nep-lam New Economics Papers
on Central and South America
Issue of 2017‒08‒06
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Separation, Child Support and Well-Being in Uruguay By Marisa Bucheli; Andrea Vigorito
  2. Impact of a Work-Study Programme for Teenagers: Evidence from a Randomized Controlled Trial By Federico Araya; José Ignacio Rivero
  3. Knowledge-Intensive Mining Services: a Regional Approach for their Development in Chile By Claudio Bravo-Ortega; Leonardo Muñoz
  4. The value of redistribution: natural resources and the formation of human capital under weak institutions By Agüero, Jorge M.; Balcázar, Carlos Felipe; Maldonado, Stanislao; Ñopo, Hugo
  5. Tax Audits as Scarecrows: Evidence from a Large-Scale Field Experiment By Marcelo L. Bérgolo; Rodrigo Ceni; Guillermo Cruces; Matias Giaccobasso; Ricardo Perez-Truglia
  6. Gendered Effects of the Personal Income Tax: Evidence from a Schedular System with Individual Filing in a Developing Country By Marisa Bucheli; Cecilia Olivieri
  7. The Joint Distribution of Income and Wealth in Uruguay By Graciela Sanroman; Guillermo Santos
  8. The Role of Export Restrictions in Agricultural Trade By Carmen Estrades; Manuel Flores; Guillermo Lezama

  1. By: Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Andrea Vigorito (Instituto de Economía, Facultad de Ciencias Económicas y de Administración, Universidad de la República)
    Abstract: There is scarce quantitative evidence on the well-being effects of separation 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 cohabiting couples in the baseline (2004). The effect is estimated using a combined difference in difference- PSM method. Our main findings that 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 parents.
    Keywords: divorce, child support, Uruguay, panel data
    JEL: J12 J13 I30
    Date: 2017–04
    URL: http://d.repec.org/n?u=RePEc:ude:wpaper:0317&r=lam
  2. By: Federico Araya (Unidad Estadística del Trabajo y la Seguridad Social, Ministerio de Trabajo y Seguridad Social); José Ignacio Rivero (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: We present an impact evaluation of a labour programme oriented to young students called “Yo Estudio y Trabajo” (“I Study and Work”) carried out in Uruguay. It is one of the first such evaluations for this country. We estimate the programme’s effects on the probability of being formally employed and continuing to study. Impacts on the very short term (about three months after the programme ended), on the short term (15 months after programme finalisation) and on the medium term (27 months after the programme was completed) are analysed. We use administrative records provided by the public social security provider, the public education administration and the state university. We were able to match all candidates for selection into the programme (over 46,000) with their administrative records. Exploiting the programme’s random selection process, we apply experimental techniques to evaluate its effects through univariate models. In addition, we allow for interdependence between the decisions of working and studying through a bivariate probit model. Results indicate different effects depending on the characteristics of the individuals and the time span considered. In particular, for socially vulnerable youths we find that the programme increases their probability of being formally employed between 8 and 12 percentage points (depending on the particular model considered) in the medium term. These results are robust to different specifications and provide evidence in favour of increasing the programme’s coverage of socially vulnerable youth (a policy that has been under way since 2015).
    Keywords: impact evaluation, youth labour programme, randomized controlled trial
    JEL: D04 I28 J08
    Date: 2017–06
    URL: http://d.repec.org/n?u=RePEc:ude:wpaper:0617&r=lam
  3. By: Claudio Bravo-Ortega; Leonardo Muñoz
    Abstract: Governments in every country are concerned about the local economic development within each country’s region. In this vein, the case of mining industry draws attention in its trend of establishing enclave economies rather than cluster dynamics at the local level. In the case of the mining industry one might estate that there is no room for local economic development based on a strong industrial fabric if no directed policies are set and implemented. This paper’s objective is to understand how the backward and forward linkages approach is a key argument to inform regional industrial and vertical initiatives that aim to upgrade mining suppliers’ technological capacities. Based on the strategic design revision of the public-private programs for mining suppliers’ development and five case studies, we explore whether those implemented initiatives are being locally translated into mining regions. We find that the regional approach is nearly nonexistent in public policies implemented in the last 12 years. From our perspective, this lack of the regional approach makes it difficult to visualize direct effects from public-private policies on local firms’ performance. All these issues contribute inputs for scoping the design and deployment of policy tools for local economic development.
    Date: 2017–07
    URL: http://d.repec.org/n?u=RePEc:udc:wpaper:wp448&r=lam
  4. By: Agüero, Jorge M. (Grupo de Análisis para el Desarrollo (GRADE)); Balcázar, Carlos Felipe; Maldonado, Stanislao; Ñopo, Hugo (Grupo de Análisis para el Desarrollo (GRADE))
    Abstract: Los autores aprovechan la variación espacial y temporal generada por el boom de las materias primas para medir el efecto de los recursos naturales sobre la formación de capital humano en el Perú, un país con bajos indicadores de gobernanza. Al combinar las puntuaciones de las pruebas de más de dos millones de estudiantes y los datos administrativos a nivel de distrito sobre la producción minera y la redistribución de los impuestos mineros a los gobiernos locales, no se encontró ningún efecto de la producción. Sin embargo, la redistribución de los impuestos mineros aumenta los resultados de las pruebas de matemáticas en 0.23 desviaciones estándar. Los autores identifican las mejoras en la calidad de los docentes y en la infraestructura de la escuela, junto con el aumento en el empleo de los adultos y en los resultados de salud de adultos y niños, como mecanismos clave de la redistribución. Finalmente, en el documento se discuten las implicaciones de política para evitar la maldición de los recursos naturales.
