1. CONSERVATION POLICIES AND LABOR MARKETS: Unraveling the effects of national parks on local wages in Costa Rica CAMP RESOURCES XVII Laura Villalobos Juan Robalino

2. 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? 2 Volcán Tenorio National Park, Costa Rica

3. 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? 3

4. Literature review Parks Literature Parks literature studies environmental effects: deforestation Previous Socioeconomic Studies Positive 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 4

5. 5 Methodology Policy: to establish a national park Is there significant difference in the wages perceived with and without parks? Non random policy: selection bias on the treatment assignmentControl for observable characteristicsPropensity Score Matching (Rosenbaum and Rubin, 1983) Bias adjustment (Ho et al. 2007)

6. 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) 6

7. Our treatment and control groups 7 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

8. RESULTS 8

9. 9 Treatment 1: Close to park OLS Effect 0.0726***0.0406***0.0643***0.0485*** Standard Error [0.011][0.010] [0.009] #obs 24,94624,916 PSM Effect 0.0445***0.0622***0.0429*** Standard Error [0.012][0.011] #obs 9,9549,7559,632 Naive Workers' characteristics + Geographic characteristics + Occupation/activity characteristics Treatment 2 : Close to park AND close to the entrance OLS Effect 0.1349***0.0758*** 0.0583*** Standard Error [0.013][0.011] #obs 23,78223,752 PSM Effect 0.0897***0.0903***0.0435*** Standard Error [0.014] [0.013] #obs 7,1166,8506,764 Treatment 3: Close to park AND far from the entrance OLS Effect -0.0597***-0.0350**0.02580.0194 Standard Error [0.018][0.016] #obs 22,78922,761 PSM Effect -0.03180.02430.0227 Standard Error [0.019][0.022][0.021] #obs 3,9442,9422,903

10. 10 Histogram of Estimated Propensity Matching Score Close to National Park Entrances versus Far from Parks

11. RESULTS: Gap by groups (close to entrance) 11

12. Robustness Tests: Different distances 12 Close to parkClose to entranceFar from entrance 5km ring0.0429***0.0435***0.0227 Standard Error[0.011][0.013][0.021] #obs9,6326,7642,903 4km ring0.0451***0.0549***0.0198 Standard Error[0.014][0.019][0.023] #obs5,9663,1732,584 6km ring0.0481***0.0631***-0.0154 Standard Error[0.010][0.011][0.019] #obs12,5929,2193,826 20km Road18km Road22km Road 5km ring0.0435***0.0641***0.0430*** Standard Error[0.013][0.015][0.011] #obs6,7645,2099,388

13. Conclusions 1. Wages close to entrances higher compared with the no-park situation 2. No gap far from the entrance 3. Shifting activities 4. Women are greatly benefitted 5. Costa Ricans, and non migrants 6. Foreigners, agriculture sector and migrants 7. Results lined up with previous studies 13

14. Next Steps Develop a theoretical model Look at other welfare dimensions Income distribution Education Infrastructure Income source diversification 14

15. GRACIAS!!!! lvillalo@catie.ac.cr robalino@catie.ac.cr

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