PhD Job Market Paper
The Effect of Place-Based Policies: Evidence from Indian SEZs [Draft]
Co-author: Yeseul Hyun. PhD Candidate, Boston University
Conference Presentations: 13th Annual Conference on Economic Growth and Development (New Delhi, 2017); 6th GREThA Development Conference on Labor Market and Development (Bordeaux, France, 2016); International Conference on Services, Investment and Global Value Chain (New Delhi, India, 2016); Workshop on Special Economic Zones (SEZs) (Copenhagen, Denmark, 2016)
We investigate the influence of Special Economic Zones (SEZs) in India on the local economy. Using nighttime lights data and firm- and worker-level survey data, we find that SEZs create positive spill-overs: generally, there is a boost to economic activity around SEZs, firms grow in size and workers become more productive and earn higher wages. We also analyze the impact at a range of distances around the SEZs to show that these effects are not due to zero-sum relocations, but represent actual gains. This finding provides some evidence against the popular criticism of SEZs as “tax havens” that result in a relocation of resources with no aggregate benefits for the wider region. Our work also reveals an important structural transformation: SEZs cause a shift in economic activity in terms of the number of firms, output and employment from the informal sector to the formal sector. This evidence suggests that SEZs do have a positive effect on development, but raises concern about the inclusiveness of this development: workers at the higher end of the income and education distribution benefit, while those who remain in the informal sector fall behind.
Working Paper
Understanding the Effect of Indian SEZs: Why SEZs cause a Shift from the Informal Sector? [Draft in Progress]
I evaluate plausible channels through which SEZs induce structural transformation towards a more formal economy. My study reveals that the formal sector relies less on the informal sector for the supply of intermediate goods in areas treated with SEZs. I then verify if this is due to an increase in the demand for higher quality of goods. The paper also attempts to determine if the informal sector shrinks due to firms dying out or firms switching to the formal sector using a unique data-set on firm registrations in Tamil Nadu.
Work in Progress
Skilling for Wage versus Self-employment: Lessons for Targeting from India (with Pratibha Joshi, Research Fellow, Institute for Financial Management and Research (IFMR), Chennai, India)
Using data on applicants and selected candidates of two major government skilling initiatives, we develop a framework for comparing the performance of training programs that target wage-employment versus programs that train for self-employment. Our study intends to compare these program-types on their effectiveness in achieving the common goal of unemployment reduction and income stability, allowing for differences in candidate characteristics and program content. Our findings will also be useful for understanding aspects of policy design such as optimal program location and effective population targeting.