nep-lam New Economics Papers
on Central and South America
Issue of 2014‒11‒28
eleven papers chosen by

  1. The Relationship between Childhood Circumstances and Adult Health Disparities: Evidence from Colombia By Fajardo-Gonzalez, Johanna
  2. Assessing Local Vulnerability to Climate Change in Agriculture for Tocantins, Brazil By Guerrero-Escobar, Santiago; Juarez-Torres, Miriam; Martinez Cruz, Adan
  3. Economic Growth and Wage Stagnation in Peru:1998-2012 By Carlos Urrutia; Peter Paz
  4. Health Status and Labor Force Participation: Evidence for Urban Low and Middle Income Individuals in Colombia By Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo
  5. The Long-Term Divergence Between Your CPI and Mine, The Case of Chile By Andrea Bentancor; Pablo Pincheira
  6. Cobertura de Acueducto y Alcantarillado, Calidad del Agua y Mortalidad Infantil en Colombia, 2000-2012 By Fabio Sánchez Torres; Alexander Vega Carvajal
  7. Risk Matters: The Impact of Nominal Uncertainty in Chile By Luis Ceballos; Damián Romero
  8. Workplace Democracy and Job Flows By Alves, Guillermo; Burdín, Gabriel; Dean, Andres
  9. Violence and the Formation of Hopelessness and Pessimistic Prospects of Upward Mobility in Colombia By Andrés Moya; Michael Carter
  10. Private Education Market, Information on Test Scores and Tuition Practices By Firpo, Sergio; Ponczek, Vladimir; Possebom, Vítor Augusto
  11. The Importance of Updating: Evidence from a Brazilian Nowcasting Model By Bragoli, Daniela; Metelli, Luca; Modugno, Michele

  1. By: Fajardo-Gonzalez, Johanna
    Abstract: This paper measures inequality of opportunity in adult health in Colombia employing the 2010 Living Standards and Social Mobility Survey. I study the relationship between childhood circumstances and health status in adulthood drawing on Roemer (1998)'s analytical approach to inequality of opportunity. I use stochastic dominance tests to capture differences in the conditional distributions of self-assessed health. This test is an initial assessment of inequality emerging from early life circumstances like parental education, household socioeconomic status in childhood and parental survival. I also calculate a dissimilarity index to provide a measure of inequality of opportunity in health and obtain the relative contributions of various circumstances using logistic regressions and the Shapley value decomposition. Since a limited set of circumstances are observed in the data, my estimation of inequality of opportunity provides a lower bound on the true inequality of opportunity. The findings suggest that there is substantial inequality of opportunity in adult health. Moreover, differences in household socioeconomic status during childhood and parental educational attainment appear to be the most important dimensions of inequality of opportunity in adult health.
    Keywords: Health status, inequality, childhood circumstances, stochastic dominance, dissimilarity index, Shapley value, Colombia, Health Economics and Policy, International Development, Labor and Human Capital,
    Date: 2014
  2. By: Guerrero-Escobar, Santiago; Juarez-Torres, Miriam; Martinez Cruz, Adan
    Abstract: We propose a reliable indicator of vulnerability to climate change in agriculture that allows assessing within the system the main components of vulnerability at a local level: stressors exposure (SE), stressors sensitivity (SS), and adaptive capacity (AC). Also, this indicator will allow identifying main vulnerability drivers and planning policies to increase system resiliency as well as designing climate change adaptation policies at the local level.
    Keywords: local vulnerability to Climate change in agriculture Brazil Tocantins, Research Methods/ Statistical Methods,
    Date: 2014
  3. By: Carlos Urrutia (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM)); Peter Paz (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))
    Abstract: In the last two decades, the Peruvian economy exhibited rapid growth. Moreover, the composition of the labor force improved in terms of education and experience, two variables which are typically associated to higher human capital. The average worker in 2012 had a higher level of education and was one and a half years older than in 1998, reáecting the impact of the demographic transition. However,the average real wage was roughly constant. We show that a decline in the wage premium for education,and to a minor extent for experience, is responsible for the lack of growth in the average real wage. Had these two premia remained constant throughout the period of analysis, average labor earnings would have increased by about 2.6 percent per year, of which 0.7 percentage points are accounted for the changes in the composition of the labor force in terms of age and education. We explore the role of the relative supply of workers with di§erent levels of human capital as an explanation for the decline in the wage premium for education. Finally, we analyze the implications of these Öndings for some macroeconomic variables, as earnings and wage inequality, the labor share and total factor productivity.
