nep-lam New Economics Papers
on Central and South America
Issue of 2017‒04‒16
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Education quality and returns to schooling: evidence from migrants in Brazil By Brotherhood, Luiz Mário; Ferreira, Pedro Cavalcanti; Santos, Cézar Augusto Ramos
  2. The evolution of inequality in Latin America in the 21st century: What are the patterns, drivers and causes? By Bogliacino, Francesco; Rojas Lozano, Daniel
  3. How Much Does Talent Matter? Evidence from the Brazilian Formal Cultural Industry By Ricardo da Silva Freguglia; Amir Borges Ferreira Neto
  4. Spillovers from U.S. Monetary Policy Normalization on Brazil and Mexico’s Sovereign Bond Yields By Carlos Góes; Herman Kamil; Phil De Imus; Mercedes Garcia-Escribano; Roberto Perrelli; Shaun K. Roache; Jeremy Zook
  5. On the Implications of Immigration Policy Restricting Citizenship: Evidence from the Dominican Republic By Amuedo-Dorantes, Catalina; Gratereaux Hernández, Carlos; Pozo, Susan

  1. By: Brotherhood, Luiz Mário; Ferreira, Pedro Cavalcanti; Santos, Cézar Augusto Ramos
    Abstract: We provide a new education quality index for states within a developing country using 2010 Brazilian data. This measure is constructed based on the notion that the financial returns obtained from an additional year of schooling can be seen as being derived from the value that market forces assign to this education. We use migrant data to estimate returns to schooling of individuals who studied in different states but who work in the same labor market. We find very heterogeneous educational qualities across states: the poorest Brazilian region presents education quality levels that are approximately equal to one-third of the average of all other regions, a gap three times larger than the one suggested by standardized test scores. We compare our index with standardized test scores, educational outcome variables, and public expenditure per schooling stage at the state level, producing new evidence related to education in a large developing country. We conduct an education quality-adjusted development accounting exercise for Brazilian states and find that human capital accounts for 26%-31% of output per worker differences. Adjusting for quality increases human capital’s explanatory power by 60%.
    Date: 2017–02–08
  2. By: Bogliacino, Francesco; Rojas Lozano, Daniel
    Abstract: In this article, we show the evolution of inequality for the largest economies of the Latin American region in the 21st century, with separate consideration of income and wealth. We analyse the drivers of the changes in inequality and possible underlying causes, including the role of the new wave of leftist governments.
    Keywords: inequality,new left,income,wealth,social policy
    JEL: D63 H53 N16 N36 P52
    Date: 2017
  3. By: Ricardo da Silva Freguglia (Federal University of Juiz de Fora, Department of Economics); Amir Borges Ferreira Neto (West Virginia University, Department of Economics)
    Abstract: The goal of this paper is to evaluate how much does talent – the individual non-observed characteristics – matter to explain the wage differences between workers from the cultural industry and workers from other formal industries in Brazil. To do so we use the data from 2003 to 2008 of the Rais-Migra – MTE, which is a true panel of formal workers from Brazil, and use fixed effects estimators to capture the talent measure and the Blinder (1973) and Oaxaca (1973) decomposition to seek for evidences of wage difference. The results imply that the talent is important in the determination of wages especially when considering formal workers in the cultural activities, occupations and workers in both cultural activities and occupation. The Oaxaca decomposition provides evidence that when considering talent, each of the groups paid their workers more per se, proving that not only the talent matter, but also that the formal cultural environment in Brazil positively discriminates their workers.
    Keywords: Wage Differentials, Cultural Industry, Talent, Fixed Effects, Brazil
    JEL: J31 Z11
    Date: 2017–04
  4. By: Carlos Góes; Herman Kamil; Phil De Imus; Mercedes Garcia-Escribano; Roberto Perrelli; Shaun K. Roache; Jeremy Zook
    Abstract: This paper examines the transmission of changes in the U.S. monetary policy to localcurrency sovereign bond yields of Brazil and Mexico. Using vector error-correction models, we find that the U.S. 10-year bond yield was a key driver of long-term yields in these countries, and that Brazilian yields were more sensitive to U.S. shocks than Mexican yields during 2010–13. Remarkably, the propagation of shocks from U.S. long-term yields was amplified by changes in the policy rate in Brazil, but not in Mexico. Our counterfactual analysis suggests that yields in both countries temporarily overshot the values predicted by the model in the aftermath of the Fed’s “tapering†announcement in May 2013. This study suggests that emerging markets will need to contend with potential spillovers from shifts in monetary policy expectations in the U.S., which often lead to higher government bond interest rates and bouts of volatility.
    Keywords: Western Hemisphere;Brazil;Mexico;QE, tapering, local-currency sovereign bond yields, vector error correction models, General
    Date: 2017–03–10
  5. By: Amuedo-Dorantes, Catalina (San Diego State University); Gratereaux Hernández, Carlos (Ministry of Economics, Dominican Republic); Pozo, Susan (Western Michigan University)
    Abstract: In 2010, an amendment to the Dominican constitution weakened the concept of jus soli citizenship by denying Dominican nationality to individuals born on Dominican soil to irregular immigrants. A few years later, in 2013, the Dominican High Court denationalized large numbers of individuals by reinterpreting language in the prior constitution to, in effect, apply the newer citizenship requirements retroactively to 1929. We gauge the impacts of changes to Dominican citizenship laws on Haitian immigrants and their descendants, to whom, many believe, these policies were directed. We find that the constitutional amendment affected informal employment of some Haitians and their descendants. Furthermore, the High Court's ruling resulted in a significant reduction in the share of Haitian-descendant youth registered in school. Non-attendance was attributed primarily to lack of appropriate documents. Given the rise of nationalist sentiments and discussions to further restrict and revoking citizenship in various regions of the world today, it is important to further explore how these policies ultimately impact targeted and vulnerable populations.
    Keywords: immigration policy, birthright citizenship, Dominican Republic, Haiti
    JEL: F22 F63 F66 F68 J61 K37
    Date: 2017–03

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