This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

« Back to Results

Health, Human Capital, and Gender Issues in Africa

Paper Session

Saturday, Jan. 4, 2020 8:00 AM - 10:00 AM (PDT)

Manchester Grand Hyatt, Promenade A
Hosted By: African Finance and Economics Association
  • Chair: Jean-Claude Maswana, Ritsumeikan University

Infectious Disease Control and Human Health Investment: Learning by Controlling

Boris Houenou
,
Washington State University

Abstract

This paper develops a model that allows a two-way interaction between disease dynamics, where infected acquire permanent immunity, and economic dynamics that relies on Ebola Virus Disease (EVD) epidemiology model and a one-sector growth model. We endogenize the disease’s incidence on economy to study health investment, disease control and learning associated with it.
We calibrate the model and simulate results that allow an understanding of how the discount rate could affect the steady states of economic variables. In the economy, there is a disease-free steady state that is parameter-free and an endemic steady state that depends on parameter values. Disease control and health capital accumulation increase for decreasing discount rate. The pattern of learning-by-controlling, although increasing for a low discount rate, is non-linear and non-monotone.
Like learning-by-controlling, under the endemic scenario, labor, consumption, output share of disease control and medical expenditures, medical expenditures, output as well as the fraction of the susceptible and recovered exhibit non-linearities in equilibrium outcomes that shed light into the interactions between the dynamics of the economy and disease. The model improves diseases and economy dynamics simultaneous modeling that could bring about insights on impacts of the diseases on economies; thus, guiding disease preparedness and responsiveness and policies that address them in countries that are severely and recurrently embattled with infectious diseases

Colonial Origins and Fertility: Can the Market Overcome History?

David Canning
,
Harvard University
Marie Christelle Mabeu
,
University of Ottawa
Roland Pongou
,
University of Ottawa

Abstract

Can market incentives overcome the long-term impact of historical institutions? We address this question by focusing on the role of colonial reproductive laws in shaping fertility behavior in Africa. Exploiting the arbitrary division of ancestral ethnic homelands and the resulting discontinuity in institutions across the British-French colonial borders, we find that women in former British areas are more likely to delay sexual debut and marriage, and that they have fewer children. However, these effects disappear in areas with exogenously high market access, where the opportunity cost of childbearing appears to be high irrespective of colonizer identity. They are only present in areas with low market access, where economic opportunities are scarcer. This heterogeneous impact of colonial origins remarkably extends to various measures of local economic development and household welfare. Examining causal mechanisms, we find that the fertility effect of colonial origins is directly linked to colonial reproductive laws and their impact on the use of modern methods of birth control. We rule out the impact of British colonization on income and women’s human capital as the primary channels through which its fertility effect operates. By uncovering novel findings on the heterogeneous nature of the colonial origins of comparative fertility behavior and economic development, our analysis implies that appropriately designed economic incentives can overcome the bonds of historical determinism.

Does Akan Literacy Influence Household's Income?

Samuel Amponsah
,
Tokyo International University
Kyoko Koga
,
Kochi University

Abstract

Amponsah and Koga (2019) demonstrated that there is a strong correlation between Akan literacy and income of both Akan and non-Akan Ghanaians. The empirical work in this article addresses the hypothesis that Akan literacy influences household income. Using Ordinary Least Square (OLS) and quantile regression models, we find that literacy in Akan is associated with higher household income. Moreover, even after accounting for ethnicity, we also and that returns to biliteracy in Akan and English is higher than returns to mono-literacy in English or Akan. When we consider our main results together with the results of the interaction terms for ethnicity and biliteracy, our results indicate that the higher returns to Akan create a lager income differentials within Akan households (income gap of about 133% for the 10th quantile) than between Akan and non-Akan households (income gap of about 35%).

The Politics and Economic Burden of Epidemic Disease: Evidence from the Meningitis Belt

Belinda Archibong
,
Barnard College
Francis Annan
,
Georgia State University
Uche Ekhator-Mobayode
,
University of Pittsburgh-Bradford

