nep-lam New Economics Papers
on Central and South America
Issue of 2012‒11‒17
thirteen papers chosen by
Maximo Rossi
University of the Republic

  1. Declining Inequality in Latin America in the 2000s: the Cases of Argentina, Brazil, and Mexico By Nora Lustig; Luis F. Lopez-Calva; Eduardo Ortiz-Juarez
  2. The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico and Peru: A Synthesis of Results By Nora Lustig; George Gray-Molina; Sean Higgins; Miguel Jaramillo; Wilson Jiménez; Veronica Paz; Claudiney Pereira; Carola Pessino; John Scott; Ernesto Yañez
  3. Social Spending, Taxes and Income Redistribution in Uruguay By Marisa Bucheli; Nora Lustig; Maximo Rossi; Florencia Amábile
  4. The Impact of the Business Cycle on Elasticities of Tax Revenue in Latin America By Roberto Machado; José Zuloeta
  5. Wages and Informality in Developing Countries By Meghir, Costas; Narita, Renata; Robin, Jean-Marc
  6. Afro-descendants in Brazil, Colombia, Ecuador and Peru and the Challenges of Measuring Health Gaps By Luana Marquez Garcia; Judith Morrison; Brittney Bailey; Josh Colston
  7. Fiscal Incidence, Fiscal Mobility and the Poor: a New Approach By Nora Lustig; Sean Higgins
  8. Equidad en la distribución de la oferta de educación pública en Argentina By Pablo Bezem
  9. Socioeconomic Impact of Broadband in Latin American and Caribbean Countries By Antonio García Zaballos; Rubén López-Rivas
  10. Crime and Erosion of Trust: Evidence for Latin America By Ana Corbacho; Julia Philipp; Mauricio Ruiz-Vega
  11. A Framework for Sustainable Food Security for Latin America and the Caribbean By César Falconi; Máximo Torero; Eduardo Maruyama; Manuel Hernández; Miguel Robles
  12. Citizen Security: Conceptual Framework and Empirical Evidence By Beatriz Abizanda; Joan Serra Hoffman; Lina Marmolejo; Suzanne Duryea
  13. The role of reading engagement in a case of national achievement improvement: analysis of Chilean results in PISA 2001-2009 By Juan Pablo Valenzuela; Gabriela Gómez V.; Carmen Sotomayor

  1. By: Nora Lustig (Tulane University); Luis F. Lopez-Calva (World Bank); Eduardo Ortiz-Juarez (UNDP)
    Abstract: Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures and data sources. In depth country studies for Argentina, Brazil and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country.
    Keywords: Income inequality, skill premium, government transfers, progressivity, Latin America
    JEL: D31 I24 H53 O15 O54
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-266&r=lam
  2. By: Nora Lustig (Tulane University and CGD and IAD); George Gray-Molina (UNDP, New York, USA); Sean Higgins (Tulane University); Miguel Jaramillo (GRADE, Lima, Peru); Wilson Jiménez (Instituto Alternativo, La Paz; Bolivia); Veronica Paz (Instituto Alternativo, La Paz; Bolivia); Claudiney Pereira (Tulane University); Carola Pessino (CGD, Washington, DC and CEMA, Buenos Aires, Argentin); John Scott (CIDE and CONEVAL, Mexico City, Mexico); Ernesto Yañez (Instituto Alternativo, La Paz; Bolivia)
    Abstract: We apply a standard tax and benefit incidence analysis to estimate the impact on inequality and poverty of direct taxes, indirect taxes and subsidies, and social spending (cash and food transfers and in-kind transfers in education and health). The extent of inequality reduction induced by direct taxes and transfers is rather small (2 percentage points on average) especially when compared with that found in Western Europe (15 percentage points on average). What prevents Argentina, Bolivia and Brazil from achieving similar reductions in inequality is not the lack of revenues but the fact that they spend less on cash transfers –especially transfers that are progressive in absolute terms--as a share of GDP. Indirect taxes result in that net contributors to the fiscal system start at the fourth, third and even second decile on average, depending on the country. When in-kind transfers in education and health are added, however, the bottom six deciles are net recipients. The impact of transfers on inequality and poverty reduction could be higher if spending on direct cash transfers that are progressive in absolute terms is increased, leakages to the nonpoor are reduced and coverage of the extreme poor by direct transfer programs is expanded.
    Keywords: fiscal incidence, inequality, poverty, taxes, social spending, Latin America.
    JEL: D31 D63 H11 H22 H5 I14 I24 I3 O15
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-264&r=lam
  3. By: Marisa Bucheli (Economics Department, Universidad de la Republica, Uruguay); Nora Lustig (Tulane University (Department of Economics; Stone Center for Latin American Studies and CIPR) and Center for Global Development and Inter-American Dialogue.); Maximo Rossi (Economics Department, Universidad de la Republica, Uruguay); Florencia Amábile (Economics Department, Universidad de la Republica, Uruguay)
    Abstract: How much redistribution does Uruguay accomplish through social spending and taxes? How progressive are revenue collection and social spending? A standard fiscal incidence analysis shows that Uruguay achieves a nontrivial reduction in inequality and poverty when all taxes and transfers are combined. In comparison with other five countries in Latin America, it ranks first (poverty reduction) and second (inequality reduction), and first in terms of poverty reduction effectiveness and third in terms of overall (including transfers in kind) inequality reduction effectiveness. Direct taxes are progressive and indirect taxes are regressive. Social spending on direct transfers, contributory pensions, education and health is quite progressive in absolute terms except for tertiary education, which is almost neutral in relative terms.
