nep-lam New Economics Papers
on Central and South America
Issue of 2020‒10‒19
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Roots of dissent: Trade liberalization and the rise of populism in Brazil By Iacoella, Francesco; Justino, Patrica; Martorano, Bruni
  2. Empowering women through multifaceted interventions: Long-term evidence from a double matching design By Stanislao Maldonado
  3. Income Changes after Inter-city Migration By Eduardo Lora

  1. By: Iacoella, Francesco (UNU-MERIT); Justino, Patrica (UNU-WIDER); Martorano, Bruni (UNU-MERIT, Maastricht University)
    Abstract: This paper investigates the long-term impact of economic shocks on populism, by exploiting a natural experiment created by the trade liberalization process implemented in Brazil between 1990 and 1995. This high impact and low duration event generated a profound shock to the economy with, we argue, long term implications for political outcomes. We focus on the 2002 and 2018 presidential elections in Brazil, which resulted in the election of a left-wing and a right-wing populist president, respectively. The results show that trade reforms explain the rise of populism in Brazil during the last two decades. Microregions with larger tariff cuts in the early 1990s had significantly higher preferences for Lula in 2002 and were also more likely to support Bolsonaro in 2018. The link between trade liberalization and populism is mediated by austerity in both cases. The shift between left-wing and right-wing preferences is driven by the supply side of populism, whereby each leader took advantage of existing cleavages in the country at the time of their election-driven by inequality in the case of Lula and by insecurity and corruption in the case of Bolsonaro-to develop narratives against austerity that would appeal to their target audiences.
    Keywords: trade liberalization, populism, austerity, inequality, insecurity, Brazil
    JEL: D72 F14 I38 O12
    Date: 2020–10–05
  2. By: Stanislao Maldonado (Universidad del Rosario)
    Abstract: Empowering women is a policy goal that has received a lot of interest by policy-makers in the developing world in recent years, yet little is known about effective ways to promote it sustain- ably. Most existing interventions fail to address the multidimensional nature of empowerment. Using a double matching design to construct the sampling frame and to estimate causal effects, I evaluate the long-term impact of a multifaceted policy intervention designed to improve women’s empowerment in the Atlantic region in Colombia. This intervention provided information about women’s rights, soft-skills and vocational training, seed capital, and mentoring simultaneously. I find that this intervention has mixed results: improvements in incomes and other economic dimensions along with large political and social capital effects, but limited or null impacts on women’s rights knowledge and control over one’s body. Using a list experiment, I even find an increase in the likelihood of intra-household violence. The results highlight the importance of addressing women’s empowerment multidimensional nature in policy innovations designed to foster it, incorporating men in these efforts.
    JEL: I38 J16 J24 O17
    Date: 2020–10
  3. By: Eduardo Lora (Center for International Development at Harvard University)
    Abstract: Using panel data for workers who change jobs, changes in several labor outcomes after inter-city migration are estimated by comparing workers in similar circumstances who move to a new city –the treatment group—with those who stay in the same city –the control group. After matching the two groups using Mahalanobis distances over a wide range of covariates, the methodology of “difference-in-difference treatment effects on the treated” is used to estimate changes after migration. On average, migrants experience income gains but their dedication to formal employment becomes shorter. Income changes are very heterogenous, with low-wage workers and those formerly employed by small firms experiencing larger and more sustained gains. The propensity to migrate by groups of sex, age, wage level, initial dedication, initial firm size and size of city of origin is significantly and directly correlated with the expected cumulative income gains of migration, and inversely with the uncertainty of such gains.
    Keywords: matched employer-employee panel data, diff-in-diff treatment effects, migration risks, migration determinants, Colombia
    JEL: J31 J61 J81
    Date: 2020–10

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