nep-lam New Economics Papers
on Central and South America
Issue of 2016‒09‒18
eight papers chosen by

  1. The Anatomy of Behavioral Responses to Social Assistance when Informal Employment is High. By Marcelo Bergolo; Guillermo Cruces
  2. Key Success Factors in the Brazilian Coffee Agrichain: Present and Future Challenges By de Almeida, Luciana Florêncio; Zylbersztajn, Decio
  3. Ahorro de los hogares de ingresos medios y bajos de las zonas urbana y rural en Colombia By Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo; Ana María Tribín-Uribe
  4. The Perils of Top-down State Building: Evidence from Colombia's False Positives By Daron Acemoglu; Leopoldo Fergusson; James A. Robinson; Dario Romero; Juan F. Vargas
  5. Happiness and victimization in Latin America By Catalina Gómez Toro; Carolina Ortega Londoño; Daniel Gómez Mesa; Lina Cardona Sosa
  6. Electoral reciprocity in programmatic redistribution: Experimental Evidence By Sebastian Galiani; Nadya Hajj; Pablo Ibarraran; Nandita Krishnaswamy; Patrick J. McEwan
  7. Informal Labor and the Efficiency Cost of Social Programs: Evidence from the Brazilian Unemployment Insurance Program By François Gerard; Gustavo Gonzaga
  8. Consecuencias de la violencia doméstica contra la mujer en el progreso escolar de los niños y niñas del Perú By Alcázar, Lorena; Ocampo, Diego

  1. By: Marcelo Bergolo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Guillermo Cruces (CEDLAS-UNLP)
    Abstract: The disincentive effects of social assistance programs on registered (or formal) employment are a first order policy concern in developing and middle income countries. Means tests determine eligibility with respect to some income threshold, and governments can only verify earnings from registered employment. The loss of benefit at some level of formal earnings is an implicit tax – a notch – that results in a strong disincentive for formal employment, and there is extensive evidence on its effects. We study an income-tested program in Uruguay and extend this literature by developing an anatomy of the behavioral responses to this program and by establishing its welfare implications in full. Our identification strategy is based on a sharp discontinuity in the program’s eligibility rule. We rely on information on the universe of applicants to the program for the period 2004-2012 (about 400,000 individuals) from the program’s records, from administrative data on registered employment from the social security administration, and from a complementary follow-up survey with information on informal work. We construct the anatomy of the program’s effects along four dimensions. First, we establish that, as predicted by the theory, beneficiaries respond to the program’s incentives by reducing their levels of registered employment by about 8 percentage points. Second, we find substantial heterogeneity in these effects: the program induces a larger reduction of formal employment for individuals with a medium probability to be a registered employee, suggesting some form of segmentation – those with a low propensity to work formally do not respond to the financial incentives of the program, probably because they have limited opportunities in the labor market to begin with. Third, the follow-up survey allows us to establish that the fall in registered employment is due to a larger extent (about two thirds) to an increase in unregistered employment, and to a lesser extent (about one third) to a shift towards non-employment. Fourth, we find an elasticity of participation in registered employment of about 1.7. These results imply a deadweight loss from the behavioral responses to the program of about 3.2% of total registered labor income.
