Asian Development Review

This paper studies the COVID-19 pandemic’s impact on Indonesia’s labor market, using the exogenous timing of the pandemic in a seasonal difference-in-differences framework. We use multiple rounds of Indonesia’s National Labor Force Survey to establish a pre-pandemic employment trend and attribute any difference from this trend to the estimated effect of the pandemic on employment outcomes. We find mixed impacts of the pandemic on Indonesia’s labor market. While the pandemic has reduced the gender gap in employment participation due to the “added worker effect” among women, it has also lowered overall employment quality among both women and men. The increase in female employment was mainly driven by women in rural areas without a high school education entering either informal agricultural employment or unpaid family work. For men, the pandemic had negative employment impacts for all subgroups. Among the employed, both women and men work fewer hours and earn lower wages.

This study introduced a new approach for monitoring regional development by applying satellite data with machine learning algorithms. Satellite data that represent physical features and environmental factors were obtained by developing a web-based application on the Google Earth Engine platform. Four machine learning methods were applied to the obtained geospatial data to predict provincial gross domestic product. The random forest method achieved the highest predictive performance, with 97.7% accuracy. The constructed random forest model was extended to conduct variable importance and minimal depth analyses, enabling the quantification of a factor’s influence on the prediction outcome. Variable importance and minimal depth analyses generated similar results, indicating that urban area and population are the most influential factors. Moreover, environmental and climate indicators exert medium-level effects. This study showed that integrating available satellite data and machine learning methods could be an alternative framework for facilitating a timely and costless monitoring system of regional development.

The Paris Agreement signals increased climate awareness and potential changes in the business environment as an economy decarbonizes. Ratification of the Paris Agreement could heighten climate-related transition risks, especially for companies in high-emitting industries. This research analyzes the impact of Paris Agreement ratification on the debt financing decisions of publicly listed companies in Southeast Asian economies. Our empirical evidence shows that, after announcement of Paris Agreement ratification, firms in high-emitting industries have leverage and financial leverage that are an average of 1.8% and 4.2% lower, respectively, than firms in low-emitting industries. Firms in the region also witnessed higher risks 2 years after ratification, and these risks do not differ significantly between high- and low-emitting industries. This finding implies that firms become riskier under heightened transition risks, and this influences their financial decisions. Governments might thus consider introducing policies that facilitate their response to a low-carbon transition.

During the past 40 years, the economy of the People’s Republic of China (PRC) has achieved miraculous growth, a significant part of which many have attributed to its favorable labor supply resulting from the country’s “demographic dividend”–that is, a relatively large share of the working-age population in the total population (WAPS). Currently, this dividend is slipping away, and many in the PRC are very concerned. Against this background, I set out to examine the contributions of various dimensions of the PRC’s changing WAPS and its impact on economic growth. I show that between 1982 and 2015 the increase in WAPS was offset by a decline in the labor force participation rate, resulting in a very limited increase in the quantity of the labor supply. I then estimate the association between regional variations in economic growth and changes in factors such as population size, WAPS, migration, and education. The results lend little support to the view that an expanding WAPS played a major role in the PRC’s economic growth over this period.

Globally, the coronavirus disease (COVID-19) pandemic has sparked unexpected and violent outbursts against doctors, nurses, and other health personnel. In the Indian context, studies on violence against doctors and other medical staff largely focus on supply-demand imbalances in health care, overcrowding, drug shortages, negligence of critical care patients, lack of diagnostic and other essential devices (e.g., X-ray and ultrasound equipment and oxygen cylinders), deaths of patients, and bribery and corruption (collusion between doctors and pharmaceutical companies). While these factors explain such violence against medical personnel partly, we argue that it is largely rooted in a lack of trust in doctors and hospitals, which eroded rapidly during the COVID-19 pandemic. We analyze the covariates of trust in public and private health-care providers based on an all-India panel survey and delineate policies to rebuild trust, especially in public health care.

Our paper uses a novel methodology to reexamine the relationship between financial development and economic growth in the era of sustainable development. Our empirical procedure deals with both functional-form misspecification bias as well as bias from endogenous regressors. It also provides an estimate of the growth-finance relationship for every country-year observation, allowing us to examine the relationship of interest for various country groups, using a global sample of 133 countries during 1960–2015. Our results indicate that countries with weak institutions and a smaller-than-average banking sector will reap more benefits from bank-based financial systems. The impact of financial development on economic performance has enormous policy implications for international institutions that provide policy support to countries in their pursuit of achieving the 2030 Agenda for Sustainable Development.

