nep-lam New Economics Papers
on Central and South America
Issue of 2014‒12‒03
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. The Economic Payoff of Creating Good Job Conditions: Theory and Evidence from Latin America By Chaparro, Juan; Lora, Eduardo
  2. The effects of a multi-pillar pension reform: The case of Peru By Javier Olivera
  3. An individual-centered approach to multidimensional poverty: The cases of Chile, Colombia, Ecuador and Peru By Franco-Correa A.
  4. The Brazilian Wage Curve: New Evidence from the National Household Survey By Baltagi, Badi H.; Rokicki, Bartlomiej; Barreiro de Souza, Kênia
  5. Determinants of Amazon Deforestation: The role of Off-Farm Income By José Gustavo FERES; Jean-Louis COMBES; Claudio ARAUJO
  6. Informality and employment quality in Argentina : country case study on labour market segmentation By Bertranou, Fabio; Casanova, Luis; Jiménez, Maribel; Jiménez, Mónica
  7. Education Policies and Structural Transformation By Cavalcanti Ferreira, Pedro; Monge-Naranjo, Alexander; Torres de Mello Pereira, Luciene
  8. More of Less isn’t Less of More: Assessing Environmental Impacts of Genetically Modified Seeds in Brazilian Agriculture By Seixas, Renato; Silveira, José Maria

  1. By: Chaparro, Juan; Lora, Eduardo
    Abstract: Based on Akerlof and Kranton (2005), who argue that group identity and social norms influence individual preferences towards work effort, a model is developed to understand why firms create good job conditions, taking into account the cost of implementing them and their impact on wages and productivity. Then, using individual-level data from the Gallup World Poll for 18 Latin American countries, the main predictions of the model are tested using propensity score matching. We find a positive link between good job conditions, workers’ labor income and productivity when there are several simultaneous signals of a good work environment. We conclude that there is a positive payoff of investing in good job conditions for both workers and firms.
    Keywords: Job Conditions, Human Resources Management, Labor Productivity, Identity Economics, Propensity Score Matching, Latin America, International Development, Labor and Human Capital, Productivity Analysis, J24, J64, M12, M54, O54,
    Date: 2014
  2. By: Javier Olivera (University of Luxembourg)
    Abstract: In this paper we study the consequences of a hypothetical multi-pillar pension system in Peru. We use unique administrative records of workers to estimate distributions of future pensions for the actual and multi-pillar system and assess the effects on pension inequality, pension liability and overall welfare for the insured population. Our results show that the large pension inequality and liability of the actual pension system can be substantially reduced with welfare preserving policies. As we consider different types of social welfare functions, our simulations illustrates, that when one considers welfare, it is important to define the implied value judgments, which are not universally agreed upon. Thus, the goal of this study is not to advice for a particular scenario of reform, but highlight the trade-offs that have to be made explicit in order to take the best possible option, which can be useful for policy-makers who intend to carry out a next generation of pension reforms in Latin America in the near future.
    Keywords: Pension reform, pension inequality, social security, Latin America, Peru, economic policy
    JEL: H55 H63 I30 G23
    Date: 2014–11
  3. By: Franco-Correa A. (UNU-MERIT)
    Abstract: This paper deals with the problem of selecting the unit of analysis in multidimensional poverty analyses, which is a central decision to take, both from academic and normative points of view. The paper compares the results of an individual-level Multidimensional Poverty Index for Chile, Colombia, Ecuador and Peru with a household-based measure. In the construction of the index, four dimensions were initially identified living conditions, health, education and labour. The motivating theoretical framework is based on Sens Capability Approach and the index used is the Adjusted Headcount Ratio AHR of the Alkire-Foster 2009 family of indicators. Different literature fields acknowledged the fact that individuals have varying preferences depending on their age Osberg, 2012, which do not necessarily agree with the collective preferences of the household. The present paper adopts Sens approach, noting that capabilities are mainly an individual concept. The individual index is constructed using three age groups children less than 18 years old, adults between 18 and 59 years and elderly 60 years or older. Multidimensional poverty is considerably different than income poverty in all countries. A simple ranking constructed with the Multidimensional Index and using the four countries for every individual approach, shows that the ordering prevails for smaller levels of the deprivation cut-off. In every scenario, Chile has the best scores of multidimensional poverty, followed by Colombia. Differences between Ecuador and Peru show that the rank-ordering does not prevail when the unit of analysis or cut-offs change.
