New Economics Papers
on Central and South America
Issue of 2012‒01‒03
ten papers chosen by

  1. Lessons Learned from Implementing the Sustainable Development Program in the State of Acre in Brazil By Cristina Dengel; John Horton
  2. Educational upgrading and returns to skills in Latin America : evidence from a supply-demand framework, 1990-2010 By Gasparini, Leonardo; Galiani, Sebastian; Cruces, Guillermo; Acosta, Pablo
  3. Effects of innovation on employment in Latin America By Crespi, Gustavo; Tacsir, Ezequiel
  4. Do Cash Transfers Improve Birth Outcomes? Evidence from Matched Vital Statistics, Social Security and Program Data By Verónica Amarante; Marco Manacorda; Edward Miguel; Andrea Vigorito
  5. School Attendance, Child Labor and Cash Transfers. An Impact Evaluation of PANES By Veronica Amarante; Mery Ferrando; Andrea Vigorito
  6. Intra-generational mobility and repeated cross-sections : a three-country validation exercise By Cruces, Guillermo; Lanjouw, Peter; Lucchetti, Leonardo; Perova, Elizaveta; Vakis, Renos; Viollaz, Mariana
  7. Educational Reform and Labor Market Outcomes: the Case of Argentina's Ley Federal de Educacion By Maria Laura Alzua; Leonardo Gasparini; Francisco Haimovich
  8. Peer effects identified through social networks. Evidence from Uruguayan schools By Gioia De Melo
  9. First-Round Impacts of the 2008 Chilean Pension System Reform By Jere R. Behrman; Maria Cecilia Calderon; Olivia S. Mitchell; Javiera Vasquez; David Bravo
  10. Desarrollo de la infraestructura y reducción de la pobreza: el caso peruano By Carlos Aparicio; Miguel A. Jaramillo; Cristina San Román

  1. By: Cristina Dengel; John Horton
    Abstract: The IDB's strategy in Brazil seeks to promote and further the reform and modernization of the public sector, to support efforts to improve the competitiveness of Brazilian goods, to support the efforts to reduce social inequalities and poverty and, finally, to address the problems of environmental and natural resource management. The Sustainable Development Program in the State of Acre supported the four elements of this strategy by including activities to strengthen the capacity for environmental management at the state level thus promoting modernization of the state, by bolstering competitiveness through improvement of the quality of the transportation infrastructure, by actions to foster the productivity of rural communities and small producers thus supporting efforts to reduce inequality and by actions for conservation and protection of the Amazon rainforest. This note gives an overview of key achievements and challenges to reach such results as well as outlines the key lessons learned accumulated over the course of the projects.
    Keywords: Economics :: Economic Development & Growth, Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Forests & Forestry, Infrastructure & Transport, lessons learned, sustainable development, Brazil, land management
    Date: 2011–08
  2. By: Gasparini, Leonardo; Galiani, Sebastian; Cruces, Guillermo; Acosta, Pablo
    Abstract: It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 percent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supply-side factors seem to have limited explanatory power relative to demand-side factors, and are only relevant to explain part of the fall in wage premia for high-school graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (non-tertiary educated) workforce, although employment patterns by sector suggest that other within-sector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highly-educated workers.
    Keywords: Labor Markets,Labor Policies,Economic Theory&Research,Inequality,Tertiary Education
    Date: 2011–12–01
  3. By: Crespi, Gustavo; Tacsir, Ezequiel
    Abstract: This study examines the impact of process and product innovation on employment growth across four Latin American countries (Argentina, Chile, Costa Rica, and Uruguay) using micro data from innovation surveys. Specifically, we relate employment growth to process innovations and to the growth of sales separately due to innovative and unchanged products. Results show that that compensation effects are prevalent, and the introduction of new products is associated with employment growth at the firm level. Specifically, we find that for the manufacturing firms as a whole, the introduction of process innovations only affects the employment growth in the countries case of Chile. At the same time, we observe no evidence of displacement effects due to the introduction of product innovations. In fact, the observed compensation effects resulting from the introduction of new products imply, in turn, employment growth even when the replacement of old products is taken into account.
