New Economics Papers
on Central and South America
Issue of 2012‒02‒20
six papers chosen by

  1. Is There Such Thing as Middle Class Values? Class Differences, Values and Political Orientations in Latin America By López-Calva, Luis Felipe; Rigolini, Jamele; Torche, Florencia
  2. Rigideces laborales y salarios en los sectores formal e informal en Colombia By Camilo Mondragón-Vélez; Ximena Peña; Daniel Wills
  3. Labor Informality and the Incentive Effects of Social Security: Evidence from a Health Reform in Uruguay By Marcelo Bérgolo; Guillermo Cruces
  4. Productivity growth in Latin American manufacturing: what role for international trade intensities? By Faundez, Sebastian; Mulder, Nanno; Carpentier, Nicole
  5. Yet Another Look at the Modernisation Hypothesis: Evidence from Latin America By Manoel Bittencourt
  6. Segregación educativa y la brecha salarial por género entre los recién graduados universitarios en Colombia By Laura Cepeda Emiliani; Juan D. Barón

  1. By: López-Calva, Luis Felipe (World Bank); Rigolini, Jamele (World Bank); Torche, Florencia (New York University)
    Abstract: Middle class values have long been perceived as drivers of social cohesion and growth. In this paper we investigate the relation between class (measured by the position in the income distribution), values, and political orientations using comparable values surveys for six Latin American countries. We find that both a continuous measure of income and categorical measures of income-based class are robustly associated with values. Both income and class tend to display a similar association to values and political orientations as education, although differences persist in some important dimensions. Overall, we do not find strong evidence of any "middle class particularism": values appear to gradually shift with income, and middle class values lay between the ones of poorer and richer classes. If any, the only peculiarity of middle class values is moderation. We also find changes in values across countries to be of much larger magnitude than the ones dictated by income, education and individual characteristics, suggesting that individual values vary primarily within bounds dictated by each society.
    Keywords: middle class, income, values, political orientations
    JEL: D3 D7 O1 Z1
    Date: 2012–01
  2. By: Camilo Mondragón-Vélez; Ximena Peña; Daniel Wills
    Abstract: Este artículo estudia el impacto de los aumentos en los costos no salariales y el salario mínimo sobre los salarios en los sectores formal e informal en Colombia durante el periodo 1988 a 2006. La estrategia de identificación incluye variación de los costos no salariales en el tiempo; y tanto del salario mínimo a nivel de ciudad como del ciclo económico a nivel del hogar (considerando medidas alternativas a nivel regional), además de su variación temporal. Utilizando regresiones por percentiles encontramos que aumentos tanto en los costos no salariales como en el salario mínimo disminuyen los salarios de todos los trabajadores. Los resultados sobre costos no salariales se mantienen en el análisis por sectores, así como el efecto negativo del salario mínimo sobre los salarios en el sector informal. En cuanto al sector formal, los resultados muestran que el efecto del salario mínimo para aquellos trabajadores que permanecen dentro de este sector es decreciente a lo largo de la distribución de salarios, y resulta negativo para las dos terceras partes de los trabajadores con mayores ingresos. Adicionalmente, encontramos evidencia de que la jornada laboral aumentó, como respuesta de los empleadores a mayores rigideces y costos del factor trabajo (particularmente en el sector formal).
    Date: 2011–11–30
  3. By: Marcelo Bérgolo; Guillermo Cruces
    Abstract: This paper studies the incentive effects of social security benefits on labor market informality following a policy reform in Uruguay. The reform extended health benefits to dependent children of private sector salaried workers, and thus altered the incentive structure of holding formal jobs within the household. The identification strategy of the reform¿s effects relies on a comparison between workers with children (affected by the reform) and those without children (unaffected by the reform). Difference in differences estimates indicate a substantial effect of this expansion of coverage on informality rates, which fell significantly by about 1.3 percentage points (a 5 percent change) among workers in the treatment group with respect to those in the control group. The evidence also indicates that individuals within households jointly optimized their allocation of labor to the formal and informal sector. Workers responded to the increased incentives for only one member of the household to work in the formal sector. These findings provide evidence of the relevant and substantial incentive effects of social security benefits on the allocation of employment.
