nep-lam New Economics Papers
on Central and South America
Issue of 2017‒06‒11
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Separation, child-support and well-being in Uruguay By Marisa Buchelli
  2. The Long-Awaited Rise of the Middle Class in Latin America Is Finally Happening By Bussolo, Maurizio; Maliszewska, Maryla; Murard, Elie
  3. Selection on Ability and the Early Career Growth in the Gender Wage Gap By Fraga, Eduardo; Gonzaga, Gustavo; Soares, Rodrigo R.
  4. Does Foreign Trade Facilitation Improve Firms’ Export Performance? A Microeconomic Analysis of Chilean Manufacturing Plants By Ricardo Lopez; Kathleen McQueeney

  1. By: Marisa Buchelli (Universidad de la República (Uruguay). Facultad de Ciencias Sociales. Departamento de EconomíaAuthor-Name: Andrea Vigorito; Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: There is scarce quantitative evidence on the well-being effects of separation and divorce, and the specific role of child support payments in Latin American countries, due to the paucity of longitudinal data. This article contributes to fill this gap by analyzing the impact of family breakdown and child support in Uruguay on a wide set of household and child outcomes, based on two waves of a longitudinal study (Estudio Longitudinal del Bienestar en Uruguay), that follows-up children that were first graders at public primary schools in 2004. We restrict our study to households composed by married or cohabiting couples in the baseline (2004). The effect is estimated using a combined difference in difference- PSM method. Our main findings show that separation entails a significant per capita household income loss (12%) and increases deprivation in terms of income poverty and access to durable goods, for custodial mothers. However, the income fall is partially mitigated by paternal child support payments, public transfers, changes in living arrangements and behavioral responses among mothers, whose labor earnings increase significantly after separation. Meanwhile, separation seems to worsen child educational outcomes, particularly grade repetition. However, this disadvantage vanishes for those children receiving transfers from non co-resident fathers.
    Keywords: divorce, child support, Uruguay, panel data
    JEL: J12 J13 I30
    Date: 2017–05
  2. By: Bussolo, Maurizio (World Bank); Maliszewska, Maryla (World Bank); Murard, Elie (IZA)
    Abstract: In many developing countries, the supply of skilled workers is likely to continue to be stronger than demand, and this should drive down the skill premium and reduce inequality. Within the limitations of any exercise based on simulations, this paper finds that the recently observed reduction in inequality in Latin America may continue. Building on counterfactual scenarios projecting economic and demograph-ic (including age and education) growth, the paper also highlights that by 2030 the long-awaited rise of the middle class in Latin America will be in full swing, as its share will be 43 percent of the region's population, twice the value in 2005. This achievement is not guaranteed, as countries with large initial inequalities will have to achieve very high rates of inclusive growth.
    Keywords: inequality, middle class, skill premium, Latin America
    JEL: D31 D58 I24 J11
    Date: 2017–05
  3. By: Fraga, Eduardo (Yale University); Gonzaga, Gustavo (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Soares, Rodrigo R. (Columbia University)
    Abstract: This paper analyzes the effect of selection on ability on the evolution of the gender wage gap during the first years of professional life. We use longitudinal data with 16 years of the early career history of formal sector workers in Brazil. The panel allows us to build a measure of unobserved ability that we use to analyze the dynamics of labor market selection across genders as individuals age. We focus on the cohort born in 1974, for which we have a close to complete history of formal labor market participa-tion. For this cohort, the average ability of formally employed men improved in relation to that of women during the first years of professional life. The selection of men and women into the labor mar-ket was similar at age 21, but by age 31 high‐ability men (one standard deviation above the mean) had a probability of employment 1.6 percentage point higher than their high‐ability female counter-parts. This contributed to the increase in the conditional gender wage gap observed in the early career, as the ability distribution of employed women deteriorated in relation to that of employed men. Our estimates suggest that, for the 1974 cohort, this mechanism explains 32% of the cumulative growth in the conditional gender wage gap between ages 21 and 36.
    Keywords: gender wage gap, selection, ability, lifecycle
    JEL: J16 J21 J31 J71
    Date: 2017–05
  4. By: Ricardo Lopez (Brandeis University); Kathleen McQueeney (Brandeis University)
    Abstract: This paper constructs sector-level measures of trade facilitation in foreign countries to examine the effect of reducing the costs required to import abroad on export activity of Chilean plants. The results show that decreases in the number of documents required to import and in the number of days required to import in international markets significantly increase the probability of exporting of Chilean plants, while a decrease in the number of documents required to import increases plants’ export intensity. The estimates also show that the effect of improved foreign trade facilitation is larger in sectors with relatively low foreign tariffs.
    Keywords: Exporting, Trade Facilitation, Cost to Import, Plant-Level Data, Chile
    JEL: F14 L60 O54 D22
    Date: 2017–06

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