New Economics Papers
on Central and South America
Issue of 2013‒07‒15
three papers chosen by

  1. Heterogeneous Self-employment and Subjective Well-Being. Evidence from Latin America By Cortés Aguilar Alexandra; Teresa Garcia-Muñoz; Ana I. Moro Egido
  2. Capital Controls in Brazil – Stemming a Tide with a Signal? By Yothin Jinjarak; Ilan Noy; Huanhuan Zheng
  3. Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia By Ana María Ibañez Londoño; Juan Carlos Muñoz Mora; Philip Verwimp

  1. By: Cortés Aguilar Alexandra (Escuela de Economía y Administración, Universidad Industrial de Santander.); Teresa Garcia-Muñoz (Globe and Universidad de Granada.); Ana I. Moro Egido (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: This paper analyzes the relationship between labor status and individual satisfaction in Latin America. Existing evidence for developed countries shows that the self-employed report higher job satisfaction than the employed. The evidence, however, is less conclusive in terms of lifesatisfaction. Moreover, for Latin American countries, the evidence shows that self-employed individuals report lower life-satisfaction than employed individuals do. To clarify the effect of selfemployment on satisfaction, we use the Latinobarómetro survey 2007 for eighteen Latin American and Caribbean countries, considering the category self-employment as a heterogeneous category. Additionally, we control for the distinction between necessity and opportunity self-employed. Contrary to existing evidence, we find that not all self-employed individuals are more satisfied than employed individuals. Specifically, we find evidence revealing that, compared to workers in paid employment (i) precarious self-employed workers are as satisfied as the employed with their life but less with job and household income; (ii) self-employed professionals are more satisfied than the employed only with their incomes; (iii) business owners are more satisfied with their lives, income and job; and (iv) self-employed famers and fisherman are less satisfied with their jobs and income.
    Keywords: Labor informality, voluntary vs. involuntary self-employment,life and job satisfaction
    JEL: C25 I31 J24 J28 O17
    Date: 2013–06–25
  2. By: Yothin Jinjarak; Ilan Noy; Huanhuan Zheng
    Abstract: Controls on capital inflows have been experiencing a renaissance since 2008, with several prominent emerging markets implementing them. We focus on Brazil, which instituted five changes in its capital account regime in 2008-2011. Using the synthetic control method, we construct counterfactuals (i.e., Brazil with no policy change) for each of these changes. We find no evidence that any tightening of controls was effective in reducing the magnitudes of capital inflows, but we observe some modest and short-lived success in preventing further declines in inflows when the capital controls were relaxed. We hypothesize that price-based capital controls’ only perceptible effect is to be found in the content of the signal they broadcast regarding the government’s larger intentions and sensibilities. Brazil’s left-of-center government’s willingness to remove controls was perceived as a noteworthy indication that the government was not as hostile to the international financial markets as many expected it to be.
    JEL: E60 F32 G23
    Date: 2013–07
  3. By: Ana María Ibañez Londoño (Universidad de los Andes- Colombia); Juan Carlos Muñoz Mora (ECARES - Université Libre de Bruxelles); Philip Verwimp (ECARES - Université Libre de Bruxelles)
    Abstract: This paper explores the importance of the risk of violence on the decision making of rural households, using a unique panel data set for Colombian coffee-growers. We identify two channels. First, we examine the direct impact of conflict on agricultural production through the change in the percentage of the farm allocated to coffee. Second, we explore how conflict generates incentives to substitute from legal agricultural production to illegal crops. Following Dercon and Christiaensen (2011), we develop a dynamic consumption model where economic risk and the risk of violence are explicitly included. Theoretical results are tested using a parametric and semi-parametric approach. We find a significant negative effect of the risk of violence and the presence of illegal crops on the decision to continue coffee production and on the percentage of the farm allocated to coffee. Results are robust after controlling for endogeneity bias and after relaxing the normality assumption.
    Keywords: selection model, armed conflict, illicit crop, coffee production
    JEL: C21 C34 D13 D74
    Date: 2013–06

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