## Andinet Woldemichael

### African Development Bank Group

I am a Principal Research Economist at the African Development Bank, Research Department. I have more than ten years of experience in economic policy research working in academia, Think-Tank, and development finance institutions. My journal articles are published at World Bank Economic Review, Journal of African Economies, and African Development Review; and as working papers at the World Bank, IMF, African Development Bank, and IZA. My research interest spans several topics, including jobs and labor markets, human capital, gender, access to finance and entrepreneurship, firm survival/dynamism, productivity and structural transformation, climate change, and risk and insurance.

I received my PhD in Economics from Georgia State University and completed a Postdoctoral Research Fellowship at the University of Maryland. I am passionate about anything data, including macroeconomic, enterprise surveys, household surveys, big-data such as Online Search and Social Media, GSI and Satellite Imagery. I use different programming languages (Matlab, R, Python and Stata) to play with data and perform econometric estimations.

### Interests

• Labor Economics
• Health Economics
• Applied Econometrics
• Bayesian Econometrics
• Agriculture
• Innovation and firm-level dynamics

### Education

• PhD in Economics, 2013

Georgia State University

• MSc in Economics, 2006

• BA in Economics, 2003

# Journal Publications

### Food Inflation and Child Health

Malnutrition is one of the most important early life shocks that have lasting effects on health. An often neglected cause of malnutrition and hidden hunger is high food inflation, particularly in developing countries. This study uses the Ethiopian Demographic and Health Survey data, matching each child’s early life age in months from the time of conception with the corresponding local monthly food price data to examine the medium-term and long-term impacts of exposure to food inflation during the critical early life window–pregnancy and infancy–on child health. Exposure to one percentage point higher month-to-month food inflation while in-utero increases the risk of under-five stunting by 0.95 percent. The impacts are heterogeneous depending on the month of exposure, highlighting the complicated biological mechanisms through which malnutrition during early life affects human growth. The results are robust to various empirical specifications and potential biases arising from survivor sample selection and age misreporting.

### Can Urbanisation Improve Household Welfare? Evidence From Ethiopia

Despite evolving evidence that Africa is experiencing urbanisation in a different way, empirical evaluations of the welfare implications of urban-development programs in Africa remain scant. We investigate the welfare implications of recent urbanisation processes in Ethiopia using household-level longitudinal data and satellite-based nightlight intensity. We also examine the impact of urban growth on the composition of household consumption and welfare. We employ temporal and spatial variations in nightlight intensity to capture urban expansion and growth. Controlling for time-invariant unobserved heterogeneity across individuals and localities, we find that urbanisation, as measured by nightlight intensity, is associated with significant welfare improvement. We find that tripling existing average nightlight intensity in a village is associated with a 42–46% improvement in household welfare. Urbanisation is also associated with a significant increase in the share of non-food consumption, which is a good measure of overall welfare and poverty. In addition, we find significant heterogeneity in urban expansion across major towns and small towns. Urban expansion in rural areas and small towns appears more impactful than similar expansion in major cities. Finally, quantile regression results suggest that better-off households are likely to benefit more from urban expansion, which may translate into higher inequality across households or communities. Our results can inform public policy debates on the consequences and implications of urban expansion in Africa.

### Does Inflation Kill? Food Price Inflation and Child Survival

Since the dawn of the new millennium, significant stride has been made in terms of reducing under-five mortality. While advances in medicine, such as vaccination, considerably reduced communicable diseases, many countries in African, Latin American and elsewhere in the less-developed world continue to grapple with food price hikes that cause hunger and food shortages. The impacts of such food price hikes during the critical periods of early life-the period between inception and the first 1,000 days after birth-on child survival has not been well understood. Using a uniquely constructed data from Ethiopia that combines the Demographic and Health Survey and high-frequency (monthly) food retail prices over 10 years period, we examine the impacts of in-utero exposure to food price inflation on child survival. Follow survival events since inception, we estimate the causal impacts of exposure to malnutrition during each month of early life. The results show that exposure to 10% increase in month-on-month staple food price inflation during in-utero increases childhood mortality by up to 0.03%. Our analysis also uncovers substantial heterogeneity in the effects of early life malnutrition on child mortality depending on specific month of exposure.

### An Empirical Analysis of Health Shocks and Informal Risk Sharing Networks

This paper investigates informal risk sharing against health shocks in the presence of multiple risk sharing networks. We use a panel household survey data from rural Ethiopia that covers the period 1994–2004. We find that neither short-term nor long-term health shocks are insured through transfers from networks such as friends, neighbors, and members of informal associations. However, networks related along bloodline such as extended family members provide assistance when health shocks are long-term such as disabilities. The results show that these networks strategically complement planned component of their transfers which are made on a regular basis such as remittance, entitlement, or chop money (small cash sums for household expenses). Moreover, we find significant history dependence in transfers from not only genetically distant networks but also extended family members as well as formal institutions, which seems to discourage dependency. Finally, the findings suggest significant heterogeneity in transfers.

