nep-lam New Economics Papers
on Central and South America
Issue of 2016‒06‒04
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Determinants of Changing Informal Employment in Brazil, 2000–2010 By Fairris, David; Jonasson, Erik
  2. Weathering storms : understanding the impact of natural disasters on the poor in Central America By Ishizawa Escudero,Oscar Anil; Miranda Montero,Juan Jose
  3. Desigualdad, Inflación, Ciclos y Crisis en Chile By Pablo García; Camilo Pérez
  4. Trade-off between amazon forest and agriculture in Brazil – shadow price and their substitution estimative for 2006 By Silva, Felipe; Fulginiti, Lilyan; Perrin, Richard
  5. Comparing the trends and strength of determinants to deforestation in the Brazilian Amazon in consideration of biofuel policies in Brazil and the United States By Carriquiry, Miguel; Elobeid, Amani; Goodrich, Ryan

  1. By: Fairris, David; Jonasson, Erik
    Abstract: This paper explores possible causal determinants of changing wage and salary informality over the period 2000–2010 in Brazil. We utilize demographic census and other institutional data sources from the opening and closing years of the decade, informality regressions in both years that exploit variation across workers and municipalities in informality rates and their causal determinants, and a Blinder-Oaxaca decomposition of changing mean informality rates over the decade. Among the determinants considered are: changes in labor law enforcement, a near doubling of the real value of the minimum wage, the emergence and growth of conditional cash transfer programs, and changing industry composition and labor force demographics. We find that two of the most important policy changes over this period – the increase in the real value of the minimum wage and the dramatic expansion of conditional cash transfer programs – contribute positively, not negatively to informality. Among the factors accounting for the decline in mean informality rates over this time are rising rates of labor law enforcement, rising education levels, increased numbers of workers with spouses in the formal sector, and changes in industry composition, which explain between 16% and 57% of the mean decline in informality over the period. However, most of the decline is accounted for by the changing estimated coefficients on the industry categorical variables – that is, by the changing way in which industrial composition translates into informality.
    Keywords: Brazil, informal employment, labor law enforcement, Bolsa Familia
    JEL: J22 J23 J46 O17
    Date: 2016–02–28
  2. By: Ishizawa Escudero,Oscar Anil; Miranda Montero,Juan Jose
    Abstract: In the past decades, natural disasters have caused substantial human and economic losses in Central America, with strong adverse impacts on gross domestic product per capita, income, and poverty reduction. This study provides a regional perspective on the impact of hurricane windstorms on socioeconomic measures in the short term. Apart from modeling the socioeconomic impact at the macro and micro levels, the study incorporates and juxtaposes data from a hurricane windstorm model categorizing three hurricane damage indexes, which lends a higher level of detail, nuance, and therefore accuracy and comprehensiveness to the study. One standard deviation in the intensity of a hurricane windstorm leads to a decrease in growth of total per capita gross domestic product of between 0.9 and 1.6 percent, and a decrease in total income and labor income by 3 percent, which in turn increases moderate and extreme poverty by 1.5 percentage points. These results demonstrate the causal relationship between hurricane windstorm impacts and poverty in Central America, producing regional evidence that could improve targeting of disaster risk management policies toward those most impacted and thus whose needs are greatest.
    Keywords: Disaster Management,Climate Change Economics,Hazard Risk Management,Rural Poverty Reduction,Natural Disasters
    Date: 2016–06–01
  3. By: Pablo García; Camilo Pérez
    Abstract: We analyze the effects of macroeconomic fluctuations, as well as episodes of financial instability and inflation, on inequality indicators in Chile for the period 1960-2014. For this purpose measures of income inequality are constructed from data from the Survey of Employment and Unemployment of the Universidad de Chile. To identify events of banking and inflationary crises we used indicators defined by Carmen M. Reinhart and Kenneth Rogoff. Furthermore, to determine the business cycle and employment fluctuations we use the Gerhart Bry and Charlotte Boschan algorithm. The relationship between episodes of crisis and fluctuations on levels of inequality are estimated from an event study, finding that they are related to fluctuations in inequality. In addition, we perform econometric estimates where inequality indicators relate to different macroeconomic variables and educational performance. The main conclusions are that banking and inflation crises, as well as periods of severe cyclical contractions, tend to increase the levels of inequality in Chile. Our results show that achieving levels of macro-financial stability in the economy contributes not only to sustain growing levels of average income per capita, but also to avoid negative effects on equity.
    Date: 2016–04
  4. By: Silva, Felipe; Fulginiti, Lilyan; Perrin, Richard
    Abstract: Agriculture has led to deforestation in the northern states of Brazil during the last decades, generating a tradeoff between forest and agricultural commodities. In this study we estimate this tradeoff for the Brazilian Amazon region. To calculate the tradeoff, we use a directional distance function to estimate a production possibility frontier and the marginal rate of transformation between deforestation and agricultural activities. Using this information and market prices we calculate the shadow price of deforestation in terms of agricultural GDP foregone. Results indicate that, on average, US$ 129.48 in agricultural GDP has to be foregone to keep one hectare of virgin tropical forest. Marginal rates of transformation suggest a higher tradeoff between livestock and deforestation given the currently extensive production in the region. Also, we found that these rates vary across states due to the relevance of each agricultural activity for them, illustrating the heterogeneity of the region with respect to agricultural production. We also found an average perpetuity shadow price of a ton of CO2 emissions of US$4.16. A market-price equilibrium for tCO2 at this average price would lead to a reduction of at least 468 thousand hectares, around 43% of 2006 deforestation.
    Keywords: Amazon Forest, Agriculture, Deforestation, Trade-off., Environmental Economics and Policy, Production Economics, Q51, Q54, C61,
    Date: 2016–05–25
  5. By: Carriquiry, Miguel; Elobeid, Amani; Goodrich, Ryan
    Abstract: This paper provides a review of several of the major factors that will determine the need to incorporate additional land to production in response to a demand increase, for example as a result of biofuel policies. Among the factors reviewed are the potential for yield intensification in response to higher returns (intensification effects), and the limited existing evidence in yield drags as areas are incorporate to crop production (extensification effects). We conduct a review of the recent trends on Amazon deforestation, highlighting the recent interventions and seemingly sustained lower rates than in earlier years. These lower rates, which may be the results of more stringent regulations and control, occur in a period of high agricultural price and demand for land, which calls for some additional research on the direct link between global agricultural demand and deforestation of the Brazilian Amazon. Scenario analysis using an augmented version of the CARD/FAPRI agricultural modeling system (augmented to include planted forests in Brazil) seem to provide evidence in this line. Systematic work in this line is scarce and clearly more research is needed to truly understand the implications of adding the competition with planted forests, different levels of policy enforcement, and potentials for yield (both in terms of crops and pastures) increases on evaluations of agricultural price change, land use change, and environmental impacts.
    Keywords: land use change, land use change models, planted forests models, Agricultural and Food Policy, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2016

This nep-lam issue is ©2016 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.