In recent years, Ethiopia has become a hub for textile and garment manufacturing. These factories provide employment opportunities in low-skilled jobs, drawing many young women into the formal labour force. Although the factories create formal jobs in a labour market characterized by a lack of wage employment opportunities, an important question remains whether low-skilled factory work is welfare improving.
We collect a new wave of follow-up data among 1500 women who participated in an RCT we conducted in 2016-2018: women applied to a factory job in one of 5 industrial parks in Ethiopia and were randomly assigned to treatment (receiving the job offer) or control (no job offer). In previous work, we find that three years after baseline, women in the treatment group were still significantly more likely to hold a formal wage job and had higher earnings. New data will allow us to estimate long-run treatment effects on labour market outcomes and wellbeing.
In addition, we ask whether and how factory employment affects fertility. In much of Sub-Saharan Africa, including, Ethiopia fertility rates are exceptionally high. Though fertility choices are tightly linked to labour market outcomes, little is known about the causal impact of paid employment on fertility. Evidence from this project will contribute to a fuller appreciation of the welfare effects of women’s paid employment, and help inform potential policy avenues for reducing population growth.
We collect a new (sixth) wave of follow-up data to analyse treatment effects around 8 years after the job offers. In addition to basic demographics, income and labour market outcomes, physical and mental health, life satisfaction, and empowerment, we collect data on the women’s complete fertility history. The data will be used to estimate intention to treat effects of factory job offers on women’s labour market outcomes, wellbeing, and fertility.
To shed light on the mechanisms through which employment may affect fertility, we use panel data on earnings and income of the women and their partners (collected in each wave), on who takes care or would take care of children if she is or would be at work (collected in each wave), and on the perceived returns to education (collected in the 36-month follow-up). Furthermore, we will analyse the role of desired fertility and decision-making power.
This project will contribute to the literature on the welfare effects of industrial employment (Heath & Mobarak 2015, Jensen 2012, Kabeer & Mahmud 2004), including several recent studies set in Ethiopia (Abebe et al. 2020, Blattman et al. 2022, Getahun & Villanger 2018, Kotsadam & Villanger 2022). Welfare effects of industrial employment are not yet well understood. Recent experimental studies in Ethiopia found only short-run employment effects, if any, and negative short-run health impacts (Abebe et al. 2020, Blattman et al. 2022,). In this project, however, we have already documented that factory job offers had significant positive effects of employment and income up to 3 years after the intervention (Aalen et al., 2023). We are therefore well positioned to contribute new evidence on the longer run welfare effects of industrial jobs, including a broad range of outcomes.
We also contribute to the literature on fertility determinants (e.g., Bandiera et al. 2020, Becker & Lewis 1973, Berge et al. 2022, Büttner et al. 2023, Doepke et al. 2022, Rossi and Godard 2022, Schultz 1991, Zipfel 2022), in which a few recent studies have focused on the impact of women’s employment (Berge et al. 2022, Zipfel 2022). Industrial employment is extremely limited in most low-income African countries, which, according to Zipfel (2022) and Büttner et al. (2023), is an important factor contributing to high fertility rates in Sub-Saharan Africa. This project provides an opportunity to understand the causal impact of formal employment on fertility in one of the poorest and most highly populated countries in Africa.
Literature:
Aalen, L., A. Kotsadam, J. Pieters and E. Villanger (2023). Jobs and Political Participation: Evidence from a Field Experiment in Ethiopia. Journal of Politics, forthcoming.
Abebe, G., N. Buehren and M. Goldstein (2020). Short-Run Welfare Impacts of Factory Jobs Experimental Evidence from Ethiopia. World Bank Policy Research Working Paper, No. 9325.
Bandiera, O., N. Buehren, R. Burgess, M. Goldstein, S. Gulesci, I. Rasul, and M. Sulaiman (2020). Women’s Empowerment in Action: Evidence from a Randomized Control Trial in Africa. American Economic Journal: Applied Economics, 12 (1): 210-59.
Becker, G. S. and Lewis, H. G. (1973). On the Interaction between the Quantity and Quality of Children. Journal of Political Economy, 81(2):S279–S288.
Berge, L.I.O., K. Bjorvatn, F. Makene, L. Helgesson Sekei, V. Somville and B. Tungodden (2022). On the Doorstep of Adulthood: Empowering Economic and Fertility Choices of Young Women. NHH Discussion Paper, SAM15/2022.
Blattman, C., S. Dercon and S. Franklin (2022). Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia. Journal of Development Economics, 156, 102807.
Büttner, N., M. Grimm, I. Günther, K. Harttgen, S. Klasen (2023). The Fertility Transition in Sub-Saharan Africa: The Role of Structural Change. IZA Discussion Paper, No. 15966, Institute of Labor Economics (IZA).
Doepke, M., A. Hannusch, F. Kindermann & M. Tertilt (2022). The Economics of Fertility: A New Era, IZA Discussion Paper, No. 15224, Institute of Labor Economics (IZA).
Getahun, T.D. and E. Villanger (2018). Labour-intensive jobs for women and development: Intra-household welfare effects and its transmission channels. The Journal of Development Studies, 54 (7), 1232-125.
Heath, R. and A. Mushfiq Mobarak (2015). Manufacturing growth and the lives of Bangladeshi women. Journal of Development Economics, 115: 1-15.
Jensen, R. (2012). Do labor market opportunities affect young women’s work and family decisions? Experimental evidence from India. The Quarterly Journal of Economics, 127, 753–792.
Kabeer, N. and S. Mahmud (2004). Rags, Riches and Women Workers: Export-oriented Garment Manufacturing in Bangladesh. In M. Carr (Ed.), Chains of Fortune: Linking Women Producers and Workers with Global Markets, p.133-164. London: Commonwealth Secretariat.
Kotsadam. A. and E. Villanger (2022). Jobs and Intimate Partner Violence – Evidence from a Field Experiment in Ethiopia. Journal of Human Resources, August 5, 2022
Rossi, P. and M. Godard (2022). The Old-Age Security Motive for Fertility: Evidence from the Extension of Social Pensions in Namibia. American Economic Journal: Economic Policy, 14(4): 488–518.
Zipfel, C. (2022). The Demand Side of Africa’s Demographic Transition: Desired Fertility, Wealth, and Jobs. Unpublished manuscript.