New Economics Papers
on Central and South America
Issue of 2008‒07‒05
five papers chosen by

  1. Economic Geography and Wages in Brazil: Evidence from Micro-Data By Thibault Fally; Rodrigo Paillacar; Cristina Terra
  2. Ideas and Growth By Robert E. Lucas, Jr.
  3. Exclusionary Policies in Urban Development, How under-servicing of migrant households affects the growth and composition of Brazilian cities By Leo Feler; J. Vernon Henderson
  4. Polarización de ingresos laborales. Argentina 1992 – 2006 By Mariana Viollaz
  5. Is firm performance driven by fairness or tournaments? Evidence from Brazilian matched data By Luiz A. Esteves; Pedro S. Martins

  1. By: Thibault Fally (PSE – Paris School of Economics); Rodrigo Paillacar (CES – Université de Paris 1); Cristina Terra (THEMA – Université de Cergy-Pontoise, EPGE – Fundação Getulio Vargas)
    Abstract: This paper estimates the impact of market and supplier access on wage disparities across Brazilian states, incorporating the control of individual characteristics to the new economic geography methodology. We estimate market and supplier access disaggregated by industry, and we compute separately access to international and internal markets. We find a strong correlation between market access and wages differentials, even after controlling for individual characteristics, firm productivity, the source of market access (international, national or local), and using instrumental variables. Furthermore, market access turns out to be more important than supplier access.
    Date: 2008
  2. By: Robert E. Lucas, Jr.
    Abstract: This paper introduces and partially develops a new model of endogenous technological change, viewed as the product of a class of problem-solving producers. The model, based on earlier work by Eaton and Kortum, is built up from the premise that all knowledge resides in the head of some individual person and the knowledge of a firm, or economy, or any group of people is simply the knowledge of the individuals that comprise it. The model is applied to an economy with a cohort structure. A calibration the model using cross-section earnings data, in addition to aggregate GDP growth, is considered.
    JEL: O0
    Date: 2008–06
  3. By: Leo Feler; J. Vernon Henderson
    Abstract: Localities in developed countries often restrict construction and population growth through regulations governing land usage, lot sizes, building heights, and frontage requirements. In developing countries, such policies are less effective because of the existence of unregulated, informal housing markets. Cities in developing countries that seek to limit in-migration must also discourage entry into informal housing by providing low levels of public services to this sector. In this paper, we analyze the causes of slums, using data from Brazilian urban areas. We develop a model of the decisions that localities make to affect in-migration and find evidence that localities act strategically. Richer and larger localities in an urban area reduce provision of water and sewerage connections to the smaller houses in which poorer migrants would live to discourage the in-migration of these poorer migrants and deflect them to other localities. We also find that under-servicing smaller houses reduces the population growth rate of localities. Not only does it reduce the in-migration of low-educated households, it seems that, because of negative externalities, such under-servicing also reduces the growth rate of higher-educated households.
    JEL: D7 H7 J6 O15 O54 R5
    Date: 2008–06
  4. By: Mariana Viollaz (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) - Universidad Nacional de La Plata)
    Abstract: Este trabajo presenta y discute un conjunto de estadísticas que caracterizan el nivel y la evolución de la polarización laboral en Argentina entre los años 1992 y 2006. Los resultados obtenidos sugieren que el nivel de polarización ha atravesado una primera etapa de crecimiento para luego iniciar un proceso de reducción. Los retornos a la educación se muestran como la fuerza fundamental para explicar la evolución de la polarización en el mercado de trabajo. La obtención de una distribución más igualitaria del capital humano parece ser el camino a seguir para alcanzar un mercado laboral menos polarizado.
    Keywords: polarización, mercado laboral, Argentina
    JEL: D3 D6 I3 J3
    Date: 2008–06
  5. By: Luiz A. Esteves; Pedro S. Martins
    Abstract: Theory and evidence are ambiguous about the effect of within-firm wage inequality on firm performance. This paper tests empirically this relationship drawing on detailed Brazilian matched employer-employee panel data, considering alternative measures of inequality and performance and different estimation methods. We find overwhelming evidence of a positive relationship between wage dispersion and firm performance when using cross-section analysis, especially in manufacturing. However, this relationship is weakened when controlling for firm time-invariant heterogeneity.
    Keywords: Tournaments, Incentives, Equity, Wage Dispersion
    JEL: D31 J31 J33 J41 J53
    Date: 2008–07

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