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Essays in urban & development economics

Picarelli, Nathalie (2017) Essays in urban & development economics. PhD thesis, London School of Economics and Political Science.

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Identification Number: 10.21953/lse.g1mloq57b3u0


This thesis consists of four independent chapters on urban and development economics. Chapter 1 looks at the issue of distance and labour outcomes in urban areas of a developing country. It studies the effect of a housing relocation program on the labour supply and living conditions of low-income households across major cities in South Africa. For this, I use four waves of panel microdata collected between 2008 and 2014, and I exploit the arbitrary eligibility rules of the policy with a fuzzy regression discontinuity design to obtain causal estimates. In the short-term of two to four years following relocation, I find that the labour supply of recipient households decreases by one standard deviation, driven mostly by a decrease in female hours. I find evidence of a large increase in distance (km) to economic opportunities. This is likely to be an important factor behind the decline, directly or indirectly through within-family shifts in livelihood strategies. Evidence is limited regarding improvements in housing and neighbourhood quality. Chapter 2 examines how neighbourhoods where children grow up can play a significant part in shaping their opportunities later in life. It provides unique evidence in a developing country context by using the random allocation of households to ethnically segregated residential areas during apartheid in South Africa. The main observations come from a panel of young adults aged 14 to 22 at baseline and residing in the city of Cape Town. It covers 5 periods of their life between 2002 to 2009. I focus on black children in families living in former black-only residential areas. I find compelling evidence of neighbourhood effects on labour and educational outcomes in adulthood across deprived neighbourhoods. The differences are more marked for young women, suggesting a stronger hold of social norms and institutions for young men. Location, both in terms of access to jobs and access to higher quality public amenities (schools), social networks and the underlying human capital composition of the neighbourhood are positively correlated to having better socioeconomic outcomes in adulthood. Chapter 3 moves beyond socioeconomic outcomes, to study the relationship between extreme weather events and disease in developing cities. As climate change is making extreme weather events more frequent around the world, urban residents in developing countries have become more vulnerable to health shocks due to poor sanitation and infrastructure. The chapter empirically measures the relationship between weather and health shocks in the urban context of sub-Saharan Africa. Using unique high-frequency datasets of weekly cholera cases and accumulated precipitation for wards in Dar es Salaam, we find robust evidence that extreme rainfall has a significant positive impact on weekly cholera incidence. The effect is larger in wards that are more prone to flooding, have higher shares of informal housing and unpaved roads. We identify limited spatial spillovers. Time-dynamic effects suggest cumulated rainfall increases cholera occurrence immediately and with a lag of up to 5 weeks. Chapter 4 addresses questions related to the local impact of economic policies in developing countries. Specifically, I provide evidence on the local effect of a popular trade policy: export processing zones. The chapter examines the impact of their establishment on the levels of per capita expenditure across Nicaraguan municipalities for the period 1993 to 2009. Using the time and cross-section variation of park openings in a difference-in-differences framework, I find that on average consumption levels increased by 10% to 12% in treated municipalities. Yet, average effects mask significant disparities across the expenditure distribution. The results suggest that the policy benefited the upper-tail the most: expenditure levels increased by up to 25% at the 90th percentile. At the opposite end of the distribution, only the bottom decile registered a positive increase in expenditure levels of close to 10% across the period.

Item Type: Thesis (PhD)
Additional Information: © 2017 Nathalie Picarelli
Library of Congress subject classification: H Social Sciences > HT Communities. Classes. Races
Sets: Departments > Geography and Environment
Supervisor: Silva, Olmo and Overman, Henry G.

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