Asian Development Review Volume 37 2020 Number 1 Seasonal Poverty and Seasonal Migration in Asia Ahmed Mushfiq Mobarak and Maira Emy Reimão Wage Differential between Rural Migrant and Urban Workers in the People’s Republic of China Hong Cheng, Dezhuang Hu, and Hongbin Li Household Debt and Delinquency over the Life Cycle Sommarat Chantarat, Atchana Lamsam, Krislert Samphantharak, and Bhumjai Tangsawasdirat Financial Spillovers in Asian Emerging Economies Shin-ichi Fukuda and Mariko Tanaka Green Trade Patterns and the Transboundary Transmission of Greenhouse Gas Emissions Sung Jin Kang The Effects of Formalization on Small and Medium-Sized Enterprise Tax Payments: Panel Evidence from Viet Nam Amadou Boly Measuring the Ecological Effi ciency of Thermal Power Plants: Evidence from Pakistan Imran Qaiser and Theocharis Grigoriadis Understanding Households’ Choice of Cooking Fuels: Evidence from Urban Households in Pakistan Dil Bahadur Rahut, Akhter Ali, Khondoker Abdul Mottaleb, and Jeetendra Prakash Aryal AADEV3701-Cover.inddDEV3701-Cover.indd 1 22/21/20/21/20 99:23:23 AAMM EDITORS YASUYUKI SAWADA, Asian Development Bank NAOYUKI YOSHINO, Asian Development Bank Institute MANAGING EDITOR JESUS FELIPE, Asian Development Bank EDITORIAL TEAM GEMMA ESTHER B. ESTRADA, Asian Development Bank MARIA SUSAN M. TORRES, Asian Development Bank MARY ANN M. MAGADIA, Asian Development Bank EDITORIAL BOARD KYM ANDERSON, University of Adelaide AHMED MUSHFIQ MOBARAK, Yale University PREMA-CHANDRA ATHUKORALA, KEIJIRO OTSUKA, Kobe University Australian National University NANCY QIAN, Northwestern University KLAUS DESMET, Southern Methodist EUSTON QUAH, Nanyang Technological University University JESUS FELIPE, Asian Development Bank KRISLERT SAMPHANTHARAK, University of NEIL FOSTER-MCGREGOR, UNU-MERIT California, San Diego SHIN-ICHI FUKUDA, The University of Tokyo KUNAL SEN, UNU-WIDER and The University SUNG JIN KANG, Korea University of Manchester HONGBIN LI, Stanford University AYA SUZUKI, The University of Tokyo XIN MENG, Australian National University MAISY WONG, University of Pennsylvania HONORARY BOARD Chair: MASATSUGU ASAKAWA, Asian Development Bank MONTEK SINGH AHLUWALIA, Former HAN SEUNG-SOO, UN Secretary-General’s Deputy Chairman of the Planning Special Envoy for Disaster Commission, India Risk Reduction and Water PETER DRYSDALE, Australian National University LAWRENCE SUMMERS, Harvard JUSTIN LIN, Peking University University, John F. Kennedy MARI ELKA PANGESTU, University of Indonesia School of Government The Asian Development Review is a professional journal for disseminating the results of economic and development research relevant to Asia. The journal seeks high-quality papers done in an empirically rigorous way. Articles are intended for readership among economists and social scientists in government, private sector, academia, and international organizations. The views expressed in this publication are those of the authors and do not necessarily refl ect the views and policies of the Asian Development Bank (ADB), the Asian Development Bank Institute (ADBI), the ADB Board of Governors, or the governments they represent. ADB and ADBI do not guarantee the accuracy of the data included in this publication and accept no responsibility for any consequence of their use. 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AADEV3701-Cover.inddDEV3701-Cover.indd 2 22/21/20/21/20 99:23:23 AAMM Asian Development Review Volume 37 • 2020 • Number 1 March 2020 Volume 37 2020 Number 1 Seasonal Poverty and Seasonal Migration in Asia 1 Ahmed Mushfi q Mobarak and Maira Emy Reimão Wage Differential between Rural Migrant and Urban Workers in the People’s Republic of China 43 Hong Cheng, Dezhuang Hu, and Hongbin Li Household Debt and Delinquency over the Life Cycle 61 Sommarat Chantarat, Atchana Lamsam, Krislert Samphantharak, and Bhumjai Tangsawasdirat Financial Spillovers in Asian Emerging Economies 93 Shin-ichi Fukuda and Mariko Tanaka Green Trade Patterns and the Transboundary Transmission of Greenhouse Gas Emissions 119 Sung Jin Kang The Effects of Formalization on Small and Medium-Sized Enterprise Tax Payments: Panel Evidence from Viet Nam 140 Amadou Boly Measuring the Ecological Effi ciency of Thermal Power Plants: Evidence from Pakistan 159 Imran Qaiser and Theocharis Grigoriadis Understanding Household’s Choice of Cooking Fuels: Evidence from Urban Households in Pakistan 185 Dil Bahadur Rahut, Akhter