nep-lam New Economics Papers
on Central and South America
Issue of 2018‒09‒03
five papers chosen by

  1. Labor Cost of Mental Health: Evidence from Chile By Jaime Ruiz-Tagle; Pablo Troncoso
  2. Media Coverage and Food Commodities: Agricultural Futures Prices and Volatility Effects By Miguel Almanzar and Maximo Torero
  3. More educated, less mobile? Diverging trends in income and educational mobility in Chile and Peru By Anja Gaentzsch and Gabriela Zapata Román
  4. Increasing productivity dispersion: Evidence from light manufacturing in Brazil By Gonzales-Rocha, Erick; Mendez-Guerra, Carlos
  5. A guide for the evaluation of programs of human capital training for science, technology and innovation By Aboal, Diego; Perera, Marcelo; Tacsir, Ezequiel; Vairo, Maren

  1. By: Jaime Ruiz-Tagle; Pablo Troncoso
    Abstract: Individuals’ labor market performance can be affected directly by their mental health through labor market participation and productivity. Moreover, poor mental health of workers limits labor mobility and hence efficiency and economic growth. Although there is some empirical evidence linking mental health and labor market performance in high-income countries, few papers provide evidence from developing countries, despite the fact that health support is typically weak. We investigate the effects of poor mental health on labor market in Chile, where depression rate reaches 17%. We build a mental health status index and control confounding effects by using a large set of individual and household socio-economic, labor and health characteristics. We address causality identification by using instrumental variables at the individual level (number of relatives that passed away, relatives diagnosed with depression), and at the municipality level (life expectancy, intra-family violence rate). Our results indicate that poor mental health could reduce labor market participation by 20%. Additionally, we find that poor mental health could reduce wages by 60% for women and 50% for men. We also find heterogeneous effects among workers due to economic sector, were private sector workers with poor mental health suffer larger impacts on wages than public sector workers.
    Date: 2018–08
  2. By: Miguel Almanzar and Maximo Torero
    Abstract: We examine how media coverage of fluctuations in the price of agricultural commodities affects these prices and their volatility. We develop a unified empirical framework to analyze the media’s effects on both returns and volatility using insights from the literature. We use daily prices of futures contracts for soybeans, hard wheat, soft wheat, rice, and maize, complemented by a unique dataset that follows a comprehensive set of global media outlets and uses an algorithm to determine sophisticated relationships among phrases in a news article which signal an increase or decrease in the price of those four commodities. We find price effects that are economically important in size. Our estimates imply a net increasing effect of media coverage on the price of these four commodities; these effects are mostly concentrated in 2012 and from 2015 onwards, meaning that these effects are important in periods of both high and low prices. Across commodities, the price effects are concentrated in soybeans and maize. We find robust evidence that media coverage decreases volatility for these agricultural commodities on average for the period we study. The effects on volatility balance each other, with decreasing price coverage decreasing the variance of returns and increasing price coverage increasing the variance of returns of futures contracts of these commodities; however, the increase is than the decrease. Our results suggest that media coverage increases periods of normal volatility and decreases periods of excessive volatility. These results point to the potential of using media coverage to bring attention to price surges and to decrease volatility during food crises or times when there is above-normal volatility. The dynamics between the price of agricultural commodities and media coverage may help prevent knee-jerk policy reactions by discouraging market overreaction, encouraging market stability, and promoting food security. They highlight crucial role of providing appropriate information as fast as possible so media coverage and reflects the fundamentals that drive food commodity prices.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Environmental Economics and Policy, Financial Economics
    Date: 2017–10–24
  3. By: Anja Gaentzsch and Gabriela Zapata Román
    Abstract: Abstract We analyse intergenerational persistence in income and education in Chile and Peru for birth cohorts of the early 1950s to 1990. Both countries have seen a structural expansion of education over this period and decreasing income inequality in recent decades. We impute non-observed parental income from repeated cross-sections and estimate persistence in the range of 0.63 to 0.67 in Peru and 0.66 to 0.76 in Chile for household heads of the birth cohorts 1977–90. The analysis of educational mobility covers household heads of birth cohorts from 1953 to 1990 and relies on retrospective information. We observe an increase in absolute mobility for younger generations, which we relate to the structural expansion of education that created room at the top. In relative terms, mobility patterns remain more stable – parental education is still a strong predictor of children’s educational achievement. The relationship is non-linear in both countries: persistence among very poorly and highly educated groups is strong, while individuals with parents of average education levels are more mobile. Upward mobility is stronger in Peru than in Chile: the chances to move from no formal education to higher education across one generation are 46% of the average in Peru compared to 20% in Chile. The chances of persisting in the top across generations are also slightly higher in Peru, with a factor of three times the average compared to 2.76 in Chile.
    Date: 2018
  4. By: Gonzales-Rocha, Erick; Mendez-Guerra, Carlos
    Abstract: Abstract Large productivity dispersion within narrowly defined sectors is widely documented. However, across studies, several statistics are used to assess dispersion and there is not enough discussion about differences among them. Using firm-level data for the textile and furniture sectors in Brazil over the 2003-2009 period, we estimated different TFP measures according to four methods: Ordinary Least Squares (OLS for short), the stochastic frontier model of Battese and Coelli (1988, 1992)(STCH for short), the control function approach of Levinsohn and Petrin (2003) (LP for short), and the corrected control function approach of Ackerberg et al. (2015) (ACF for short). Next, we calculated three dispersion statistics: Standard Deviation (SD); Coefficient of Variation (CV); and Interquartile Range (IQR). After confirming the existence of large productivity dispersion within the studied sectors, we analyzed if the dispersion is increasing or decreasing over time. For both sectors, SD and CV convey an increasing productivity dispersion message, but they do so at different rates (CV is seven times higher than SD). On the contrary, IQR suggests less productivity dispersion over time for textiles and mixed results for furnitures. Overall, in terms of characterizing the increasing productivity dispersion, the CV statistic combined with the ACF method define an upper bound while the IQR with LP method define a lower bound. Considering these results, the article underlines that there are non-trivial differences in the use of dispersion statistics. Thus, their use could not be interchangeable and should consider methodological issues, behavior in the tails of the firm productivity distribution, sample sizes and scenarios of divergence/convergence, among others.
    Keywords: total factor productivity, dispersion, manufacturing firms, Brazil
    JEL: D24 O47 O54
    Date: 2018–08–15
  5. By: Aboal, Diego (Centro de Investigaciones Economicas, Montevideo); Perera, Marcelo (Centro de Investigaciones Economicas, Montevideo); Tacsir, Ezequiel (UNU-MERIT, and Centro de Investigaciones Economicas, Montevideo); Vairo, Maren (Centro de Investigaciones Economicas, Montevideo)
    Abstract: We provide a practical guide for impact evaluation of Training and Human Capital programs in Science Technology and Innovation (STI). This document addresses specific challenges that arise when evaluating this type of programs, discussing its logic, the advantages and drawbacks of the different sources of information, the strategies which may be appropriate for evaluation, and the suitability of applying the different experimental and quasi-experimental available methods. For each technique, the document highlights the characteristics and assumptions, the strengths and weaknesses, and the practical issues related to their application to programs of human capital training for STI. Also, some specific issues, as for example the time after which the effects and externalities are expected to materialize, are discussed. Discussion is based on specific examples of existing evaluations.
    Keywords: Impact Evaluation, Human Capital, Training Programs, Science, Technology and Innovation, Effectiveness for Development
    JEL: H43 C01 O15 O22 O31 O32 O38
    Date: 2018–08–08

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