nep-lam New Economics Papers
on Central and South America
Issue of 2016‒02‒17
six papers chosen by

  1. Índios na cidade: perfil sociodemográfico dos indígenas residentes na região metropolitana de Belo Horizonte By Vanessa Cardoso Ferreira; Bartolomeu Pankararu; Ramon da Silva Torres; Cláudio Santiago Dias Júnior
  2. Impact of Weather Insurance on Small Scale Farmers: A Natural Experiment By Ibanez, Marcela; Dietrich, Stephan
  3. Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru By Lavado, Pablo; Yamada, Gustavo
  4. An Unfulfilled Promise? Higher Education Quality and Professional Underemployment in Peru By Yamada, Gustavo; Lavado, Pablo; Martínez, Joan J.
  5. When too much punishment decreases legality. The case of coca-reducing policies in Colombia By Vasquez Escallon, Juanita
  6. Local Labor Market Conditions and Crime: Evidence from the Brazilian Trade Liberalization By Dix-Carneiro, Rafael; Soares, Rodrigo R.; Ulyssea, Gabriel

  1. By: Vanessa Cardoso Ferreira (Cedeplar-UFMG); Bartolomeu Pankararu (FAE/UFMG); Ramon da Silva Torres (FACE/UFMG); Cláudio Santiago Dias Júnior (UFMG)
    Abstract: Surveys carried out by entities linked to the indigenous cause, such as the Indigenous Missionary Council (CIMI) and the Socio-Environmental Institute (ISA) show that in Brazil there are about 200 indigenous peoples. These people are distributed throughout the country, and are divided into various ethnic groups and languages ​​spoken, with social, cultural and economic distinct. The size of this population varies according to the sources of information. Preliminary results of Census 2010 show that there are 815,000 indigenous people, about 0.4% of the total population.Data from the Brazilian Institute of Geography and Statistics (IBGE) estimated that there are 32,000 people who declared themselves as indigenous in the state of Minas Gerais in 2010, while this figure was 49,000 in 2000. In Minas Gerais, the number of indigenous villages is approximately 12 thousand people, according to the census conducted by the Federal University of Ouro Preto (UFOP) in 2007. According to this survey, nine indigenous peoples reside in the state, and they are Xakriabá, Maxakali, Krenak, Pataxó, Caxixó, Xukuru- Kariri, Pankararu, Aranã and Mukurin. This paper describes some characteristics of the self-declared indigenous population of the third largest metropolitan area in Brazil, the metropolitan area of ​​Belo Horizonte (MRBH), located in the state of Minas Gerais. For this survey, we used the data from the IBGE Census of 2000 and 2010 and information collected in field work, through interviews applied to a sample of indigenous residents in Greater Belo Horizonte. The sociodemographic study of the indigenous population of the self-declared MRBH yielded important information on the sociodemographic characteristics of this population. The present results, in general, show a poor, with low education, with precarious jobs without proper social security and assistance. Also shows a significant reduction in the number of Indians in MRBH with fundamental changes in the age structure.
    Keywords: Indians, city, sociodemographic profile, Belo Horizonte
    JEL: Y80
    Date: 2015–12
  2. By: Ibanez, Marcela; Dietrich, Stephan
    Abstract: This paper explores the impacts of traditional agricultural insurance that offers protection against climatic shocks on small-scale tobacco farmers in Colombia after a period of substantial crop failures. Our identi cation strategy bene ts from a natural experimental setup of the form in which the insurance was launched. We fnd that tobacco producers with access to the insurance program were less likely to acquire informal loans, were less likely to use loans to repay debts, and had access to loans with lower interest rates and longer maturation periods. Moreover, access to this program was positively associated with increased savings and accumulation of liquid assets.
    JEL: G22 O13 O12
    Date: 2015
  3. By: Lavado, Pablo (Universidad del Pacifico); Yamada, Gustavo (Universidad del Pacifico)
    Abstract: Many studies have been conducted to analyze the effect of stricter Employment Protection Legislation (EPL). However, almost all of them has focused on an ex-post impact; leaving aside a second but equally important channel: expectations. This paper aims to analyze the role of expectations on Peruvian formal and informal labor market; using news as our identification variable. We use the monthly number of news related to the approval of the General Labor Law (GLL), a proposal entailing future stronger labor rigidities, from January 2001 to May 2012. Using the Permanent Employment Survey (EPE), we find a negative relation between expectations towards a stricter labor market and both employment and average income. News mainly affect formal occupied EAP, arousing a substitution effect from formal to informal employment. We also discover that the effect of expectations differs in periods with higher versus lower GDP growth. Finally, we find some evidence supporting news having a cumulative effect: the larger the previous stock of news, the weaker the effect.
