TY - JOUR
T1 - Spatial Inequality, Poverty and Informality in the Democratic Republic of the Congo
AU - Ibale, Douglas Amuli
AU - Docquier, Frédéric
AU - Iftikhar, Zainab
N1 - Publisher Copyright:
© 2023 Elsevier Ltd
PY - 2024/1
Y1 - 2024/1
N2 - We construct a model incorporating labor market frictions to elucidate income disparities among provinces, sectors (formal vs. informal), and skill categories (skilled vs. unskilled) within the Democratic Republic of the Congo. Through quantitative analysis, we demonstrate the significance of technologies, human capital, infrastructure, and labor market frictions in explaining spatial and intra-province inequalities. Although technological disparities emerge as the primary drivers, our findings underscore the presence of strong “O-ring” inequality patterns. This implies that effective development policies necessitate a mix of coordinated policy measures. When considered in isolation, policies focused on enhancing education, infrastructure, and mitigating labor market frictions could potentially escalate poverty along the intensive margin. Additionally, a development policy disregarding the informal sector also yields counterproductive distributional and poverty outcomes.
AB - We construct a model incorporating labor market frictions to elucidate income disparities among provinces, sectors (formal vs. informal), and skill categories (skilled vs. unskilled) within the Democratic Republic of the Congo. Through quantitative analysis, we demonstrate the significance of technologies, human capital, infrastructure, and labor market frictions in explaining spatial and intra-province inequalities. Although technological disparities emerge as the primary drivers, our findings underscore the presence of strong “O-ring” inequality patterns. This implies that effective development policies necessitate a mix of coordinated policy measures. When considered in isolation, policies focused on enhancing education, infrastructure, and mitigating labor market frictions could potentially escalate poverty along the intensive margin. Additionally, a development policy disregarding the informal sector also yields counterproductive distributional and poverty outcomes.
KW - Inequality
KW - Informality
KW - Labor market frictions
KW - O-ring theory of development
UR - http://www.scopus.com/inward/record.url?scp=85173541840&partnerID=8YFLogxK
U2 - 10.1016/j.worlddev.2023.106411
DO - 10.1016/j.worlddev.2023.106411
M3 - Article
AN - SCOPUS:85173541840
SN - 0305-750X
VL - 173
JO - World Development
JF - World Development
M1 - 106411
ER -