nep-lam New Economics Papers
on Central and South America
Issue of 2017‒02‒12
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Deflecting my burden, hindering redistribution: How elites influence tax legislation in Latin America By Juan A. Bogliaccini; Juan Pablo Luna
  2. The Recent Growth Boom in Developing Economies: A Structural-Change Perspective By Diao, Xinshen; McMillan, Margaret; Rodrik, Dani
  3. National Care System in Uruguay: Who benefits and who pays? By Verónica Amarante; Maira Colacce; Victoria Tenenbaum
  4. Occupational Choice and Matching in the Labor Market By Eric Mak; Aloysius Siow
  5. Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries By Nora Lustig

  1. By: Juan A. Bogliaccini; Juan Pablo Luna
    Abstract: This paper proposes to understand a singular but salient factor that enables the wealthy to deflect their tax burden downwards: elites. political leverage to shape legislation via their capacity to influence political actors and policy outcomes. The analysis sheds light on alternative mechanisms used by economic elites over time and space. Our analysis of the political economy of taxing upper-income groups in Chile and Uruguay reveals the importance of continuous political agency on the part of organized elite interest groups. Our results show how even centre-left parties competing on a redistributive programmatic platform confront and concede to the interests of wealthy elites, especially when sustained interaction between political leaders and economic elites becomes routinized in the long run.
    Keywords: tax policy, Latin America, elites, tax avoidance, redistribution, case study
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-092&r=lam
  2. By: Diao, Xinshen; McMillan, Margaret; Rodrik, Dani
    Abstract: Growth has accelerated in a wide range of developing countries over the last couple of decades, resulting in an extraordinary period of convergence with the advanced economies. We analyze this experience from the lens of structural change - the reallocation of labor from low- to high-productivity sectors. Patterns of structural change differ greatly in the recent growth experience. In contrast to the East Asian experience, none of the recent growth accelerations in Latin America, Africa, or South Asia was driven by rapid industrialization. Beyond that, we document that recent growth accelerations were based on either rapid within-sector labor productivity growth (Latin America) or growth-increasing structural change (Africa), but rarely both at the same time. The African experience is particularly intriguing, as growth-enhancing structural change appears to have come typically at the expense of declining labor productivity growth in the more modern sectors of the economy. We explain this anomaly by arguing that the forces that promoted structural change in Africa originated on the demand side, through either external transfers or increase in agricultural incomes. In contrast to Asia, structural change was the result of increased demand for goods and services produced in the modern sectors of the economy rather than productivity improvements in these sectors.
    Date: 2017–01
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:11804&r=lam
  3. By: Verónica Amarante; Maira Colacce; Victoria Tenenbaum
    Abstract: In this paper, we analyse two specific policies that make up the National Care System, a social policy being implemented in Uruguay. Through the calibration of a static tax benefit model, we estimate the distributive impact of the expansion of childcare services and home-based care for dependent elderly, both financed through a progressive direct tax on income. We discuss the importance of identifying who benefits from these services, and show that, in the Uruguayan case, the redistributive impact is very limited. Even if the benefits are significant for individual households, the overall impact is weak because the number of beneficiaries is small.
    Keywords: childcare, elderly care, redistribution, microsimulation
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-2&r=lam
  4. By: Eric Mak; Aloysius Siow
    Abstract: Integrating Roy with Becker, this paper studies occupational choice and matching in the labor market. Our model generates occupation earnings distributions which are right skewed, have firm fixed effects, and large changes in aggregate earnings inequality without significant changes in within firm inequality. The estimated model fits the earnings distribution both across and within firms in Brazil in 1999. It shows that the recent decrease in aggregate Brazilian earnings inequality is largely due to the increase in her educational attainment over the same years. A simulation of skilled biased technical change in the model also qualitatively fit the recent changes in earnings inequality in the United States.
    Keywords: occupational choice, matching, earnings distribution, inequality
    JEL: J J31
    Date: 2017–02–03
    URL: http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-577&r=lam
  5. By: Nora Lustig (Department of Economics, Tulane University)
    Abstract: Current policy discussion focuses primarily on the power of fiscal policy to reduce inequality. Yet, comparable fiscal incidence analysis for twenty-eight low and middle income countries reveals that, although fiscal systems are always equalizing, that is not always true for poverty. In Ethiopia, Tanzania, Ghana, Nicaragua, and Guatemala the extreme poverty headcount ratio is higher after taxes and transfers (excluding in-kind transfers) than before. In addition, to varying degrees, in all countries a portion of the poor are net payers into the fiscal system and are thus impoverished by the fiscal system. Consumption taxes are the main culprits of fiscally-induced impoverishment. Net direct taxes are always equalizing and indirect taxes net of subsidies are equalizing in nineteen countries of the twenty-eight. While spending on pre-school and primary school is pro-poor (i.e., the per capita transfer declines with income) in almost all countries, pro-poor secondary school spending is less prevalent, and tertiary education spending tends to be progressive only in relative terms (i.e., equalizing but not pro-poor). Health spending is always equalizing but not always pro-poor. More unequal countries devote more resources to redistributive spending and appear to redistribute more. The latter, however, is not a robust result across specifications.
    Keywords: fiscal incidence, social spending, inequality, poverty, developing countries
    JEL: H22 H5 D31 I3
    Date: 2017–01
    URL: http://d.repec.org/n?u=RePEc:tul:wpaper:1701&r=lam

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