|
on Central and South America |
|
Issue of 2021‒05‒31
eight papers chosen by |
| By: | Ali Enami (The University of Akron); Ugo Gentilini (World Bank); Patricio Larroulet (CEQ Institute and CEDES); Nora Lustig (Tulane University); Emma Monsalve (World Bank); Siyu Quan (Tulane University); Jamele Rigolini (World Bank and IZA) |
| Abstract: | Using microsimulations this paper analyzes the poverty and tax implications of replacing current transfers and subsidies by a budget-neutral (no change in the fiscal deficit) universal basic income program (UBI) in Brazil, Chile, India, Russia, and South Africa. We consider three UBI transfers with increasing levels of generosity and identify scenarios in which the poor are no worse off than in the baseline scenario of existing social transfers. We find that for poverty levels not to increase under a UBI reform, the level of spending must increase substantially with respect to the baseline. Accordingly, the required increase in tax burdens is high throughout. In our five countries and scenarios, the least increase in taxes required to avoid poverty to be higher than in the baseline is around 25% (Brazil and Chile). Even at this lower rate, political resistance and efficiency costs could limit the feasibility of a UBI reform. |
| Keywords: | Universal basic income, microsimulation, inequality, poverty, tax incidence |
| JEL: | H22 H31 H55 I32 D63 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:2108&r= |
| By: | Marcelo Bérgolo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Burdín (University of Leeds); Santiago Burone (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Mauricio de Rosa (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Matías Giaccobasso (University of California. Anderson School of Management); Martín Leites (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1815 first-year undergraduate economics and business students in Uruguay to understand why people are inequality averse. We elicited inequality aversion by asking participants to make a sequence of choices between hypothetical societies characterized by varying levels of average income and income inequality. In addition, we use randomized information treatments to prime participants into competing narratives regarding the sources of inequality in society. The main findings are that (1) the prevalence of inequality aversion is high: most participants’ choices revealed inequality-averse preferences; (2) the extent of inequality aversion depends on the individual’s position in the income distribution; (3) individuals are more likely to accept inequality when it comes from effort rather than luck regardless of their income position; (4) the effect of social mobility on inequality aversion is conditional on individual’s income position: preferences for mobility reduces inequality aversion for individuals located at the bottom of the income distribution, where risk aversion cannot play any role. |
| Keywords: | Inequality aversion, fairness, risk, effort, luck, redistribution, questionnaire-experiments |
| JEL: | D63 D64 D81 C13 C91 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-19-20&r= |
| By: | Niklas Engbom; Christian Moser |
| Abstract: | We show that a rise in the minimum wage accounts for a large decline in earnings inequality in Brazil since 1994. To this end, we combine rich administrative and survey data with an equilibrium model of the Brazilian labor market. Our results imply that the minimum wage has far-reaching spillover effects on wages higher up in the distribution, accounting for one-third of the 25.9 log point fall in the variance of log earnings in Brazil since 1994. At the same time, the minimum wage’s effects on employment and output are muted by reallocation of workers toward more productive firms. |
| JEL: | E24 E25 E61 E64 J31 J38 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28831&r= |
| By: | Bibiana Lanzilotta (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Merlo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriela Mordecki (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Viviana Umpierrez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Using different measures of uncertainty indexes, we quantify how economic uncertainty impacts on a set of nominal and real variables in a small and open economy like Uruguay. Our measures of uncertainty are based on two different methods: newspaper-based and composite index-based, covering roughly 15 years of monthly data. The main findings suggest that economic uncertainty has, to a certain extent, an impact on the real economy, whereas we find no evidence over the financial sector. This result can be linked to the high stability of the Uruguayan economy and the small size of its financial sector. |
| Keywords: | economic uncertainty, EPU index, VAR, volatility, Uruguay |
| JEL: | D80 E32 E37 E44 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-17-20&r= |
