Superstores or mom and pops? Technolgy adoption and productivity differences in retail trade

I document that cross-country productivity differences in retail trade, which employs around 20% of workers, are accounted for in large part by compositional differences. In richer countries, most retailing is done in modern stores, with high measured output per worker, whereas in developing countries, retail trade is dominated by less-productive traditional stores. I hypothesize that developing countries rationally adopt few modern stores since car ownership rates are low. A simple quantitative model of home production supports the role of cars in determining the composition of retail technologies used and retail-sector productivity differences across countries.Retail trade ; Technology ; Productivity

Social security and the consumer price index for the elderly

Some argue that social security benefits should be adjusted using a price index that reflects the spending habits of the elderly rather than those of workers. This study suggests that if such an index were adopted today, over the next forty years benefit levels would increase and the social security trust fund could become insolvent up to five years sooner than projected.Social security ; Old age ; Consumer price indexes

Migration costs and observational returns to migration in the developing world

Recent studies find that observational returns to rural-urban migration are near zero in three developing countries. We revisit this result using panel tracking surveys from six countries, finding higher returns on average. We then interpret these returns in a multi-region Roy model with heterogeneity in migration costs. In the model, the observational return to migration confounds the urban premium and the individual benefits of migrants, and is not directly informative about the welfare gain from lowering migration costs. Patterns of regional heterogeneity in returns, and a comparison of experimental to observational returns, are consistent with the model’s predictions

Urban-rural gaps in the developing world: does internal migration offer opportunities?

This article provides an overview of the growing literature on urban-rural gaps in the developing world. I begin with recent evidence on the size of the gaps as measured by consumption, income, and wages, and argue that the gaps are real rather than just nominal. I then discuss the role of sorting more able workers into urban areas and review an array of recent evidence on outcomes from rural-urban migration. Overall, migrants do experience substantial gains on average, though smaller than suggested by the cross-sectional gaps. I conclude that future work should help further explore the frictions—in particular, information, financial, and in land markets—that hold back rural-urban migration and may help explain the persistence of urban-rural gaps.https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.34.3.174Published versionPublished versio

Reopening schools too early could spread COVID-19 even faster – especially in the developing world

Low-income countries face a very different set of circumstances to high-income countries when it comes to reopening schools after lockdown. In developing countries, adults and the elderly generally have more contact with children than those in advanced economies. A new study predicts that delaying school openings in developing countries could save lives.Published versio

Electricity and firm productivity: a general-equilibrium approach

Many policymakers view power outages as a major constraint on firm productivity in developing countries. Yet empirical studies find modest short-run effects of outages on firm performance. This paper builds a dynamic macroeconomic model to study the long-run general-equilibrium effects of power outages on productivity. Outages lower productivity in the model by creating idle resources, depressing the scale of incumbent firms and reducing entry of new firms. Consistent with the empirical literature, the model predicts small shortrun effects of eliminating outages. However, the long-run general-equilibrium effects are much larger, supporting the view that eliminating outages is an important development objective.First author draf

Lockdowns in developing countries should focus on shielding the elderly

The COVID-19 pandemic has led to dramatic policy responses in most advanced economies, and in particular sustained lockdowns matched with sizable transfers to workers. This column discuss the extent to which developing countries should try to replicate these policies. Due to differences in labour market informality, fiscal capacity, healthcare infrastructure, and demographics, blanket lockdowns appear less effective in developing countries. Age-targeted policies – where the young are allowed to work while the old are shielded from the virus – can potentially save both more lives and livelihoods.Published versio

How should policy responses to the COVID-19 pandemic differ in the developing world?

This paper quantitatively analyzes how policy responses to the COVID-19 pandemic should differ in developing countries. To do so we build an incomplete-markets macroeconomic model with heterogeneous agents and epidemiological dynamics that features several of the key distinctions between advanced and developing economies germane to the pandemic. We focus in particular on differences in: age structure, fiscal capacity, healthcare capacity, informality, and the frequency of contacts between individuals at home, work, school and other locations. The model predicts that blanket lockdowns are less effective in developing countries, saving fewer lives per unit of lost GDP. In contrast, age-specific policies are even more effective, since they focus scarce public funds on shielding the smaller population of older individuals. School closures are also more effective at saving lives in developing countries, providing a greater reduction in secondary transmissions between children and older adults at home.First author draf

Protecting lives and livelihoods during the COVID-19 pandemic by shielding elderly populations

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NCoR Repression of LXRs Restricts Macrophage Biosynthesis of Insulin-Sensitizing Omega 3 Fatty Acids

SummaryMacrophage-mediated inflammation is a major contributor to obesity-associated insulin resistance. The corepressor NCoR interacts with inflammatory pathway genes in macrophages, suggesting that its removal would result in increased activity of inflammatory responses. Surprisingly, we find that macrophage-specific deletion of NCoR instead results in an anti-inflammatory phenotype along with robust systemic insulin sensitization in obese mice. We present evidence that derepression of LXRs contributes to this paradoxical anti-inflammatory phenotype by causing increased expression of genes that direct biosynthesis of palmitoleic acid and ω3 fatty acids. Remarkably, the increased ω3 fatty acid levels primarily inhibit NF-κB-dependent inflammatory responses by uncoupling NF-κB binding and enhancer/promoter histone acetylation from subsequent steps required for proinflammatory gene activation. This provides a mechanism for the in vivo anti-inflammatory insulin-sensitive phenotype observed in mice with macrophage-specific deletion of NCoR. Therapeutic methods to harness this mechanism could lead to a new approach to insulin-sensitizing therapies