    Keywords: employment protection legislation, expectations, labor law, informal labor market
    JEL: J21 J23 J24 J32
    Date: 2015–12
  4. By: Yamada, Gustavo (Universidad del Pacifico); Lavado, Pablo (Universidad del Pacifico); Martínez, Joan J. (Universidad del Pacifico)
    Abstract: Despite the high growth of the Peruvian economy during the last decade, college graduates are facing increasing difficulties to find occupations that match their higher educational background, skills and educational investments. This scenario is embodied in the "professional underemployment" condition by which 4 out of 10 college graduates, by 2012, are overeducated, occupying non-professional and sub-paid positions. We propose that the deterioration in higher education quality has been a trigger for the increase in underemployment of university graduates, as an alternative to the literature that analyzes its causes related to labor demand. The main objective is to explore and quantify the extent to which higher education quality contributes to professional underemployment in Peru. Using data from the National Household Survey for the period 2004-2012 and the National University Census for the years 1996 and 2010, we propose a discrete choice model that measures the impact of college quality on the individual condition of underemployment in the long run. The source of variability for identifying this effect is the institutional and legal process of deregulation of universities initiated in the nineties. Our results indicate that the probability of being underemployed among graduates who attended "lower quality" universities increased from 0.19 to 0.30 beginning the college market deregulation. These estimation consider a twofold effect of deregulation, over the quality of university to which university applicants are prone to attend and in the probability of acquiring university education among individuals with lower academic skills.
    Keywords: discrete choice models, employment determination, occupational choice, human capital, professional labor markets and occupation, unemployment
    JEL: C21 J23 J24 J44 J64
    Date: 2015–12
  5. By: Vasquez Escallon, Juanita
    Abstract: States want their people to follow the law. They can either persuade them, sanction law-breakers, or both. But sanctions do not only alter people s perception of risks and costs; they also affect how people view their state and its legitimacy, unleashing a series of non-economic factors that determine compliance with the law. In fact, when a sanction is perceived as unjust it may be inefficient in reducing law violations and could crowd-out legality in other aspects of life. Law scholars warn against violating the principle of proportionality by exerting extreme punishment in comparison with the magnitude of the crime, as it may result in the loss of citizen cooperation with the law. I take one of Colombia s drug-reducing policies, aerial spraying of coca crops and study the effect of its disproportionate use on legal crops. My results point to a non-linear effect of punishment on legality: spraying shocks or extreme spraying in relation to the amount of illegal crops found reduce engagement in legal crops, where as proportional levels of spraying induce legality. I use four different sources of data to test this relationship: macro data on all coca growing municipalities in Colombia, and micro data of three very different sets of farmers, namely coca growers surveyed by the UNODC, farmers that are beneficiaries of Colombia s biggest alternative development Program (Forest Warden Families) and coffee growers in municipalities that have had coca. I find the same results in all four samples and conclude that when the state overdoes its coercive actions, these can backfire and crowd out legality.
    JEL: D78 K42 Q12
    Date: 2015
  6. By: Dix-Carneiro, Rafael (Duke University); Soares, Rodrigo R. (Sao Paulo School of Economics); Ulyssea, Gabriel (Pontifical Catholic University of Rio de Janeiro (PUC-Rio))
    Abstract: This paper estimates the effect of local labor market conditions on crime in a developing country with high crime rates. Contrary to the previous literature, which has focused exclusively on developed countries with relatively low crime rates, we find that labor market conditions have a strong effect on homicides. We exploit the 1990s trade liberalization in Brazil as a natural experiment generating exogenous shocks to local labor demand. Regions facing more negative shocks experience large relative increases in crime rates in the medium term, but these effects virtually disappear in the long term. This pattern mirrors the labor market responses to the trade shocks. Using the trade liberalization episode to design an instrumental variables strategy, we find that a 10% reduction in expected labor market earnings (employment rate × earnings) leads to a 39% increase in homicide rates. Our results highlight an additional dimension of adjustment costs following trade shocks that has so far been overlooked in the literature.
    Keywords: labor markets, crime, trade liberalization
    JEL: F16 J23 J24 K42
    Date: 2016–01

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