nep-lam New Economics Papers
on Central and South America
Issue of 2020‒06‒08
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Financial Disincentives to Formal Employment and Tax-Benefit Systems in Latin America By Deza Delgado, María Cecilia; Jara Tamayo, Holguer Xavier; Oliva, Nicolás; Torres, Javier
  2. Transferencias de Ingresos y Decisiones dentro del Hogar By Cecilia Parada
  3. Corruption in the Times of Pandemia By Gallego, Jorge; Prem, Mounu; Vargas, Juan F.
  4. El Impacto Asimétrico de la Cuarentena By Cristian Bonavida; Leonardo Gasparini
  5. Does Internal Displacement Affect Educational Achievement in Host Communities? By Sergio Parra Cely; Clotilde Mahé
  6. Self-Selection into Corruption: Evidence from the Lab By Pablo Brassiolo; Ricardo Estrada; Gustavo Fajardo; Juan F. Vargas
  7. Health Shocks under Hospital Capacity Constraint: Evidence from Air Pollution in Sao Paulo, Brazil By Guidetti, Bruna; Pereda, Paula; Severnini, Edson R.
  8. Entrepreneurship among Low-, Mid- and High-Income Workers in South America: A Fuzzy-Set Analysis By Velilla, Jorge; Molina, José Alberto; Ortega, Raquel

  1. By: Deza Delgado, María Cecilia; Jara Tamayo, Holguer Xavier; Oliva, Nicolás; Torres, Javier
    Abstract: The aim of this paper is twofold. First, it provides a comprehensive assessment of the financial cost informal workers would incur if they entered formal employment in five Latin American countries: Bolivia, Colombia, Ecuador, Peru, and Venezuela. Then, it analyzes the extent to which formalizing informal workers would contribute to increase fiscal capacity. Our results show a wide variation in formalization tax rates ranging between 8.5 percent in Venezuela and 65 percent in Colombia. Formalization costs are particularly high for self-employed informal workers, and mainly driven by the burden associated to social insurance contribution payments. Interestingly, potential formalization of informal workers with the highest probability of being formal would allow capturing a substantial share of the additional tax revenue lost due to informality and would reduce inequality. The comparative analysis highlights the possibility of adopting strategies to reduce the financial burden to formalization of certain population groups in the region.
    Date: 2020–05–18
    URL: http://d.repec.org/n?u=RePEc:ese:emodwp:em8-20&r=all
  2. By: Cecilia Parada (IECON-Universidad de la República)
    Abstract: El aumento del ingreso de un miembro del hogar puede conducir a cambios en su poder de decisión al interior del mismo y, como consecuencia, traducirse en efectos sobre algunas dimensiones específicas. En este trabajo se estiman los efectos de una política de transferencias de ingresos a hogares de bajos recursos en Uruguay (PANES) sobre la probabilidad de separación, cambios en la estructura de los hogares, distribución de las tareas domésticas y la probabilidad de que las mujeres sean jefas de hogar. Para ello, se explota la discontinuidad en la asignación al programa resultado del indicador de elegibilidad (ICC). Los resultados indican que la asistencia social aumentó la probabilidad de mantener el estatus marital de la línea de base e introdujo estabilidad en el número de integrantes del hogar. Además, estos resultados muestran cierta persistencia en el tiempo una vez que dejan de percibir el beneficio, al menos en el muy corto plazo. No se encontró que quien recibe la transferencia cambie su condición respecto a realizar las tareas del hogar cuando se considera al total de beneficiarios, pero se observaron efectos heterogéneos dependiendo del sexo del perceptor. Finalmente, no se registraron cambios en la probabilidad de que las mujeres, principales receptoras de la asistencia, sean jefas de hogar.
    Date: 2020–05
    URL: http://d.repec.org/n?u=RePEc:dls:wpaper:0262&r=all
  3. By: Gallego, Jorge; Prem, Mounu; Vargas, Juan F.
    Abstract: The public health crisis caused by the COVID-19 pandemic, coupled with the subsequent economic emergency and social turmoil, has pushed governments to substantially and swiftly increase spending. Because of the pressing nature of the crisis, public procurement rules and procedures have been relaxed in many places in order to expedite transactions. However, this may also create opportunities for corruption. Using contract-level information on public spending from Colombia's e-procurement platform, and a difference-in-differences identification strategy, we find that municipalities classified by a machine learning algorithm as traditionally more prone to corruption react to the pandemic-led spending surge by using a larger proportion of discretionary non-competitive contracts and increasing their average value. This is especially so in the case of contracts to procure crisis-related goods and services. Our evidence suggests that large negative shocks that require fast and massive spending may increase corruption, thus at least partially offsetting the mitigating effects of this fiscal instrument.
