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What Drives Corruption? Evidence from North African Firms

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  • Clara Delavallade

    ()
    (SALDRU, School of Economics, University of Cape Town)

Abstract

We estimate the effect of the child support grant on mothers' labour supply in South Africa. Identification is based on the use of specific samples, such as black mothers, aged 20 to 45, whose youngest child is aged within 2 years of the age eligibility cut-off, and unanticipated variation over the years in the age eligibility cut-off. Balancing tests across the age cut-o s are used to show that there are no signi cant di erences between mothers of eligible and ineligible children in the samples used, over the years. Different techniques are used to estimate the effect of the child support grant from many angles, including simple OLS as a bench mark, a difference in difference estimator, using appropriately constructed treatment and control groups, instrumental variables estimates, and descriptive analysis. The effect of having an age eligible child is large. Mothers who become recipients in their twenties see an average increase in employment probability of 15%, and in labour force participation of 9%. Many robustness and specification checks are used, including placebo regressions in the pre-treatment years, to ensure the estimated effect is not due to age or another variable.

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Bibliographic Info

Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU Working Papers with number 68.

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Length: 45 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:ldr:wpaper:68

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Keywords: Supply of Corruption; Administrative Corruption; State Capture; Tax Evasion; Competitiveness; North Africa;

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References

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  1. Vito Tanzi, 1998. "Corruption Around the World," IMF Working Papers 98/63, International Monetary Fund.
  2. Laszlo Goerke, 2006. "Bureaucratic Corruption and Profit Tax Evasion," CESifo Working Paper Series 1666, CESifo Group Munich.
  3. Johnson, Simon & McMillan, John & Woodruff, Christopher, 1999. "Why do Firms Hide? Bribes and Unofficial Activity After Communism," CEPR Discussion Papers 2105, C.E.P.R. Discussion Papers.
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  8. Hindriks, J. & Keen, M. & Muthoo, A., 1996. "Corruption, Extortion and Evasion," Papers 179, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  9. Alberto Ades & Rafael Di Tella, 1997. "The New Economics of Corruption: a Survey and Some New Results," Political Studies, Political Studies Association, vol. 45(3), pages 496-515.
  10. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
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  16. Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much? Evidence from a cross-section of firms," Seminar Papers 713, Stockholm University, Institute for International Economic Studies.
  17. Bernard Gauthier & Jean-Paul Azam & Jonathan Goyette, 2004. "The Effect of Fiscal Policy and Corruption Control Mechanisms on Firm Growth and Social Welfare: Theory and Evidence," Cahiers de recherche 04-10, HEC Montréal, Institut d'économie appliquée.
  18. Gauthier, Bernard & Reinikka, Ritva, 2001. "Shifting tax burdens through exemptions and evasion - an empirical investigation of Uganda," Policy Research Working Paper Series 2735, The World Bank.
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Cited by:
  1. Pieroni, Luca & d'Agostino, Giorgio & Bartolucci, Francesco, 2013. "Identifying corruption through latent class models: evidence from transition economies," MPRA Paper 43981, University Library of Munich, Germany.

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