industry can increase infant survival rates in areas with a high level of preexisting disease burden related to poverty. The long run health implications of the industry, however, remain unknown.
Access to Sanitary Products and Psychological Well-Being: Evidence from a Randomized Control Trial in Kenya (with Amir Jina, University of Chicago)
Asymmetric Information in the Household: Evidence from Lab Experiments in the Field (with Eeshani Kandepal, The World Bank, and Carolin Sjoholm, University of Gothenburg)
African Mining, Gender and Local Employment (2016).
Joint with Andreas Kotsadam. World Development.
Previous version: World Bank Policy Research Working Paper (WPS7251) “African Mining, Gender and Local Employment” (2015). OxCarre Working Paper Series “Mineral Mining and Female Employment” (2013).
Abstract: It is a contentious issue whether large-scale mining creates local employment, and the sector has been accused of hurting women’s labor supply and economic opportunities. This paper uses the rapid expansion of mining in Sub-Saharan Africa to analyze local structural shifts. We match 109 openings and 84 closings of industrial mines to survey data for 800,000 individuals and exploit the spatial-temporal variation. With mine opening, women living within 20 km of a mine switch from self-employment in agriculture to working in services or they leave the work force. Men switch from agriculture to skilled manual labor. Effects are stronger in years of high world prices. Mining creates local boom-bust economies in Africa, with permanent effects on women’s labor market participation.
Blog post: Let’s Talk Development, World Economic Forum
Press release: University of Gothenburg
Media coverage: Women in Mining Mail (2014)
Long summary: UNRISD Think Piece