nep-lam New Economics Papers
on Central and South America
Issue of 2021‒05‒17
seven papers chosen by

  1. Immigration, crime, and crime (Mis)perceptions By Nicolás Ajzenman; Patricio Domínguez; Raimundo Undurraga
  2. Financial dollarization and de-dollarization in the new milennium By Eduardo Levi Yeyati
  3. Common trends in producers’ expectations, the nonlinear linkage with Uruguayan GDP and its implications in economic growth forecasting By Bibiana Lanzilotta; Juan Gabriel Brida; Lucía Rosich
  4. What works for active labor market policies? By Eduardo Levi Yeyati; Martín Montané; Luca Sartorio
  5. Racial quotas in higher education and pre-college academic performance: Evidence from Brazil By Guilherme Strifezzi Leal; Ã lvaro Choi
  6. More than words: Leader’s speech and risky behavior during a pandemic By Nicolás Ajzenman; Tiago Cavalcanti; Daniel Da Mata
  7. Stratification of returns to higher education in Peru: the role of education quality and major choices By Alan Sánchez; Marta Favara; Catherine Porter

  1. By: Nicolás Ajzenman (Sao Paulo School of Economics - FGV); Patricio Domínguez (Inter-American Development Bank); Raimundo Undurraga (University of Chile)
    Abstract: This paper studies the effects of immigration on crime and crime perceptions in Chile, where the foreign-born population more than doubled in the last decade. By using individual-level victimization data, we document null effects of immigration on crime but positive and significant effects on crime-related concerns, which in turn triggered preventive behavioral responses, such as investing in home-security. Our results are robust across a two-way fixed effects model and an IV strategy based on a shift-share instrument that exploits immigration inflows towards destination countries other than Chile. On mechanisms, we examine data on crime-related news on TV and in newspapers, and find a disproportionate coverage of immigrant-perpetrated homicides as well as a larger effect of immigration on crime perceptions in municipalities with a stronger media presence. These effects might explain the widening gap between actual crime trends and public perceptions of crime.
    Keywords: crime immigration crime perception media crime beliefs
    JEL: O15 F22 K1
    Date: 2021–04
  2. By: Eduardo Levi Yeyati (Universidad Torcuato Di Tella/The Brookings Institution)
    Abstract: Dollarization, in its many variants, is crucial to understanding Latin American macroeconomics, as well as that of many developing countries. This paper builds a new updated dataset on dollarization, reviews its evolution in Latin America since 2000, and summarizes the lessons learned from several de-dollarizing attempts in the region, based on a three-way taxonomy: 1) attempts that focus on the macroeconomic drivers, 2) microeconomic measures that deter investors from dollarizing their financial assets and liabilities based on market incentives or regulatory limits, and 3) regulations that affect the choice of foreign currency as a means of payment or a unit of account. The study provides examples using seven cases that may be considered paradigmatic of the different dollarization varieties: Bolivia, Peru, Uruguay, Costa Rica, El Salvador, Ecuador and Venezuela.
    Date: 2021–03
  3. By: Bibiana Lanzilotta (Universidad de la República); Juan Gabriel Brida (Universidad de la República); Lucía Rosich (Universidad de la República)
    Abstract: Este trabajo estudia las tendencias comunes entre las expectativas de los productores industriales y su interdependencia con el crecimiento económico del Uruguay en las últimas dos décadas (1998 – 2017). Se utilizaron las series de expectativas recabadas por la Cámara de Industrias del Uruguay clasificadas en cuatro grupos industriales: exportadoras, bajo comercio, sustitutivas de importación y comercio intra rama. En base a la estimación de Modelos Estructurales Multivariantes, se encontró un nivel común entre los indicadores de expectativas de los cuatro grupos industriales. El grupo que lidera las expectativas de todas las empresas pertenecientes a la industria manufacturera es el más expuesto a la competencia internacional. En consecuencia, el componente tendencial de las empresas exportadoras impulsa al de los otros grupos.
    Keywords: expectativas de los agentes factores comunes Modelos Estructurales Multivariantes, proyección del PIB cointegración no lineal
    JEL: C32 D84 E32
    Date: 2021–04
  4. By: Eduardo Levi Yeyati (Universidad Torcuato Di Tella/The Brookings Institution); Martín Montané (Universidad Torcuato Di Tella); Luca Sartorio (Universidad Torcuato Di Tella)