| By: | Carlos Bianchi (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Fernando Isabella (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Santiago Picasso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This article provides evidence that the external constraint, measured through export margins, explains the middle income trap (MIT)condition. This refers to the situation of stagnation or slowing down of economic growth that many countries face when they reach middle income levels. This results from an endogenous mechanism that makes these countries unable to follow the growth strategy based on simple products and standardized technologies, because their production costs increased as the country increased its income levels. However, these countries lack the necessary capacities to transform their production, incorporating sophisticated goods and services, to sustain growth and continue to increase the living standards of their population. Using static and dynamic econometric models, we corroborate a positive and significant relationship between export margin and the growth of GDPpc for those countries defined as MIT. On the contrary, this relationship is not found for other countries. Hence, a mechanism is identified that explains the situation of entrapment in middle income, overcoming the mere identification of stagnation and its empirical demarcation, and allowing us to distinguish between countries that are in transit within middle income thresholds and those that are trapped in them. |
| Keywords: | Middle Income Trap, external constraint, growth, development |
| JEL: | I10 J13 C89 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-18-20&r= |
| By: | Rodrigo Ceni (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Cecilia Parada (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Ivone Perazzo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Eliana Sena (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | We estimate the quantitative impact of a long-acting reversible contraceptive (LARCs) policy on the unexpected recent collapse of the Total Fertility Rate (TFR) in Uruguay. We exploit, first, the expansion schedule of a large-scale policy of access to sub-dermal implants in public hospitals across the country, through an event study to capture causal effects, and second, detailed birth administrative records for the last 20 years. We document an average reduction of 3% in the birth rate in public hospitals across the two years after the policy was implemented. These effects were concentrated among teens, with a decrease of 5.5%, and this decrease affects mainly the first birth. In the context of a reduction of 20% in births in three years, the use of implants can explain one-third of the reduction in births in public hospitals. We also document a more significant effect on first births and no effect on pregnancy outcomes such as childbirth weight or weeks of gestation. |
| Keywords: | Long-acting reversible contraceptive, Fertility, Adolescent fertility, Public policy, Birth collapse |
| JEL: | H42 H75 I12 J13 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-14-20&r= |
| By: | Maira Colacce (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Unlike what happens with underweight indicators, there is no single internationally validated indicator for evaluating overweight and obesity in children. Additionally, in the case of children older than 5 years, there is also no consensus on the cut-off points that determine that a child is overweight or obese. This methodological note presents a brief discussion on the indicators available in the Nutrition, Child Development and Health Survey (ENDIS) for the assessment of overweight and obesity in children. The different alternatives used at the clinical and population level are described and the sensitivity of the results for the Uruguayan case is analyzed. The change in the indicators of excess body mass does not introduce major variations in the evolution of the incidence of the variables of interest. However, the use of age-differentiated thresholds generates discrete jumps in the prevalence of overweight and obesity, which could lead to inferring a significant increase in overweight and obesity over time that is the product of the threshold change. |
| Keywords: | Child obesity, Child overweight, measurement, Uruguay |
| JEL: | I10 C89 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-15-20&r= |
| By: | Cesar Martinelli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Cynthia Boruchowicz (University of Maryland); Susan W. Parker (University of Maryland, Center for Research and Teaching in Economics (CIDE)) |
| Abstract: | We study the effects of mass migration from Venezuela on Peruvian labor markets. In 4239–423:, about :92,222 Venezuelans migrated to Peru; about :6% settled in the Lima metropolitan area, where the percentage of Venezuelans in the working age population went from nil to over 32%. Migrants were more educated in average than the local labor force, and did nor face large cultural barriers. We propose a simple assignment model of the labor market, which suggests that migration will lead to a reallocation of local workers toward lower skill jobs. Using synthetic control methods, and comparing Lima with a group of other Peruvian cities, we find evidence of adjustment in occupational structure in the direction predicted by the model. Overall, market adjustment to a large shock in labor supply was strikingly smooth. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1080&r= |