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Using linked employer-worker panel data from Myanmar, we estimate wage returns to workplace training. First, we document a low prevalence of training in manufacturing enterprises. Second, we find the wage premium associated with training of about 7%, which is in the range found in other South-East Asian countries. Third, we show that workplace training is offered selectively to workers and when this is the case, the wage gap between trained and untrained workers doubles. Fourth, we find that previous training does not contribute to higher present wage, which indicates low transferability of workplace trainingin Myanmar. While this setup may benefit employers, workers get short-lived benefits from training, which do not carry throughout the working life. Fifth, we find a convex profile of the returns to training with respect to education and that specific industries such as food, apparel and printing lend themselves more to the benefits from training. Considering the wage return as a lower bound of productivity gains from training, our results suggest that government support of workplace training programs could help increase performance of the manufacturing sector in Myanmar.

We look into the relationship between business practices and enterprise productivity using panel data with matched employer and employee information from Myanmar. The data show that micro, small, and medium-size enterprises in Myanmar typically do only a few modern business practices. Even so, through estimates of value-added functions and labour demand relations we find a positive and economically important association between business practices and productivity. The results are confirmed when we utilize employer-employee information to estimate Mincer-type wage regressions. In combination, the value-added functions and the Mincer regressions show that at least half of the productivity gain from improved business practices stems from selection effects of employment of more productive workers. This sorting channel is important to keep in mind when supporting enterprises in Myanmar's manufacturing sector through entrepreneurial training activities. While our results indicate that implementation of more structured business practices could be a key ingredient of a private sector development strategy in Myanmar, the full effect of such a strategy may take time to materialize. Moreover, entrepreneurial training should be accompanied by labour market initiatives aimed at improving productive matches of employers and employees.

The quality of people's jobs is a fundamental determinant of their well-being, and judging the state of a labour market on the basis of job quantity alone delivers a very partial picture. This study is an attempt to place the spotlight on the working conditions of workers in the Myanmar manufacturing sector. Using a model of job demands and job resources, we focus on the balance between different stress factors and the support workers get. We find that a large fraction of workers face severe pressures. In particular, nearly one half faces severe time pressure; nearly a quarter is exposed to health hazards, such as loud noises, carrying heavy loads, and operating in uncomfortable or painful positions. These factors are often not met with adequate support from the firm. Male workers and those with lower levels of education are most exposed to occupational risks. Contrary to the narrative that a trade-off might exist between firm competitiveness and job quality, we find that labour productivity is higher in firms where working conditions are better.

Synthetic pesticides can be detrimental to the health of humans, particularly when handled inappropriately, which is often the case in developing countries. We investigate to what extent using personal protective equipment (PPE) during pesticide application can mitigate the detrimental health effects of pesticides. Our empirical analysis is based on data from smallholder cotton farmers in Benin and includes both conventional cotton farmers who extensively use synthetic pesticides and organic cotton farmers who are only allowed to use bio-pesticides. Using per-capita health expenditure as proxy for the health of the farmers, our results show that conventional cotton farmers generally have significantly poorer health than organic cotton farmers because most conventional farmers wear insufficient PPE when spraying pesticides. While PPE use vastly improves the health of conventional farmers, we do not find a statistically significant effect on the health of organic cotton farmers, which could indicate that bio-pesticides have much smaller detrimental health effects than synthetic pesticides. However, conventional farmers have a similar state of health as organic farmers when they use four or more PPE items. Hence, measures that encourage conventional cotton farmers to use more PPE during pesticide spraying or to adopt organic farming would substantially improve these farmers’ health.

Synthetic pesticides can be detrimental to the health of humans, particularly when handled inappropriately, which is often the case in developing countries. We investigate to what extent using personal protective equipment (PPE) during pesticide application can mitigate the detrimental health effects of pesticides. Our empirical analysis is based on data from smallholder cotton farmers in Benin and includes both conventional cotton farmers who extensively use synthetic pesticides and organic cotton farmers who are only allowed to use bio-pesticides. Using per-capita health expenditure as proxy for the health of the farmers, our results show that conventional cotton farmers generally have significantly poorer health than organic cotton farmers because most conventional farmers wear insufficient PPE when spraying pesticides. While PPE use vastly improves the health of conventional farmers, we do not find a statistically significant effect on the health of organic cotton farmers, which could indicate that bio-pesticides have much smaller detrimental health effects than synthetic pesticides. However, conventional farmers have a similar state of health as organic farmers when they use four or more PPE items. Hence, measures that encourage conventional cotton farmers to use more PPE during pesticide spraying or to adopt organic farming would substantially improve these farmers' health.