    Keywords: welfare policy, labor supply, registered employment, labor informality
    JEL: H31 I38 J22 O17
    Date: 2016–09
  2. By: de Almeida, Luciana Florêncio; Zylbersztajn, Decio
    Abstract: Coffee production has grown 100% in volume over the past 30 years, with 30 million bags of coffee consumed every year in the world. Brazil is responsible for 35% of this production, followed by Vietnam (16%), Indonesia (7%), Colombia (5%), and Ethiopia (5%). At this pace, consumption has expanded not only in traditional markets such as the United States of America (4.2 kg/year), Germany (6.9 kg/year) and France (5.7 kg/year), but also in tea‐driven markets such as Japan, Korea, Russia and China (CECAFE 2013). In 2013, Brazil harvested 49.15 million 60 kg bags of processed coffee, 38.29 million of which were of Arabica coffee and 10.86 million of Conilon species (CONAB 2014). The planted area in Brazil is 2.3 million hectares and there are about 287,000 producers, predominantly mini and small farmers. Having continental dimensions, the country presents a variety of climates, reliefs, altitudes and latitudes that allow the production of a wide range of types and qualities of coffee (MAPA 2014). This research aimed to clarify present and future challenges for the Brazilian coffee agrichain, considering the growing demand and also competitiveness between the coffee countries’ producers. To capture the vivid perception of the actors in the coffee chain, a qualitative approach was employed. The research was conducted in three phases. In the first phase, 10 coffee specialists were interviewed using the snowball technique with the saturation premise, to identify the coffee sector’s main milestones for Brazil over the next 30 years. In the second phase, desk research was conducted to collect data and bibliographical information. This culminated in eight key success factors for coffee farming management. Finally, in the third phase, the results of phase two were submitted for analysis by 39 coffee farmers through three discussion panels held in the major producing regions: Sul de Minas (corresponding to 60% of the national production), Cerrado Mineiro (with 20%), and Matas de Minas (with 15%) (CECAFE 2012). The first outcome was a comparative analysis of the three regions using the lens of the key success factors and, secondly, the main future challenges faced by each region. Added to those results, the panels provided insights for public policies and private strategies. The study consolidated new drivers of change that directly impact corporate strategies and public policies, namely: a) increasing complexity in coffee farming, b) farm succession, c) mechanization, d) increased use of pesticides, d) climate change, e) consumer behavior, and e) risk management in the coffee agrichain. Given these drivers of change, companies in the Brazilian coffee agrichain may move forward with relevant strategic focus on important issues, leading to: i) loyalty from the farmer to guarantee high quality coffee supply, ii) increase in entry barriers to ensure the maintenance of leadership in world coffee production and exportation, iii) operational risk minimization for companies as well as coffee farmers, iv) encourage and participate in the farmers´ actions to make coffee activity more environmental friendly, and finally, v) designing marketing plans connected with the coffee consumers’ habits and desires, current and future.
    Keywords: coffee, agribusiness, key success factors, Agribusiness,
    Date: 2016–05
  3. By: Ana María Iregui-Bohórquez (Banco de la República de Colombia); Ligia Alba Melo-Becerra (Banco de la República de Colombia); María Teresa Ramírez-Giraldo (Banco de la República de Colombia); Ana María Tribín-Uribe (Banco de la República de Colombia)
    Abstract: Este documento analiza empíricamente el ahorro de los hogares de ingresos medios y bajos de las zonas urbana y rural en Colombia, utilizando información de la Encuesta Longitudinal Colombiana de la Universidad de los Andes. Los resultados muestran una relación positiva entre el ingreso y el ahorro de los hogares. Además, se encuentra que la probabilidad de ahorrar aumenta con el nivel educativo, el ingreso, la participación laboral y la tenencia de vivienda del individuo. De otro lado, los resultados indican que la educación, el ingreso y una situación laboral estable aumentan la probabilidad de ahorrar en bancos y fondos de empleados o cooperativas y disminuyen la probabilidad de ahorrar de manera informal. Classification JEL: C25, D14, G21, R20
    Keywords: Ahorro de los hogares, zona urbana, zona rural, Colombia
    Date: 2016–09
  4. By: Daron Acemoglu; Leopoldo Fergusson; James A. Robinson; Dario Romero; Juan F. Vargas
    Abstract: How should a state which lacks the monopoly of violence go about acquiring it? We investigate the use of high-powered incentives for members of the Colombian army as part of a strategy to combat left-wing guerillas and build the state's monopoly of violence. We show that this top-down state-building effort produced several perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as 'false positives'). Exploiting the fact that Colombian colonels have stronger career concerns and should be more responsive to such incentives, we show that there were significantly more false positives during the period of high-powered incentives in municipalities where a higher share of brigades were commanded by colonels and in those where checks coming from civilian judicial institutions were weaker. We further find that in municipalities with a higher share of colonels, the period of high-powered incentives coincided with a worsening of local judicial institutions and the security situation, with more frequent attacks not just by the guerillas but also by paramilitaries.
