nep-lam New Economics Papers
on Central and South America
Issue of 2020‒09‒07
four papers chosen by

  1. The Impact of COVID-19 Lockdowns and Expanded Social Assistance on Inequality, Poverty and Mobility in Argentina, Brazil, Colombia and Mexico By Nora Lustig; Valentina Martinez Pabon; Federico Sanz; Stephen D. Younger
  2. Hard and Soft Skills in Vocational Training: Experimental Evidence from Colombia By Felipe Barrera-Osorio; Adriana D. Kugler; Mikko I. Silliman
  3. The Macroeconomic Effects of Macroprudential Policy: Evidence from a Narrative Approach By Diego Rojas; Carlos A. Vegh; Guillermo Vuletin
  4. The Gender Gap in Time Allocation in Europe By Gimenez-Nadal, J. Ignacio; Molina, José Alberto

  1. By: Nora Lustig (Tulane University); Valentina Martinez Pabon (Tulane University); Federico Sanz (Tulane University); Stephen D. Younger (CEQ Institute)
    Abstract: We use microsimulation to estimate the distributional consequences of covid-19-induced lockdown policies in Argentina, Brazil, Colombia and Mexico. Our estimates of the poverty consequences are worse than many others’ projections because we do not assume that the income losses are proportionally equal across the income distribution. We also simulate the effects of most of the expanded social assistance governments have introduced in response to the crisis. This has a large offsetting effect in Brazil and Argentina, much less in Colombia. In Mexico, there has been no such expansion. Contrary to prior expectations, we find that the worst effects are not on the poorest, but those (roughly) in the middle of the ex ante income distribution. In Brazil we find that poverty among the afrodescendants and indigenous populations increases by more than for whites, but the offsetting effects of expanded social assistance also are larger for the former. In Mexico, the crisis induces significantly less poverty among the indigenous population than it does for the nonindigenous one. In all countries the increase in poverty induced by the lockdown is similar for male- and female-headed households but the offsetting effect of expanded social assistance is greater for female-headed households.
    Keywords: Covid-19, inequality, poverty, mobility, microsimulations, Latin America
    JEL: C63 D31 I32 I38
    Date: 2020–08
  2. By: Felipe Barrera-Osorio; Adriana D. Kugler; Mikko I. Silliman
    Abstract: We randomly assign applicants to over-subscribed programs to study the effects of teaching hard and soft skills in vocational training and examine their impacts on skills acquisition and labor market outcomes using both survey and administrative data. We find that providing vocational training that either emphasizes social or technical skills increases formal employment for both men and women. We also find that admission to a vocational program that emphasizes technical relative to social skills increases overall employment and also days and hours worked in the short term. Yet, emphasis on soft-skills training helps applicants increase employment and monthly wages over the longer term and allows them to catch up with those learning hard skills. Further, through a second round of randomization, we find that offering financial support for transportation and food increases the effectiveness of the program, indicating that resource constraints may be an obstacle for individuals considering vocational training.
    JEL: C21 I25 I26 J24 J60 O54
    Date: 2020–07
  3. By: Diego Rojas; Carlos A. Vegh; Guillermo Vuletin
    Abstract: We analyze the macroeconomic effects of macroprudential policy – in the form of legal reserve requirements – in three Latin American countries (Argentina, Brazil, and Uruguay). To correctly identify innovations in changes in legal reserve requirements, we develop a narrative approach – based on contemporaneous reports from the IMF and Central Banks in the spirit of Romer and Romer (2010) – that classifies each change into endogenous or exogenous to the business cycle. We show that this distinction is critical in understanding the macroeconomic effects of reserve requirements. In particular, we show that output falls in response to exogenous increases in legal reserve requirements but would seem not to be affected (or could even increase!) when using all changes and relying on traditional time-identifying strategies. This bias reflects the practical relevance of the misidentification of endogenous countercyclical changes in reserve requirements. We also push the empirical frontier along two important dimensions. First, in measuring legal reserve requirements, we take into account both the different types of legal reserve requirements in terms of maturity and currency of denomination as well as the structure of deposits. Second, since in practice reserve requirement policy is tightly linked to monetary policy, we also jointly analyze the macroeconomic effects of changes in central bank interest rates. To properly identify exogenous central bank interest rate shocks, we follow Romer and Romer (2004).
    JEL: E32 E52 E58 F31 F41
    Date: 2020–08
  4. By: Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: This article explores the gender gap in time allocation in Europe, offering up-to-date statistics and information on several factors that may help to explain these differences. Prior research has identified several factors affecting the time individuals devote to paid work, unpaid work, and child care, and the gender gaps in these activities, but most research refers to single countries, and general patterns are rarely explored. Cross-country evidence on gender gaps in paid work, unpaid work, and child care is offered, and explanations based on education, earnings, and household structure are presented, using data from the EUROSTAT and the Multinational Time Use Surveys. There are large cross-country differences in the gender gaps in paid work, unpaid work, and child care, which remain after controlling for socio-demographic characteristics, although the gender gap in paid work dissipates when the differential gendered relationship between socio-demographic characteristics and paid work is taken into account. This paper provides a comprehensive analysis of gender gaps in Europe, helping to focus recent debates on how to tackle inequality in Europe, and clarifying the factors that contribute to gender inequalities in the uses of time.
    Keywords: paid work, unpaid work, gender gap, European countries, earnings, household structure
    JEL: D10 J16 J22
    Date: 2020–07

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