New Economics Papers
on Central and South America
Issue of 2010‒05‒02
three papers chosen by

  1. The Moving Middle: Migration, Place Premiums and Human Development in Bolivia By George Gray Molina; Ernesto Yañez
  2. Fiscal policy in Colombia and a prospective analysis after the 2008 financial crisis By Ignacio Lozano
  3. A Balance of Pension Fund Infrastructure Investments: The Experience in Latin America By Javier Alonso; Jasmina Bjeletic; Carlos Herrera; Soledad Hormazabal; Ivonne Ordonez; Carolina Romero; David Tuesta

  1. By: George Gray Molina (Human Development Report Office, United Nations Development Programme); Ernesto Yañez (Central Bank of Bolivia)
    Abstract: Over half of Bolivian heads of household are lifetime migrants. This paper looks at the long term impact of internal migration over human development in Bolivia. Three issues frame these effects. First, twenty five years of rural to urban migration have transformed the demographic profile of Bolivian society. The new middle third is younger, more bilingual and better educated, with more access to social services than in the past. The poorest of the poor, however, did not migrate to the extent of the non-poor. Second, urban workers make approximately four times as much wages as identical workers in rural areas, controlling for age, ethnicity, and years of schooling. Two caveats dampen this place premium effect: schooling quality and informal insurance mechanisms that make migration more costly. Third, increases in human development can be associated to an “urbanization dividend” that made social services more accessible to first and second generation migrants over a twenty-five year period. Future increases in human development, however, are likely to depend on providing quality services and expanding socials services to the rural poor, rather on gains from urbanization. The key policy challenges of the future include both an expansion of services to the poorest of the poor in rural areas and breaking down discrimination barriers against women and indigenous people in urban labor markets.
    Keywords: Migration, human development, poverty, employment, schooling
    JEL: J11 O15 I32 F22
    Date: 2009–09
  2. By: Ignacio Lozano
    Abstract: The purpose of this study is twofold: First, it provides an empirical characterization of fiscal policy in Colombia over the last decades, by assessing the three most relevant macroeconomic factors: the behavior of fiscal policy over the business cycle; whether it has been coherent with the long-term debt sustainability; and, whether it has been a significant source of macroeconomic volatility. The results are compared internationally. Second, it evaluates the fiscal stance of the Colombian authorities during the 2008 global financial crisis, and examines the adoption of a fiscal rule as an appropriate tool to manage public finances beyond the recovery phase.
    Date: 2010–04–20
  3. By: Javier Alonso; Jasmina Bjeletic; Carlos Herrera; Soledad Hormazabal; Ivonne Ordonez; Carolina Romero; David Tuesta
    Abstract: The purpose of this study is to create a detailed account of what Latin American pension funds have meant to the financing of infrastructures, with the purpose of serving as a basis for reflection regarding potential improvements to optimize the portfolios of pension funds and accomplish a greater contribution of retirement savings to the evelopment of countries. The involvement of pension funds in infrastructure is a recommended strategy for managed portfolios based on the criteria establishing that they should be an attractive investment for future pensions, and thus must reach an adequate balance between return and risk. Likewise, given the importance of infrastructure in development, we see that a more significant involvement of pension funds also constitutes a desirable goal because it implies not only greater private benefits for owners of retirement savings (affiliates), but also for society as a whole. In order to perform a complete analysis, we study the evolution and traditional forms of participation in the financing of infrastructure, identifying strengths as well as weaknesses to be corrected. Existing processes are also described, which have assisted to a greater or lesser extent in the involvement of the private sector through concession laws in these countries. Finally, we discuss the different tools that the current systems depend on which allow the involvement of pension funds, as well as how these processes have been carried out up to this moment and the opportunities foreseen.
    Date: 2010–02

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