KDI SCHOOL OF PUBLIC POLICY AND MANAGEMENT

PH.D. LABOR AND DEVELOPMENT

Semester: Fall 2023

Lecture Room: TBD

COURSE DESCRIPTION
This Ph.D.-level course on development economics aims to examine the micro-
economic development literature, with an emphasis on empirical applications. Core
knowledge of microeconomics and econometrics at the graduate level is required.

Keywords
Microeconometrics, development, agriculture, human capital, labor

Text Book
Scott Cunningham (2021). Causal Inference. (Referred to as CI in the weeks below.)
Optional:
Angrist, J. D., & Pischke, J. S. (2009). Mostly Harmless Econometrics. Princeton
University Press. (This is a good reference for a bit more in-depth treatment of
microeconometrics than CI above.)
Bardhan, Pranab, and Christopher R. Udry (1999), Development Microeconomics,
Oxford: OUP. (This is a good reference for development theory)

Readings
Articles, to be posted online. Be warned: there is a lot of reading in this class! Also, the
syllabus may change slightly – e.g. a change in readings – over the course of the
semester.

References
N/A

1
Course Requirements (Pre-requisites)
Graduate-level microeconomics and econometrics

EVALUATION
Students will be evaluated on the basis of four course requirements:
1. In-Class Presentations (30%): You will be required to make three in-class
presentations. Depending on the number of students in the class, this number could be
adjusted. I will confirm this with you sometime in the first three weeks of the class.
These in-class presentations will be 25 minutes including discussion and no more than
20 PPT slides long. Eligible papers are those listed with an asterisk (*) in the syllabus
and your paper selection must be approved in advance to ascertain that the paper is not
already “taken” by another classmate. You can sign up for your three presentations on a
shared Google doc.
https://docs.google.com/spreadsheets/d/1_2kszgsRjyGRjh3kBp552mNmg3vqXJtqtKgv
RQrbgxg/edit?usp=sharing
Sign up prior to the third week of class. If you do not sign up by then, I will choose
articles for you! (Trust me. You don’t want me to do that.) The first presentations will
be in week four.
2. Referee Report (20%): Write a referee report on the assigned paper with your
assessment of whether the paper should be published in a top journal. This report is not
a summary of the paper, but a critique of the analysis, its contribution relative to the
existing literature, and especially, the soundness of the identification strategy (given that
you all are just starting out, grading will emphasize the analysis and identification). You
will be required to present the referee report in Week 6. After discussing the referee
reports, we will as a class put together a “final referee report” and you will be required
to write an author’s response letter in order to address the referee’s comments on the
paper. The author’s response by each student will be presented in Week 10.
3. Paper replication and presentation (50%): You will need to find data from a
previously published paper and replicate the main tables and propose one or two
extensions. There are two ways you could do this:
(a) use the replication data from a previous paper (e.g. AEJ: Applied tends to have
replication data posted with articles);
(b) find a new context and see whether the overall findings translate. Note that this will
not be possible with RCTs.

2
This assignment has two main goals. First, it will require you to think carefully about
the analyses in a published paper as well as possible ways to extend those results.
Second, it will require you to work with actual data. As applied microeconomists, data
needs to be our strong suit.
Submit a description (1.5 spaced and up to 15 pages) of your work by Week 10. You
will present your findings in Week 11 and Week 12. The exact schedule will depend on
the number of students in the class.

This course includes Korean development experience (*please check Yes or No)
□ YES
X NO

This course utilizes resources from KSP(Knowledge Sharing Program), K-Developedia,

COURSE OUTLINE

Week 1
Introduction
• Introduction to the course
• Introduction to work in applied micro
• Thinking about (and completing) an applied micro research project/dissertation
• Poor but rational
Readings
• Don Davis - Ph.D. Thesis Research: Where do I Start?
• Cochrane - Writing Tips for Ph. D. Students
• Jesse Shapiro - How to give an applied micro talk
• A. V. Banerjee and E. Duflo. The Economic Lives of the Poor. Journal of
Economic Perspectives, 21(1):141–167, 2007
• Duflo, E. Poor but Rational. WP, 2003.
• Bardhan, P. (1993). Economics of Development and the Development of
Economics. Journal of Economic Perspectives, 7(2), 129-142.

