MD MAHBUBUR RAHMAN
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"Why is Agricultural Productivity So Low in Poor Countries? The Case of India". Joint work with Oksana M. Leukhina. 

It is well known that poor countries exhibit a large labor productivity gap between urban and agricultural sectors. Furthermore, development economists have pointed out that the low agricultural productivity stems from the persistence of small non-mechanized farms. We propose and quantify one potential explanation for this phenomenon. If residing in a village provides access to a network that effectively insures against income fluctuations, then households are less willing to live in the cities where labor income risk is uninsured. As a result, labor stays cheap in agriculture, and the incentives for switching to capital-intensive methods of farming remain weak. In order to understand the quantitative importance of this mechanism, we calibrate the model to Indian data and study an abstract policy intervention - a provision of complete insurance against earnings risk in the city. The policy intervention decreases the urban-rural gap by 32 percent. This effect comes about because of a 13 percent drop in the agricultural share of employment, which encourages an inflow of capital and raises  average farm size by 9 percent.
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"The Rise and Fall of India's Relative Investment Price: A Tale of Policy Error and Reform". Joint work with Alok Johri, American Economic Journal: Macroeconomics, 2022, 14 (1): 146-78.

India's relative price of investment rose 44 percent from 1981 to 1991 and fell 26 percent from 1991 to 2006. We build a simple DGE model calibrated to Indian data in order to explore the impact of capital import substitution policies and their reform post-1991, in accounting for this rise and fall. Our model delivers a 23 percent rise before reform and a 31 percent fall thereafter. GDP per effective labor was 3 percent lower in 1991 compared to 1981 due to import restrictions on capital goods. Their removal and a 71 percentage point reduction in tariff rates raised GDP per effective labor permanently by 20percent.

"Baby Bonus, Anyone? Examining Heterogeneous Responses to a Policy". Joint work with Natalie Malak & Terry Yip,  Journal of Population Economics, 32 - 4 (2019): 1205-1246.
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We examine the impact of the Allowance for Newborn Children, a universal baby bonus offered by the Canadian province of Quebec, on birth order, sibship sex composition, income, and education. We find a large response for third and higher-order births for which the bonus was more generous. Interestingly, though, we find stronger response if there were two previous sons or a previous son and daughter rather than two previous daughters. We also find, in addition to a transitory effect, a permanent effect, with the greatest increase in one daughter-two son families among three-child households. Moreover, we find a hump shape response by income group, with the greatest response from middle-income families. Also, women with at least some post-secondary education respond more to the policy than those with less. These findings suggest that properly structured pro-natal policies can successfully increase fertility among different segments of the population while simultaneously diminishing the effect of gender preferences and fertility disparity related to women’s education. ​
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