    Date: 2014
  4. By: Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo
    Abstract: This paper uses the first wave of the Colombian Longitudinal Survey (ELCA) to analyze the relationship between individual health status and labor force participation. The empirical modeling strategy accounts for the presence of potential endogeneity between these two variables. The results show that there is a positive relationship between health and labor force participation in both directions, indicating that better health is likely to lead to a higher probability of participation in the labor market, and also that those who are in the labor market are more likely to report better health. Moreover, interesting differences arise when the database is further divided by gender and/or age groups. Our findings highlight the importance of public policy to guarantee good health conditions of the population which could also have a positive impact on labor productivity and consequently on long-run economic growth.
    Keywords: Health status, labor force participation, endogeneity, Colombia
    JEL: C35 C36 I10 J21
    Date: 2014–11–06
  5. By: Andrea Bentancor; Pablo Pincheira
    Abstract: In this paper we analyze the Chilean Consumer Price Index (CPI) with respect to ten price indexes representing the average price faced by ten different income groups. We construct these indexes using information from two versions of the Household Expenditure Survey: that obtained for the period 1996-1997 and for the period 2006-2007. We show that the official CPI is a fairly good representation of the prices faced by the eighth and seventh income decile agents (first income decile is the poorest, tenth income decile is the richest). CPI shows a decreasing ability to represent the cost of life as the distance to the seventh and eighth decile increases. In particular, the poorest and richest people are the worst represented by the CPI. We also show that the inflation faced by different income groups has important similarities, but also some remarkable differences. For instance, while all income groups display a monthly inflation rate around 0.25 percent, the standard deviation of the lowest income group annual inflation is 45% higher than that of the richest group. More importantly, we show that different income groups face either permanent or very persistent gaps in their price indexes, indicating that differences across income groups may take a long time to dissapear.
    Date: 2014–08
  6. By: Fabio Sánchez Torres; Alexander Vega Carvajal
    Abstract: Determinar la relación entre las tasas de cobertura de acueducto y alcantarillado y la calidad del agua con la mortalidad infantil es clave para el diseño de políticas públicas que buscan mejorar las condiciones de vida de la población. El presente estudio encuentra que –para el caso de Colombia- aumentos de las coberturas mencionadas se traducen en disminuciones significativas en los menores de un año y cinco años. Este estudio cuantifica también el impacto de la calidad del agua sobre las tasas de mortalidad infantil medida aquella a través del Índice de Riesgo de la Calidad del Agua (IRCA) –información que se recolecta Colombia desde 2006. Los resultados de las estimaciones econométricas sugieren que los efectos en la disminución de la mortalidad infantil de una mayor calidad del agua sobre la mortalidad infantil son bastante mayores que los de la cobertura.
    Keywords: cobertura agua y alcantarillado, calidad del agua, mortalidad infantil, Colombia, gobiernos departamentales y municipales, variables instrumentales, dato panel
    JEL: C33 C36 H25 I13
    Date: 2014–10–08
  7. By: Luis Ceballos; Damián Romero
    Abstract: In this paper we analyze the empirical relationship between inflation and economic growth in both level as well as its uncertainty components based in a bivariate GARCH model for Chilean economy. Then we proceed to analyze the economic causality between level/uncertainty for both nominal and real variables. Our main finding suggests that nominal uncertainty plays a relevant role in the economy as a channel through which economic growth is affected. Finally, we compare some empirical benchmarks with the nominal uncertainty measure derived from the model. We conclude that the information reported by the Economic Expectation Survey (regarding the dispersion for the one-month expected inflation question), presents the higher correlation with our uncertainty measure among all benchmarks evaluated.