3
Helpful
• https://www.cgdev.org/blog/how-write-introduction-your-development-
economics-paper
• https://www.cgdev.org/blog/write-your-economics-papers-more-clearly-it-pays-
influence
• Marc Bellemare. How to write an applied economics paper.
• Marc Bellemare (2022). Doing Economics: What you should have learned in
grad school – but didn’t.

Week 2
Introduction to causality
• Potential outcomes framework
• Problems with simple regression
• Why randomization works
• Instrumental variables
Readings
• CI pages 315-384
• Abaluck, Jason et al. (2021). The Impact of Community Masking on COVID-
19: A Cluster-Randomized Trial in Bangladesh. Working paper.
• Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The colonial origins of
comparative development: An empirical investigation. American Economic
Review, 91(5), 1369-1401.
• Casey, G., & Klemp, M. (2021). Historical instruments and contemporary
endogenous regressors. Journal of Development Economics, 149, 102586.
Optional
• Mostly Harmless, chapter 4
• Sovey, A. J., & Green, D. P. (2011). Instrumental variables estimation in
political science: A readers’ guide. American Journal of Political Science, 55(1),
188-200.
• Muralidharan, K., & Sundararaman, V. (2011). Teacher performance pay:
Experimental evidence from India. Journal of Political Economy, 119(1), 39-77.
• Imbens, Guido. 2010. “Better LATE Than Nothing: Some Comments on Deaton
(2009) and Heckman and Urzua (2009).” Journal of Economic Literature 48:
399-423.

4
Week 3
Causality continued
• Differences-in-differences
• Regression discontinuity
Readings
• CI pages 315-384
• Goodman-Bacon, A. (2021). Difference-in-differences with variation in
treatment timing. Journal of Econometrics.
• Roth, J., Sant'Anna, P. H., Bilinski, A., & Poe, J. (2022). What's Trending in
Difference-in-Differences? A Synthesis of the Recent Econometrics Literature.
arXiv preprint arXiv:2201.01194.
• Karthik Muralidharan and Nishith Prakash. 2017. “Cycling to School: Increasing
Secondary School Enrollment for Girls in India.” American Economic Journal:
Applied Economics 9(3), pp. 321–350.
• Ozier, O. (2018). The Impact of Secondary Schooling in Kenya: A Regression
Discontinuity Analysis. Journal of Human Resources, 53(1), 157-188.
Optional
• CI pages 241-313
• Duflo, Esther. 2001. "Schooling and Labor Market Consequences of School
Construction in Indonesia: Evidence from an Unusual Policy
Experiment." American Economic Review, 91 (4): 795-813.
• Bertrand, M., Duflo, E., & Mullainathan, S. (2004). How much should we trust
differences-in-differences estimates? Quarterly Journal of Economics, 119(1),
249-275.
• Imbens, G. W., & Wooldridge, J. M. (2009). Recent developments in the
econometrics of program evaluation. Journal of Economic Literature, 47(1), 5-
86.
• * Hjort, J., & Poulsen, J. (2019). The arrival of fast internet and employment in
Africa. American Economic Review, 109(3), 1032-79.

Week 4
Agriculture
Readings
• Gollin, D., Lagakos, D., & Waugh, M. E. (2014). The agricultural productivity
gap. The Quarterly Journal of Economics, 129(2), 939-993.

