nep-lam New Economics Papers
on Central and South America
Issue of 2017‒09‒17
five papers chosen by

  1. El diálogo de dos desafíos: evolución y relación de la desigualdad y la escolaridad en Chile By Estéfano rubio
  2. Conditional cash transfer programmes in Latin America and the Caribbean: Coverage and investment trends By Cecchini, Simone; Atuesta, Bernardo
  3. On the middle 70%. The impact of fiscal policy on the emerging middle class in Latin America using Commitment to Equity By Christian Daude; Nora Lustig; Angel Melguizo; Jose Ramon Perea
  4. Long-Term Care in Latin America and the Caribbean? Theory and Policy Considerations By Martín Caruso; Sebastian Galiani; Pablo Ibarrarán
  5. Uruguay en democracia: treinta años de evolución económica (1985-2015) By Gabriela Mordecki

  1. By: Estéfano rubio (Centro de Estudios Públicos, Santiago)
    Abstract: A continuación se presenta un análisis de la relación entre escolaridad y desigualdad en Chile. Se analiza la evolución de la desigualdad de ingresos desde el año 1990 al 2013, período en que el país ha experimentado una caída en el índice de Gini desde 0,56 a 0,52. Este hecho se intenta explicar desde dos enfoques: por un lado se analizan cuáles han sido los factores que han favorecido esta disminución y, por el otro, se estudian posibles causas de por qué estas cifras han permanecido tan elevadas durante los años. En relación a lo primero se incluyen los siguientes factores: leve caída en los retornos a la educación superior, reducción en la dispersión de escolaridad de la población y efectos período favorables. Entre las razones que explican por qué estas cifras continúan siendo elevadas, están: el aumento en el promedio de la escolaridad de la población — sumado a que los retornos de la escolaridad crecen con el nivel educacional—; un elevado retorno de la educación superior (universitaria especialmente); elevada participación del salario en los ingresos totales; y factores de fondo que establecen una estructura social que limita la masificación de la escolaridad en grupos de menos recursos (una baja movilidad educacional intergeneracional sumada a elevados índices de emparejamiento selectivo u homofilia). Por último se simula un escenario contrafactual en el cual no hubiese existido homofilia por parte de los padres de cada individuo; se encuentra que el Gini del ingreso laboral (a nivel de individuos) caería de 0,48 a 0,43, aunque asociado con una reducción de 15% de los salarios promedio.
    Keywords: emparejamiento selectivo; homogamia; desigualdad; movilidad intergeneracional; efectos edad-cohorte-período
    JEL: D31 I24 J12 J62
    Date: 2016–05
  2. By: Cecchini, Simone; Atuesta, Bernardo
    Abstract: This document analyses the evolution of the population coverage and investment of conditional cash transfer (CCT) programmes, which are poverty reduction initiatives, in the countries of Latin America and the Caribbean over the past 20 years. The analysis is based on up-to-date, detailed information from the database on non-contributory social protection programmes in Latin America and the Caribbean, which is administered by the Economic Commission for Latin America and the Caribbean (ECLAC) and available to the public via the Internet. The database presents information on the various components of the programmes and the institutions responsible for them and provides data on budgets, expenditure, coverage and transfer amounts of each CCT programme.
    Date: 2017–09
  3. By: Christian Daude (Development Bank of Latin America - CAF); Nora Lustig (Department of Economics, Tulane University); Angel Melguizo (OECD Development Centre); Jose Ramon Perea (World Bank)
    Abstract: This paper analyzes the effects of indirect and direct taxes, as well as monetary and in-kind transfers on the income distribution in nine Latin American countries applying the CEQ methodology and using household and expenditure microdata around 2010. In particular, we focus on the effect of fiscal policies on two groups of the emerging middle class: the vulnerable and the middle class. We find that while the vulnerable tend to be net receivers in fiscal terms, especially when including in-kind transfers, the middle class seems to be mainly a net payer. This might be aggravated by the perception of a relatively low quality of in-kind transfers, notably in education and health-care services. We provide some evidence based on subjective surveys pointing in this direction.
    Keywords: Middle class, tax-benefit analysis, fiscal incidence, fiscal mobility
    JEL: D31 H22 H50 I30
    Date: 2017–09
  4. By: Martín Caruso; Sebastian Galiani; Pablo Ibarrarán
    Abstract: This paper discusses theoretical and practical issues related to long-term care (LTC) services in Latin America. Demand for these services will rise as the region undergoes a swift demographic transition from its currently young population to a rapidly aging one, especially since the region’s aging cohorts are more prone to experience a decline in their functional and physical abilities than elderly people elsewhere in the world. We argue that private insurance markets are ill-equipped to provide coverage to meet the need for LTC, while the amount of personal savings required to afford self-insurance would be prohibitively high. We study how developed economies have dealt with the issue of LTC and pay special attention to the most salient features of their LTC programs. We then direct the discussion to Latin America, where LTC may not be an immediate priority, but governments are likely to encourage the development of LTC programs as demand for them steadily grows. In particular, policymakers are probably going to focus initially on LTC programs for the poor and vulnerable, for whom affordability of LTC is a greater problem. We therefore study how basic elements of policy design affect cost-effectiveness of LTC programs by means of a formal model. Our study shows that pro-poor programs are more cost effective when people have the option to receive cash subsidies, and the availability of in-kind and in-cash choices reduces program costs overall.
    JEL: J14
    Date: 2017–09
  5. By: Gabriela Mordecki (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: After more than a decade of dictatorship (June-1973/Feb-1985), in March 1985 the new democratic government takes charge of the Uruguayan economy, which had suffered a deep crisis that bottomed out in 1982. From there the monetary, fiscal, wage policy was redefined, and entered with great hope in a new growth path. However, international and regional conditions greatly limited economic growth and macroeconomic stability, and comes to 1989 with GDP stagnation, high inflation and fiscal deficit. Under these conditions, since 1990 a new neoliberal government established a stabilization plan with exchange rate anchor, labor market flexibility and tried to achieve fiscal balance. The stabilization policies generated a strong currency appreciation, that combined with the Mercosur’s creation and Argentinean convertibility policy and Brazil’s “Plan Real” generated a high regional dependence. After Brazilian devaluation of January 1999, the Uruguayan economy began to shrink, and rushed to another deep crisis after Argentina abandoned convertibility in December 2001. These facts led to a bank run that lasted until August 2002, when a 3-day bank holiday and a change in the economic team managed to stop it, with tough measures: banks closures and deposit freeze. The living conditions of Uruguayans rapidly deteriorated, with high unemployment, sharp increase in poverty, which implied migration and different survival strategies. The economy began to grow in 2003, and in 2005 the left-wing party, for the first time in power, made structural reforms (tax, social security, health, labor market, etc.) and with favorable international conditions, the economic growth continued for more than a decade. At the same time, promoted social and labor market improvements, although in recent years appeared some macroeconomic imbalances, such as inflation above the target range and high fiscal deficit. Thus, in this paper we analyze the impact of different economic policies implemented and the results obtained in Uruguay, in the context of the changing international and regional situation.
    Keywords: economic policy, economic growth, Uruguay
    JEL: E61 E63 N16
    Date: 2017–08

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