nep-lam New Economics Papers
on Central and South America
Issue of 2021‒07‒26
five papers chosen by

  1. Re-examining the Brazilian South-Northeast labour income gap: A decomposition approach By Rodrigo C. Oliveira; Raul da Mota Silveira Neto
  2. The Effect of School Voucher Spending on Initial Earnings By Correa, Juan A.; Parro, Francisco; Sánchez, Rafael
  3. Long-term effects of the Inca Road By Ana Paula Franco; Sebastian Galiani; Pablo Lavado
  4. Exports “brother-boost†: the trade-creation and skill-upgrading effect of Venezuelan forced migration on Colombian manufacturing firms By Carlo Lombardo; Leonardo Peñaloza-Pacheco
  5. The Causal Effect of an Income Shock on Children’s Human Capital By Cristina Borra; Ana Costa-Ramon; Libertad González; Almudena Sevilla-Sanz

  1. By: Rodrigo C. Oliveira; Raul da Mota Silveira Neto
    Abstract: The purpose of this article is to provide new evidence about the sources of regional income inequalities in Brazil along the wage distribution, taking into account the regional differentials in purchasing power.
    Keywords: Brazil, Income inequality, Decomposition, Income distribution, Regional characteristics
    Date: 2021
  2. By: Correa, Juan A. (Universidad Andres Bello); Parro, Francisco (Universidad Adolfo Ibañez); Sánchez, Rafael (Universidad Diego Portales)
    Abstract: We quantify the effect of school voucher spending on initial earnings. We use administrative data on the monetary resources received by schools from a targeted voucher program implemented in Chile. We merge this dataset with education and labor market administrative records for the universe of students enrolled in the Chilean education system. We find that an increase of US$100 in the yearly expenditure of voucher resources per student raises initial earnings by 2.3%. However, we find that the positive effect of voucher spending only holds for private voucher schools that operate in local education markets with low enrollment concentration.
    Keywords: school vouchers, education spending, earnings
    JEL: H52 I22 I26 I28
    Date: 2021–07
  3. By: Ana Paula Franco; Sebastian Galiani; Pablo Lavado
    Abstract: The Inca Empire was the last of a long series of highly developed cultures in pre-colonial South America. It stretched across parts of the current territories of Argentina, Bolivia, Chile, Colombia, Ecuador and the whole of Peru. The Inca Road was its 30,000-kilometer-long transportation system. The aim of this study is to identify its long-term impact on current development in Peru. Our results show that the long-run effect of the Inca Road includes increases in wages and educational attainment, a reduction of child malnutrition and an increase in children’s mathematics test scores. We also find that these effects are around 20% greater for women and explore the mechanisms that may account for this pattern.
    JEL: O1
    Date: 2021–07
  4. By: Carlo Lombardo (CEDLAS-IIE-FCE-UNLP); Leonardo Peñaloza-Pacheco (CEDLAS-IIE-FCE-UNLP and Cornell University)
    Abstract: This paper studies the impact of a massive skilled labor supply shock on Colombian manufacturing firms’ exports, the Venezuelan exodus. We exploit crosssectional and time variability of Venezuelan forced migrants’ settlements in Colombian sub-national areas through an enclave instrumental variables approach to account for the selection of immigrants’ location. Using yearly customs data from 2013 to 2019, we find that the Venezuelan migration improved Colombian manufacturing firms’ export performance, particularly to high-income countries of the OECD located in North America and low-income countries. This effect was stronger for firms that exported less prior to the exodus (2012). Furthermore, using a detailed yearly panel of manufacturing firms from 2013 to 2019 we identify the potential labor market driving mechanism of the trade-creation effect: immigrants lowered exporting firms’ blue-collar wages, and allowed them to upgrade their labor force skill composition, namely firms were able to hire workers more compatible with exports to developed destinations.
    JEL: F22 F16 F14 J61 J31
    Date: 2021–07
  5. By: Cristina Borra; Ana Costa-Ramon; Libertad González; Almudena Sevilla-Sanz
    Abstract: We investigate the causal impact of a generous unconditional cash transfer at birth on children's later health outcomes and academic performance. Using rich administrative data, we take advantage of the unexpected introduction of a “baby bonus” in Spain in 2007, and implement a difference-in-discontinuity approach comparing children born in the surrounding months in different years. We find that the subsidy did not have a significant effect on health outcomes during childhood, nor on test scores in primary school. In line with this result, we show that the benefit did not affect the main potential mechanisms that could in turn have affected children’s health and academic performance. Our results contribute to understanding which interventions are effective at improving children's health and human capital formation.
    Keywords: children, health, education, income shock, Child benefit, Spain
    JEL: I12 J13 H31 H24
    Date: 2021–07

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