5
 • Porzio, T., Rossi, F., & Santangelo, G. (2022). The human side of structural
transformation. American Economic Review, 112(8), 2774-2814.
• *Chen, C., Restuccia, D., & Santaeulalia-Llopis, R. (2017). Land misallocation
and productivity (No. w23128). National Bureau of Economic Research.
• *Gollin, D., Hansen, C. W., & Wingender, A. M. (2021). Two blades of grass:
The impact of the green revolution. Journal of Political Economy, 129(8), 000-
000.
• *Udry, C. (1996). Gender, agricultural production, and the theory of the
household. Journal of Political Economy, 104(5), 1010-1046.
Optional
• Lewis, W. A. (1954). Economic Development with Unlimited Supplies of
Labour. The Manchester School, 22(2), 139-191. [This is a classic reference.]
• Gollin, D. (2014). The Lewis model: A 60-year retrospective. Journal of
Economic Perspectives, 28(3), 71-88.
• *Lagakos, D., & Waugh, M. E. (2013). Selection, agriculture, and cross-country
productivity differences. American Economic Review, 103(2), 948-80.
• *Christiaensen, L., Demery, L., & Kuhl, J. (2011). The (evolving) role of
agriculture in poverty reduction—An empirical perspective. Journal of
Development Economics, 96(2), 239-254.
• Lagakos, D. (2020). Urban-rural gaps in the developing world: Does internal
migration offer opportunities? Journal of Economic Perspectives, 34(3), 174-92.
• *Barrett, C. B., Bellemare, M. F., & Hou, J. Y. (2010). Reconsidering
conventional explanations of the inverse productivity–size relationship. World
Development, 38(1), 88-97.
• *Duflo, E., Kremer, M., & Robinson, J. (2011). Nudging farmers to use
fertilizer: Theory and experimental evidence from Kenya. American economic
review, 101(6), 2350-90.
• *Casaburi, L., & Willis, J. (2018). Time versus state in insurance: Experimental
evidence from contract farming in Kenya. American Economic Review, 108(12),
3778-3813.
• *Benjamin, D. (1992). Household composition, labor markets, and labor
demand: testing for separation in agricultural household models. Econometrica,
287-322. [This is a classic reference.]
• *LaFave, D., & Thomas, D. (2016). Farms, families, and markets: New evidence
on completeness of markets in agricultural settings. Econometrica, 84(5), 1917-
1960.

6
 • *Bold, T., Ghisolfi, S., Nsonzi, F., & Svensson, J. (2022). Market Access and
Quality Upgrading: Evidence from Four Field Experiments. American Economic
Review, 112(8), 2518-52.

Week 5
Poverty traps and self-employment
Readings
• Kraay, A., & McKenzie, D. (2014). Do poverty traps exist? Assessing the
evidence. Journal of Economic Perspectives, 28(3), 127-48.
• Balboni, C., Bandiera, O., Burgess, R., Ghatak, M., & Heil, A. (2022). Why do
people stay poor? The Quarterly Journal of Economics, 137(2), 785-844.
• *S. De Mel, D. McKenzie, and C. Woodruff. Returns to capital in
microenterprises: evidence from a field experiment. The Quarterly Journal of
Economics, 123(4):1329–1372, 2008
• *Banerjee, A., Breza, E., Duflo, E., & Kinnan, C. (2019). Can microfinance
unlock a poverty trap for some entrepreneurs? (No. w26346). National Bureau
of Economic Research.
Optional
• *Fafchamps, M., McKenzie, D., Quinn, S., & Woodruff, C. (2014).
Microenterprise growth and the flypaper effect: Evidence from a randomized
experiment in Ghana. Journal of Development Economics, 106, 211-226.
• *De Mel, S., McKenzie, D., & Woodruff, C. (2009). Are women more credit
constrained? Experimental evidence on gender and microenterprise
returns. American Economic Journal: Applied Economics, 1(3), 1-32.

Week 6
Firms, returns to capital, and efficiency
Readings
• *Banerjee, A. V., & Duflo, E. (2014). Do firms want to borrow more? Testing
credit constraints using a directed lending program. Review of Economic
Studies, 81(2), 572-607.
• *McKenzie, D. (2017). Identifying and Spurring High-Growth
Entrepreneurship: Experimental Evidence from a Business Plan
Competition. The American Economic Review, 107(8), 2278.

7
 • *N. Bloom, B. Eifert, A. Mahajan, D. McKenzie, and J. Roberts. Does
Management Matter? Evidence from India. The Quarterly Journal of Economics,
128(1):1–51, 2013
• Restuccia, D., & Rogerson, R. (2013). Misallocation and productivity. Review of
Economic dynamics, 16(1), 1-10.

