Evidence on Wealth-Improving Effects of Forest Concessions in Liberia

Abstract

The effects of resource-led development on local people’s well-being are disputed. Using four rounds of Demographic and Health Survey data in Liberia, we find that households living closer to active forest concessions achieved a higher asset-based wealth score compared to those living farther away. These wealth-improving effects did not stem, however, from the direct employment effects of concessions. Rather, evidence suggests that indirect general equilibrium effects related to demand for goods and services and increased employment in all-year and nonsubsistence jobs are the main channels. Our study underlines potential wealth-improving effects of resource-led development in poor countries, thereby contributing to the literature on well-being impacts of resource-led development on local people.