Poverty

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Sam Heft-Neal is a research fellow at the Center on Food Security and the Environment and in the Department of Earth System Science. Sam is working with Marshall Burke to identify the impacts of extreme climate events on food availability and childhood nutrition in Africa. Specifically, they are examining the impacts of climate induced food shocks on child health measures including child mortality rates. Sam’s previous work examined the non-linear relationship between agricultural productivity and the environment and its effects on human health and the economy. Sam holds a Ph.D. in Agricultural and Resource Economics from the University of California, Berkeley and a B.A. in Statistics and Economics from the same institution.

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In this paper we discuss the scope of the adaptation challenge facing world agriculture in the coming decades. Due to rising temperatures throughout the tropics, pressures for adaptation will be greatest in some of the poorest parts of the world where the adaptive capacity is least abundant. We discuss both autonomous (market driven) and planned adaptations, distinguishing: (a) those that can be undertaken with existing technology, (b) those that involve development of new technologies, and (c) those that involve institutional/market and policy reforms. The paper then proceeds to identify which of these adaptations are currently modeled in integrated assessment studies and related analyses at global scale. This, in turn, gives rise to recommendations about how these models should be modified in order to more effectively capture climate change adaptation in the farm and food sector. In general, we find that existing integrated assessment models are better suited to analyzing adaptation by relatively well-endowed producers operating in market-integrated, developed countries. They likely understate climate impacts on agriculture in developing countries, while overstating the potential adaptations. This is troubling, since the need for adaptation will be greatest amongst the lower income producers in the poorest tropical countries. This is also where policies and public investments are likely to have the highest payoff. We conclude with a discussion of opportunities for improving the empirical foundations of integrated assessment modeling with an emphasis on the poorest countries.

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Energy Economics
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Thomas Hertel
David Lobell

This project aims to develop and test remote-sensing based approaches to gathering two typesof aid-relevant data: data on agricultural productivity and data on household assets, with a focus on Sub-Saharan Africa.  The work will combine new high-resolution satellite imagery with household survey data to develop algorithms to measure crop yields and key household assets remotely (i.e. from space), with the household survey data providing the “ground truth” with which to train the algorithms.

Growing knowledge that the climate is changing has far outpaced our knowledge of how these changes might impact economic outcomes that we care about.  Does climate change constitute one of the most important development challenges facing humanity over the next century, as is sometimes claimed, or is it a minor concern relative to other determinants of economic prosperity? Our proposed work will use modern econometric techniques and new data to quantify how poverty has responded to historical shifts in 

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Conditional cash transfer (CCT) programs are an increasingly popular tool for reducing poverty in conflict affected areas. Despite their growing popularity, there is limited evidence on how CCT programs affect conflictand theoretical predictions are ambiguous. We estimate the effect of conditional cash transfers on civil conflict in the Philippines by exploiting an experiment that randomly assigned eligibility for a CCT program at the village level. We find that cash transfers caused a substantial decrease in conflict-related incidents in treatment villages relative to control villages in the first nine months of the program. Using unique data on local insurgent influence, we also find that the program reduced insurgent influence in treated villages. An analysis of possible spillovers yields inconclusive results. While we find no statistical evidence of spillovers, we also cannot rule out that the village level effect was due to displacement of insurgent activity from treatment to control villages.

This journal article can be accessed below.

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Journal of Development Economics
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Benjamin Crost
Patrick Johnston
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Accumulation of human capital is indispensable to spur economic growth. If students fail to acquire such skills, not only will they have a hard time finding high-wage employment in the future, but the development of the economies in which they work may also stagnate from a shortage of human capital. The overall goal of this study is try to understand if China is ready in terms of the education of its labor force to progress from middle income to high income country status. To achieve this goal, we seek to understand the share of the labor force that has attained at least some upper secondary schooling (upper secondary attainment) and to benchmark these educational attainment rates against the rates of the labor forces in other countries (e.g., high income/OECD countries; a subset of G20 middle income/BRICS countries). Using the Sixth Population Census data, we are able to show that China’s human capital is shockingly poor. In 2010 only 24% of China’s entire labor force (individuals 25-64 years of age) had ever attended upper secondary school. This rate is less than one-third of the average upper secondary attainment rate in OECD countries. China’s overall upper secondary attainment rate and the attainment rate of its youngest workers (25-34 year old workers) is also the lowest of all the BRICS countries (with the exception of India for which data were not available). Our analysis also demonstrates that the statistics on upper secondary education reported by the Ministry of Education (MoE) are overestimated. In the paper, we document when MoE and Census-based statistics diverge and raise three possible policy-based reasons why officials may have begun to have an incentive to misreport in the mid-2000s.