    JEL: D02 D73 D74 D82 K42
    Date: 2016–09
  5. By: Catalina Gómez Toro; Carolina Ortega Londoño; Daniel Gómez Mesa; Lina Cardona Sosa
    Abstract: In recent decades, studies on economics have identified happiness as a life quality indicator that not only accounts for individuals’ socioeconomic improvement but also accounts for their interactions with institutions and public goods, such as personal safety and protection of life. This study examines the determinants of individual happiness of Latin American citizens by focusing on whether the individual had been a victim of a crime in the last twelve months. To do this, a generalized ordered logit with partial constraints is used to analyze data obtained from the Americas Barometer Survey of 2014. The individual self- reported level of life satisfaction is used to study its relationship with having been a victim of a crime during the previous year. The results suggest the existence of a negative relationship between having been a victim of a crime in the past twelve months and being very satisfied with life.
    Keywords: crime, happiness, life satisfaction, generalized ordered logit
    JEL: I3 K42 D62
    Date: 2016–09–01
  6. By: Sebastian Galiani; Nadya Hajj; Pablo Ibarraran; Nandita Krishnaswamy; Patrick J. McEwan
    Abstract: We analyzed two conditional cash transfers experiments that preceded Honduran presidential elections in 2001 and 2013. In the first, smaller transfers had no effects on voter turnout or incumbent vote share. In the second, larger transfers increased turnout and incumbent share in similar magnitudes, consistent with the mobilization of the incumbent party base rather than vote switching. Moreover, we found that turnout and incumbent share increased when cumulative payments were similar, but larger payments were made closer to the elections. As in prior lab experiments, individuals seem to overweight “peak” and “end” payments in their retrospective estimation of net benefits. We further argue that a model of intrinsically-reciprocal voters is most consistent with the findings.
    JEL: H3 I38
    Date: 2016–09
  7. By: François Gerard; Gustavo Gonzaga
    Abstract: It is widely believed that the presence of a large informal sector increases the efficiency cost of social programs – transfer and social insurance programs – in developing countries. We evaluate such claims for policies that have been heavily studied in countries with low informality – increases in unemployment insurance (UI) benefits. We introduce informal work opportunities into a canonical model of optimal UI that specifies the typical tradeoff between workers' need for insurance and the efficiency cost from distorting their incentives to return to a formal job. We then combine the model with evidence drawn from comprehensive administrative data to quantify the efficiency cost of increases in potential UI duration in Brazil. We find evidence of behavioral responses to UI incentives, including informality responses. However, because reemployment rates in the formal sector are low to begin with, most beneficiaries would draw the UI benefits absent behavioral responses, and only a fraction of the cost of (longer) UI benefits is due to perverse incentive effects. As a result, the efficiency cost is relatively low, and in fact lower than comparable estimates for the US. We reinforce this finding by showing that the efficiency cost is also lower in labor markets with higher informality within Brazil. This is because formal reemployment rates are even lower in those labor markets absent behavioral responses. In sum, the results go against the conventional wisdom, and indicate that efficiency concerns may even become more relevant as an economy formalizes.
    JEL: H0 J46 J65
    Date: 2016–09
  8. By: Alcázar, Lorena (Grupo de Análisis para el Desarrollo (GRADE)); Ocampo, Diego
    Abstract: La violencia contra la mujer es un gran problema que no solo tiene enormes consecuencias en las víctimas directas. Además, perturba todo el ámbito familiar, y atenta contra el desarrollo integral de los niños y las niñas. Utilizando datos de la Encuesta Demográfica y de Salud Familiar (ENDES), este estudio estima el efecto que tiene la violencia de género sobre la probabilidad de que los niños y las niñas repitan el año escolar. La violencia en el hogar genera un clima de tensión que impide el normal desarrollo cognitivo y de habilidades de los niños y las niñas. Al mismo tiempo, las madres víctimas de violencia tienen menos capacidad de brindar a sus hijos el cuidado y la atención que necesitan, lo cual contribuye a reducir el desarrollo de las habilidades de los niños y las niñas. Estos dos efectos suelen reflejarse en un desempeño escolar más pobre en comparación con el de sus pares que no sufren este problema. Por otra parte, el estudio no encuentra evidencia de que la violencia doméstica contra la madre tenga un efecto diferenciado entre las niñas y los niños.
    Keywords: Violencia domestica,Rendimiento escolar, Repetición, Niños, Domestic violence, Academic achievement, Grade repetition, Children, Peru
    JEL: I21
    Date: 2016

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.