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-263&r=lam
  4. By: Roberto Machado; José Zuloeta
    Abstract: This paper estimates short-run and long-run elasticities of tax revenue with respect to GDP in eight Latin American countries using quarterly data. Taxes considered are corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and overall taxes. Results indicate that long-run elasticities are statistically and economically larger than 1, whereas short-run elasticities appear not to be statistically different from zero in the majority of cases. Tax systems seem very elastic in Argentina, Colombia, Ecuador, Peru, and Venezuela. The CIT exhibits the largest estimated long-run elasticity in most countries. Focusing on short-run elasticities that show statistical significance, only the CIT in Colombia and the PIT in Brazil and Colombia show larger fluctuations over the business cycle than growth potential in the long run. Overall, our results indicate that tax systems in Latin America are significantly more elastic than previous estimations.
    Keywords: Economics :: Economic Development & Growth, Economics :: Production & Business Cycles, Tax revenue, Elasticities, Business cycles,
    JEL: E32 H24 H25 H29
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:76398&r=lam
  5. By: Meghir, Costas (Yale University and IFS, London); Narita, Renata (World Bank); Robin, Jean-Marc (Sciences Po, Paris and U College London)
    Abstract: It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow heterogeneous firms to decide whether to locate in the formal or the informal sector, as well as set wages. Workers engage in both off the job and on the job search. We estimate the model using Brazilian micro data and evaluate the labor market and welfare effects of policies towards informality.
    JEL: J24 J30 J42 J60 O17
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:ecl:yaleco:109&r=lam
  6. By: Luana Marquez Garcia; Judith Morrison; Brittney Bailey; Josh Colston
    Abstract: In Latin America, the inclusion of a race/ethnicity variable in the administrative records of health establishments is still very rare. Additionally, Health Departments in the countries analyzed have not yet incorporated race/ethnicity variable following the standardization used by their National Statistical Offices (the only exception is Brazil). This is a major area for improvement and deserves immediate attention by countries if they wish to quantify the magnitude and promote the analysis of existing race/ethnic disparities in access to health services. In this presentation to the ICHAD (International Conference on Health in the African Diaspora) conference, we: (i) briefly review what is known about the connections between socio-economic and racial inequalities; (ii) describe the data available; (iii) estimate the magnitude of race gaps in some health outcomes and (iv) map out a research agenda for producing knowledge on these issues.
    Keywords: Social Development :: Afro Descendants & Indigenous Peoples, Health, Afro-descendants, health gaps, inclusion, race, ethnicity, access to health services, socio-economic and racial inequalities, presentation
    Date: 2012–07
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:75398&r=lam
  7. By: Nora Lustig (Tulane University); Sean Higgins (Tulane University)
    Abstract: Taxes and transfers can have significant impacts on poverty and inequality. All standard measures are by definition anonymous in the sense that we do not know the identity of winners and losers. That a given combination of taxes and transfers makes some of the poor poorer, however, may be important information to incorporate into a fiscal incidence analysis. The directional mobility literature provides a useful framework to identify which individuals are adversely/favorably impacted by a particular policy. This paper introduces a “fiscal mobility matrix” to identify winners and losers. We show that taxes and transfers can lower inequality and poverty (including the severity of poverty) but still make a subgroup of the poor worse off. We use Brazilian data to illustrate how indirect taxes make around 11 percent of the non-poor poor, 15 percent of the moderate poor extremely poor, and 4 percent of the extremely poor “ultra-poor” despite any cash transfers they receive, even when standard poverty and inequality indicators decline and overall taxes are progressive.
    Keywords: fiscal incidence, taxes and transfers, inequality, poverty, redistribution, mobility.
    JEL: D31 H22 H53 I32 I38
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-265&r=lam
  8. By: Pablo Bezem
    Abstract: Las escuelas pobres para "pobres" cristalizan la brecha social y profundizan las desigualdades. En otras palabras, las condiciones materiales de las escuelas pueden tener un efecto redistributivo porque impactan positivamente sobre el aprendizaje y contrarrestan la incidencia del nivel socioeconómico. Por eso, el acceso a un entorno de aprendizaje adecuado es un derecho prioritario para los alumnos de sectores vulnerables, porque sus hogares no siempre cuentan con los espacios o insumos básicos para la estimulación y el aprendizaje. Este estudio analiza en qué medida la acción del sistema educativo reduce, reproduce o amplía las desigualdades sociales en la escuela. Más específicamente, se investiga cuál es el grado de correlación entre el nivel socioeconómico de los alumnos y la disponibilidad de recursos educativos en las escuelas públicas de la Argentina.
