Paulo Bastos

Imported digital goods are critical for productivity growth in low‐income countries. Using detailed data on international trade flows and tariffs, this paper finds that African nations tend to import relatively low‐quality, low‐price digital goods. It also finds that digital goods in Africa are subject to relatively higher tariffs, along with other factors that contribute to their higher cost in the domestic market compared to other regions, especially in some low‐income countries. The findings show that the African Continental Free Trade Area will do little to reduce this tariff burden, as most digital goods are sourced from higher‐income non‐members. In contrast, unilateral tariff liberalisation towards all countries would significantly increase the imports of digital goods in Africa and lead to sizable increases in real GDP in several low‐income countries.

We exploit gaps between observed and recently forecasted GDP growth in export destinations to estimate the effects of unexpected demand shocks on worker compensation. Using employer–employee panel data, we find that the revenues from these demand shocks are partly transmitted to workers in the form of higher average wages, especially close to the top of the within‐firm wage distribution. These wage responses occur in the form of both higher overtime payment and base wage increases. We also find significant increases in bonus‐related pay in firms managed by highly skilled managers, and the unequal average distribution of unexpected revenues is also mainly driven by wage effects in the same subset of firms. This suggests that the way in which revenues from unexpected demand shocks are transmitted to workers is significantly related to managerial capabilities.

This paper uses municipal‐level data from South Africa for the period 1996–2011 to estimate the medium to long‐run effects of trade liberalisation on local labour markets. It finds that local labour markets that were more exposed to tariff cuts tended to experience slower growth in employment and income per capita than less exposed regions. The longer‐term effects of trade liberalisation on regional earnings are stronger than the medium‐term effects and tend to be more pronounced among municipalities that included the former homelands.

We document new facts about the evolution of firm performance and prices in international markets and propose a theory of firm dynamics emphasizing the interaction between learning about demand and quality choice to explain the observed patterns. Using data from the Portuguese manufacturing sector, we find that: (1) firms with longer spells of activity in export destinations tend to ship larger quantities at lower prices; (2) older exporters tend to use more expensive inputs; (3) the volatility of output and input prices tends to decline with export experience; and (4) input prices and quantities tend to increase with revenue growth within firms. We develop a model of endogenous input and output quality choices in a learning environment that is able to account for these patterns. Counterfactual simulations reveal that minimum quality standards on traded goods reduce welfare by lowering entry in export markets and reallocating resources from old and large towards young and small firms.

This paper examines the relationship between the destination of exports and the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. Both ordinary least squares regressions and an instrumental-variable strategy using exchange-rate movements (interacted with indicators for initial exports) as a source of variation in destinations indicate that exporting to richer countries leads firms to pay higher prices for inputs, other things equal. The results are supportive of what we call the income-based quality-choice channel: selling to richer destinations leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs. (JEL D22, D24, F14, F31, L15)

Evidence on the impacts of a large-scale expansion in preprimary education is limited and mostly circumscribed to high- and middle-income nations. We estimate the effects of such an expansion on progression in primary school in rural communities of Guatemala, where the number of preprimaries increased from about 5,300 to 11,500 between 1998 and 2005. Combining administrative and population census data in a difference-in-differences framework, we find that access to preprimary education increased by 2.4 percentage points the proportion of students who progress adequately and attend sixth grade by age 12. These positive although limited effects suggest the need for complementary actions to produce substantial improvements in adequate progression.