nep-lam New Economics Papers
on Central and South America
Issue of 2021‒06‒21
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Universal Basic Income Programs: How Much Would Taxes Need to Rise? Evidence for Brazil, Chile, India, Russia, and South Africa By Ali Enami; Ugo Gentilini; Patricio Larroulet; Nora Lustig; Emma Monsalve; Siyu Quan; Jamele Rigolini
  2. Poverty traps and affluence shields: modelling the persistence of income position in Chile By Prieto Suarez, Joaquin
  3. How does market competition affect firm innovation incentives in emerging countries? Evidence from Latin American firms. By Benavente, Jose Miguel; Zuniga, Pluvia
  4. La Protección Social Durante La Pandemia: Los Casos de Argentina, Brasil, Colombia y México By Merike Blofield; Nora Lustig; Mart Trasberg

  1. By: Ali Enami (University of Akron); Ugo Gentilini (World Bank); Patricio Larroulet (Tulane University); Nora Lustig (Tulane University); Emma Monsalve (World Bank); Siyu Quan (Tulane University); Jamele Rigolini (World Bank)
    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 costscould limit the feasibility of a UBI reform.
    Keywords: Universal basic income, microsimulation, inequality, poverty, tax incidence
    JEL: H22 H31 H55 I32 D63
    Date: 2021–06
  2. By: Prieto Suarez, Joaquin
    Abstract: I propose analysing the dynamics of income positions using dynamic panel ordered probit models. I disentangle, simultaneously, the roles of state dependence and heterogeneity (observed and non-observed) in explaining income position persistence, such as poverty persistence and affluence persistence. I apply my approach to Chile exploiting longitudinal data from the P-CASEN 2006–2009. First, I find that income position mobility at the bottom and the top of the income distribution is much higher than the expected, showing signs of high economic insecurity. Second, the observable individual characteristics have a much stronger impact than true state dependence to explain individuals’ current income position in the income distribution extremes.
    Keywords: longitudinal data; poverty persistence; affluence persistence; income mobility; Chile; Latin America
    JEL: D31 D63 I32
    Date: 2021–05
  3. By: Benavente, Jose Miguel (Inter-American Development Bank (IADB)); Zuniga, Pluvia (UNU-MERIT)
    Abstract: The role of market competition on firm innovation remains a controversial policy question, especially in the context of developing countries. This paper presents new empirical evidence about the impact of market competition on firm innovation engagement in Colombian and Chilean manufacturing industries. We correct for the endogeneity of market competition using instruments proxying entry costs and policy interventions (i.e. competition decisions and entry law reforms), our results are like those of developed countries. Market competition increases firm propensity to invest in innovation in manufacturing enterprises and this relationship is linear in Chilean while in Colombian industries it takes the form of an inversed-U shape relation. The impact of competition is decreasing with the level of sector asymmetry -as preconised in the literature, while the impact of firm distance to the frontier affects firm innovation engagement differently in the two countries. In Chile, competition raises innovation incentives for the third and fourth productivity quartiles while no impact is found for firms in the first (bottom) two quartiles. In contrast, in Colombia market competition raises innovation engagement across regardless their firm productivity position but effects are stronger in the medium range (second and third quartiles). Our main results are robust to controlling for past innovation engagement, import competition and business dynamics.
    Keywords: Market Competition, Innovation, Technology Purchasing, Productivity, Latin American Firms
    JEL: O32 D41 O47 D24
    Date: 2021–05–19
  4. By: Merike Blofield; Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQ).); Mart Trasberg
    Abstract: En este trabajo analizamos las respuestas de protección social y en qué medida estas medidas han mitigado potencialmente el impacto del COVID-19 sobre la desigualdad y la pobreza en los cuatro países más grandes de la región: Argentina, Brasil, Colombia y México. Hay diversidad en el tipo de respuestas y también en términos de velocidad, amplitud y tamaño. Los cuatro países pusieron en marcha medidas para proteger el sustento de los trabajadores formales, que incluían la prohibición de despidos, reducciones de salarios y horas de trabajo y permisos. Argentina, Brasil y Colombia lanzaron programas para subsidiar el empleo en el sector formal en empresas que se vieron fuertemente afectadas por la crisis, y México otorgó préstamos a pequeñas y medianas empresas. Los cuatro gobiernos mantuvieron intactos sus programas existentes de transferencias monetarias no contributivas contra la pobreza, y Argentina, Brasil y Colombia lanzaron nuevos programas de transferencias de emergencia, mientras que México no lo hizo. La expansión de los programas de asistencia social existentes o los nuevos creados han potencialmente podido mitigar el impacto sobre la desigualdad y la pobreza causada por la crisis en Argentina y Brasil y, en menor medida, en Colombia.
    Keywords: Covid-19, social protection, poverty, inequality, health, education, Latin America
    JEL: D31 I14 I31 I32 I38
    Date: 2021–01

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