essays on the effects of informal and formal protection arrangements

194 Pages·2014·1.31 MB·English

E E I
SSAYS ON THE FFECTS OF NFORMAL AND
FORMAL PROTECTION ARRANGEMENTS

Renate Hartwig
© Renate Hartwig

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mechanical, photocopying, recording or otherwise, without the prior permission
of the author.

ISBN 978-94-91478-21-5
E E I
SSSAYS ONN THE FFFECTS OF NFOORMAL AAND
FF P AA
ORMALL ROTEECTION RRANGGEMENTSS

E
SSAAYS OVER DE EFFFECTENN VAN INFORMELLE EN
FORMELLE BESCHERMINGSREGEELINGENN

Thesis

to obtain the ddegree of Doctor from tthe
Erasmus University RRotterdam
bby command of the Recttor Magnificuus

Profeessor dr H.A.P Pols

aand in accorrdance with the decisionn of the Docctorate Boarrd

The public ddefence shalll be held onn
12 Marcch 2014 at 16.00 hrs

by

Rennate Harttwig
born in Weeiden i.d. Opf., Germanyy
Doctoral Committee

Promotor
Prof.dr. M. Grimm

Other Members
Prof.dr. M. Lindeboom, VU University Amsterdam
Prof.dr. E.K.A. van Doorslaer
Prof.dr. A.S. Bedi

Co-promotor
Dr. R. Sparrow
To those who taught me
Contents

List of Tables, Figures, and Appendices ix 
Acronyms xii 
Acknowledgements xv 
Abstract xvii 
Samenvatting xx 
1 INTRODUCTION 1
1.1  General introduction 1 
1.2  A bird's-eye view of formal safety net mechanisms in developing
countries 4
1.3  Selected safety nets and their productive linkages 9 
2 DOES FORCED SOLIDARITY HAMPER INVESTMENT IN SMALL AND
MICRO ENTERPRISES? 15 
2.1  Introduction 15 
2.2  A model of investment under redistributive pressure 18
2.3  Data 24 
2.3.1  General description of the data 24
2.3.2  Measures of pressure for redistribution 28 
2.3.3  Measures of risk aversion 30 
2.3.4  Perceptions about pressure for redistributions 31 
2.4  Empirical specification 33 
2.4.1  Investment 33
2.4.2  Remittances 34 
2.4.3  Compliance with sharing norms and investment 35 
2.5  Test of hypotheses and discussion of results 37 
2.5.1  Redistributive pressure, risk
vi
Contents vii
aversion and investment 37
2.5.2  Redistributive pressure, risk aversion and transfers to the
kin 43 
2.5.3  Reciprocity of transfers 45
2.5.4  Compliance with sharing norms and invesment 47
2.5.5  Transfers and investment across the capital distribution 51 
2.6  Conclusion 53 
Notes 56 
3 MUTUAL HEALTH INSURANCE AND THE CONTRIBUTION TO
IMPROVEMENTS IN CHILDHOOD HEALTH IN RWANDA 58 
3.1  Introduction 58  
3.2  Background 63 
3.2.1  Implementation and organization of the Mutuelles 63 
3.2.2  Previous assessments of the Mutuelles 66 
3.2.3  The role of the quality of care for health outcomes 66 
3.2.4  Study hypothesis 67 
3.3  Data 69 
3.3.1  General description of the data 69 
3.3.2  Outcome variables 71 
3.4  Econometric approach 73 
3.4.1  Empirical strategy and estimation 73
3.4.2  Alternative approach and robustness test 76 
3.5  Results 78 
3.5.1  The Mutuelles and childhood health 78
3.5.2  Results of the sector level estimations 82
3.5.3  Confounding factors 82
3.6  Conclusion 83 
Notes 85 
4 PUBLIC WORKS AS A MEANS TO PUSH FOR POVERTY REDUCTION?
SHORT-TERM WELFARE EFFECTS OF RWANDA'S VISION 2020
UMURENGE PROGRAMME 87 
4.1  Introduction 87 
4.2  Programme nature and context 91 
4.2.1  Programme design and objectives 91
4.2.2  Public works implementation 93
viii ESSAYS ON THE EFFECTS OF INFORMAL AND FORMAL PROTECTION ARRANGEMENTS
4.3  Data and descriptive statistics 98 
4.3.1  Quantitative data 98
4.3.2  Qualitative data 99
4.3.3  Descriptive statistics of the sample households by area 101
4.3.4  Descriptive statistics of beneficiary households 101
4.3.5  Outcome variables 106
4.4  Empiricial strategy 107 
4.4.1  Propensity score matching 107
4.4.2  Difference-in-difference estimation 115 
4.5  Empiricial results 117 
4.5.1  Estimates of the programme impact 117
4.5.2  Confounding factors 120
4.5.3  Qualitative evidence and further discussion 121 
4.6  Conclusions and implications 123 
Notes 1255 
5 CONCLUSION 126
5.1  Summary 126 
5.2  Lessons for policy 129
5.3  Further discussion: Institutions and the financing of safety nets 131 
5.4  Avenues for further research 133 
Notes 135 

