Mahdi Majbouri

Abstract: Conscription is a popular method of army recruitment in developing countries. This study examines the largely under-researched issues of military service by looking at an unintended consequence of a military service exemption law and answering a principal question: is there a fear of conscription among the youth? It uses a discontinuity in the military service law in an under-studied country, Iran, and offers causal evidence that disutility from conscription entices young men to go to college by 14 percentage points (24%) more. Several robustness checks are employed to ensure that nothing other than the exemption law drives the results. Since sole sons and their households go through ordeals to increase their chances of going to college, the disutility of the conscription is substantial (for example, an applicant spends about 1.5 times per capita GDP on average in one year to prepare for the national university entrance exam.) Potential policies to address this inefficiency in developing countries are discussed.

Abstract: Economists have long advocated replacing inefficient natural resource subsidies, such as those for fossil fuels, with targeted cash transfers. However, it is challenging to calculate the size of cash transfers that compensate for the economy-wide rise in prices due to the reduction in these subsidies. Current methods rely on input-output matrices that are often difficult to obtain accurately in developing economies, leading to potentially gross policy errors. This paper presents a simpler, more precise, data-efficient approach, feasible in developing economies, to determine the size of cash transfers and illustrates its application with publicly available data from a country.