New Economics Papers
on Central and South America
Issue of 2012‒05‒08
six papers chosen by

  1. Institutional Effect over Economic Growth: New Evidence for Latin America By William Orlando Prieto Bustos
  2. Evolution of poverty in Bolivia: a multidementional approach By Werner L. Hernani-Limarino; Paul Villarroel
  3. Unemployment in Bolivia By Werner L. Hernani-Limarino; Maria Villegas; Ernesto Yanez
  4. Decomposing the Rural-Urban Differential in Student Achievement in Colombia Using PISA Microdata By Ramos, Raul; Duque, Juan Carlos; Nieto, Sandra
  5. Estimation of the Distribution of the Reserve Wage By Werner L. Hernani-Limarino; Werner L. Hernani-Limarino
  6. The Benefits of Logistics Investments: Opportunities for Latin America and the Caribbean By Jean-Paul Rodrigue

  1. By: William Orlando Prieto Bustos
    Abstract: In lieu of the institutional hypothesis of economic growth, an economic model and an econometric model are proposed to explore how important institutional settings were for economic performance during the first ten years of the new millennium in Latin America. According to instrumental variables models, institutional quality explains 1.13 and 1.09 of income differences for the decade 2000 – 2010, holding formal and informal structural characteristics constant. The highest average income was greater in a factor of 5,6 than the lowest average income so that, giving econometric results, institutional quality accounts for 20% of such income gap. Compared with short term gains, only Argentina, Chile and Uruguay seem to have been implemented changes in technical efficiency during the decade relevant for Total Factor Productivity levels.
    Date: 2012–04–25
  2. By: Werner L. Hernani-Limarino (Fundación ARU); Paul Villarroel (Fundación ARU)
    Abstract: This document constructs a multidimentional measure of poverty for Bolivia based on the new 2008 constitution's fundamental rights, which can be measured in surveys; it also documents the changes in poverty observed in the last decade, in a multidimensional approach. Particulary, we extend the analysis made by Hernani Limarino (2010) on the evolution of poverty in monetary dimensions with a complementary analysis of five other non-monetary dimentions: access to education, short term social security (health), long term social security (pensions), housing and basic household services. The Analysis shows that non-monetary poverty has remained in high levels, and quite elusive despite the reduction in poverty according to monetary measures has decreased.
    Keywords: Bolivia, Multidimensional Poverty.
    JEL: I30 I32 I39
    Date: 2012–01
  3. By: Werner L. Hernani-Limarino (Fundación ARU); Maria Villegas (Fundación ARU); Ernesto Yanez (Fundación ARU)
    Abstract: This paper attempts to evaluate the effectiveness of Bolivia’s labor market institutions, particularly the Plan Nacional de Empleo de Emergencia (PLANE). It is found that unemployment as conventionally defined may not be the most important problem in Bolivia’s labor market, as the non-salaried market is always an alternative. While un-employment durations and unemployment scarring consequences are relatively low, labor market regulations and labor market programs do not help to increase the size of the formal market, apparently as a result of Bolivia’s rigid labor markets and labor policies based mainly on temporary employment programs. Such programs, however, may have helped to smooth consumption. Given the country’s high level of infor-mality, protection policies are second best to active policies specifically designed to increase the productivity/employability of vulnerable populations.
    Keywords: Bolivia, Unemployment, Labor Policies, Impact Evaluation.
    JEL: J08 J21 J64
    Date: 2011–12
  4. By: Ramos, Raul (University of Barcelona); Duque, Juan Carlos (Universidad EAFIT); Nieto, Sandra (University of Barcelona)
    Abstract: Despite the large number of studies that draw on Programme for International Student Assessment (PISA) microdata in their analyses of the determinants of educational outcomes, no more than a few consider the relevance of geographical location. In going some way to rectify this, our paper examines the differences in educational outcomes between students attending schools in rural areas and those enrolled in urban schools. We use microdata from the 2006 and 2009 PISA survey waves for Colombia. The Colombian case is particularly interesting in this regard due to the structural changes suffered by the country in recent years, both in terms of its political stability and of the educational reform measures introduced. Our descriptive analysis of the data shows that the educational outcomes of rural students are worse than those of urban students. In order to identify the factors underpinning this differential, we use the Oaxaca-Blinder decomposition and then exploit the time variation in the data using the methodology proposed by Juhn-Murphy-Pierce. Our results show that most of the differential is attributable to family characteristics as opposed to those of the school. From a policy perspective, our evidence supports actions addressed at improving conditions in the family rather than measures of positive discrimination of rural schools.
    Keywords: educational outcomes, rural-urban differences, decomposition methods
    JEL: J24 I25 R58
    Date: 2012–04
  5. By: Werner L. Hernani-Limarino (Fundación ARU); Werner L. Hernani-Limarino (Fundación ARU)
    Abstract: This paper uses a simple model of the labor supply to identify the distribution of the reserve wages. The distribution of the reserve wages of the non-employed population (Unemployed or out of the labor force) it's fundamental not only to understand the nature of the no-employment but to also define the wages that should be offered by the labor programs to attract the attention of different groups of the population. The paper uses data from the Quarterly Survey of Urban Employment to illustrate the methodology proposed Estimates show that the heavy reliance of household on labor income determines the levels of reserve wages to be much more lower than expected wages. It also shows that reserve wages for the inactive population dominates stochastically the distribution for unemployed, and in turn, the last one dominates stochastically the distribution for the employed. This implies that a good part of the employed population can't cover the cost of searching for better employment opportunities while unemployed have more room to wait.
    Keywords: Bolivia, Unemployment, reservation wages
    JEL: J21 J30 J64
    Date: 2011–02
  6. By: Jean-Paul Rodrigue
    Abstract: Transportation is an inherently crucial factor in supporting economic activities as well as providing opportunities for economic development. As such, the provision of transport infrastructures is a common priority in capital investment, particularly in Latin America and the Caribbean where infrastructural capabilities are often lacking. The purpose of this report is to underline the key dimensions behind the benefits of logistics investments. It particularly focuses on port / hinterland supply chains in which the setting of logistics zones, transport and logistics corridors and inland ports provide a salient example of the multiplying effects of transport infrastructure and freight logistics investments.
    Keywords: Rural & Urban Development :: Public Utilities, Infrastructure & Transport :: Ports & Waterways, Infrastructure & Transport :: Roads & Highways, Integration & Trade :: Trade Facilitation, Infrastructure & Transport :: Railways, Integration & Trade :: Globalization & Regionalization, Freight Transport, Trade Facilitation, Airports, Railways, Roads, Logistics zones
    JEL: R40 O18 R42 L92 L93
    Date: 2012–04

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.