    Abstract: The past 5 years have witnessed a flurry of RCT evaluations that shed new light on the impact and cost effectiveness of Active Labor Market Policies (ALMPs) aiming to improve workers ´ access to new jobs and better wages. We report the first systematic review of 102 RCT interventions comprising a total of 652 estimated impacts. We find that (i) a third of these estimates are positive and statistically significant (PPS) at conventional levels; (ii) programs are more likely to yield positive results when GDP growth is higher and unemployment lower; (iii) programs aimed at building human capital, such as vocational training, independent worker assistance and wage subsidies, show significant positive impact, and (iv) program length, monetary incentives, individualized follow up and activity targeting are all key features in determining the effectiveness of the interventions.
    Keywords: vocational training labor policies wage subsidies randomized controlled trials
    JEL: J21 J48 E24
    Date: 2021–03
  5. By: Guilherme Strifezzi Leal (Universitat de Barcelona); Ã lvaro Choi (Universitat de Barcelona)
    Abstract: The effects of affirmative action on the incentives to human capital accumulation are ambiguous from a theoretical perspective and the scarce empirical evidence on the matter provides mixed results. In this paper, we address this issue by investigating the impacts of Brazil’s Law of Quotas on the students’ performance in the college entrance exam, the ENEM. The law established that a specific share of places in Brazilian federal universities should be filled by non-white students from public high schools. We employ a difference-in-differences approach in order to estimate the effects of the implementation of these quotas on the ENEM scores and provide causal evidence that the law fostered incentives to pre-college human capital accumulation. Moreover, the effects of the quotas were greater in more quantitative- intensive subjects but were not different by gender or parental education, and these impacts increased throughout the first years after the law’s implementation.
    Keywords: Racial quotas, Higher education, Equality of opportunity, Academic performance.
    JEL: J15 I24 I28 H52
    Date: 2021
  6. By: Nicolás Ajzenman (Sao Paulo School of Economics - FGV); Tiago Cavalcanti (University of Cambridge/CEPR/Sao Paulo School of Economics); Daniel Da Mata (Sao Paulo School of Economics - FGV)
    Abstract: How do political leader’s words and actions affect people’s behavior? We address this question in the context of Brazil by combining electoral information and geo-localized mobile phone data for more than 60 million devices throughout the entire country. We find that after Brazil’s president publicly and emphatically dismissed the risks associated with the COVID-19 pandemic and advised against isolation, the social distancing measures taken by citizens in pro-government localities weakened compared to places where political support of the president is less strong, while pre-event effects are insignificant. The impact is large and robust to different empirical model specifications. Moreover, we find suggestive evidence that this impact is driven by localities with relatively higher levels of media penetration and is stronger in municipalities with a larger proportion of Evangelic parishioners, a key group in terms of support for the president.
    Keywords: Health Coronavirus Leadership Persuasion Risky Behavior
    JEL: D1 I31 Z13
    Date: 2021–03
  7. By: Alan Sánchez (GRADE); Marta Favara (University of Oxford, Oxford Department of International Development); Catherine Porter (Lancaster University)
    Abstract: In the last two decades, access to higher education has increased substantially in Latin America. The quantity of new programs available has created concerns about education quality, which has implications for the labor market. We use rich longitudinal data from a Peruvian cohort tracked from ages 8 to 26 (the Young Lives study) to analyze the profile of students enrolled in different ‘types’ of higher education, and to explore the returns to higher education before and during the COVID-19 crisis. We find evidence of stratification at higher education level: (a) students from the wealthiest households tend to enroll in universities (as opposed to technical institutes), and choose majors and institutions with the highest income rewards; (b) students with higher levels of cognitive skills and socio-emotional competencies tend to attend better quality universities; (c) there are hidden gender gaps: females are more likely to enroll in majors that are the least rewarded in the labor market. In the 2020 labor market, by age 26 we find that: (d) pre-COVID, positive returns to higher education are only observable for those that attended better quality universities; (e) during the pandemic, higher education became a protective factor, with the income premium being higher for everyone that attended this education level; (f) the male income premium doubled during the pandemic.
    Date: 2021–05

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