New Economics Papers
on Central and South America
Issue of 2014‒02‒02
three papers chosen by

  1. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America" By Fernando Rios-Avila
  2. Household Debt During the Financial Crisis: Micro-Evidence from Chile By Roberto Álvarez; Luis Opazo
  3. Proceso de Endeudamiento y Sobre Endeudamiento de los Hogares en Chile By Jaime Ruiz-Tagle; Leidy García; Álvaro Miranda

  1. By: Fernando Rios-Avila
    Abstract: This paper analyzes the economic impact of unions on productivity in the manufacturing sector across six Latin American countries: Argentina, Bolivia, Chile, Mexico, Uruguay, and Paraguay. Using an augmented Cobb-Douglas production function, the paper finds that unions have positive, but mostly small, effects on productivity, with the exception of Argentina, with a large negative effect, and Bolivia, with no effect. An analysis on profitability shows that, in most cases, the positive productivity effects barely offset higher union compensation, and that unions are negatively related to investment in capital and R and D. Different explanations for these effects are discussed.
    Keywords: Unions; Productivity; Profitability; Investment; Latin America; Developing Countries
    JEL: J50 L1 O54
    Date: 2014–01
  2. By: Roberto Álvarez; Luis Opazo
    Abstract: We examine evidence from a data panel from 2006 to 2009 to explore how chilean households were affected by the negative income shock observed during the recent financial crisis. our results show that there is a negative and significant relationship between income shocks and changes in consumption debt. this suggests that increasing debt allowed households to smooth consumption during the financial crisis and provides new empirical evidence about the importance of financial constraints in a developing country. we find evidence of heterogeneous effects by type of consumption debt and across households. our results show that reduction in income increased indebtedness with banking institutions, but not with non-banking creditors. across households, these results are driven mainly by those with financial assets and low levels of indebtedness before the crisis.
    Date: 2013–07
  3. By: Jaime Ruiz-Tagle; Leidy García; Álvaro Miranda
    Abstract: During the last years Chile has experienced a great expansion in access to household credit. This has led to important increases of indebtedness, in particular by the poorest income quintile. In this paper we analyze the evolution and the determinants of debt and over-indebtedness in last decade, as well as the robustness of the changes, using the Survey of Household Finances and the Social Protection Survey. The study also explores the role of shocks and preferences of individuals on household debt. The analysis shows that participation in indebtedness grows with income. We also find that the ratios of debt of the first quintile diminish significantly when considering the earning capacity of the household, so it can be inferred that this quintile would be less indebted than what can be thought from traditional indicators. On the other hand, the paper concludes that the effects of shocks (of health, income and spending on education) in the over-indebtedness are heterogeneous according to the different measures of debt used. Besides, it appears that individual characteristics such as having self-control problems, low self-esteem and low financial literacy are correlated with the level of household indebtedness.
    Date: 2013–08

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.