### Sequential therapies and the cost-effectiveness of treating metastatic colon cancer patients

BACKGROUND–Technological advances in colon cancer treatment have significantly increased survival outcomes among metastatic patients. With different chemotherapy and biologic regimens administered in first, second, and subsequent lines of treatments, costs and survival outcomes vary considerably. However, there is little evidence on how the type of regime administered in the first line of treatment affects the costs and survival outcomes of the second line of treatment. OBJECTIVE–To examine how the cost-effectiveness of second-line treatment for elderly metastatic colon cancer patients varies by the type of regimen administered in the first line of treatment. METHODS–The Surveillance, Epidemiology and End Results (SEER) cancer registry was used, which is linked with the Medicare claims database, to study elderly metastatic patients diagnosed between 2003 and 2009. Average survivals are estimated using the robust nonparametric Kaplan-Meier method. Selection bias was adjusted for using inverse probability weighting and censoring using robust nonparametric methods of estimating the average of total health care costs. RESULTS–Mean incremental survival was 6.7 months (95% CI = 5.7-7.7) for patients who received second-line treatment compared with those receiving only first-line treatment. However, the mean incremental survival varied between 4 months (95% CI = 0.0-7.3) and 9 months (95% CI = 6.5-11.0) depending on whether fluorouracil with or without leucovorin, irinotecan, oxaliplatin, or other agents were administered in first-line treatment. The mean incremental cost associated with receipt of second-line treatment was $60,231 (95% CI = 52,461-64,198) but ranged between $55,368 (95% CI = $48,294-$61,290) and $71,211 (95% CI = $43,168-$99,667), depending on the type of regimen administered in the first-line treatment. Combining survival benefits and costs, the incremental cost-effectiveness ratios per life-year gained associated with the receipt of second-line treatment were $97,368 (95% CI = $80,415-$117,965), $110,621 (95% CI = $89,560-$133,961), $130,689 (95% CI = $101,459-$171,918), and $247,951 (95% CI = $112,629- \$808,976) when irinotican, fluorouracil/leucovorin, oxaliplatin, and “other” combinations were, respectively, administered in first-line treatment. In addition, the results varied depending on which statistical method was used. CONCLUSIONS–When therapies are administered in a sequential manner, the cost-effectiveness of the second line of therapy depends on what was administered in the first line of therapy.

# Working Papers

### Mom-and-Pop Jobs: Wage Subsidies and Youth Unemployment in South Africa

Youth unemployment has been increasing in Africa. It is particularly pervasive in South Africa, where the youth unemployment rate is persistently high, posing considerable socioeconomic challenges. In response, the government introduced the Employment Tax Incentive (ETI) program in 2014 to boost employment opportunities for youth. This study examines the extent to which the ETI program increases youth employment by looking at hiring and separation rates. The study also examines whether the program displaces non-youth workers—one of the main concerns among unions in South Africa. We take advantage of detailed employee-firm matched panel tax data from the National Treasury and the Revenue Service covering the (2011-2018) period and estimate a Difference-in-Difference model. We find that the program is associated with a 0.003 probability points higher of hiring youth in the 18-24 age bracket. However, we find a significant reduction in both hiring and separation rates for workers in the 24-29 and 30-44 age groups, suggesting some displacement effects not only on at-risk non-youth workers but also youth in the older age bracket. We also find that the overall positive effects of hiring rates of younger workers are driven by microenterprises, typically referred to as mom-and-pop businesses. Overall, the paper uncovers important heterogeneity in the impacts that could inform policymakers to re-configure the program for better targeting.

### Winners and Losers from COVID-19 : Global Evidence from Google Search

As COVID-19 continues to wreak havoc across the world, researchers are attempting to quantify the economic fallout from the pandemic as it continues to unfold. Estimating the economic impacts of a prevailing pandemic is fraught with uncertainties about the epidemiology of the disease and the breadth of disruption of economic activities. This paper employs historical and near real-time Google search data to estimate the immediate impacts of COVID-19 on demand for selected services across 182 countries. The analysis exploits the temporal and spatial variations in the spread of the virus and finds that demand for services that require face-to-face interaction, such as hotels, restaurants and retail trade, has substantially contracted. In contrast, demand for services that can be performed remotely or provide solutions to the challenges of reduced personal interactions, such as information and communications technology (ICT), and deliveries, has increased significantly. In a span of three months, the pandemic has resulted in a 63 percent reduction in demand for hotels, while increasing demand for ICT by a comparable rate. The impacts appear to be driven by supply contractions, due to social distancing and lockdown measures, and demand shocks as consumers shelter in place, with the latter dominating for most services. The magnitude of the changes in demand varies considerably with government responses to the pandemic.

