nep-lam New Economics Papers
on Central and South America
Issue of 2020‒09‒21
five papers chosen by

  1. Explorando sinergias entre la cooperación tributaria internacional y los desafíos tributarios latinoamericanos en tiempos de COVID-19 By Jiménez, Juan Pablo; Ocampo, José Antonio; Podestá, Andrea; Valdés, María Fernanda
  2. Distributional Effects of Reducing Energy Subsidies: Evidence from Recent Policy Reform in Argentina By Fernando Giuliano; Maria Ana Lugo; Ariel Masut; Jorge Puig
  3. Minimum Wages in Formal and Informal Sectors: Evidence from an Inflation Shock in Colombia By Pérez Pérez Jorge
  4. "Multidimensional Inequality and COVID-19 in Brazil" By Luiza Nassif Pires; Laura Carvalho; Eduardo Rawet
  5. Investment for the Demographic Window in Latin America By Rodriguez Maria Jose

  1. By: Jiménez, Juan Pablo; Ocampo, José Antonio; Podestá, Andrea; Valdés, María Fernanda
    Abstract: El mundo enfrenta un panorama de alta incertidumbre durante el 2020 como resultado de la pandemia del coronavirus y sus efectos sobre la población y la economía global. La propagación del COVID-19, aparte de su impacto sobre la población y la salud pública, condujo en todo el mundo a significativas contracciones de la actividad económica y el comercio internacional. Este conjunto de factores ha requerido y está requiriendo una decidida respuesta de los sectores públicos de la región. Dentro de este panorama de alta incertidumbre, una certeza es que las economías y las sociedades de la región requerirán una provisión creciente de bienes y servicios públicos. También es una certeza que esta crisis tendrá un impacto significativo en las bases del financiamiento público (ingresos tributarios sobre la renta y el consumo, ingresos provenientes de actividades intensivas en recursos naturales, y financiamiento interno y externo). En este marco y ante la necesidad de mejorar el nivel y la incidencia distributiva de la carga tributaria en América Latina, el objetivo de este documento es revisar los puntos de contacto y posibles sinergias entre la cooperación tributaria internacional y los desafíos de alcanzar sistemas impositivos más redistributivos en los países de América Latina, una relación que no ha sido lo suficientemente tratada en la literatura.
    Date: 2020–09–07
  2. By: Fernando Giuliano (World Bank); Maria Ana Lugo (World Bank); Ariel Masut (YPF S. A); Jorge Puig (CEDLAS-IIE-FCE-UNLP)
    Abstract: We analyze the distributional effects of the reduction in energy subsidies in Argentina since 2016. As the policy reform also includes the introduction of a scheme to protect less well-off families (social tariff), we also review how well the targeting mechanism works. We apply traditional benefit-incidence analysis using household surveys and administrative data, focusing on residential subsidies to natural gas and electricity in the Buenos Aires Metropolitan Area. We find that the social tariff is relatively pro-poor, with significantly higher coverage among the poorest households. There are some exclusion errors in the low-income deciles and large inclusion errors in the medium- and high-income deciles. The distributive incidence of subsidies does not appear to have changed substantially. Energy subsidies in Argentina (lower in aggregate terms) continue to be, although progressive, pro-rich. The distributional effect is explained by the fact that generalized subsidies to all categories of consumption coexist with a relatively well targeted social tariff. Regarding energy budget shares, monthly spending on electricity has increased from 1.1 percent of total household income to 3.4 percent. Monthly spending on piped gas rose from 1.3 percent to 3.3 percent. These shares are in line with many other countries in the region. Naturally, there has been a convergence of tariffs toward service provision costs.
    JEL: H22 D31 D78 Q48
    Date: 2020–09
  3. By: Pérez Pérez Jorge
    Abstract: I estimate the effect of a real minimum wage increase on formal and informal wages, and employment in Colombia. For identification, I take advantage of an unexpected increase in the real minimum wage during 1999, and I compare cities and industries with different incidence of the minimum wage increase. I measure incidence as the percentage of workers whose real minimum wage is between the old and the new real minimum wage before the increase. I find evidence of positive wage responses for wages close to the minimum wage. The results show that wages increase more in the formal than in the informal sector. I do not find that informal wages are reacting to the minimum wage indirectly, through the linkages between formal and informal markets. I show that employers in both sectors use the minimum wage as reference, although they set some wages below it. These results may not be generalizable to other countries or contexts, or to larger minimum wage increases.
    Keywords: Minimum wage;wage distribution;informal labor markets
    JEL: J31 J38 J46
    Date: 2019–09
  4. By: Luiza Nassif Pires; Laura Carvalho; Eduardo Rawet
    Abstract: After spending over 6 percent of GDP responding to the COVID-19 crisis, Brazil has suffered among the worst per capita numbers in the world in terms of cases and deaths. In this policy brief, Research Fellow Luiza Nassif-Pires, Laura Carvalho, and Eduardo Rawet explore how stark inequalities along racial, regional, and class lines can help account for why the pandemic has had such a damaging impact on Brazil. Although they find that fiscal policy measures have so far neutralized the impact of the crisis with respect to income inequality, the existence of structural inequalities along racial lines in particular have resulted in an unequally shared public health burden. Broader policy changes are necessary for addressing dimensions of inequality that are rooted in structural racism.
    Date: 2020–09
  5. By: Rodriguez Maria Jose
    Abstract: This paper studies the behavior of investment during demographic transitions. In particular, I focus on the period where the working age to population ratio reaches its maximum, namely the demographic window. I document that in Europe, Asia, and Oceania investment rates are higher 15 years before and during the window than in other periods, whereas in Latin America they are lower. To understand the relation between investment and a demographic window, I build an overlapping generations model with demographic change and variable degree of financial openness. Within this framework, I conduct several exercises and counterfactuals involving potential drivers of the investment behavior. I find that the demographic behavior in conjunction with the region-specific financial openness can explain the main pattern of investment for the demographic window in Latin America vis-a-vis Europe and Asia.
    Keywords: Investment;Demographic Window;Latin America
    JEL: F21 E22 J10 O54 F41
    Date: 2019–10

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