    Keywords: Consumer Economics: Empirical Analysis; Equity, Justice, Inequality, and Other Normative Criteria and Measurement; Measurement and Analysis of Poverty;
    JEL: I32 D63 D12
    Date: 2014
  4. By: Baltagi, Badi H. (Syracuse University); Rokicki, Bartlomiej (Warsaw University); Barreiro de Souza, Kênia (CEDEPLAR/UFMG)
    Abstract: This paper reconsiders the Brazilian wage curve using individual data from the National Household Survey at 27 Federative Units over the period 2002 - 2009. We find evidence in favor of the Brazilian wage curve with an unemployment elasticity of -0.08 when the lagged unemployment rate is used as an instrument for current unemployment rate. We also find that males in Brazil are significantly more responsive to local unemployment rates (-0.13) than their female counterparts. In fact, we find that the unemployment elasticity for women is statistically insignificant. Applying gender specific unemployment rates, the elasticity for men decreases to -0.09, while the elasticity for women remains statistically insignificant. This paper also finds that the estimates for Brazilian wage curve are completely different for the case of formal and informal workers.
    Keywords: wage curve, fixed effects, regional labor markets, household surveys, informal workers
    JEL: C26 J30 J60
    Date: 2014–09
  5. By: José Gustavo FERES; Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International); Claudio ARAUJO (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: This paper aims at assessing the determinants of Amazon deforestation, with an emphasis on the role played by off-farm income. We first present a microeconomic model which relates off-farm income to deforestation patterns. We then test the empirical implications by using data on the 2006 Brazilian Agricultural Census. Our results suggest that an increase in off-farm income tends to reduce deforestation. This may be explained by the fact that greater off-farm opportunities tends to increase the opportunity cost of farm labor. Results also show that smallholders are less responsive to the increase in the returns of off-farm activities than large ones, which is in line with our hypothesis of labor market imperfections regarding off-farm activities.
    Keywords: deforestation, farm household, off-farm income, pseudo-panel
    JEL: C23 Q23 Q12
    Date: 2014–10
  6. By: Bertranou, Fabio; Casanova, Luis; Jiménez, Maribel; Jiménez, Mónica
    Abstract: This working paper examines employment quality and labour market segmentation in Argentina. The labour market in the country is marked by heterogeneity; the rate of informal employment is high, though it diminished significantly during the 2003-2011 period.
    Keywords: labour market segmentation, informal economy, informal workers, employment security, Argentina, segmentation du marché du travail, économie informelle, travailleurs informels, sécurité de l'emploi, Argentine, segmentación del mercado de trabajo, economía informal, trabajadores informales, seguridad en el empleo, Argentina
    Date: 2014
  7. By: Cavalcanti Ferreira, Pedro (EPGE/FGV); Monge-Naranjo, Alexander (Federal Reserve Bank of St. Louis); Torres de Mello Pereira, Luciene (EPGE/FGV)
    Abstract: This article studies the impact of education and fertility in structural transformation and growth. In the model there are three sectors, agriculture, which uses only low-skill labor, manufacturing, that uses high-skill labor only and services, that uses both. Parents choose optimally the number of children and their skill. Educational policy has two dimensions, it may or may not allow child labor and it subsidizes education expenditures. The model is calibrated to South Korea and Brazil, and is able to reproduce some key stylized facts observed between 1960 and 2005 in these economies, such as the low (high) productivity of services in Brazil (South Korea) which is shown to be a function of human capital and very important in explaining its stagnation (growth) after 1980. We also analyze how different government policies towards education and child labor implemented in these countries affected individuals’ decisions toward education and the growth trajectory of each economy.
    Keywords: economic growth; structural transformation; education; fertility
    JEL: J13 J24 O40 O41 O47 O57
    Date: 2014–10–29
  8. By: Seixas, Renato; Silveira, José Maria
    Abstract: We investigate the environmental effects due to pesticides for two different genetically modified (GM) seeds: insect resistant (IR) cotton and herbicide tolerant (HT) soybeans. Using an agricultural production model of a profit maximizing competitive farm, we derive predictions that IR trait decreases the amount of insecticides used and HT trait increases the amount of less toxic herbicides. While the environmental impact of pesticides for IR seeds is lower, for the HT seeds the testable predictions are ambiguous: scale as substitution effects can lead to higher environmental impacts. We use a dataset on commercial farms use of pesticides and biotechnology in Brazil to document environmental effects of GM traits. We explore within-farm variation for farmers planting conventional and GM seeds to identify the effect of adoption on the environmental impact of pesticides measured as quantity of active ingredients of chemicals and the Environmental Impact Quotient index. The findings show that the IR trait reduces the environmental impact of insecticides and the HT trait increases environmental impact due to weak substitution among herbicides of different toxicity levels.
    Keywords: Brazil, Agriculture, Environmental Impact, Genetically Modified Seeds, Herbicide Tolerant Soybeans, Insect Resistant Cotton, Pesticides, Agricultural and Food Policy, Environmental Economics and Policy, Q12, Q18, Q51, Q52, Q53,
    Date: 2014

This nep-lam issue is ©2014 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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.