    Keywords: Educación :: Educación primaria y secundaria, Desarrollo social :: Pobreza, Desarrollo social :: Jóvenes y niños, Equidad, igualdad de oportunidades
    JEL: I24
    Date: 2012–07
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:76199&r=lam
  9. By: Antonio García Zaballos; Rubén López-Rivas
    Abstract: Broadband plays a key role in society, impacting GDP, productivity, and employment. In the Latin American and Caribbean region, which is characterized by low broadband penetration costly Internet connection, low usage, and sporadic adoption of mobile technology, a major goal for governments is to universalize access to and usage of broadband. This paper presents an econometric model which shows that, in Latin America and the Caribbean, on average, a 10 percent higher broadband penetration is associated with 3.19 percent higher GDP, 2.61 percent higher productivity, and 67,016 new jobs. It also defines the variables that a government can control to help increase the number of broadband subscriptions per capita in order to effectively improve socioeconomic conditions in the country.
    Keywords: Science & Technology :: Research & Development, Science & Technology :: Telecommunications, Broadband, LAC, Socioeconomic impact, GDP, Productivity, Employment
    JEL: C52
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:77638&r=lam
  10. By: Ana Corbacho; Julia Philipp; Mauricio Ruiz-Vega
    Abstract: Crime has tangible economic costs. It also has less understood and likely sizable intangible costs. In particular, widespread crime has the potential to weaken trust between citizens and institutions, undermine government reform efforts, and become an obstacle to development. Yet, the impact of crime on trust remains relatively unexplored in the literature. This paper analyzes the potential interrelationship between individual victimization and several measures of trust, including trust in formal public institutions and trust in informal private networks. It is based on a representative sample of individuals in 19 countries in Latin America. The empirical strategy is intended to mitigate overt biases and assess sensitivity to hidden biases. The results show that victimization has a substantial negative effect on trust in the local police but no robust effect on informal institutions. Governments may henceforth need to redouble efforts to reduce victimization and the resulting erosion of trust in public institutions.
    Keywords: Public Sector :: Citizen Security & Crime Prevention, Crime, Beliefs, Trust, Social Capital, Welfare
    JEL: D74 D83 H41 I39 K42 O54
    Date: 2012–08
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:76118&r=lam
  11. By: César Falconi; Máximo Torero; Eduardo Maruyama; Manuel Hernández; Miguel Robles
    Abstract: This Technical Note presents a framework for food security in LAC that takes into consideration the key drivers and external factors behind food security. This framework for food security policy interventions will guide policymakers and analysts in answering the following questions: i) Which are the top priority interventions needed to provide a more focused approach to food security aimed specifically at dealing with the issues that are impeding LAC's capacity to reduce the impacts of the food crisis on its population and at helping to solve the food crisis, given the region's comparative advantages in agriculture; ii) What is the net impact of policy interventions across households in the region, taking into consideration environment and climate change, water management, trade liberalization, and domestic food prices; and iii) How does a specific policy intervention compare to other policy interventions with respect to net impact on food security, other positive impacts, and net intervention costs?
    Keywords: Agriculture & Food Security :: Plant, Animal, & Food Production, Publication, Food Security, Agriculture, Policy Interventions, Policy Evaluation Tool
    JEL: Q18 N56 O13
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:76941&r=lam
  12. By: Beatriz Abizanda; Joan Serra Hoffman; Lina Marmolejo; Suzanne Duryea
    Abstract: Given the strong ties linking citizen security and the development of Latin America and the Caribbean, the Bank has been supporting efforts to tackle crime and violence. It has framed its work in citizen security through the establishment of specific guidelines (Operational Guidelines for Program Design and Execution in the Area of Civic Coexistence and Public Safety, GN-2535), which identify the Bank's areas of support, as well as those outside its mandate and those for which it does not have a comparative advantage as a development institution. It has also developed the present Conceptual Framework, to complement the Operational Guidelines, by reviewing a group of concepts to provide focus, rationale, and tools to integrate and interpret information relevant to the citizen security policies and under the spectrum defined by the Guidelines. The Conceptual Framework is intended as a tool to guide the analyses of the sector, drawing from a growing empirical knowledge base of "what works" in crime and violence prevention.
    Keywords: Public Sector :: Citizen Security & Crime Prevention, crime prevention, violence, public safety
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:76338&r=lam
  13. By: Juan Pablo Valenzuela; Gabriela Gómez V.; Carmen Sotomayor
    Abstract: Reading achievement is usually explained by economic and institutional factors external to the students themselves. This research uses data from PISA (2001- 2009) to analyze the reading improvement in Chile (the highest of the period in OECD countries). The authors emphasize the role of reading engagement (attitudes, motivation and learning strategies), scarcely studied in developing countries. Results obtained by Oaxaca-Blinder decomposition and multilevel regressions are consistent with previous literature, in addition, attitudes toward reading fit to explain a quarter of the 2001-2009 score improvement and 8% of both assessments variance within schools. Strategies, in contrast, seems unrelated to reading achievement.
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:udc:wpaper:wp367&r=lam

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