Working Papers

Provenzano, Sandro (2020): Isolated and Poor: The Cost of Remoteness from the Capital City. (Available at: http://eprints.lse.ac.uk/105688/1/Provenzano_isolated_and_poor_paper_9_2020.pdf).

Abstract: This paper investigates whether areas isolated from the capital city are less developed economically in Sub-Saharan Africa. We apply a boundary-discontinuity design using national borders that divide pre-colonial ethnic homelands to obtain quasi-experimental variation in distance to the national capital city. Based on nightlights and geocoded surveys, we find that a one percent increase in distance to the capital city causes a decrease in the probability of detecting nightlights by 3 percentage points and a reduction in household wealth corresponding to 3.5 percentiles of the national wealth distribution. Our results suggest that a lower provision of public goods in isolated areas is a key link between remoteness and economic performance. Despite receiving worse services, people who are isolated exhibit a higher level of trust in their political leaders. We interpret this as pointing towards dysfunctional accountability mechanisms that reduce the incentives of state executives to invest into isolated areas.


Provenzano, Sandro (joint with Felipe Carozzi and Sefi Roth) (2020): Urban Density and COVID-19. IZA Discussion Paper. (Available at: http://cep.lse.ac.uk/pubs/download/dp1711.pdf and http://ftp.iza.org/dp13440.pdf).

Abstract: This paper estimates the link between population density and COVID-19 spread and severity in the contiguous United States. To overcome confounding factors, we use two Instrumental Variable (IV) strategies that exploit geological features and historical populations to induce exogenous variation in population density without affecting COVID-19 cases and deaths directly. We find that density has affected the timing of the outbreak, with denser locations more likely to have an early outbreak. However, we find no evidence that population density is positively associated with time-adjusted COVID-19 cases and deaths. Using data from Google, Facebook, the US Census and The County Health Rankings and Roadmaps program, we also investigate several possible mechanisms for our findings. We show that population density can affect the timing of outbreaks through higher connectedness of denser locations. Furthermore, we find that population density is positively associated with proxies for social distancing measures, access to healthcare and income, highlighting the importance of these mediating factors in containing the outbreak.


Work in Progress

Provenzano, Sandro (with Iddawela, Yohan): Subnational Institutions and Local Development in Africa.

Publications (Peer-Reviewed)

Provenzano, Sandro (2017): The Empirics of Hidden Labor Force Dynamics in Germany. In: Journal of Economics and Statistics, Vol. 237(5): 373-406.

Abstract: The unemployment rate is the core indicator when researchers and policy-makers assess the level of underemployment in an economy. However, accumulating evidence suggests that the unemployment rate is biased and underestimates the true level of underemployment. Closing this gap is especially important because the distortion systematically changes along the business cycle and affects the various subgroups of the population differently. Neglecting these effects when setting up policies might flaw its effectiveness and result in unexpected outcomes. Although the existence of these effects is widely agreed upon only little is known about the magnitude of these effects across various subgroups. Using a highly disaggregated dataset from Germany, this study examines the dynamics in labor force participation that go beyond the unemployment rate. Ample evidence is found that the discouraged and the added worker effect significantly affect particular subgroups in the German labor market. In addition, the discouraged and the added worker effect are generally found to be very symmetric in economic upturns and downturns. Moreover, the labor market reforms in Germany between 2003 and 2005 are found to have reduced the discouraged worker effect on average by 25%, leaving the added worker effect unchanged.