Essays on Development Economics in Bangladesh

Abstract

This thesis contributes to the literature on two traditionally marginalized groups in Bangladesh -- rural girls and the urban poor. Chapter 1 revisits the effectiveness of the Female Secondary School Stipend Programme (FSSSP) in increasing female education in rural upazilas/sub-districts of the country. Using an extension of DID, I combine the cross-cohort variation in exposure induced by the timing of the programme with the cross-upazila pre-intervention differences in educational attainment to estimate a lower bound for the effect of FSSSP. I find that upazilas with lower pre-FSSSP average female education were ‘more treatable’ by the intervention compared to the ‘less treatable’ ones with higher pre-existing mean. On average, a girl in the partially and fully exposed cohort living in a ‘more treatable’ upazila had 1.2 and 1.7 additional years of schooling respectively (equivalent to a 57 and 80 percent increase), compared to a girl in the never-exposed cohort living in a ‘less treatable’ upazila. Despite being lower-bound estimates, these results are larger than those in the existing literature, suggesting that they may have underestimated FSSSP's true impact due to their choice of counterfactuals. The programme also reduced the disparity in female schooling across intervention areas and had a sizable positive spillover effect on rural boys. In Chapter 2, I provide early insights into the immediate economic consequences on, and the mitigation strategies adopted by, urban poor households in slums and low-income settlements during the COVID-19 lockdown. By comparing data from before and after the first nationwide lockdown, I find a large fall of 43 percent in household income, mainly driven by losses in salary/wages and business earnings. One-tenth of households reported income falling to zero, two-fifths became ‘newly poor’ and there was a significant increase in food insecurity. Households responded to this shock mainly by reducing expenditures which included cutting back on staple food items, receiving COVID-relief and extensively using their liquid assets through dissaving, borrowing and defaulting. Fewer households liquidated their physical assets (at a ‘distressed’ price) or migrated out of the cities (mostly to rural ancestral homes) to cope with the crisis. I do not find much evidence of increased labour force participation despite widespread unemployment. My findings have immediate and long-term relevance for policymakers aiming to recover past milestones in poverty reductions and restore households’ fallback positions to pre-pandemic levels.

Date of Award	15 Jan 2025
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Abhishek Chakravarty (Main Supervisor), Peter Backus (Co Supervisor) & Mazhar Waseem (Co Supervisor)