nep-lam New Economics Papers
on Central and South America
Issue of 2017‒05‒07
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Evolving Wage Cyclicality in Latin America By Gambetti, Luca; Messina, Julián
  2. Using your ties to get a worse job? The differential effects of social networks on quality of employment: Evidence from Colombia By Deguilhem, Thibaud; Berrou, Jean-Philippe; Combarnous, François
  3. Wage Rigidities in Colombia: Measurement, Causes, and Policy Implications By Agudelo, Sonia A.; Sala, Hector
  4. Ageing Poorly? Accounting for the Decline in Earnings Inequality in Brazil, 1995-2012 By Ferreira, Francisco H. G.; Firpo, Sergio; Messina, Julián
  5. Learning about the Enforcement of Conditional Welfare Programs: Evidence from Brazil By Brollo, Fernanda; Kaufmann, Katja Maria; La Ferrara, Eliana
  6. Why Is Chiapas Poor? By Levy, Dan; Hausmann, Ricardo; Santos, Miguel Angel; Espinoza, Luis; Flores, Miguel
  7. Glass Ceiling in Research: Evidence from a National Program in Uruguay By Daniel Bukstein; Néstor Gandelman

  1. By: Gambetti, Luca (Autonomous University of Barcelona); Messina, Julián (Inter-American Development Bank)
    Abstract: Examines the evolution of the cyclicality of real wages and employment in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical during the 1980s and early 1990s, a period characterized by high inflation. As inflation declined wages became less pro-cyclical, a feature that is consistent with emerging downward wage rigidities in a low inflation environment. Compositional effects associated with changes in labor participation along the business cycle appear to matter less for estimates of wage cyclicality than in developed economies.
    Keywords: downward wage rigidity, indexation, real wage cyclicality, vector autoregression, time varying coefficients, Bayesian estimation
    JEL: E24
    Date: 2017–03
  2. By: Deguilhem, Thibaud; Berrou, Jean-Philippe; Combarnous, François
    Abstract: This article examines the effect of social networks through the use of family, friends or relatives ties on quality of employment (QoE). Drawing from the socioeconomic literature on social networks and labor market, we propose an original and multidimensional measure of QoE, and a fruitful estimation approach of the effect of social networks on QoE that allows to deal with complex inter-groups heterogeneity. Using the Great Integrated Houshold Survey (GIHS) and a sample on Bogota's workers in 2013, we find evidence proving that the use of ties has high negative effects on QoE index for those who are in the lower quality of employment range. Likewise, the use of social networks has very low negative effects on QoE index for individuals who are in the better quality of employment range. Complemented by focus groups interviews, these empirical results raise questions about the difference prevailing in relational practices between necessity networks for precarious workers and opportunity networks for protected workers.
    Keywords: Social networks, Quality of employment, Finite Mixture Regression Model, Colombia
    JEL: J42 L14 O54 Z13
    Date: 2017–04
  3. By: Agudelo, Sonia A. (Universitat Autònoma de Barcelona); Sala, Hector (Universitat Autònoma de Barcelona)
    Abstract: This paper evaluates the extent of wage rigidities in Colombia over a period, 2002-2014, in which the fall in unemployment was relatively slow with respect to sustained economic growth. Following Holden and Wulfsberg (2009), we compute a measure of downward real wage rigidity (DRWR) of 12.09%, four times bigger than their aggregate estimate for the OECD economies. Moreover, in contrast to the evidence for the advanced economies, the determinants of such rigidities show no connection to the wage bargaining system. Amid the absence of effective labor market institutions to make rigidities less prevalent, economic growth appears as the most powerful mechanism to ward them off. Under this light, we provide a stylized description of the wage setting rule in Colombia, compare it with the common one in the advanced economies, and call for a far-reaching reform of the Colombian wage bargaining setup.
    Keywords: downward real wage rigidity, wage bargaining, minimum wage, informality, unemployment
    JEL: E24 J3 J48 J58
    Date: 2017–03
  4. By: Ferreira, Francisco H. G. (World Bank); Firpo, Sergio (Insper, São Paulo); Messina, Julián (Inter-American Development Bank)
    Abstract: The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in earnings inequality was even larger by other measures, with the 90-10 percentile ratio falling by almost 40 percent. Although the conventional explanation of a falling education premium did play a role, an RIF regression-based decomposition analysis suggests that the decline in returns to potential experience was the main factor behind lower wage disparities during the period. Substantial reductions in the gender, race, informality and urban-rural wage gaps, conditional on human capital and institutional variables, also contributed to the decline. Although rising minimum wages were equalizing during 2003-2012, they had the opposite effects during 1995-2003, because of declining compliance. Over the entire period, the direct effect of minimum wages on inequality was muted.
