New Economics Papers
on Central and South America
Issue of 2012‒02‒27
seven papers chosen by

  1. Dinámica Laboral en Chile By Macarena García; Alberto Naudon
  2. Inequality Trends and their Determinants: Latin America over 1990-2010 By Giovanni Andrea Cornia
  3. Estimating the Impacts of Bolivia's Protected Areas on Poverty By Canavire Bacarreza, Gustavo Javier; Hanauer, Merlin M.
  4. The Risk-Taking Channel in Colombia Revisited By Martha López; Fernando Tenjo; Héctor Zárate
  5. The Effects of Gender Quotas in Latin American National Elections By Kotsadam, Andreas; Nerman, Måns
  6. The dynamics of inequality change in a highly dualistic economy: Honduras, 1991-2007 By Stephan Klasen; Thomas Otter; Carlos Villalobos
  7. Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment By Karen Macours; Norbert Schady; Renos Vakis

  1. By: Macarena García; Alberto Naudon
    Abstract: In this article we use data from the National Employment Survey conducted by Chile’s National Statistics Institute (INE) to analyze the dynamic behavior of the Chilean labor market during the years 1993 to 2009. We study both the size and the cyclical behavior of flows among three different labor market states: employment, unemployment, and out of labor force. We also evaluate the contribution of those flows to the variance of the unemployment rate.
    Date: 2012–01
  2. By: Giovanni Andrea Cornia (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: The paper reviews the steady and widespread decline in income inequality which has taken place in most of Latin America over 2002-10 and which––if continued for another 2-3 years––would reduce the average regional income inequality to pre-liberalization levels. The paper then focuses on the factors, which may explain such inequality decline. A review of the literature and an econometric test indicate that a few complementary factors played an important role in this regard, including a drop in the skill premium following a rapid expansion of secondary education, and the adoption of a new development model by a growing number of left-of-centre governments which emphasizes fiscally-prudent but more equitable macroeconomic, tax, social expenditure and labour policies. For the region as a whole, improvements in terms of trade, migrant remittances, FDI and world growth played a less important role than expected although their impact was perceptible in countries where such transactions were sizeable.
    Keywords: income inequality, human capital inequality, policy regimes, external conditions, Latin America
    JEL: D31 E6 H53 I28 I38
    Date: 2012
  3. By: Canavire Bacarreza, Gustavo Javier (Georgia State University); Hanauer, Merlin M. (Sonoma State University)
    Abstract: Protected areas represent a powerful policy tool for the preservation of ecosystems and their services. The rapid proliferation of protected areas in Bolivia over the past several decades has prompted interest in understanding their impacts on surrounding populations. Recent studies from other developing countries show that protected areas have had positive impacts on poverty. Using rich biophysical and socioeconomic data from Bolivia we find that municipalities with at least 10% of their area occupied by a protected area established between 1992 and 2000 exhibited differentially greater levels of poverty reduction between 1992 and 2001 compared to similar municipalities unaffected by protected areas. We find that our results are robust to a number of econometric specifications, spillover analyses and a placebo study. Although our overarching results that Bolivia's protected areas were associated with poverty reduction are similar to previous studies, our underlying results differ subtly, but significantly. Previous studies found that controlling for key observable covariates led to fundamentally antithetical results compared to naïve (uncontrolled) estimates. Conversely, our results indicate that naïve estimates lead to an over estimation of the poverty reducing impacts of protected areas. Our results expose the heterogeneity of protected area impacts across countries and, therefore, underscore the importance of country-level impact evaluations in order to build the global knowledge base regarding the socioeconomic impacts of protected areas.
    Keywords: ecosystems, poverty, protected areas, impacts, program evaluation, econometrics, Bolivia
    JEL: C14 I38 Q56
    Date: 2012–02
  4. By: Martha López; Fernando Tenjo; Héctor Zárate
    Abstract: Levels of interest rates below historical norms may have enhanced financial instability in developed and developing economies during the 2000's. The risk taking channel of monetary policy transmission is a recent theory that explains the interaction between risk perceptions of the financial system and monetary policy. This paper presents empirical evidence of the risk taking channel of monetary policy using detailed information on consumer and commercial loans from the Colombian banking system. Using probit and duration models we find that the banking system takes on more risk when the level of interest rates are too low. We also find that the response to interest rates is higher in the case of commercial loans.
    Date: 2012–02–07
  5. By: Kotsadam, Andreas (Dept of Economics, University of Oslo); Nerman, Måns (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This study investigates the effects of gender quotas in national elections on political participation, public policy, and corruption in Latin America. We are able to replicate the findings from previous research that women in politics do affect these outcomes, but only when we treat the number of women in parliament as exogenous. We argue, however, that the introduction of gender quotas caused an – in this context – exogenous increase in women’s representation, and while we find that quotas in Latin America increased the number of women in parliament, we find no substantial effects beyond mere representation. The mechanisms for these findings are scrutinized, and we find no indications that quota women are more marginalized than other elected women in Latin American parliaments. Hence, increasing women’s representation by means of gender quotas may not result in the same outcomes as an increased representation in non-quota elections.<p>
    Keywords: gender quotas; Latin America; women in parliament
    JEL: D72 H50 Z10
    Date: 2012–02–20
  6. By: Stephan Klasen (University ot Goettingen / Germany); Thomas Otter; Carlos Villalobos (University of Goettingen / Germany)
    Abstract: We examine the drivers of inequality change in Honduras between 1991-2007, trying to understand why inequality increased in Honduras until 2005, while it was falling in most other Latin American countries. Using annual household surveys, we document first rising inequality between 1991-2005, which is followed by falling inequality thereafter. Using an inequality decomposition technique, we show that the rising inequality between 1991 and 2005 was, for the most part, driven by the dispersion of labour incomes in rural areas. We also show that the extraordinary labour earnings disequalization is mainly the result of a widening wage gap between the tradable and non-tradable sectors and occupations, combined with highly segmented labor markets and poor overall educational progress. The underlying determinants of the divergence between tradable and non-tradable sectors were highly overvalued currencies and poor commodity process for Honduras’ agricultural exports. Between 2005 and 2007, however, the inequality reduction was a result of equalizing trends in labour and non-labour incomes. The commodity boom promoting the tradable sector and remittances (in this order) played a significant role here, with government transfers playing a small supporting role. Since the decline in inequality is largely driven by international factors, we cannot be sure whether the decline in inequality will continue.
    Keywords: Inequality, Decomposition, Education, Wages, Honduras, Migration
    JEL: C15 D31 I21 J23 J31 R23 J31 J61
    Date: 2012–02–17
  7. By: Karen Macours; Norbert Schady; Renos Vakis
    Abstract: Cash transfer programs have become extremely popular in the developing world. There is a large literature on the effects of these programs on schooling, health and nutrition, but relatively little is known about possible impacts on child development. This paper analyzes the impact of a cash transfer program on cognitive development in early childhood in rural Nicaragua. Identification is based on random assignment. We show that children in households assigned to receive benefits had significantly higher levels of development nine months after the program began. There is no fadeout of program effects two years after the program had ended and transfers were discontinued. We show that the changes in child development we observe are unlikely to be a result of the cash component of the program alone.
    Keywords: Social Development :: Poverty, Education :: Early Childhood Education, Social Development :: Youth & Children, child development, transfers
    JEL: D12 I2 I3
    Date: 2012–02

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