Ali, Khondoker Abdul Mottaleb, and Jeetendra Prakash Aryal Seasonal Poverty and Seasonal Migration in Asia Ahmed Mushfiq Mobarak and Maira Emy Reimão∗ Four in five poor people in the Asia and Pacific region live in rural areas. Crop cycles in agrarian areas create periods of seasonal deprivation, or preharvest “lean seasons,” when work is scarce and skipped meals become frequent. In this paper, we document this phenomenon of seasonal poverty and discuss existing formal mechanisms for coping with it. We then focus on seasonal migration from rural to urban areas as a potential coping strategy and review the evidence on the effects of encouraging seasonal migration through transport subsidies. Over the past 10 years, we have conducted a series of randomized control trials in Bangladesh and Indonesia that provided rural agricultural workers with small migration subsidies to pay for the cost of round-trip travel to nearby areas in search of work. This paper summarizes the lessons learned from this multicountry, multiyear series of seasonal migration trials, the implications of these results for spatial misallocation, urbanization, and growth, and the replicability and relevance of this and other policies encouraging domestic migration more broadly for other areas in the Asia and Pacific region. Keywords: Asia, Bangladesh, migration, seasonal poverty, seasonality JEL codes: J61, O12, O15 I. An Introduction to Seasonal Poverty and Domestic Seasonal Migration In the Asia and Pacific region, poverty is highly concentrated in rural areas. Four out of every five poor people in Asia live in rural areas (Asian Development Bank 2007), and the rural concentration of poverty is even starker within some countries. In Viet Nam and Cambodia, for instance, rural areas account for 90% of all poor people (Balisacan, Edillon, and Piza 2005). In Bangladesh, 35% of rural households are poor, compared to 21% in urban areas. In Pakistan, these figures are 36% and 18%, respectively, and in the Lao People’s Democratic Republic, 29% of ∗Ahmed Mushfiq Mobarak (corresponding author): Professor, Yale University, United States and Deakin University, Australia. E-mail: [email protected]; Maira Emy Reimão (corresponding author): Assistant Professor, University of Florida. E-mail: maira.reimao@ufl.edu. We thank Innovations for Poverty Action Bangladesh, Rangpur Dinajpur Rural Service (RDRS) Bangladesh, and Evidence Action for field and implementation support; and GiveWell and Evidence Action for financial support. We would also like to thank the managing editor and the anonymous referee for helpful comments and suggestions. Mobarak acknowledges support from a Carnegie Fellowship (Grant ID G-F-17-54329). The usual ADB disclaimer applies. Asian Development Review, vol. 37, no. 1, pp. 1–42 © 2020 Asian Development Bank and https://doi.org/10.1162/adev_a_00139 Asian Development Bank Institute. Published under a Creative Commons Attribution 3.0 International (CC BY 3.0) license. 2 Asian Development Review Figure 1. Trends in Rural and Urban Population Distributions by Region Source: Authors’ calculations using World Bank, World Development Indicators data. https://datacatalog.worldbank .org/dataset/world-development-indicators (accessed 7 May 2019). rural households are poor, almost three times the share for urban residents (10%) (World Bank 2018).1 As a subregion, South Asia is the most rural in the world and the only one besides sub-Saharan Africa in which the share of the population living in rural areas still exceeds that for urban areas (Figure 1). A majority of the population in rural areas, coupled with a concentration of poverty in these same places, translates into a large number of poor rural households in relative and absolute terms. Most of these households are engaged in agriculture and are vulnerable to more severe and frequent shocks compared to urban households. In this paper, we discuss the seasonal variation in poverty within rural, agrarian areas and summarize findings from 10 years of research on a strategy many poor rural households use as a way to cope with seasonal deprivation: temporary, within-country seasonal migration. Both pilot and larger-scale interventions conducted in Bangladesh and Indonesia reveal 1Based on the national poverty lines. Seasonal Poverty and Seasonal Migration in Asia 3 that policies that encourage seasonal migration by providing transport subsidies and lowering