Optional
• *Allcott, H., Collard-Wexler, A., & O'Connell, S. D. (2016). How do electricity
shortages affect industry? Evidence from India. American Economic Review,
106(3), 587-624.
• *Hsieh, C. T., & Klenow, P. J. (2014). The life cycle of plants in India and
Mexico. The Quarterly Journal of Economics, 129(3), 1035-1084.

Week 7
Referee report presentations
Readings to help you
• Berk et al. Preparing a Referee Report: Guidelines and Perspectives
• Nicole Fortin – Guidelines for your referee report
• PSE – Suggestions on how to write a referee repot
• Referee report – Example questions

Week 8
Wages, opportunity costs, and seasonality
Readings
• Kaur, S. (2019). Nominal wage rigidity in village labor markets. American
Economic Review, 109(10), 3585-3616.
• Fink, G., Jack, B. K., & Masiye, F. (2020). Seasonal liquidity, rural labor
markets, and agricultural production. American Economic Review, 110(11),
3351-92.
• Breza, E., Kaur, S., & Shamdasani, Y. (2021). Labor rationing. American
Economic Review, 111(10), 3184-3224.
• Liu, M. Y., Shamdasani, Y., & Taraz, V. (2021). Climate change and labor
reallocation: Evidence from six decades of the Indian Census. AEJ: Policy
(forthcoming).

8
Optional
• *Somanathan, E., Somanathan, R., Sudarshan, A., & Tewari, M. (2021). The
impact of temperature on productivity and labor supply: Evidence from Indian
manufacturing. Journal of Political Economy, 129(6), 1797-1827.
• *Colmer, J. “Temperature, Labor Reallocation, and Industrial Production:
Evidence from India.” American Economic Journal: Applied Economics.
• *Jayachandran, S. (2006). Selling labor low: Wage responses to productivity
shocks in developing countries. Journal of Political Economy, 114(3), 538-575.
• *Qian, N. (2008). Missing women and the price of tea in China: The effect of
sex-specific earnings on sex imbalance. The Quarterly Journal of
Economics, 123(3), 1251-1285.
• *Shah, M., & Steinberg, B. M. (2017). Drought of opportunities:
Contemporaneous and long-term impacts of rainfall shocks on human
capital. Journal of Political Economy, 125(2), 527-561.

Week 9
Education
Readings
• *Jensen, R. (2010). The (perceived) returns to education and the demand for
schooling. The Quarterly Journal of Economics, 125(2), 515-548.
• *Dizon-Ross, R. (2019). Parents' beliefs about their children's academic ability:
Implications for educational investments. American Economic Review, 109(8),
2728-65.
• *Baird, S., McIntosh, C., & Özler, B. (2011). Cash or condition? Evidence from
a cash transfer experiment. The Quarterly Journal of Economics, 126(4), 1709-
1753.
• *Duflo, E., Hanna, R., & Ryan, S. P. (2012). Incentives work: Getting teachers
to come to school. American Economic Review, 102(4), 1241-78.
Optional
• *Duflo, E. The medium run effects of educational expansion: evidence from a
large school construction program in Indonesia. Journal of Development
Economics, 74(1):163–197, 2004.
• *Akresh, R., Halim, D., & Kleemans, M. (2018). Long-term and
intergenerational effects of education: Evidence from school construction in
Indonesia (No. w25265). National Bureau of Economic Research.

9
 • *Das, J., Dercon, S., Habyarimana, J., Krishnan, P., Muralidharan, K., &
Sundararaman, V. (2013). School inputs, household substitution, and test
scores. American Economic Journal: Applied Economics, 5(2), 29-57.
• Behrman, J. R. (2010). Investment in education—inputs and incentives.
In Handbook of Development Economics (Vol. 5, pp. 4883-4975). Elsevier.
• Orazem, P. F., & King, E. M. (2007). Schooling in developing countries: The
roles of supply, demand and government policy. Handbook of Development
Economics, 4, 3475-3559.

Week 11: Reading period

Week 12: Final exam

10