VoxDev Development Economics

Labor markets in poor countries are very different to labour markets in rich countries. Millions of young people in developing economies who will be starting work in the next few years will face rationed jobs, volatile employment, and low-quality work. How will they cope and how can policy best help them?Emily Breza of Harvard University and Supreet Kaur of UC Berkeley are the authors of a new review of how labour markets in developing countries. They tell Tim Phillips some surprising facts about how labour markets work, what policy can do better – and what we still need to discover to help those young jobseekers find decent work.

Ideas in Development is VoxDev's new second podcast! You can listen to Ideas in Development wherever you get your podcasts, or watch on YouTube. Don't forget to subscribe, so you won't miss an episode.Today we're bringing you one of the episodes from our new series. Oliver Hanney and Kartik Akileswaran ask how Costa Rica, a small country of approximately 5 million people, became an attractive hub that now hosts operations for more than 1,000 multinationals. To take us through this period of economic change, we were joined by Andres Valenciano Yamuni, who played his own role in Costa Rica’s FDI journey during his time as Minister of Foreign Trade.

Benjamin Piper, a development and education specialist at the Gates Foundation, dives into the critical issue of global literacy. He emphasizes that reading is foundational for learning, enabling skills like numeracy. Piper discusses how ineffective teaching methods hinder progress and outlines six core instructional areas to improve literacy. He advocates for phonics and the importance of accessible reading materials. Additionally, he highlights the benefits of teaching in children's first language and showcases successful programs that doubled literacy outcomes, urging policymakers to act.

In this engaging discussion, economists Robin Burgess from LSE and Rohini Pande from Yale dive into the concept of a unified global carbon market. They explore how integrating compliance and voluntary markets can enhance credibility and efficiency in carbon trading. The duo highlights successful models like the EU ETS and discusses the need for standardized regulations to build trust. They also examine how this unified system can shift funds to low-income countries, accelerate clean energy adoption, and unlock significant investments for sustainable growth.

Many papers in economics have shown the scale of the damage that slavery did to Africa, but can we also make the argument that the slave trade helped cause Europe’s economic development? Ellora Derenoncourt of Princeton is the author of a recently published paper which uses new methods and new data to investigate this question.  She talks to Tim Phillips about what historical records can and cannot tell us about that link, and what this data tells us about the growth of European port cities.

Seema Jayachandran, a Princeton economist focused on development economics and gender, teams up with Alessandra Voena from Stanford, who specializes in family economics. They delve into the complexities of women’s power at home, discussing how economic growth alone isn’t enough to enhance women's influence without legal reforms. Insights include the challenges of measuring household power, the impact of cash transfers on women, and effective strategies like boosting earnings and rights. They also explore the risks of backlash when empowering women and highlight the need for better data on household dynamics.

Manisha Shah, an economist and professor at UC Berkeley specializing in intimate partner violence (IPV), discusses the complexities of measuring and preventing IPV. She reveals that about one in three women experience IPV globally, with heightened prevalence in certain regions. Shah highlights the economic costs of IPV, estimated at 1-2% of GDP, and analyzes how poverty and social norms contribute to its persistence. She also emphasizes the importance of engaging men in prevention strategies and the need for cost-effective interventions like counseling.

The modern state, and the way in which is governs, is clearly very important. It provides social programs, education, disaster relief or, on the other side, it can cause violence and repression. We tend to assume that there is one model of a successful state, and the emergence of government has followed a single path with, as Francis Fukuyama wrote, “Getting to Denmark” as its end point. But is that the story that the historical record tells? And are successful states today, even in high-income countries, all governed in a way that matches our assumptions? Leander Heldring of Northwestern University is the author of a chapter on the forthcoming Handbook of Political Economy that examines the historical data and the types of government that have succeeded and failed. He tells Tim Phillips what he has discovered about what types of bureaucracy have succeeded in history, what forms of government that citizens in different times and places have chosen, and whether there is one true evolutionary path to a successful state.

In this discussion, Penny Goldberg, an economist at Yale known for her insights on trade's role in growth miracles, joins Michele Ruta from the IMF, who focuses on the implications of trade policies for developing countries. They explore why past trade-driven growth may not be replicable, diving into key factors like technology transfer, market access, and the evolution of global value chains. They also assess the impact of geopolitical shifts, rising industrial policies, and climate risks on future development prospects.

David McKenzie, a World Bank economist and senior editor of the VoxDevLit, dives into the intricacies of training entrepreneurs in developing countries. He discusses the diverse needs of different types of businesses, from subsistence microenterprises to high-growth startups. McKenzie reveals that while many skills can be taught, not all training has lasting effects. He emphasizes the importance of realistic outcomes and highlights that innovative delivery methods, including AI, are emerging in entrepreneur training. Finally, he considers the significant role of women in entrepreneurship.