Session ID 4816, Paper# 19892

Employer-provided benefits are independent elements in the compensation packages that make up firms' payment strategies. Such benefits are aimed at attracting and retaining preferred employees and improving incentives. In Myanmar, there are two employee benefit systems: (1) an unregulated traditional system in which firms offer their employees in-kind benefits such as meals and accommodation; and (2) a modern mandatory system in which firms are required by law to offer payment schemes such as payment-while-absent and compensation for accidents. Using a survey of matched employers and employees in the manufacturing sector in Myanmar, we identify firms and workers that supply and demand the two types of employee benefits. We show that traditional benefits are widely supplied and demanded, while modern benefits are supplied by fewer firms and provided to fewer workers. We analyse the relative importance of a range of observable firm and worker attributes that may be associated with the supply and demand for the benefits. We find that firms that provide accommodation appear to attract young, unmarried, uneducated workers who are often migrants, and who, on average, receive lower wages compared to similar workers who do not receive equal in-kind payments. Large firms are more likely to offer the modern benefits and highly educated workers are more likely to demand them. Moreover, workers who receive modern benefits tend to stay longer with the firm and the benefit appears not to have an adverse impact on their wage level. Our findings indicate that both types of benefits contribute to sorting in the labour market. Therefore, both must be considered when labour laws are amended. Moreover, if increased minimum wages are accompanied by reduced provision of traditional in-kind benefits to low-wage workers, then there is a real risk that inequality in consumption will increase even though wage inequality decreases.

This chapter investigates the scope for international private standards to play a role in reducing business risk among the small and medium enterprises in Vietnam. Business risk is measured as variability in revenue, variability in customer base, practice of making informal payments, and temporary firm closure. The results show lower levels of business risk among certified firms, especially for firms in the middle deciles of the risk distribution. This finding is robust to the use of different business risk measures. Certification also correlates negatively with risk for technologically advanced firms, as well as firms located in rural areas and northern provinces of Vietnam. The results suggest that firms could find protection from business downsides by investing in internationally recognized quality management tools.

Using a representative sample of more than 5,000 Vietnamese enterprises, we explore the firm-level productivity effects of corporate social responsibility (CSR). The data enables us to create 12 quantitative CSR measures, which can be grouped into two broader categories related to management and community-based CSR initiatives. We find a positive relationship between adoption of CSR initiatives and firm efficiency, and reveal that the impact is stronger for firms in non-competitive industries. Moreover, we show that local community focused CSR initiatives drive the aggregate effect. This suggests that socially responsible actions by firms are likely to pay-off when stakeholder engagement has a localised focus. We provide evidence of reciprocity by showing that employees accept a lower share of additionally generated value-added (controlling for productivity differences) in exchange for working in a company that signals ‘good’ corporate values.

We use the case of the timber industry in Myanmar to analyse how national regulatory frameworks and international ecological discourses affect forest management and small businesses. The state plays two roles in the timber industry in Myanmar: it is the main producer and legal source of raw timber for the private sector; and it regulates timber extraction and the legality of operation of private sector firms. The state seeks a balance between forest conservation as a public policy objective and providing enough raw timber for the private sector. The implications of this for the private sector are twofold. The strict regulatory framework increases operational costs, as multiple licences and permits are required. And the state-controlled supply of raw materials results in inefficiencies, such as shortage and high raw timber prices. Under these conditions, the smallholder wood industry in Myanmar is at risk of stagnating at best, if not disappearing.

Using data from a new survey of small and medium-sized enterprises in Myanmar, we analyse enterprise demand for formal credit and the extent to which they are constrained in the formal credit market. We account for firms self-selecting out of the credit market in Myanmar. Our data contain information about individual firm owner/manager gender, managerial capacity, and attitude towards risk. We use this information to test whether the allocation of scarce loanable funds is systematically associated with these attributes. It emerges that managerial capacity and risk attitudes are positively associated with the probability of firms demanding credit, while firms with female owner/managers have lower probabilities of demanding credit. On the supply side we find no discernible links to any of the three traits, whereas firm's size and age have substantial impacts on the probability of obtaining credit. As such, the allocation of credit could improve if banks were better at identifying managers' managerial capacity and personality traits.

This study investigates the role of owners' personal preferences and behaviour in determining the success of micro, small and medium-sized enterprises using a lab-in-the-field experiment with small-business owners in Myanmar. The study is a complement to a 2017 quantitative survey conducted within the project 'Towards inclusive development in Myanmar'. The lab-in-the-field experiment comprised five behavioural games: dictator, bargaining, trust, public goods, and risk-preference elicitation. It was conducted in 12 townships in 11 states and regions of Myanmar in September and October 2018. The sample comprised 397 enterprise owners, managers, and employees. This study has a twofold contribution. First, we present for the first time the behavioural profile of small-business owners in Myanmar. Second, we link the results of different behavioural games to the main participant and enterprise characteristics. Finally, we reflect on the implications for enterprise performance and for policy as it relates to micro, small and medium-sized enterprises.