Abstract

Climate change is expected to have large social and economic costs and may worsen epidemic disease, with costs largely borne by poorer countries in the tropics. We investigate the economic impacts of epidemic disease and examine the effects of institutions in mitigating these costs using evidence from the meningitis belt in sub-Saharan Africa (SSA). The meningitis belt consists of 23 countries in Africa, extending from Senegal to Ethiopia and making up over 700 million individuals, that are frequently exposed to meningitis epidemics. We assemble data on meningitis cases, epidemics, the flow of foreign aid, economic activity and human capital to investigate the effects of institutions on the economic burden of epidemic disease. We examine the role of regional favoritism and foreign aid in determining the distribution of resources following an epidemic. We find that high levels of meningitis significantly reduce economic activity on average. The effect is nonlinear, with high levels of meningitis increasing economic activity during years declared by the World Health Organization (WHO) as epidemic years and reducing economic activity during non-epidemic years. The magnitude of the positive effect of high meningitis on economic activity is even larger if the president comes from the same ethnicity as the affected region, suggesting that a main mechanism may be regional favoritism in resource distribution. Another potential mechanism explaining the heterogeneity in results and the positive effect of meningitis on economic activity during epidemic years may be the influx of foreign aid when the WHO declares an epidemic year, which is enough to offset the decline from increased direct and indirect costs resulting from the epidemic.

Perceived Glass Ceiling? Women Self-Selection out of the Credit Market in Africa

Hanan Morsy
,
African Development Bank
Amira El-Shal
,
African Development Bank
Andinet Woldemichael
,
African Development Bank

Abstract

Women in Africa are disproportionately disadvantaged in terms of access to finance. Little is understood about demand-side factors’ contribution to the gender gap in access to finance. This paper provides empirical evidence on how women managers’ perceptions about their creditworthiness contribute to the observed large gender gap in Africa, particularly in the Northern region. In a simple and parsimonious theoretical model of the credit market with imperfect and asymmetric information, we show that loan applicants’ perception of their creditworthiness is an important demand-side factor for self-selectivity out of the credit market even in the absence of discriminatory practice on the side of the banks. We use firm-level data from the World Bank Enterprise Survey, covering 47 African countries. We find that women entrepreneurs are more likely to self-select themselves out of the credit market due to low perceived creditworthiness compared with their male counterparts. The results also suggest that the observed self-selection behavior is not a response to discriminatory lending practices by the banks. The findings will inform policies supporting greater financial inclusion of women in the region.

China’s Finance in Africa: What and How Much?

Evelyn Wamboye
,
Pennsylvania State University

Abstract

This study provides an evaluation of official finances from China to Africa using Ethiopia, Kenya, and Tanzania as case studies. It attempts to address the following four questions: how much of Chinese finance is pouring into Africa? which sectors and projects are benefiting from these finances?, what is Africa’s foreign aid policy in relation to Chinese finance?, and what is the economic impact of Chinese finance in Africa? The empirical analysis employs a micro-level approach using data from AidData with a goal of providing in-depth evaluation and targeted policies that could enhance the effectiveness of Chinese finance in the recipient country. Moreover, our analysis is limited to the 2000-2014 period for which meaningful data is available; with 2000 being very important since it is the year that China made a formal partnership with Africa during the first FOCAC conference. Micro-level approach for our case study is motivated by the fact that Africa is a heterogeneous continent, and therefore, a policy driven assessment must take this heterogeneity into account.

Trade with China and the Impacts of Infrastructure and Human Capital on Africa’s Industrial Development

Mina Baliamoune-Lutz
,
University of North Florida

Abstract

In the last two decades or so, many African countries have reversed the trend of low or negative growth rates and some countries have experienced markedly high growth rates. However, significant output growth cannot be sustained in the absence of economic diversification, enhanced export competitiveness, technological upgrading, productivity increases, and availability of formal employment opportunities for women and men (ACET, 2013). We also have witnessed, in many African countries, a significant increase in trade with China which drove some scholars to focus on the destination of exports as a factor that may influence the effectiveness of trade in causing development and growth in Africa (see, for example, Baliamoune-Lutz, 2011). In this paper we try to assess the contributions of specific factors, especially trade with China, to this process. Using 1990-2017 country-level data from a large group of African countries and Arellano-Bond GMM estimation technique, and controlling for the roles of agglomeration, FDI and resource rents, we examine the relative contributions of trade with China, infrastructure and human capital to 4 measures/indicators of industrial development. Preliminary results show mostly positive effects from infrastructure (electric power). However, the contribution of human capital is significant only in the case of three indicators of industrial development. Interestingly, exports to China do not seem to have positive effects on African’s industrial development in most cases, while imports from China have positive effects only when interacted with infrastructure. We discuss the policy implications of these findings.
Discussant(s)
Bichaka Fayissa
,
Middle Tennessee State University
Akpan Ekpo
,
African Development Bank
Bedassa Tadesse
,
University of Minnesota-Duluth
Kwabena Gyimah-Brempong
,
National Science Foundation
Jean-Claude Maswana
,
Ritsumeikan University
Boniface Yemba
,
Marshall University
JEL Classifications
  • I1 - Health
  • J1 - Demographic Economics