    Keywords: Labor :: Workforce & Employment, Labor :: Social Security, Health :: Health Policy, CEDLAS
    Date: 2011–03
  4. By: Faundez, Sebastian; Mulder, Nanno; Carpentier, Nicole
    Abstract: This paper analyzes the relationship between the intensity of international trade flows and labor productivity for 28 industries in the five main economies in the region (Argentina, Brazil, Chile, Colombia and Mexico)using the Arellano-Bond generalized method of moments (GMM)estimator. The results show that international trade flows contributed through various channels to labor productivity growth in the period 1990 to 2008. These channels, which have been developed in the theoretical literature, are export intensity (share of production exported), import penetration (share of domestic demand covered by imports), the diversification of the export basket and intra-industry trade. The estimation also includes several control variables, of which several turn out significant. In addition to estimates for the total manufacturing sector, we also show results for three different groups of manufacturing industries characterized by different factor endowments: natural resource intensive,labor and capital intensive ones.
    Keywords: productivity; international trade; manufacturing; Latin America; labour
    JEL: F16 O54 J24 D24
    Date: 2011–11
  5. By: Manoel Bittencourt (Department of Economics, University of Pretoria)
    Abstract: We investigate in this paper whether the modernisation hypothesis holds in Latin America, and our sample includes nine Latin American countries that re-democratised in the last forty years or so. The data set covers the period between 1970 and 2007, and the results, based on dynamic panel data analysis (we use the Fixed Effects, Fixed Effects with Instrumental Variables, DIF-GMM and SYS-GMM estimators), suggest that the modernisation hypothesis holds in the region, or that income, or development in general, play a positive role on democracy. We also test for the critical junctures hypothesis, or whether particular historical structural changes play any role in contemporaneous democratisation in the region, however we are not able to provide any concrete evidence in favour of it. Essentially, we suggest that a certain level of development is an important condition for democracy to mature and survive, which-- in times of a new democratisation wave taking place in societies with different levels of development-- is a suggestive observation.
    Keywords: Modernisation hypothesis, democracy, development, Latin America
    JEL: O10 O54 P16
    Date: 2012–02
  6. By: Laura Cepeda Emiliani; Juan D. Barón
    Abstract: In this paper we show the importance of subject of degree in explaining the gender wage gap in Colombia. In order to minimize the influence of gender differences in experience, promotions, and job changes on the wage gap, we focus on college graduates who have a formal job and who have been in the labor market at most one year. Using unique, administrative datasets with detailed subjects of degree, we find that the wage gap against women is on average 11% and that 40% of it can be explained by differences in subject of degree. Using a distributional decomposition, we find an increasing gender wage gap across the distribution of wages (from 2% at the bottom to 15% at the top), although subject of degree explains a lower 30% of the gap at the top. Policies designed to reduce the gender wage gap need to address the differing gender educational choices and the factors that influence them. These policies would be more effective in reducing the gap for median wage earners. RESUMEN: En este trabajo mostramos la importancia del área de estudio para explicar la brecha de salarios por género en Colombia. Para minimizar la influencia que pueden tener las diferencias por género en la experiencia, ascensos laborales y cambios de trabajo sobre la brecha, nos enfocamos en los graduados universitarios con trabajos formales que hayan estado en el mercado laboral como máximo un año. Utilizando bases de datos administrativas y únicas con información detallada acerca de las áreas de estudio de los graduados, encontramos que la brecha salarial en contra de las mujeres es en promedio 11% y que el 40% de ella puede ser explicada por diferencias en el área de estudio. Asimismo, una descomposición en la distribución salarial nos muestra que la brecha aumenta a lo largo de la distribución (de 2% en la parte baja a 15% en la parte alta), aunque el área de estudio explica un porcentaje menor, 30 %, de la brecha en la parte alta. Las políticas diseñadas para reducir la brecha deben enfocarse en las distintas decisiones educativas que toman hombres y mujeres y los factores que las influencian. Estas políticas serían más efectivas en reducir la brecha para los que ganan salarios cercanos a la media.
    Date: 2012–02–06

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.