    Keywords: earnings inequality, Brazil, RIF regressions
    JEL: D31 J31
    Date: 2017–03
  5. By: Brollo, Fernanda (University of Warwick); Kaufmann, Katja Maria (University of Mannheim); La Ferrara, Eliana (Bocconi University)
    Abstract: We study the implementation of Bolsa Familia, a program that conditions cash transfers to poor families on children's school attendance. Using unique administrative data, we analyze how beneficiaries respond to the enforcement of conditionality. Making use of random variation in the day on which punishments are received, we find that school attendance increases after families are punished for past noncompliance. Families also respond to penalties experienced by peers: a child's attendance increases if her own classmates, but also her siblings' classmates (in other grades or schools), experience enforcement. As the severity of penalties increases with repeated noncompliance, households' response is larger when peers receive a penalty that the family has not (yet) received. We thus find evidence of spillover effects and learning about enforcement.
    Keywords: enforcement, conditional welfare programs, learning, Brazil
    JEL: I25 I38 O15
    Date: 2017–03
  6. By: Levy, Dan (Harvard University); Hausmann, Ricardo (Harvard University); Santos, Miguel Angel (Harvard University); Espinoza, Luis (Harvard University); Flores, Miguel (Harvard University)
    Abstract: No matter which way you look at it, Chiapas is the most backward of any state in Mexico. Its per capita income is the lowest of the 32 federal entities, at barely 40% of the national median (Figure 1). Its growth rate for the decade 2003-2013 was also the lowest (0.2%),1 causing the income gap separating Chiapas from the national average to increase from 53% to 60%. That is to say that today the average income for a worker in Mexico is two and a half times greater than the average in Chiapas. The two next poorest states, Oaxaca and Guerrero, are 25% and 30% above Chiapas.2 According to the Instituto Nacional de Estadistica y Geografia de Mexico (INEGI, National Institute of Statistics and Geography), Chiapas is also the state with the highest poverty rate (74.7%) as well as extreme poverty (46.7%).3 These major differences in income levels among Mexican federal entities are reproduced as in a fractal within Chiapas. In fact, while the wealthiest entity (Mexico City) is wealthier than the poorest (Chiapas) by a factor of six, the difference within Chiapas between the wealthiest municipality (Tuxtla Gutierrez) and the poorest (Aldama and Mitontic) is by a factor greater than eight.4 As there are different "Mexicos" within Mexico,5 in Chiapas there are also different sorts of Chiapas (Figure 2). Income per capita in Tuxtla Gutierrez, to the right of the distribution, is five standard deviations above the state average. Next comes a series of intermediate cities, San Cristobal de las Casas, Comitan de Dominguez, Tapachula, and Reforma, between two and a half to four standard deviations above the average. The remaining municipalities of Chiapas follow (122 in all), clustered to the far left of the distribution. In addition, both the statistics available at the town level and our visits to various municipalities in Chiapas seem to indicate that significant differences also exist within these municipalities. From this vantage point, questions as to why Chiapas is poor, or what explains its significant backwardness compared to other areas of Mexico, become much more complex. Why do some regions in Chiapas have high income levels, while other regions remain stagnant, fully dependent on federal transfers and deprived from the benefits of modern life? 1 This is the non-oil gross domestic product growth rate reported by INEGI, considered to be more representative of the productive spectrum. In any case, the overall rate of growth in Chiapas (-0.2%) was also the lowest amongst all Mexican entities for the decade. 2 Refers to non-oil GDP; in general terms, Guerrero and Oaxaca are 19% and 16% above Chiapas. 3 Growth figures refer to the decade 2003-2013, poverty figures are those published by INEGI for 2012. 4 Comparisons of Chiapas municipalities are made based on the data from the 10% sample of the 2010 Population Census, which is representative at the state level. 5 This is a reference to the report, A tale of two Mexicos: Growth and prosperity in a two-speed economy, McKinsey Global Institute (2014).
    Date: 2015–07
  7. By: Daniel Bukstein; Néstor Gandelman
    Abstract: This paper presents evidence that female researchers have 7.1 percentage points lower probability of being accepted into the largest national research support program in Uruguay than male researchers. They also have lower research productivity than their male counterparts. Differences in observable characteristics explain 4.9 of the 7.1 percentage point gap. The gender gap is wider at the higher ranks of the program consistent with the existence of a glass ceiling. The results are robust to issues of bidirectionality (impact of research productivity on the probability of accessing the program and impact of the program on research productivity), joint determination and correlation of variables (e.g. having a Ph.D., publishing, and tutoring), and initial productivity effects (positive results at early stages may have long-term effects on career development). The paper presents three hypotheses for the gender gap (an original sin in the organization of the system, biases in the composition of evaluation committees, and differences in field of concentration) and finds some evidence for each. Glass ceilings are stronger in the fields where women are overrepresented among the applicants to the system: medical sciences, natural sciences, and humanities. Finally, it presents a counterfactual distribution of the program in the absence of discriminatory treatment of women and discusses the economic costs of the gender gap.
    Keywords: Female Researchers, gender discrimination, gender gap, Science and Technology Policy, Human Capital, Wage Gap, Wage Distribution, gender gap, female researchers, research
    JEL: J71 J4 J16
    Date: 2017–04

This nep-lam issue is ©2017 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.