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Niny Khor
Lihua Pang
Fang Chang
Prashant Loyalka
Prashant Loyalka
Scott Rozelle
Scott Rozelle
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Growing evidence demonstrates that climatic conditions can have a profound impact on the functioning of modern human societies, but effects on economic activity appear inconsistent. Fundamental productive elements of modern economies, such as workers and crops, exhibit highly non-linear responses to local temperature even in wealthy countries. In contrast, aggregate macroeconomic productivity of entire wealthy countries is reported not to respond to temperature= while poor countries respond only linearly. Resolving this conflict between micro and macro observations is critical to understanding the role of wealth in coupled human–natural systems and to anticipating the global impact of climate change. Here we unify these seemingly contradictory results by accounting for non-linearity at the macro scale. We show that overall economic productivity is non-linear in temperature for all countries, with productivity peaking at an annual average temperature of 13 °C and declining strongly at higher temperatures. The relationship is globally generalizable, unchanged since 1960, and apparent for agricultural and non-agricultural activity in both rich and poor countries. These results provide the first evidence that economic activity in all regions is coupled to the global climate and establish a new empirical foundation for modelling economic loss in response to climate change, with important implications. If future adaptation mimics past adaptation, unmitigated warming is expected to reshape the global economy by reducing average global incomes roughly 23% by 2100 and widening global income inequality, relative to scenarios without climate change. In contrast to prior estimates, expected global losses are approximately linear in global mean temperature, with median losses many times larger than leading models indicate.

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Nature
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Marshall Burke
Marshall Burke
Solomon Hsiang
Edward Miguel
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Beth Duff-Brown
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Stanford students belong to the first generation that could witness the end of extreme global poverty — in what would be one of humankind's greatest achievements — the head of the World Bank said during a recent talk on campus.

But their generation, he said, is also likely to experience the first global pandemic since the 1918 influenza that killed more than 50 million people.

Jim Yong Kim, president of the World Bank, said innovations in health, education and finance are behind the World Bank's twin goals of ending extreme poverty and boosting shared prosperity for the bottom 40 percent of the global population.

Speaking at the inaugural conference of the Stanford Global Development and Poverty Initiative on Oct. 29, Kim lauded faculty and students for their multidisciplinary approach in tackling poverty and improving public health. He is an infectious disease physician who oversaw World Health Organization initiatives on HIV/AIDS.

"Seeking transformative solutions to challenges of development and poverty that are necessarily cross-disciplinary is exactly what a great university should be doing," Kim said in his speech at Stanford.

The World Bank announced last month that the number of people living on less than $1.90 a day is expected to drop to 9.6 percent of the global population by the end of the year. That is down from 36 percent in 1990.

The bank has pledged to cut that rate to 3 percent by 2030.

"We expect the extreme poverty rate to drop below 10 percent for the first time in human history," he said. "This is the best news in the world today. And this is the first generation in human history that has been able to see that potential outcome." 

Promoting prosperity

One of the co-founders of Partners in Health, Kim was the keynote speaker at the daylong conference, "Shared Prosperity and Health," which drew together Stanford faculty and researchers, plus government and NGO officials from around the world.

Stanford's global development and poverty effort is a university-wide initiative of the Stanford Institute for Innovation in Developing Economies, known as Stanford Seed, and the Freeman Spogli Institute for International Studies. The conference was held at Stanford's Graduate School of Business, which was a partner in the event.

Kim's talk was optimistic about the newly adopted U.N. Sustainable Development Goals, with an ambitious agenda to end poverty and hunger, ensure healthy lives, empower women and girls and attain quality education for all children by 2030.

 

While those goals seem lofty, Kim pointed to the accomplishment of bringing down extreme poverty to 10 percent, a figure many had once said was impossible.

