nep-lam New Economics Papers
on Central and South America
Issue of 2017‒05‒14
six papers chosen by

  1. Household Education Spending in Latin America and the Caribbean: Evidence from Income and Expenditure Surveys By Santiago Acerenza; Néstor Gandelman
  2. Skill Premium, Labor Supply and Changes in the Structure of Wages in Latin America By Manuel Fernández; Julián Messina
  3. Ageing Poorly?: Accounting for the Decline in Earnings Inequality in Brazil, 1995-2012 By Francisco H. G. Ferreira; Sergio P. Firpo; Julián Messina
  4. Stylized Facts about the Quantity and Quality of Parental Time Investments on the Skill Formation of Their Children By Javier Torres; Jorge M. Agüero
  5. The Political Economy of Program Enforcement: Evidence from Brazil By Brollo, Fernanda; Kaufmann, Katja; La Ferrara, Eliana
  6. Trade Reforms and Industry Wage Premium: Evidence from Argentina By Guillermo Falcone; Luciana Galeano

  1. By: Santiago Acerenza; Néstor Gandelman
    Abstract: This paper characterizes household spending in education using microdata from income and expenditure surveys for 12 Latin American and Caribbean countries and the United States. Bahamas, Chile and Mexico have the highest household spending in education while Bolivia, Brazil and Paraguay have the lowest. Tertiary education is the most important form of spending, and most educational spending is performed for individuals 18-23 years old. More educated and richer household heads spend more in the education of household members. Households with both parents present and those with a female main income provider spend more than their counterparts. Urban households also spend more than rural households. On average, education in Latin America and the Caribbean is a luxury good, while it may be a necessity in the United States. No gender bias is found in primary education, but households invest more in females of secondary age and up than same-age males.
    Keywords: Household Expenditure, Household Income, Education Expenditure, Primary & Secondary Education, Children, School Attendance, gender bias, Educational Level, Household Expenditure, Household Income, Household Education Spending
    JEL: D12 I2 E21
    Date: 2017–03
  2. By: Manuel Fernández; Julián Messina
    Abstract: Earnings inequality declined rapidly in Argentina, Brazil and Chile during the 2000s. A reduction in the experience premium is a fundamental driver of declines in upper-tail (90/50) inequality, while a decline in the education premium is the primary determinant of the evolution of lower-tail (50/10) inequality. Relative labor supply is important for explaining changes in the skill premiums. Relative demand trends favored high-skilled workers during the 1990s, shifting in favor of low-skilled workers during the 2000s. Changes in the minimum wage, and more importantly, commodity-led terms of trade improvements are key factors behind these relative skill demand trends.
    Keywords: Wage Gap, Income Inequality, Minimun wage, Labor Productivity Growth, Labor supply, Labor Force, Unemployment Rate, Commodity Prices, Human Capital, Female Labor Force Participation, Unemployment, labor supply, Wage Gap, Minimun wage
    JEL: J31 J20
    Date: 2017–03
  3. By: Francisco H. G. Ferreira; Sergio P. Firpo; Julián Messina
    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 urbanrural 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: Wage Gap, Household Income, Human Capital, Income Inequality, Wage Disparity, Wage Growth, Wage Premium, Informal Employment, Formal Employment, income inequality, household income, human capital, wage gaps
    JEL: J31 D31
    Date: 2017–03
  4. By: Javier Torres; Jorge M. Agüero
    Abstract: This paper uses seven nationally representative time use surveys in Latin America to identify key stylized facts regarding the quantity and quality of parental time investment on the skill formation of their children. Traditional models of household behavior have failed to account for the differential behavior of parents with respect to skill formation of their children vis-à-vis home production. This paper finds that, similarly to higher-income countries, there is a positive education gradient, as more educated parents spend more time on skill formation than their less educated counterparts. This pattern is observed across all countries. The paper further extends this literature by showing that more educated parents also provide better care for their children, thus increasing the socioeconomic gap.
    Keywords: Parental Time Investment, Skill Formation, Parenting Interventions, Productivity Level, Child Care Quality, Children, Educational Level, Labor Force Participation, child care, household behavior, home production, Children, Parental Time Investments
    JEL: I21 J13 J12 D13
    Date: 2017–03
  5. By: Brollo, Fernanda; Kaufmann, Katja; La Ferrara, Eliana
    Abstract: Do politicians manipulate the enforcement of conditional welfare programs to influence electoral outcomes? We study the Bolsa Familia Program (BFP) in Brazil, which provides a monthly stipend to poor families conditional on school attendance. Repeated failure to comply with this requirement results in increasing penalties. First, we exploit random variation in the timing when beneficiaries learn about penalties for noncompliance around the 2008 municipal elections. We find that the vote share of candidates aligned with the President is lower in zip codes where more beneficiaries received penalties shortly before (as opposed to shortly after) the elections. Second, we show that politicians strategically manipulate enforcement. Using a regression discontinuity design, we find weaker enforcement before elections in municipalities where mayors from the presidential coalition can run for reelection. Finally, we provide evidence that manipulation occurs through misreporting school attendance, particularly in municipalities with a higher fraction of students in schools with politically connected principals.
    Date: 2017–04
  6. By: Guillermo Falcone (CEDLAS-FCE-UNLP); Luciana Galeano (CEDLAS-FCE-UNLP)
    Abstract: This paper studies the impact of Argentina trade liberalization during the nineties on the industry wage premium structure. We find that accounting for unobserved timeinvariant industry characteristics is crucial. When we do not control for industry fixed effects, we find that workers in protected sectors receive lower wages. However, introducing industry fixed effects reverses the results; tariff protection creates sector specific rents that are in part translated to workers in terms of greater wages. Since Argentina’s tariff structure during this period protected relatively more sectors employing higher proportions of skilled workers, nineties trade policy may have had an adverse effect on Argentina’s income distribution
    Date: 2017–05

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