nep-lam New Economics Papers
on Central and South America
Issue of 2019‒09‒23
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Tax audits as scarecrows. Evidence from a large-scale field experiment By Marcelo Bérgolo; Rodrigo Ceni; Guillermo Cruces; Matías Giaccobasso; Ricardo Pérez-Truglia
  2. Cost-Effective Public Daycare in a Low-Income Economy Benefits Children and Mothers By Hojman, Andrés; López Bóo, Florencia
  3. Experimental Long-Term Effects of Early-Childhood and School-Age Exposure to a Conditional Cash Transfer Program By Molina Millán, Teresa; Macours, Karen; Maluccio, John; Tejerina, Luis
  4. The Effects of Mandating Training in Firms: Theory and Evidence from the Colombian Apprenticeship Program By Santiago Caicedo; Arthur Seibold; Miguel Espinosa
  5. Discriminación de género en las calificaciones de las escuelas públicas uruguayas By Marisa Bucheli; Claudia Contreras
  6. Inattention, Disagreement and Internal (In)Consistency of Inflation Forecasts By Fernando Borraz; Laura Zacheo
  7. Technology, routinization and wage inequality: Difference between men and women in the case of Uruguay By Sandra Rodríguez-López; Graciela Sanroman

  1. By: Marcelo Bérgolo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Rodrigo Ceni (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Guillermo Cruces (Universidad Nacional de La Plata (Argentina). Facultad de Ciencias Económicas. Centro de Estudios Distributivos, Laborales y Sociales.); Matías Giaccobasso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Ricardo Pérez-Truglia (Universidad de California en Los Angeles (EEUU))
    Abstract: The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with Uruguay’s tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than 200 million dollars in taxes per year. Our letters provided exogenous yet nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measured 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, based on administrative data. We find that providing information about audits had a significant effect on tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972). Our findings are consistent with an alternative model, risk-as-feelings, in which messages about audits generate fear and induce probability neglect. According to this model, audits may deter tax evasion in the same way that scarecrows frighten off birds.
    Keywords: tax, evasion, audits, penalties, frictions
    JEL: C93 H26 K34 K42 Z13
    Date: 2019–06
  2. By: Hojman, Andrés (Pontificia Universidad Catolica de Chile); López Bóo, Florencia (Inter-American Development Bank)
    Abstract: This paper evaluates the impacts of a public program that introduced access to part-time childcare centers for children younger than four years of age in poor urban areas in Nicaragua. We explore the effects of this program on several measures of children's and parental outcomes. Our identification strategy exploits the original randomization and the distance to the centers, using Instrumental Variables (IV) and Marginal Treatment Effects (MTE) methods to tackle imperfect compliance with the original treatment assignments. We present a theoretical model to rationalize our IV assumptions. We find a positive impact of 0.35 standard deviations on the personal-social domain of a widely used development test, and an impact of 14 percentage points on mothers' work participation. Our results are robust to different econometric specifications. We also find suggestive evidence that quality greatly matters for the impacts at the child level, but not at the mother level.
    Keywords: RCT, early childhood development, daycare, Latin America, maternal labor force participation, quality
    JEL: C21 I28 I38
    Date: 2019–08
  3. By: Molina Millán, Teresa (Universidade Nova de Lisboa); Macours, Karen (Paris School of Economics); Maluccio, John (Middlebury College); Tejerina, Luis (IDB Invest)
    Abstract: Numerous evaluations of conditional cash transfer (CCT) programs show positive short-term impacts, but there is only limited evidence on whether these benefits translate into sustained longer-term gains. This paper uses the municipal-level randomized assignment of a CCT program implemented for five years in Honduras to estimate long-term effects 13 years after the program began. We estimate intent-to-treat effects using individual-level data from the population census, which allows assignment of individuals to their municipality of birth, thereby circumventing migration selection concerns. For the non-indigenous, we find positive and robust impacts on educational outcomes for cohorts of a very wide age range. These include increases of more than 50 percent for secondary school completion rates and the probability of reaching university studies for those exposed at school-going ages. They also include substantive gains for grades attained and current enrollment for others exposed during early childhood, raising the possibility of further gains going forward. Educational gains are, however, more limited for the indigenous. Finally, exposure to the CCT increased the probability of international migration for young men, from 3 to 7 percentage points, also stronger for the non-indigenous. Both early childhood exposure to the nutrition and health components of the CCT as well as exposure during school-going ages to the educational components led to sustained increases in human capital.
    Keywords: conditional cash transfers (CCTs), early childhood, education, migration
    JEL: I25 I28 I38 O15
    Date: 2019–09
  4. By: Santiago Caicedo (University of Chicago); Arthur Seibold (University of Mannheim); Miguel Espinosa (Universitat Pompeu Fabra)
    Abstract: We study the effect of apprenticeship programs on firms and welfare, using novel administrative data on the universe Colombian manufacturing firms with at least 10 workers, and a unique reform to apprenticeship regulation. The reform simultaneously establishes apprentice quotas that vary discontinuously in firm size and lowers apprentices' wages. We begin by documenting that the policy is successful in increasing the number of trained apprentices more than threefold. However, the reform also induces significant firm size distortions driven by heterogeneous firm responses. In sectors with high skill requirements, firms avoided hiring apprentices decreasing their size and bunching just below the regulation thresholds. In contrast, firms in low-skilled sectors, increase their size and bunch just above the regulation thresholds in order to be able to hire more apprentices. As a consequence, the regulation results in most apprentices being trained in low-skilled sectors. We develop a simple theoretical model featuring heterogeneous training costs across sectors in order to rationalize and quantify these empirical findings. The key insight of the model is firms that train apprentices incur in an opportunity cost of spending time teaching and not producing. As training in high-skill sectors takes longer than in low-skill sectors, firms in high skilled sectors will avoid apprentices while firms in low-skill sectors try to get as many as possible. Finally, we use the model to analyze the welfare consequences of the regulation and study counterfactual policies.
