IGC Financed Papers Presented

The International Growth Center, IGC, based at EDRI organized a one day seminar on “Dimensions of Structural Transformation in Ethiopia: Reflection from Recent Evidence” on September 14, 2016 at the Sheraton Addis. 

After a welcoming remark and a brief about IGC by Dr. Alemayehu Tafesse, Country Director, IGC, Ato Newai Gebre-ab, Chief Economic Advisor to the Prime Minister and Executive Director of EDRI and Dr. Abraham Tekeste, Deputy Commissioner, National Planning Commission delivered opening remarks.

A series of IGC financed papers have been presented at the seminar followed by reflections from policy and academic discussants as well as questions and comments from participants.

 

Papers presented at the seminar include:

1. “Anonymity or Distance? Removing Obstacles to Youth Employment in Africa” by Stefano Caria

Following the pressing challenge to policy makers as a result of the ever increasing urban population and high unemployment, the study has been conducted on a sample of 4,000 young job seekers. As indicated in the presentation, the problem of youth unemployment is not only the lack of jobs and skills but one related also to the inability to bear the cost of job search and to signal skills to potential employers. The study used experimental evaluation on two interventions, namely, ‘transport treatment’ and ‘job application workshop’ to apply on unemployed youth with little formal education. The first intervention involves offering financial allowance to young job seekers for transport costs in their job search activities. The ‘job application workshop’ as a second treatment is meant to equip job seekers with the necessary skills to be able to show their skills to employers.

According to the findings of the study, the two interventions help individuals get better jobs; the workshop raises permanent employment by 40% and have greater impacts for the least educated, women and inactive jobseekers. It has also been indicated that policies targeting unemployed youth should focus on reducing the transport cost of job seeking and the difficulty to signal skills. 

2. “Fading Choice: Market Development and Consumer Good Choice in Remote Markets” by Dr. Pramila Krishnan

The joint study analyzed the determinants of market development. As the conclusions indicate, market development, measured by either prices or variety of consumer goods, depends on infrastructure. More specifically, as travel time determined by distance and infrastructure quality increases, the price of consumer goods also increases and an increase in transport cost lowers the availability of consumer goods. Market size as explained by number of shoppers and number of kebelles who use the market determine the availability of consumer goods. Accordingly, an increase in the number of shoppers increases availability of goods as does an increase in the number of kebelles whose residents use the market. 

3. “How do various Rural Savings and Credit Cooperatives (RUSACCO) attributes shape performance? Evidence from Ethiopia” by Guush Berhane, ESSP

The project addresses the question “How should financial cooperatives be organized?” It has been indicated that these financial services, though pro-poor, they have limited national coverage in Ethiopia. With a unique member based institutional model, RUSSACO members as providers and borrowers have social and economic relationships which helps them become less prone to group liability.

The data for the study has been collected from randomly selected RUSACCOs in Oromia, Tigray, Amhara and SNNP. Attributes such as size, diversity in overall economic profiles and saving have been analyzed as performance indicators in the study. The study concludes that there is no prescription as to how cooperatives should be organized and that each cooperative should be allowed to develop within their own specific contexts and policies addressing such issues should allow the evolutionary process of RUSSACOs to happen. 

4. An ongoing project on “The Impact of Condominium Housing in Addis Ababa: Preliminary Findings” by Simon Franklin looked into the fairness of the lottery, the composition of the target groups and the down payments by way of assessing whether the low cost housing policy is the right policy and the ways in which it could be improved.

The study concludes that the lottery appears to be completely fair based on different measurements. It also tried to see the effects of pulling people out of the centers of Addis and settling them in the peripheries and what this means in terms of usage of the emptied space.

Due to the large down-payments, poor people are opting out of the program but those who managed to pay the down-payments realize the returns of their investment. Therefore it has been indicated that the program is not specifically targeting the poor. Consequently, the study suggests that future programs should be well thought out in terms of redistribution and targeting. In addition, it has also been suggested that due to the long distance of the housing project sites from the centers, it is worth thinking about whether improved transportation for residents could lead to better access to their old livelihoods.

The study also pointed out that the program is increasing the density of urban development and the price of rental housing in the city. As a future direction, the study is looking into the effect of the condominium housing program on the creation of vibrant communities and on the disruption of the lives of the displaced. 

5. “Unemployment, self-employment and labor market functioning in Ethiopia” by Markus Poshke 

The study aimed at developing a macroeconomic model of the labor market in Ethiopia to understand the determinants of its features and to perform policy analysis of the spillover effects of one policy over another.