nep-lam New Economics Papers
on Central and South America
Issue of 2015‒12‒28
six papers chosen by

  1. Can a small social pension promote labor force participation ? evidence from the Colombia Mayor program By Pfutze,Tobias; Rodriguez Castelan,Carlos
  2. Appraising cross-national income inequality databases: An introduction By Francisco H. G. Ferreira; Nora Lustig; Daniel Teles
  3. Seguro de paro y protección a los desempleados en Uruguay (1958-2014): legislación y desempeño By Nicolás Bonino-Gayoso; Ulises Garcia Repetto
  4. Tax Revenue Trends in Asia and Latin America: A Comparative Analysis By Joshua Aizenman; Yothin Jinjarak; Jungsuk Kim; Donghyun Park
  5. Poverty and Inequality Dynamics in Manaus: Legacy of a Free Trade Zone? By Marta Castilho; Marta Menéndez; Aude Sztulman
  6. Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America By Lee E. Ohanian; Paulina Restrepo-Echavarria; Mark L. J. Wright

  1. By: Pfutze,Tobias; Rodriguez Castelan,Carlos
    Abstract: One of the primary motivations behind the establishment of noncontributory pension programs is to allow beneficiaries to retire from the labor force. Yet, as with other unconditional cash transfer schemes, their aggregate effects may be more complex. Using panel data and instrumental variable techniques, this paper shows that the effect of one such program, Colombia Mayor, has been to raise the labor force participation of relatively younger male beneficiaries. This increase occurred precisely in the occupations with characteristics that are likely to require some up-front investment. The paper concludes that the transfer effectively loosened the liquidity constraints to remaining in these occupations. However, no such effect is found among women or older beneficiaries.
    Keywords: Labor Markets,Population Policies,Poverty Monitoring&Analysis,Debt Markets,Labor Policies
    Date: 2015–12–15
  2. By: Francisco H. G. Ferreira (World Bank, U.S.A.); Nora Lustig (Tulane University, U.S.A.); Daniel Teles (Tulane University, U.S.A.)
    Abstract: In response to a growing interest in comparing inequality levels and trends across countries, a number of cross-national inequality databases are now available. These databases differ considerably in purpose, coverage, data sources, inclusion and exclusion criteria, and quality of documentation. A special issue of the Journal of Economic Inequality, which this paper introduces, is devoted to an assessment of the merits and shortcomings of eight such databases. Five of these sets are microdata-based: CEPALSTAT, Income Distribution Database (IDD), LIS, PovcalNet, and Socio-Economic Database for Latin America and the Caribbean (SEDLAC); two are based on secondary sources: “All the Ginis” (ATG) and the World Income Inequality Database (WIID); and one is generated entirely through multiple-imputation methods: the Standardized World Income Inequality Database (SWIID). Although there is much agreement across these databases, there is also a non-trivial share of country/year cells for which substantial discrepancies exist. In some cases, different databases would lead users to radically different conclusions about inequality dynamics in certain countries and periods. The methodological differences that lead to these discrepancies often appear to be driven by a fundamental trade-off between a wish for broader coverage on the one hand, and for greater comparability on the other. These differences across databases place considerable responsibility on both producers and users: on the former, to better document and explain their assumptions and procedures, and on the latter, to understand the data they are using, rather than merely taking them as true because available.
    Keywords: Inequality comparisons, inequality databases, international inequality.
    JEL: D31 I32
    Date: 2015–11
  3. By: Nicolás Bonino-Gayoso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Ulises Garcia Repetto (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: From the beginning of the 20th century the issue of unemployed workers’ protection has occupied a central place in the political agenda of Uruguay. The problem has been attempted to address through three mechanisms: the so-called “pension for dismissal” (“jubilación por despido”, 1904-1979), the seasonal unemployment insurance (1944-1979) and the compulsory and autonomous unemployment insurance (from 1958 onwards). By the mid-1950s, in moments when the economic stagnation of the country started to be perceived, authorities felt the need to organize a scheme of unemployed workers’ protection that should be autonomous of retirement benefits. This aim is reached in 1958 when a compulsory an autonomous unemployment insurance program is approved for the private workers of industry and commerce. This paper examines the legislation that has ruled the program since 1958, its financial performance and real coverage, in comparison with international experience. Its conclusion is that in Uruguay unemployment insurance has been a marginal tool regarding its coverage and financial dimension, in spite of being Uruguay a country with a highly formalized labour market in relation to the rest of Latin America. This reveals the limitations of state’s action.
    Keywords: Unemployment insurance, Social Security, Unemployment, Social Public Spending, Public Finances
    JEL: N46
    Date: 2015–12
  4. By: Joshua Aizenman; Yothin Jinjarak; Jungsuk Kim; Donghyun Park
    Abstract: We take stock of and compare tax revenue trends in Asia and Latin America. The tax revenues to GDP ratios increased significantly in both regions in the 2000s, although they remain visibly below European levels. Our analysis portrays a complex picture of the tax collection challenges facing developing countries. Overall, there remains sizable heterogeneity in the revenue performance of developing countries, and across regions. While progress has been made, the gap between the advanced economies and developing countries suggests ample room for future fiscal developments, and for more disaggregated studies of the tax mobilization challenges facing developing countries in the aftermath of the global financial crisis.
    Date: 2015–11
  5. By: Marta Castilho (Universidade Federal Fluminense [Niterói]); Marta Menéndez (PSL - Paris Sciences et Lettres - Paris Sciences et Lettres, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, DIAL - Développement, institutions et analyses de long terme - Institut de recherche pour le développement [IRD], UP9 - Université Paris 9, Dauphine - Université Paris IX - Paris Dauphine); Aude Sztulman (IRD - Institut de Recherche pour le Développement - Institut de Recherche pour le Développement, DIAL - Développement, institutions et analyses de long terme - Institut de recherche pour le développement [IRD], LEDa - Université Paris Dauphine (Paris 9))
    Abstract: This study contributes to the literature on the social impacts of Special Economic Zones by analyzing the dynamics of poverty and inequality in the Brazilian state of Amazonas, where the Free Trade Zone of Manaus (FTZM) is located. Using census data, micro-decompositions and counterfactual simulations, we show that if labor income was a major driver of poverty and inequality declines for the municipality of Manaus in the 2000-2010 decade, non-labor income was far more important in the rest of the state of Amazonas. Our contrasting results illustrate both the benefits and limitations of the influence of the FTZM. A better targeting of both social policies and training programs could improve distributional outcomes in the whole area.
    Keywords: Free trade zone,poverty,inequality,Manaus,Brazil
    Date: 2015–12
  6. By: Lee E. Ohanian; Paulina Restrepo-Echavarria; Mark L. J. Wright
    Abstract: Since 1950, the economies of East Asia grew rapidly but received little inter-national capital, while Latin America received considerable international capitaleven as their economies stagnated. The literature typically explains the failureof capital to flow to high growth regions as resulting from international capitalmarket imperfections. This paper proposes a broader thesis that country-specificdistortions, such as domestic labor and capital market distortions, also impactcapital flows. We develop a DSGE model of Asia, Latin America, and the Rest ofthe World that features an open-economy business cycle accounting framework tomeasure these domestic and international distortions, and to quantify their con-tributions to international capital flows. We find that domestic distortions havebeen the predominant drivers of international capital flows, and that the generalequilibrium effects of these distortions are very large. International capital market distortions also matter, but less.
    JEL: F21 F32 F41 F44
    Date: 2015–11

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