Ninety-one percent of children in developing countries now attend primary school, up from 83 percent in 2000, he said. And the number of people on antiretroviral drugs for treatment of HIV in sub-Saharan Africa has increased eightfold in the last decade.

"But we're humbled by the challenges ahead," Kim said. "Rising global temperatures will have devastating impacts on poor countries and poor people – and, as we saw with Ebola, major pandemics are likely to disproportionately affect the poor."

Pandemic threats

Kim said that most virologists and infectious disease experts are certain a pandemic will sweep the world in the next 30 years. He said that would lead to more than 30 million deaths and anywhere from 5 to 10 percent of lost GDP.

He blasted the global community for taking eight months to respond to the Ebola crisis in West Africa, noting that Guinea, Sierra Leone and Liberia had among the fastest growing economies in Africa before the outbreak killed more than 11,000 people – most of whom were poor.

In an effort to speed up financial aid the next time such an outbreak occurs, the World Bank is developing the Pandemic Emergency Facility, which would disburse funding immediately to national governments and responding agencies.

Rajiv Shah, the administrator for the U.S. Agency for International Development from 2010-2015, spoke earlier at the conference about his work leading the U.S. efforts to contain Ebola.

"Three small countries with total population of maybe 30 million people had such weak health systems with so little domestic investment – in one country $6 per capita health investment per year – that when Ebola became a crisis there was no first-line of defense," he said.

By October 2014, the U.S. was pouring hundreds of millions of dollars into containment efforts, including the establishment of a 2,500-personnel military deployment to hit Ebola on the ground. Shah said President Obama "stayed extraordinarily true to the science" of containment at the source.

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world bank poverty

Stunted children 

Moving beyond containment of epidemics, Kim said the most important investment developing countries could make in their people starts when a woman becomes pregnant. Using a combination of health, nutrition and education will have lifelong benefits for each child, as well as for the country in which each prospers.

The World Bank estimates that 26 percent of all children under age 5 in developing countries are stunted, which means they are malnourished and under-stimulated, risking a loss of cognitive abilities that lasts a lifetime. The number climbs to 36 percent in sub-Saharan Africa, giving those children limited prospects in life."This is a disgrace, a global scandal and, in my view, akin to a medical emergency," Kim said. "Children who are stunted by age 5 will not have an equal opportunity in life. If your brain won't let you learn and adapt in a fast-changing world, you won't prosper and, neither will society. All of us lose."

From 2001 to 2013, the World Bank invested $3.3 billion in early childhood development programs in poor countries. Kim said innovative policymaking and financial tools allowed the bank to help Peru cut its rate of child stunting in half to 14 percent in just eight years.

"Progress is possible – and it can happen quickly. But we must do even more,"he said.

Kim said the world set a target in 2012 to reduce stunting in children by 40 percent. But that would still leave 100 million children malnourished and undereducated. The bank and world leaders should pledge to end stunting for all children by 2030, he said.

"With partners like the Global Development and Poverty Initiative and the entire Stanford community, I'm full of hope that we can indeed be the first generation in human history to end extreme poverty and create a more just and prosperous world for everyone on the planet."

Read more here about another innovation to improve health in the developing world.

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Jóvenes con Porvenir is a public-funded program run by the government of Zapopan. This pioneering policy initiative was designed and implemented in response to the major social and economic challenges affecting young people. The program offers scholarships to young men and women not enrolled in school, so they can attend vocational training courses regardless of their employment status.

The impact evaluation aims to estimate the effect of the program in different aspects of the beneficiaries' professional and personal lives. More specifically, we evaluate the impact of the program on participants' employment and educational outcomes, access to professional networks, and weakening of social bonds to gang groups. In addition, we evaluate whether the program changed students' expectations of the future.

We estimate heterogeneous effects of the program across gender, age, and levels of marginalization. The evaluation also includes an analysis of graduation and reenrollment rates, as well as an assessment of beneficiaries' experiences in the program. Finally, the study provides feedback on the design and implementation of the program for scaling-up purposes.

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International Crime and Violence Lab
Authors
Beatriz Magaloni
Alberto Díaz-Cayeros
Brenda Jarillo Rabling
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