New Economics Papers
on Central and South America
Issue of 2014‒07‒05
seven papers chosen by

  1. The Politics of the diffusion of Conditional Cash Transfers in Latin America By Paola Pena
  2. Latin American Growth in the 21st Century: The 'Commodities Boom' That Wasn't By David Rosnick; Mark Weisbrot
  3. Economic and political inclusion of human development conditional transfer programmes in Latin America? By Armando Barrientos; Juan Miguel Villa
  4. Dutch Disease in Latin American countries: De-industrialization, how it happens, crisis, and the role of China By Wong, Sara A.; Petreski, Marjan
  5. Echoes of the crises in Spain and US in the Colombian labor market: a differences-in-differences approach By Luis E. Arango; Dolores de la Mata; Nataly Obando
  6. Caracterización del Mercado Laboral en Chile y su Evolución en los Últimos 25 años By Gonzalo Castex; Fabián Sepúlveda
  7. Export Mix Changes and Firm Performance: Evidence from Chile By Roberto Álvarez; Andrés Zahler

  1. By: Paola Pena
    Abstract: Abstract Is the emergence and rapid expansion of Conditional Cash Transfers (CCTs) in Latin America associated with the turn to the left in Latin American politics? The paper applies a modified version of the Dolowitz and Marsh (2000) Policy Transfer Framework to successive waves of policy diffusion in nineteen countries in the region. The analysis did not find a “New Left” footprint in the motivations, actors, and lesson-drawing processes that characterised the expansion of CCTs. It concludes that social assistance is at the top of the agenda of governments in Latin America regardless of the ideological leaning of ruling coalitions.
    Date: 2014
  2. By: David Rosnick; Mark Weisbrot
    Abstract: Latin America's economic growth rebound in the 2000s is often attributed to a “commodities boom,” which implies that the region’s growth was stimulated by sizable increases in the price of commodity exports. This paper looks at whether the data support such a conclusion. It finds that there is no statistically significant relationship between the increase in the terms of trade (TOT) for Latin American countries and their GDP growth. There is, however, a positive relationship between the TOT increase and an improvement in the current account balance. It may be that this allowed countries to avoid balance of payments crises or constraints.
    Keywords: latin america, terms of trade, commodities boom
    JEL: E E0 F F1 F13 F17
    Date: 2014–05
  3. By: Armando Barrientos; Juan Miguel Villa
    Abstract: Abstract Human development conditional transfer programmes have been adopted by a majority of countries in Latin America to address the intergenerational persistence of poverty. Typically, programmes provide regular and reliable transfers in cash to households in poverty, with transfers conditional on children attending school and on household members attending health clinics. Rigorous impact evaluations have established that, on the whole, programmes reach their explicit objectives, especially as regards nutrition, children’s schooling and improved health care utilisation. It is too early to say whether human development programmes will be successful in reducing the intergenerational persistence of poverty in the region. To certain degree, this will depend on whether they contribute to the economic and political inclusion of groups in poverty and extreme poverty. To the extent that improvements in children’s schooling and health state cannot guarantee a successful inclusion in the labour market, or that transfers reinforce longstanding clientelistic practices in the region; the fuller economic and political inclusion of these groups might not materialise. The paper aims to throw light on these issues by assessing existing knowledge on the longer term effects of participation in human development transfer programmes leads on productive capacity, employment and political participation. It finds a mixed picture.
    Date: 2014
  4. By: Wong, Sara A.; Petreski, Marjan
    Abstract: This study investigates if and how different episodes of large net inflows – export boom, remittances, FDIs, or aid – caused Dutch disease in Latin American countries. We investigate this disease – i.e. the decline of manufacturing output – with special reference to the channels through which it works, to the crisis period and to the role of China for LAC. The study conducts analyses at the 3-digit International Standard Industrial Classification level for manufacturing industries. Our results robustly suggest that export, aid and remittances booms may indeed have an adverse impact on the rate of growth of exportable industries. The exchange rate overvaluation has proven to be the channel through which these capital booms induced decline of manufacturing output growth, but only after the work monetary and fiscal policies is considered. The crisis likely softened the Dutch disease effects in LAC. We find China exporting manufactures to some of the LAC does not significantly affect the manufacturing growth of other fellow LAC, but depending on the type of manufacture industry and country considered China may play a negative or positive role for LAC’s manufacturing through the work on third-market competition: Mexican manufacturing suffering significant negative impacts while for the rest of Latin American countries studied the effect of China may be positive.
    Keywords: Dutch disease, manufacturing value added, excess appreciation, Latin America
    JEL: N66 O14
    Date: 2014–06
  5. By: Luis E. Arango; Dolores de la Mata; Nataly Obando
    Abstract: This paper presents evidence of the effect of the recent phases of the business cycle in Spain and United States, proxied by their respective unemployment rates, on the labor market of Colombian cities with high migration tradition. These countries are the main destination for labor Colombian migrants. Using information from the household survey between 2006 and 2011 for urban areas in Colombia and a differences-in-differences approach we find that unemployment rates of those countries negatively affect the probability and the amount of remittances received by Colombian households living in areas with high and moderate migration tradition. At a second stage we provide evidence that unemployment rates of those countries positively affect the labor force participation decisions in Colombian regions with the highest migration tradition.
    Keywords: Migration, remittances, labor participation, Spanish and United States unemployment rates.
    JEL: C21 J21 J22
    Date: 2014–06–24
  6. By: Gonzalo Castex; Fabián Sepúlveda
    Abstract: We present descriptive statistics of the Chilean labor market over the last 25 years. Several demographic and institutional changes may influence the individual’s decision to participate or not in the labor force. The present study shows trends in participation, employment, wages and other labor market characteristics. Those trends are analyzed for different demographic groups and for different economic sectors. The study shows that the increase in the labor market participation is driven by female participation. The economic sectors that grew the most are Commerce and Tourism, and Financial Services. The Personal Services sector concentrates the larger fraction of workers. Women represent an important fraction of it. The study reports an increase in the wage level and a decrease in the gender wage gap.
    Date: 2014–05
  7. By: Roberto Álvarez; Andrés Zahler
    Abstract: In this paper we analyze changes in the export mix of Chilean firms, looking particularly at differences between large firms and SMEs. To do that, we use detailed information of exported products by firms during the period 1995-2005. Our econometric results, which look at the impact of export product churning on firm performance, are heterogeneous by type of change in export mix and by firm size. In general, export mix changes are associated with improvements on productivity, although our results suggest that this positive effect is only for SMEs. In terms of employment and sales, we find that export product churning has positive effect on large firms and lower - and in some case negative - on SMEs. It seems that changes in export mix are more important for firm growth in large firms, but not in terms of productivity. In contrast, SMEs can have a higher potential for productivity improvement through export product churning but this does not translate necessarily in significant increase in sales and employment.
    Keywords: Integration & Trade, Productivity, SME, Small and Medium Size Enterprises (SMEs), Firm performance, Export mix, Large firms, New products, Product mix
    Date: 2014–04

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