CONSERVATION POLICIES AND LABOR MARKETS: Unraveling the effects of national parks on local wages in Costa Rica

CAMP RESOURCES XVII

Laura VillalobosJuan Robalino

Research Questions

1. Is there a gap in the wages received by people living close to national parks with respect to wages in other rural areas?

2. If there is, where are these differences coming from?

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Volcán Tenorio National Park, Costa Rica

Motivation

DEMAND FOR LAND Demand for land : 12% global land area under protection

(Coad et al. 2008), incentives to increase PAs in developing countries: REDD

ENVIRONMENT AND DEVELOPMENT How will these policies affect the well being of individuals in

localities where these policies are implemented? Effects on labor markets

POLICY IMPLICATIONS More informed decisions To whom to address policies?

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Literature review Parks Literature

Parks literature studies environmental effects: deforestation

Previous Socioeconomic StudiesPositive effects on:

Poverty: Costa Rica and Thailand (Andam et al 2009, Sims 2009) Household consumption: Thailand (Sims 2009) Bolivia Yanez (2006)

Our contribution Look at the effect of being close to the entrance Split the data so we can look at the effects for different groups Labor Market: wages

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Methodology

Data

Socioeconomic variables Household surveys (INEC 2000-2007) Dependent Variable: Real wages per hour (log) Gender, age, education level, migrant status, nationality, marital status,

and full-year employment, place of residency two years before, economic activity and occupation

These households are geographically referenced with census tracks

Geographic variables Map from ITCR 2005: National Parks’ map precipitation, slope, road density, distances to: schools, clinics,

coasts, rivers and San José We located visitors’ access to parks (entrances)

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Our treatment and control groups

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Treatment 2:Close to park, near the

entrance

Treatment 3:Close to park, far from

the entrance

Treatment 1:Close to park

Control Group: rural areas, far

from parks

24 National Parks

10% CR of territory

RESULTS8

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Treatment 1: Close to park

OLS Effect 0.0726*** 0.0406*** 0.0643*** 0.0485*** Standard Error [0.011] [0.010] [0.010] [0.009] #obs 24,946 24,916 24,916 24,916 PSM Effect 0.0445*** 0.0622*** 0.0429*** Standard Error [0.012] [0.011] [0.011]

#obs 9,954 9,755 9,632

Naive Workers'

characteristics+ Geographic characteristics

+ Occupation/activity characteristics

Treatment 2 : Close to park AND close to the entrance

OLS Effect 0.1349*** 0.0758*** 0.0758*** 0.0583*** Standard Error [0.013] [0.011] [0.011] [0.011] #obs 23,782 23,752 23,752 23,752 PSM Effect 0.0897*** 0.0903*** 0.0435*** Standard Error [0.014] [0.014] [0.013]

#obs 7,116 6,850 6,764

Treatment 3: Close to park AND far from the entrance

OLS Effect -0.0597*** -0.0350** 0.0258 0.0194 Standard Error [0.018] [0.016] [0.016] [0.016] #obs 22,789 22,761 22,761 22,761 PSM Effect -0.0318 0.0243 0.0227 Standard Error [0.019] [0.022] [0.021]

#obs 3,944 2,942 2,903

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0.0

25.0

5.0

75.1

.125

.15

Fra

ctio

n

0 .1 .2 .3 .4 .5Propensity Score

a. Before Matching

0.0

25.0

5.0

75.1

.125

.15

0 .1 .2 .3 .4Propensity Score

b. After Matching

Solid: Treated; Dashed: Controls

Histogram of Estimated Propensity Matching Score Close to National Park Entrances versus Far from Parks

RESULTS: Gap by groups (close to entrance)

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Robustness Tests: Different distances

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Close to park Close to entrance Far from entrance

5km ring 0.0429*** 0.0435*** 0.0227Standard Error [0.011] [0.013] [0.021]#obs 9,632 6,764 2,9034km ring 0.0451*** 0.0549*** 0.0198Standard Error [0.014] [0.019] [0.023]#obs 5,966 3,173 2,5846km ring 0.0481*** 0.0631*** -0.0154Standard Error [0.010] [0.011] [0.019]#obs 12,592 9,219 3,826

20km Road 18km Road 22km Road5km ring 0.0435*** 0.0641*** 0.0430***Standard Error [0.013] [0.015] [0.011]#obs 6,764 5,209 9,388

Conclusions

1. Wages close to entrances higher compared with the no-park situation

2. No gap far from the entrance3. Shifting activities4. Women are greatly benefitted5. Costa Ricans, and non migrants6. Foreigners, agriculture sector and migrants7. Results lined up with previous studies

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Next Steps

Develop a theoretical model Look at other welfare dimensions

Income distribution Education Infrastructure Income source diversification

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GRACIAS!!!!

lvillalo@catie.ac.cr robalino@catie.ac.cr

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