    Date: 2019
  5. By: Marisa Bucheli (Departamento de Economía. Facultad de Ciencias Sociales. Universidad de la República (Uruguay)); Claudia Contreras (Banco Central del Uruguay)
    Abstract: This paper analyzed the existence of a gender bias in the final performance’s grading set by teachers of third grade and six-grade of public schools in Uruguay. For this, administrative data, blind test scores (TERCE) and non-blind tests scores (final performance’s grading) of third-grade and sixth-grade of school students are used. The econometric strategy consisted in controlling the performance’s grade with the blind test scores and certain characteristics of the students, the social-economical background, the school’s characteristics, the teacher’s grading of student’s behavior and a dummy of the sex of the child. A bias was found in performance’s grading in favor of men in third-grade but no differences were found in sixth-grade performance’s grading. The different teacher’s behavior in each grade could be a consequence of the matching mechanism between teachers and classes, that would seem to assign the better teachers to sixth-grade.
    Abstract: En este trabajo se analizó la existencia de diferencias de género en las calificaciones finales de rendimiento de los alumnos de tercer y sexto grado de escuelas públicas de Uruguay. Se utilizaron datos administrativos, calificaciones de pruebas ciegas (TERCE) y calificaciones de pruebas no ciegas (calificaciones finales de rendimiento) de estudiantes de tercer y sexto grado. La estrategia econométrica consistió en controlar la calificación del rendimiento con las calificaciones de las pruebas ciegas y ciertas características de los estudiantes, del entorno socioeconómico, de la escuela, por la calificación final de conducta del alumno y una dummy del sexo del niño. Se encontró un sesgo en las calificaciones de rendimiento a favor de los niños en tercer grado pero no se encontraron diferencias en las calificaciones de rendimiento de sexto grado. Se interpretó que el comportamiento disímil por grado podría ser una consecuencia del mecanismo de asignación de los docentes a las clases, que parecería estar asignando a los mejores docentes a sexto grado.
    Keywords: gender differences, discrimination, stereotypes, teacher grading, blind-test, education; diferencias de género, discriminación, estereotipos, calificaciones, pruebas ciegas, educación
    JEL: I21 J16
    Date: 2018
  6. By: Fernando Borraz (Banco Central del Uruguay; Departamento de Economía. Facultad de Ciencias Sociales. Universidad de la República (Uruguay)); Laura Zacheo (Banco Central del Uruguay)
    Abstract: This paper uses a rich and unique data set with eight years of monthly inflation expectation and subjective probability distributions to analyze the expectation formation process of firms in Uruguay. First, firms exhibit a very high degree of attention to current inflation conditions which we link to the countries' historical inflation experience. Second, the forecasters fail to incorporate all of the available information and firms' forecasts are more accurate than those of professional forecasters in Uruguay. Third, there is disagreement between forecasters at the short run but also at the long run and the disagreement is higher for forecasters that revise than for forecasters that do not revise. Therefore, there must be some noise or friction that prevents agents that changes prices to get access to perfect information. Fourth, the disagreement is not fully explained by differences in the information set because one in five forecasts is not internal consistent.
    Abstract: Este documento analiza el proceso de formación de expectativas de las empresas en Uruguay examinando una base de datos única, con ocho años de expectativas de inflación mensuales y distribuciones de probabilidad subjetiva. En primer lugar, las empresas muestran un alto grado de atención a las condiciones inflacionarias actuales, aspecto que vinculamos con la experiencia histórica de inflación del país. En segundo lugar, al realizar proyecciones los agentes no incorporan toda la información disponible; además, las proyecciones de las empresas son más precisas que las de los analistas profesionales en Uruguay. En tercer lugar, existe desacuerdo entre las empresas respecto a sus proyecciones a corto plazo pero también a largo plazo y el desacuerdo es mayor para aquellas que revisan sus proyecciones que para las que no revisan. Por lo tanto, debe haber algún ruido o fricción que impida a los agentes que modifican los precios obtener acceso a la información perfecta. Cuarto, el desacuerdo no es explicado completamente por las diferencias en el conjunto de información porque una de cada cinco proyecciones de inflación no es consistente internamente.
    Keywords: inflation expectation, inattention, disagreement, subjective probability distribution
    JEL: D84 E31 E58
    Date: 2018
  7. By: Sandra Rodríguez-López (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Graciela Sanroman (Universidad de la República (Uruguay). Facultad de Ciencias Sociales)
    Abstract: Technology has changed the way we work, creating and destroying employment but especially modifying the occupational tasks we must perform. This paper seeks to analyze the contribution of technology to changes in the distribution of wages in Uruguay and its differences between genders. We adress this question for the perspective of the task-based approach. We use the recentered influence function regression (RIF-Regression) decomposition method and apply it to men and women wage data for the period 2005-2015. Our estimates suggest that introducing occupational tasks linked to technology into the analysis contributes to explane changes in the distribution of wages in Uruguay during the period of the analysis. However, technology played a different role in explaining the evolution of men and women wages. While it was relativily more important to explain the reduction in wage inequality at the top end of the distribution of men wages it was more relevant to explain changes at the lower end of the dsistribution of women wages. Althought, nor men neither women wages did polarized during the period of analysis, we find that the predicted effect of the routinization hypothesis seems to be more in line with the impact of technology over the evolution of women wages.
    Keywords: occupational tasks, RIF-regressions, technology, weage inequality, Gender inequaliy
    JEL: J3 J5
    Date: 2019–06

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