### Human Capital, Productivity, and Structural Transformation

This paper revisits the role of investment in human capital in closing the productivity gap, boosting labor productivity growth, speeding the rate of structural transformation, and ultimately creating high-quality jobs in Africa. Analysis of detailed sector-level historical data on employment, value added, and human capital shows that investment in human capital is significantly and positively associated with the rate at which countries close the labor productivity gap between agriculture and the rest of the economy. Investment in human capital also significantly increases labor productivity within sectors and the speed at which labor is reallocated from low-productivity to high-productivity employment. In line with other research on this topic, the findings from this study underscore that Africa is ready to benefit significantly from improving human capital through investments in education, health care, and nutrition.

### The Cost of Inaction: Obstacles and Lost Jobs in Africa

Africa has no shortage of labor supply. But it lacks high-productivity job opportunities in high- productivity nonagricultural sectors. Its relatively rapid and sustained economic growth over the past decade did not yield enough jobs for the growing wave of jobs seekers-mainly youth in urban areas. Nonagricultural employment continues to be dominated by the informal sector, where wages are low, benefits nonexistent, workplace safety absent, and labor exploitation common. With significant demographic change expected to bring pressure on African labor markets, the urgency of creating high-quality and remunerative jobs at a much faster pace is not only an economic issue but a political and social one. This report investigates the extent to which failure to remove business constraints hinders actual and potential job growth. In particular, using World Bank Enterprise Survey (ES) panel data, the report quantifies the number of actual jobs lost due to the impact of business obstacles on firm survival and employment growth.

### Labor Market Flexibility and Jobs in Selected African Countries

Africa enjoyed relatively fast economic growth over the past decade and a half. The sustained growth undoubtedly kindled hopes for a prosperous Africa. However, poverty and inequality remained pervasive. In 2013, poverty was still widespread, and the rate was high in Sub-Saharan Africa-41 percent, compared with the world average of just 10.7 percent and the South Asia average of 15 percent. While the intensity of poverty, measured by the poverty gap, declined from 26 percent to 16 percent during the same period, it is still high compared with the world average of 3.2 percent. Moreover, the benefits of growth were not shared widely, and inequality was widespread and persistent. The median Gini coefficient measuring inequality in Africa was 0.36 in 2014, and 7 percent of total income goes to the bottom 20 percent of the income distribution.

# Policy Briefs

### Long-run impacts of the conflict in Ukraine on food security in Africa

Many African countries heavily rely on imports of agricultural commodities and agricultural inputs from Ukraine and Russia, for example wheat, other grains, and fertilizer. Russia’s invasion of Ukraine has disrupted global access to grains due to reduced production, exports, and increased trade costs. This policy brief investigates the possible long-term consequences of the conflict on food security in Africa. We use a long-run general equilibrium trade model and study three scenarios that may evolve as a consequence of the conflict ending exports of Ukrainian wheat and other cereals for food production, such as corn or sorghum; Russia’s potential ban on exports of grains and fertilizers; and the impact of increased trade costs due to disrupted trade routes in the Black Sea. The model simulations show the conflict will severely compromise food security in Africa. We document important cross-country heterogeneity in the severity of impacts.

### Dubai's Economic Transformation: Lessons for Some African Countries

In this paper, we review Dubai’s unique economic transformation model, which has been driven by bold government interventions in globally competitive markets. We highlight diversification strategies and policies that Dubai implemented throughout its transformation. We discuss the respective roles of leadership, governance structure, the public sector, and the business environment and regulations, which were instrumental in rapidly transforming the economy. Finally, with some caveats, we provide some policy lessons for African countries.

### Africa’s Agricultural Transformation:Identifying Priority Areas and Overcoming Challenges

Africa has achieved unprecedented economic growth over the past two decades and is experiencing its longest period of sustained economic growth since the 1960s. The growth rate has not only accelerated, but also spread geographically…

### Transforming Africa’s Agriculture through Agro-Industrialization

Economic growth in Africa has been accelerating for the past two decades. The continent enjoyed sustained economic growth registering an annual average growth of more than 5 percent….

# Posts|Data Corner

### The "Missing Women" in African Labor Markets

This brief piece assesses labor market participation of women in Africa. It focuses on estimating the number of women who would be participating in the labor market had the relative Labor Force Paricapation rates for women and men were in par with the levels in advanced countries.

### Closing the Gender Gap in African Labor Markets is Good Economics

While progress had been made in gender equality in global labor markets thanks to economic and social advancement, gender inclusivness is lagging in Africa due to high poverty and gender discrimination.