    Keywords: Innovation; Employment; Developing countries; Latin America; Innovation surveys
    JEL: O31 J23
    Date: 2011–09–28
  4. By: Verónica Amarante; Marco Manacorda; Edward Miguel; Andrea Vigorito
    Abstract: There is limited empirical evidence on whether unrestricted cash social assistance to poor pregnant women improves children's birth outcomes. Using program administrative micro-data matched to longitudinal vital statistics on the universe of births in Uruguay, we estimate that participation in a generous cash transfer program led to a sizeable 15% reduction in the incidence of low birthweight. Improvements in mother nutrition and a fall in labor supply, out-of-wedlock births and mother's smoking all appear to contribute to the effect. We conclude that, by improving child health, unrestricted unconditional cash transfers may help break the cycle of intergenerational poverty.
    Keywords: Poverty relief program, maternal health, cash transfers, social assistance, Uruguay, birth outcomes,Low birthweight, Cash transfer program, Nutrition
    JEL: J88 I38 J13
    Date: 2011–12
  5. By: Veronica Amarante; Mery Ferrando; Andrea Vigorito
    Abstract: In this paper we analyze the impact an emergency social assistance program, PANES, on school attendance and child labour. The program was carried out in Uruguay from April 2005 to December 2007. Specifically, we analyze the effects of the cash transfer component of the plan (Ingreso Ciudadano), and explore potential explanatory channels such as labour market outcomes, income and awareness of conditionalities. This research is based on a panel of successful and unsuccessful applicants to PANES. The first wave uses the administrative records of the program and the second wave is a follow-up survey that was gathered two months after the program ended and was specifically designed to carry out the impact evaluation of the program. In order to check the robustness of our results, we provide evidence based on two different identification strategies: a regression discontinuity approach using data from the second wave of the panel, and a difference-in-difference approach that exploits the longitudinal nature of the collected data. Our results indicate that the program did not affect school attendance or child labour, whether children are considered as one group or are disaggregated by age or sex. We also do not find any impact on household income, which suggests that income substitution does not explain the lack of results in terms of schooling. It therefore appears that either the size of the transfer was not generous enough to promote school attendance or that the determinants of child school attendance are more complex and require complementary interventions. Our results are particularly relevant for understanding of the role of cash transfers in middle-income countries where attendance rates at primary school are already high, and where the main challenge is to keep students in school at the secondary level. The data also allows us to explore the role of conditionalities. Only a small share of households was aware of the school enrolment condition (20%). Conditionalities were announced and are present in other social security programs in Uruguay, but were ultimately not monitored in this case. We did not find the conditionality to have any robust impact (as perceived by the household) on children’s school enrolment.
    Keywords: Cash transfer program; Impact evaluation; School attendance, Child labour, Uruguay
    JEL: I38 J13 I21 J22
    Date: 2011
  6. By: Cruces, Guillermo; Lanjouw, Peter; Lucchetti, Leonardo; Perova, Elizaveta; Vakis, Renos; Viollaz, Mariana
    Abstract: This paper validates a recently proposed method to estimate intra-generational mobility through repeated cross-sectional surveys. The technique allows the creation of a"synthetic panel"-- done by predicting future or past household income using a set of simple modeling and error structure assumptions -- and thus permits the estimation of lower and upper bounds on directional mobility measures. The authors validate the approach in three different settings where good panel data also exist (Chile, Nicaragua, and Peru). In doing so, they also carry out a number of refinements to the validation procedure. The results are broadly encouraging: the methodology performs well in all three settings, especially in cases where richer model specifications can be estimated. The technique does equally well in predicting short and long-term mobility patterns and is robust to a broad set of additional"stress"and sensitivity tests. Overall, the paper lends support to the application of this approach to settings where panel data are absent.
    Keywords: Services&Transfers to Poor,Poverty Reduction Strategies,Scientific Research&Science Parks,Science Education,Housing&Human Habitats
    Date: 2011–12–01
  7. By: Maria Laura Alzua; Leonardo Gasparini; Francisco Haimovich
    Abstract: In the nineties Argentina implemented a large education reform (Ley Federal de Educación – LFE) that mainly implied the extension of compulsory education in two additional years. The timing in the implementation substantially varied across provinces, providing a source of identification for unraveling the causal effect of the reform. The estimations from difference-in-difference models suggest that the LFE had an overall positive although mild impact on education and labor outcomes. The impact on the income-deprived youths was small for education outcomes and null for labor outcomes.