Appendices 136 
References 154
List of Tables, Figures, and

Appendices

Tables
2.1 Descriptive statistics (N=278) 27
2.2 Measures of the pressure for redistribution (N=278) 30
2.3 Descriptive statistics of variables that enter risk aversion index
(N=278) 31
2.4 The effect of redistributive pressure and risk aversion on investment 39
2.5 The effect of redistributive pressure and risk aversion on remittances 44
2.6 The effect of remittances on obtained support in times of shocks 46
2.7 Mixture model – Growth vs. insurance regime 49

3.1 Descriptive statistics of the outcome variables 72
3.2 Impact of Mutuelles coverage on child health outcomes and health
behaviour (local linear matching with tri-cube kernel, bandwitdth
0.1) 81
3.3 Impact of Mutuelles coverage on child health outcomes and health
behaviour (sector fixed effects) 83

4.1 Infrastructure generated through VUP public works (2008-2012) 97
4.2 Public works (PW) participation and income (2008-2012) 98
4.3 Baseline characteristics of public works participants (N=137) and
public works eligible non-participants (N=237) in cohort 3 sectors 103
4.4 Probit regression of public works participation on decision-to-
participate determinants 111
4.5 Estimates of programme impact from public works participation 120

ix
x ESSAYS ON THE EFFECTS OF INFORMAL AND FORMAL PROTECTION ARRANGEMENTS
Figures
1.1 Evolution of safety net programmes in developing countries 6
1.2 Health insurance coverage in developing countries 9
1.3 Selected mechanisms and their links to growth 14

2.1 Perceptions about pressure for redistribution 32
2.2 Distribution of the probability to choose the growth regime,
predictions based on switching regression in Table 2.7 (kernel
density estimate) 51
2.3 Investment and remittances across the captial distribution 52

3.1 Services covered by the Mutuelles de Santé 64
3.2 Coverage rates of the Mutuelles de Santé (2003-2010) 65
3.3 Causal chain linking insurance coverage and health outcomes 69
3.4 Distribution of the propensity score of insured and uninsured
children 75

4.1 Distribution of average daily wage in rural Rwanda (2010/11) 94
4.2 Composition of the household survey 100
4.3 Distribution of the propensity score of acutal and hypothetical public
works households 114

Appendices
A3.1 Descriptive statistics by Mutuelles insurance status in 2005 137
A3.2 Descriptive statistics by Mutuelles insurance status in 2010 138
A3.3 Probit and marginal effects of the characteristics of enrolment 139
A3.4 Mean of child-, mother- and household characteristics before and
after matching 141
A3.5 Impact of Mutuelles coverage on child health outcomes and health
behaviour (OLS) 143

A4.1 VUP coverage by sector (2008-2011) 144
A4.2 Sample composition (in-depth interviews) 145