    Keywords: Recursos naturales, Canon minero, Rendimiento académico, Gobierno local, Perú, Academic achievement, Natural resources, Local government, Peru
    JEL: N5
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:gad:avance:0028&r=lam
  5. By: Marcelo L. Bérgolo; Rodrigo Ceni; Guillermo Cruces; Matias Giaccobasso; Ricardo Perez-Truglia
    Abstract: According to the canonical model of Allingham and Sandmo (1972), firms evade taxes by making a trade-off between a lower tax burden and higher expected penalties. However, there is still no consensus about whether real-world firms operate in this rational way. We conducted a large-scale field experiment, sending letters to over 20,000 firms that collectively pay over 200 million dollars in taxes per year. In our letters, we provided firms with exogenous but nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measure the effect of these signals on their subsequent perceptions about the auditing process, based on survey data, as well as on the actual taxes paid, according to administrative data. We find that firms do increase their tax compliance in response to information about audits. However, the patterns in these responses are inconsistent with utility maximization. The evidence suggests that, much like scarecrows frighten off birds, audits can be a significant deterrent for tax evaders even though they would be perceived as harmless by a rational optimizer.
    JEL: C93 H26 K42
    Date: 2017–07
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:23631&r=lam
  6. By: Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Cecilia Olivieri (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This article analyzes the gender differences in the Personal Income Tax (PIT)-to-income ratio in Uruguay. Although the tax code does not explicitly specify gender differences, the tax burden varies among households types. When analyzing these differences, our findings suggest that the PIT serves as somewhat of an incentive towards equal gender time allocation within the family, which is consistent with gender equity. In turn, this pattern is reinforced by non-desirable aspects such as higher levels of informality among women and a higher level of non-taxable sources of income among single female households. The above conclusion relies on the assumption of individual filing. Our analysis also observes that the strengths of the PIT system from the gender perspective are eroded by the possibility to opt for a (rarely used) joint filing. The empirical strategy was assessed through the estimation of a zero-one inflated beta model (ZOIB). This model properly addresses the fact that the PIT-to-income ratio includes many zero data points.
    Keywords: economics of gender, family economics, income tax, tax incidence
    JEL: B54 J16 H22 H24 H31
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:ude:wpaper:0217&r=lam
  7. By: Graciela Sanroman (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Guillermo Santos (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This paper analyzes the joint distribution of income and wealth in Uruguay, and compares it to that of Chile, Spain and the U.S. using data from Surveys of Household Finances and Wealth. First, we analyze income and wealth separately and find that wealth is much more concentrated and notably more asymmetric than income. Afterwards, we provide non-parametric estimation of copulas for income and wealth. As expected, high income households are among the wealthiest, while low income households are mostly in the bottom of the wealth distribution, but dependence at the top is much stronger. Although this fact is observed in all the economies analyzed, by performing a test of equality between copulas we find that the pattern of dependence significantly varies across countries, except for the couple of Spain-Uruguay. Finally, we assess for the sources of income and wealth heterogeneity in Uruguay and conclude that education strongly influences income, wealth and the relationship between them. However, most of the wealth heterogeneity and some remarkable features of its relationship with income (in particular the peak at the top of the joint distribution) are not explained by the household characteristics commonly used to study income.
    Keywords: income, wealth, inequality, copula, non-parametric estimation
    JEL: C4 C31 D31
    Date: 2017–07
    URL: http://d.repec.org/n?u=RePEc:ude:wpaper:0717&r=lam
  8. By: Carmen Estrades (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Manuel Flores (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República y Geneva School of Economics and Management (Suiza)); Guillermo Lezama (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: Between 2006 and 2011, in a global context of rising food prices, many countries applied price-isolating policies, among them export restrictions. As countries are not obliged to notify WTO about the imposition of export restrictions, there is not good information about the measures applied. We fill this void by building a comprehensive database on export restrictions applied in the agricultural sector worldwide between 2005 and 2014. Using the Export Restriction in Agriculture (ERA) database, we assess the effects of export restrictions on agricultural trade and global food prices in 2005-2013. To do so, we estimate a disaggregated gravity model of trade. Clear evidence of export restrictions affecting world prices is limited to a handful of sectors, and weak evidence suggests that it may exist in some other sectors. We also find weak evidence of an impact of import promoting policies on agricultural prices. These results highlights the idea that export restrictions should be addressed at the multilateral level, but negotiations on export restrictions should not be disassociated from talks on other price-insulating policies.
    Keywords: export restrictions, export taxes, export bans, agricultural prices, gravity model
    JEL: F14 Q17 F13 C33 Q18
    Date: 2017–05
    URL: http://d.repec.org/n?u=RePEc:ude:wpaper:0417&r=lam

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