We quantify the impacts on consumption expenditure and the patterns following India’s initial sudden lockdown in response to the coronavirus disease pandemic and the gradual relaxation that followed. We use household survey data from a representative Indian state, Punjab. We separate the effects between rural versus urban households, and whether the households were female headed or had daily laborers. While the urban population cut back expenditure across all categories, rural households shifted toward basic commodities and cut back more on other expenditure. Rural households that included daily-wage laborers were the most severely affected.

Economic theory suggests that growth may improve gender equality directly by raising women’s employment and indirectly by reducing poverty–thereby causing poorer families to discriminate less against females in intra-household allocations. This paper argues that growth in India has not substantially improved gender equality because it has not sufficiently activated either of these mechanisms. I analyze structural changes from 1982/83 to 2011/12 to show that India’s high-growth period has not been pro-poor. While female employment levels have actually declined since the 1980s, growth has not expanded remunerative employment opportunities sufficiently, even for poor males. This suggests that better-paid jobs for men—by lowering poverty—might actually have led to greater gender equality in India—by reducing poverty-linked gender discrimination. The analysis thus highlights the importance of pro-poor growth, illustrating how structural changes can shape employment, thereby altering the quality of growth and its impact on gender equality.

This paper discusses the evolution of key taxes during the past 20 years in developing Asia and the fiscal challenges that the region’s economies face in light of the coronavirus disease (COVID-19) pandemic. It presents estimates of tax capacity and tax potential, and discusses the productivity of key taxes in the region. The paper finds that developing Asia has the potential to raise more revenues–reaching up to 4% of gross domestic product on average. While corporate income tax productivity is high vis-à-vis other regions, the same does not apply to personal income tax or value-added tax. There is potential in many economies to raise more revenues by improving the compliance and design of the value-added tax. It is also important to ensure that tax systems in developing Asia become more progressive with the expansion of personal income and property taxes. Increased allocations and better targeting of social spending would help offset some of the regressivity stemming from indirect taxes. An important source of revenue leakage is tax expenditures granted by economies in the region.

This paper analyzes the effects of an unfunded pension system on economic growth using an extended overlapping generations model to include the informal sector. Emerging countries usually have a more significant informal sector than advanced ones. The findings based on the Thai economy data suggest that an increase in unfunded pension payouts and the noncontributory old-age allowance induces lower output and changes the consumption profiles of the workers. Furthermore, it reduces households’ incentives to save and provide labor, especially among formal workers, which lowers the physical capital stock in the new steady state.

A dynamic between foreign direct investment (FDI) and international trade, and the level of urbanization, has been observed in many developing countries. This study seeks to fill a literature gap on the extent that FDI and international trade impact developing Asian economies through urbanization. The study explores the relationship between FDI, international trade, and urbanization in 31 developing Asian economies from 1991 to 2019, utilizing the dynamic panel model. Empirical results imply the significant effect of FDI inflows and trade openness on urbanization in developing Asia. The impact is clearly observed following the global financial crisis despite increased deglobalization. This finding supports the existence of structural changes and the transformation of economies in the region, which, among other factors, are driven by stronger global supply chains and improved logistics infrastructure in developing Asia.

Using 791 consistent households in the balanced panel, comprising 3,985 households in the unbalanced panel–from a nationally representative, multipurpose, five-round (1988, 2000, 2004, 2008, and 2014) Mahabub Hossain Panel Data in Bangladesh—we provide evidence for the long-term impact of different rural credit sources—which include formal banks, quasiformal microfinance institutes, and informal channels—on household welfare indicators. We find that the long-term impact of access to rural credit on a few welfare indicators is statistically insignificant and sometimes negative. This finding mostly holds when we investigate the impact of different rural credit sources separately. Our results raise a question on the progressive lending of some credit sources, especially microfinance institutes, and have implications for the introduction of nationwide credit bureaus in Bangladesh.

This research examines how the digital economy, energy efficiency, and demographic transition might help Viet Nam achieve more sustainable economic development. The causal association between digitalization, the demographic dividend, energy intensity, and long-term economic development has not been thoroughly investigated yet. Therefore, this paper aims to examine the asymmetric relationship between these indicators in Viet Nam, which is recognized as an emerging economy, using the relatively novel quantile-on-quantile regression and Granger causality approaches in different quantiles. The empirical findings suggest that the asymmetric interaction between digital innovation, energy intensity, demographic change, and economic growth in Viet Nam is primarily positive, even though there are slight differences across various quantiles of the selected indicators. In addition, the outcomes of Granger causality in quantile analysis uncover that, during the sample period, a bidirectional association exists between digitalization, the demographic dividend, and economic growth, while a unidirectional causality runs from energy intensity to economic growth.