    Keywords: Education, reform, labor market, wages, employment, Argentina
    JEL: I2 I3
    Date: 2011
  8. By: Gioia De Melo
    Abstract: This paper provides evidence on peer effects in educational achievement exploiting for the first time a unique data set on social networks within primary schools in Uruguay. The relevance of peer effects in education is still largely debated due to the identification challenges that the study of social interactions poses. I adopt a recently developed identification method that exploits detailed information on social networks, i.e. individual-specific peer groups. This method enables me to disentangle endogenous effects from contextual effects via instrumental variables that emerge naturally from the network structure. Correlated effects are controlled, to some extent, by classroom fixed effects. I find significant endogenous effects in standardized tests for reading and math. A one standard deviation increase in peers’ test score increases the individual’s test score by 40% of a standard deviation. This magnitude is comparable to the effect of having a mother that completed college. By means of a simulation I illustrate that when schools are stratified by socioeconomic status peer effects may operate as amplifiers of educational inequalities.
    JEL: I21 I24 O1
    Date: 2011–11
  9. By: Jere R. Behrman (University of Pennsylvania); Maria Cecilia Calderon (Population Council); Olivia S. Mitchell (Wharton School, University of Pennsylvania); Javiera Vasquez (Universidad de Chile); David Bravo (Universidad de Chile)
    Abstract: Chile’s innovative privatized pension system has been lauded as possible model for Social Security system overhauls in other countries, yet it has also been critiqued for not including a strong safety net for the uncovered sector. In response, the Bachelet government in 2008 implemented reforms to rectify this shortcoming. Here we offer the first systematic effort to directly evaluate the reform’s impacts, focusing on the new Basic Solidarity Pension for poor households with at least one person age 65+. Using the Social Protection Survey, we show that targeted poor households received about 2.4 percent more household annual income, with little evidence of crowding-out of private transfers. We also suggest that recipient household welfare probably increased due to slightly higher expenditures on basic consumption including healthcare, more leisure hours, and improved self-reported health. While measured short-run effects are small, follow-ups will be essential to gauge longer-run outcomes.
    Date: 2011–09
  10. By: Carlos Aparicio (Departamento de Economía, Universidad del Pacífico y Consorcio de Investigación Económica y Social); Miguel A. Jaramillo (Departamento de Economía, Universidad del Pacífico y Consorcio de Investigación Económica y Social); Cristina San Román (Departamento de Economía, Universidad del Pacífico y Consorcio de Investigación Económica y Social)
    Abstract: In recent years, economic growth and the development of social programs have contributed significantly to poverty reduction in Peru. In this process, the development of infrastructure has been very important in reducing the long term vulnerability of households.This paper examines the role of infrastructure in reducing poverty in households in Peru within a dynamic perspective of poverty and under an asset-based approach. To do this, we estimate Logit models to reflect the impact of different types of infrastructure on the likelihood of being poor in Peru. We also estimate static panel data models (fixed and random effects) to reflect the impact of the different types of infrastructure on the spending ofPeruvian households. Both groups of models are based on information at the household level for the years 2007-2010 from the Peruvian official household survey provided by INEI. These impacts are estimated considering the sex of the household head and the area of residence(urban or rural). For static panel data models, we estimate the impact of the different types of infrastructure on household spending distinguishing whether they are transient poor or chronically poor. Given the data constraints at the household level in Peru, we only analyze the following infrastructures throughout the document: water, sewage, electricity and telecommunications. From the results, we verify a significant and different impact of the various types of infrastructure on poverty according to the area of residence and the gender of the household head. Similarly, we verify a significant and different impact of infrastructure on the types of poverty (transient and chronic poverty).
    Keywords: Infraestructura, pobreza, ingresos, enfoque de activos, dinámica de la pobreza.
    Date: 2011–07

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.