    Date: 2014–08
  8. By: Alves, Guillermo (IECON, Universidad de la República); Burdín, Gabriel (IECON, Universidad de la República); Dean, Andres (IECON, Universidad de la República)
    Abstract: This paper investigates the relationship between workplace democracy and job flows (net job creations, gross job creations and destructions) by comparing the behavior of worker-managed firms (WMFs) and conventional firms. The empirical analysis relies on high frequency administrative firm-level panel data from Uruguay over the period April 1996-July 2009. The main findings of the paper are that (1) WMFs exhibit much more stable job dynamics than CFs; (2) both types of firms have decreasing in age and increasing in size gross job creation profiles; (3) there are heterogeneous employment regimes within WMFs: high job creation and destruction rates of hired workers and low job creation and destruction of members. This paper contributes to the literature on the role of institutions in shaping job flows. Our results may have important implications for the understanding of the allocative efficiency effects of worker participation.
    Keywords: job flows, worker-managed firms
    JEL: D21 J54 J63
    Date: 2014–10
  9. By: Andrés Moya; Michael Carter
    Abstract: Violence has severe material and psychological consequences. In this article we explore if it also induces hopelessness and pessimistic prospects of upward mobility. For this purpose, we bring together novel data from a sample of individuals residing in violence-torn regions in Colombia, including some who were directly victimized and displaced during last ten years. We find that victims who suffered more severe episodes of violence are hopeless and perceive overly pessimistic prospects of upward mobility. These results suggest that shocks and traumatic experiences can shatter hopes and beliefs through psychological constraints and hinder the ability of people to recover in a pervasive way.
    JEL: D03 D84 O12
    Date: 2014–09
  10. By: Firpo, Sergio (Sao Paulo School of Economics); Ponczek, Vladimir (Sao Paulo School of Economics); Possebom, Vítor Augusto (Sao Paulo School of Economics)
    Abstract: In this paper, we study the impact of disclosing information about school quality of private schools in Brazil on school choice. Particularly, we investigate whether test score disclosure affected private schools' tuition prices. In 2006, Brazil started to announce the schools' average test score of ENEM, a high school exit exam run by the federal government. Using longitudinal school data, we gauge the effect of test score disclosure on tuitions of private schools for three different schools levels (elementary, middle and high school). We find that the disclosure of schools' average test scores affects tuitions positively for all these three educational levels, but the effect is larger for high school tuitions. We also find that private education markets are local instead of national, since local ranks better predict tuition prices than national ranks. Finally, adjustments on prices did not follow immediately after the publication of scores but occurred gradually over time, revealing that the parents needed some time to trustfully associate results on the exam to new information on school quality.
    Keywords: educational markets, information provision, private schools, tuition practices, school quality
    JEL: O12 I21 L15 D82
    Date: 2014–09
  11. By: Bragoli, Daniela (Universita Cattolica); Metelli, Luca (London School of Economics); Modugno, Michele (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: How often should we update predictions for economic activity? Gross domestic product is a quarterly variable disseminated usually a couple of months after the end of the quarter, but many other macroeconomic indicators are released with a higher frequency, and financial markets react very strongly to them. However, most of the professional forecasters, including the IMF, the OECD, and most central banks, tend to update their forecasts of economic activity only two to four times a year. The main exception is the Central Bank of Brazil which is responsible for collecting and publishing a daily survey on GDP and other variables. The aim of this article is to evaluate the forecasting performance of the Central Bank of Brazil Survey and to compare it with the mechanical forecasts based on state-of-the-art nowcasting techniques. Results indicate that institutional forecasts perform as well as model-based forecasts. The latter finding suggests that, on the one hand, judgmental forecasters do not have computational limitations and are able to incorporate very quickly new information in a way that is as efficient as a machine. On the other hand, it confirms what has been found in other studies, namely that a linear time invariant model does a good job and hence that eventual nonlinearities, time variations and soft information (such as weather conditions or government decisions) that could be incorporated by judgment, do not provide new important information.
    Keywords: Nowcasting; Updating; Dynamic Factor Model
    JEL: C33 C53 E37
    Date: 2014–11–04

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