nep-lam New Economics Papers
on Central and South America
Issue of 2021‒02‒01
five papers chosen by

  1. Informality, labour transitions, and the livelihoods of workers in Latin America By Roxana Maurizio; Ana Paula Monsalvo
  2. Intergenerational transmission of lockdown consequences: Prognosis of the longer-run persistence of COVID-19 in Latin America By Guido Neidhoefer; Nora Lustig; Mariano Tommasi
  3. Do High Aspirations Lead to Better Outcomes? Evidence from a Longitudinal Survey of Adolescents in Peru By Carol Graham; Julia Ruiz Pozuelo
  4. "Mixed Oligopoly and Market Power Mitigation: Evidence from the Colombian Wholesale Electricity Market" By Carlos Suarez
  5. The Endogenous Formation of Common Pool Resource Coalitions By Carlos A. Chávez; James J. Murphy; Felipe J. Quezada; John K. Stranlund

  1. By: Roxana Maurizio; Ana Paula Monsalvo
    Abstract: This paper studies the incidence and heterogeneity of labour informality in six Latin American countries?Argentina, Brazil, Ecuador, Mexico, Paraguay, and Peru. We divide workers into five work statuses: formal wage-employed, formal self-employed, upper-tier informal wage-employed, lower-tier informal wage-employed, and informal self-employed. We evaluate the patterns of the occupational turnover between these work statuses and assess their impact on wage dynamics. In all the countries, wages are highest for formal workers and lowest for lower-tier informal jobs.
    Keywords: Informality, Occupational turnover, Education, Wages, Latin America, Occupations, Occupational mobility, Occupational choice
    Date: 2021
  2. By: Guido Neidhoefer (ZEW Mannheim); Nora Lustig (Tulane University); Mariano Tommasi (Universidad de San Andres)
    Abstract: The shock on human capital caused by COVID-19 is likely to have long lasting consequences, especially for children of low-educated families. Applying a counterfactual exercise we project the effects of school closures and other lockdown policies on the intergenerational persistence of education in 17 Latin American countries. First, we retrieve detailed information on school lockdowns and on the policies enacted to support education from home in each country. Then, we use this information to estimate the potential impact of the pandemic on schooling, high school completion, and intergenerational associations. In addition, we account for educational disruptions related to household income shocks. Our findings show that, despite that mitigation policies were able to partly reduce instructional losses in some countries, the educational attainment of the most vulnerable could be seriously affected. In particular, the likelihood of children from low educated families to attain a secondary schooling degree could fall substantially.
    Keywords: COVID-19, lockdowns, human capital, school closures, intergenerational persistence, education, inequality, Latin America.
    JEL: I24 I38 J62
    Date: 2021–01
  3. By: Carol Graham (The Brookings Institution); Julia Ruiz Pozuelo (University of Oxford)
    Abstract: Using a novel panel survey of relatively poor urban Peruvian adolescents, we explore the link between three type of aspirations (educational, occupational, and aspirations to migrate) and individual’s propensity to invest in the future. We found remarkably high education aspirations, even among relatively poor individuals and adolescents that were exposed to negative shocks in the past, suggesting high levels of resilience among our sample. We also find that aspirations are quite stable over time, and positively associated with personality traits such as self-efficacy, life satisfaction, and locus of control, which helps explain their persistence over time. Finally, we find that high aspirations are strongly associated with positive future outcomes such as higher investments in education and less engagement in risky behaviors such as unsafe sex and binge drinking.
    Keywords: adolescents, aspirations, human capital outcomes, risky behavior, Peru
    JEL: I24 I20 J24
    Date: 2021–01
  4. By: Carlos Suarez (Department of Econometrics, Statistics and Applied Economics, Research Group on Governments and Markets, University of Barcelona, Avinguda Diagonal 690, 08034 Barcelona, Tower 6 Floor 3. Engineering Department, Research Group on Energy, Environment and Development, Jorge Tadeo Lozano University.)
    Abstract: Using information on price bids in wholesale electricity pools and empirical techniques described in the literature on electricity markets, this study identifies the market power mitigation effect of public firms in the Colombian market. The results suggest that while private firms exercise less market power than is predicted by a profit-maximization model, there are marked differences between private and public firms in their exercise of unilateral market power. These findings support the hypothesis of the market power mitigation effect of public firms.
    Keywords: Electricity Markets, Market Power, Privatization, Mixed Oligopoly, Regulatory Intervention. JEL classification: L13, L94, C10.
    Date: 2021–01
  5. By: Carlos A. Chávez (Universidad de Talca); James J. Murphy (Department of Economics, University of Alaska Anchorage); Felipe J. Quezada (University of Massachusetts Amherst); John K. Stranlund (University of Massachusetts Amherst)
    Abstract: We develop a theoretical model of endogenous CPR coalition formation in which the resource is co-defended with costly monitoring by coalition members and sanctions for encroachment imposed by the government. We demonstrate that CPR coalitions can form even when monitoring is so costly that coalition members choose not to monitor for encroachment, but the coalitions will be relatively small. Larger coalitions will form if monitoring costs are low enough to yield effective deterrence. We tested the results of the model using lab-in-field experiments with fishers who were members of Chile’s territorial use rights fisheries (TURFs) and in the lab with Chilean university students. We find that fishers frequently formed CPR coalitions, even when they could not deter outsider poaching. Fishers usually formed the grand coalition when the monitoring cost was low, but they formed smaller coalitions when monitoring was more costly. Fishers invested in monitoring frequently and these investments reduced poaching. Relative to open access, when coalitions formed, total harvest effort was curtailed and earnings for coalition members generally increased. Students formed coalitions less frequently, these coalitions tended to be small, and they infrequently invested in monitoring, even when it was profitable to do so. Consequently, student coalition member earnings were not better off on average than under open access.
    Keywords: experimental economics, Common pool resources; enforcement; field experiments; poaching; territorial use rights fisheries; social dilemma; fisheries management; development economics; co-enforcement; coalition formation; encroachment
    JEL: C72 C90 C93 D70 K42 Q22 Q28 Q56 H40
    Date: 2021–01

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