    Keywords: DiCorruption; COVID-19; Public procurement; Machine learning
    JEL: H57 D73 I18 H75
    Date: 2020–05
    URL: http://d.repec.org/n?u=RePEc:rie:riecdt:43&r=all
  4. By: Cristian Bonavida (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata); Leonardo Gasparini (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata, CONICET)
    Abstract: El trabajo remoto es un factor que ha ido cobrando importancia entre distintos sectores de actividad y empleo desde hace un tiempo. En la actualidad, en el contexto del aislamiento social, preventivo y obligatorio (cuarentena) decretado como reacción a la pandemia del Covid-19, se ha vuelto un tema de enorme relevancia. En este estudio evaluamos en qué medida el trabajo remoto es viable para el conjunto de ocupaciones en las que están empleados los argentinos. Para ello combinamos datos sobre características de las ocupaciones y su consistencia con el teletrabajo de O*NET con información de empleo e ingresos de la Encuesta Permanente de Hogares. Nuestras estimaciones sugieren que en las condiciones actuales solo alrededor de un cuarto de la población ocupada podría trabajar bajo la modalidad remota. El grado de aplicabilidad de esta modalidad por ocupación e industria es muy heterogéneo. Las ocupaciones menos compatibles con el teletrabajo están caracterizadas por una mayor proporción de trabajadores informales y cuentapropistas, con niveles de educación, calificación y salarios más bajos. Mediante una simulación de ingresos sencilla se estima que los efectos negativos de corto plazo de la pandemia serían mayores en los estratos de menores recursos, lo que implicaría un aumento significativo de la pobreza y la desigualdad de ingresos en el país.
    Date: 2020–04
    URL: http://d.repec.org/n?u=RePEc:dls:wpaper:0261&r=all
  5. By: Sergio Parra Cely (Universidad San Francisco de Quito, Equador); Clotilde Mahé (CREA, Université du Luxembourg)
    Abstract: We study the relationship between internal displacement and education in host municipalities in Colombia. We employ a fuzzy regression discontinuity design, exploiting the fact that political loyalty during local elections triggered massive flows of internally displaced people. We obtain a transitory but sizable negative effect of about 3% of a standard deviation per additional displaced arrival by 10,000 inhabitants, on high-school exit exams in math and language during the first two years of incumbency -- an average drop of 0.4 standard deviations. Findings suggest that policies aimed at fostering educational achievement might be ineffective in the shadow of a refugee crisis.
    Keywords: Civil conflict, Migration, Education.
    JEL: I25 J61 R23
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:luc:wpaper:20-05&r=all
  6. By: Pablo Brassiolo; Ricardo Estrada; Gustavo Fajardo; Juan F. Vargas
    Abstract: We study whether opportunities to extract rents in a job affect the type of individuals who are attracted to it in terms of their underlying integrity. We do so in a laboratory experiment in which participants choose between two contracts that involve different tasks. We experimentally introduce the possibility of graft in one of them and study the sorting of subjects across contracts based on an incentivized measure of honesty. We find that the corruptible contract changes the composition of subjects because it attracts the most dishonest individuals and repels the most honest ones. In addition, we observe extensive graft when the opportunity is available. We introduce a double randomization strategy to disentangle the extent of which stealing responds to the aforementioned negative selection or to pure incentives (net of selection). We find that, in this setting, selection is the main driver of graft. Our results have clear policy implications to curb corruption.
    Keywords: Corruption, selection, rent extraction opportunities, personnel economics
    JEL: C91 D73 M5
    Date: 2020–05–28
    URL: http://d.repec.org/n?u=RePEc:col:000518:018182&r=all
  7. By: Guidetti, Bruna (University of Michigan); Pereda, Paula (University of Sao Paulo); Severnini, Edson R. (Carnegie Mellon University)
    Abstract: When a health shock hits a location, the healthcare infrastructure needs to be adjusted to meet the increased demand. This may be a challenge in developing countries because of limited hospital capacity. In this study, we examine the consequences of health shocks induced by air pollution in a megacity in the developing world: Sao Paulo, Brazil. Using daily data from 2015-2017, and an instrumental variable approach based on wind speed, we provide evidence that exposure to particulate matter (PM10) causes an increase in pediatric hospitalizations for respiratory diseases, which in turn leads to a decrease in hospital admissions for elective care – phimosis surgery and epilepsy-related procedures such as video-EEG (electroencephalograph) monitoring. Importantly, emergency procedures such as appendectomy and bone fracture repair are not affected. While strained Sao Paulo hospitals seem to absorb the increased demand induced by poor air quality, our results imply that the common practice of using health outcomes unrelated to pollution as "placebo tests" in studies on the effects of air pollution might be inadequate in settings with limited healthcare infrastructure. This is often the case in developing countries, where severe pollution is also ubiquitous, but also happens in deprived areas in the developed world.
    Keywords: air pollution, health outcomes, hospitalization for respiratory diseases and other causes, healthcare infrastructure, hospital capacity constraint
    JEL: I15 Q53 Q56 O13
    Date: 2020–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp13211&r=all
  8. By: Velilla, Jorge (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Ortega, Raquel (University of Zaragoza)
    Abstract: This paper studies the reasons underlying the entrepreneurial decisions of low-, middle-, and high-income workers in South America. Using data from the GEM APS for the period 2005-2017, we apply fuzzy set Qualitative Comparative Analysis, allowing us to find causal links in the form of necessary conditions linked to entrepreneurship in the sample countries. Results show some differences in the conditions that lead individuals to become entrepreneurs, depending on income levels and gender. However, peer effects, the social perception of entrepreneurship, entrepreneurial skills, and formal education seem decisive in different contexts, although they may operate in both complementary and substitutive ways. The same combination of conditions does not appear to work for all the countries, even when taking into account the gender and income level of workers.
    Keywords: South America, entrepreneurship, income, fsQCA, GEM data
    JEL: L26 J22
    Date: 2020–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp13209&r=all

This nep-lam issue is ©2020 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.