nep-lam New Economics Papers
on Central and South America
Issue of 2021‒09‒27
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Gender differences in housework and earnings: intrahousehold evidence from Latin America By Verónica Amarante; Cecilia Rossel
  2. 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
  3. Fiscal Policy, Income Redistribution and Poverty Reduction in Argentina By Juan Cruz Lopez Del Valle; Caterina Brest López; Joaquín Campabadal; Julieta Ladronis; Nora Lustig; Valentina Martínez Pabón; Mariano Tommasi
  4. Short- and Medium-term Effects of Parental Separation on Children’s Well-being. Evidence from Uruguay By Marisa Bucheli; Andrea Vigorito
  5. Annualizing Labor Market, Inequality, and Poverty Indicators By Eduardo Lora; Miguel Benítez; Diego Gutiérrez
  6. Epidemics and Informality in Developing Countries By Cesar Salinas

  1. By: Verónica Amarante (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Cecilia Rossel (Universidad Católica del Uruguay. Departamento de Ciencias Sociales.)
    Abstract: This paper analyzes the intrahousehold allocation of housework and paid work in five Latin American countries. The study of intrahousehold decisions in a region where gender inequality is higher than in the developed world and where a high proportion of women are excluded from paid work is important to disentangle how existing theories for the developed world apply to more unequal contexts. We carry out OLS regressions using harmonized time-use surveys for Chile, Colombia, Mexico, Peru, and Uruguay to consider the relationship between earnings and housework, in the framework of the dependency, gender deviance neutralization, and autonomy hypothesis. We find that in Latin America, female housework decisions are better associated with women´s absolute earnings. The econometric evidence compatible with the dependence hypothesis, or even with compensatory gender display for some countries, tends to disappear when absolute earnings are considered to understand women’s time devoted to household work. The significance that women´s monetary resources have in shaping intra-household decisions in Latin America offers new evidence to incorporate into policy design, highlighting the crucial links between labor market performance and intrahousehold gender equity in the region.
    Keywords: unpaid family work; Time use; Housework/division of labor, Latin America
    JEL: C81 D13 C83
    Date: 2021–07
  2. By: Ali Enami; Ugo Gentilini; Patricio Larroulet; Nora Lustig; Emma Monsalve; Siyu Quan; Jamele Rigolini
    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: 2021–09
  3. By: Juan Cruz Lopez Del Valle; Caterina Brest López; Joaquín Campabadal; Julieta Ladronis; Nora Lustig; Valentina Martínez Pabón; Mariano Tommasi
    Abstract: We implement a fiscal incidence analysis for Argentina with data from the 2017 national household survey. We find that Argentina’s fiscal system reduces inequality and poverty more than it is the case in many other comparable countries. This result is driven more by the size of the state (as measured by social spending to GDP) than by the progressivity of the fiscal system. While there are spending items that are quite progressive and even pro-poor, taxes are unequalizing and a number of subsidies benefit disproportionately the rich.
    Keywords: Fiscal policy, inequality, poverty, incidence, public economics
    JEL: E62 D6 H22 H23 I14 I24 I32
    Date: 2021–08
  4. By: Marisa Bucheli (Universidad de la República (Uruguay). Facultad de Ciencias Sociales, Departamento de Economía.); Andrea Vigorito (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: There is limited quantitative research on the effect of parental union dissolution on children’s well-being in developing countries. Based on three waves of a longitudinal study that follows up a cohort of Uruguayan children from age 6 to 19, we study the short- and medium-term effects of parental separation on school attendance, grade repetition, completed years of schooling, socio-emotional status, time devoted to a wide set of activities, and labour force participation. We carry out a fixed effect estimation comparing children from married or cohabiting couples that remained together versus a similar group that split after 2004. We find evidence that union dissolution worsens child educational outcomes in the short and medium term. Meanwhile, at age 19, socio-emotional well-being, labour force participation and worked hours remain unchanged. Although effects by gender and timing of the divorce (childhood or adolescence) are similar in the short term, at age 19 girls’ educational outcomes are almost unaffected. We do not find robust differences related to child support payments and contact with co-resident fathers. We also explore a set of potential moderators, such as household income, maternal employment, access to durable goods and public transfers, which suggest that worsened educational outcomes are closely connected to post-separation economic hardship.
    Keywords: union dissolution; child support; education; socio-emotional well-being; Uruguay; panel data
    JEL: J12 J13 I30
    Date: 2021–07
  5. By: Eduardo Lora; Miguel Benítez; Diego Gutiérrez
    Abstract: Widely, 12-month or 4-quarter average labor market, inequality and poverty indicators computed from repeated cross sections of household surveys are interpreted as annual. This is a valid interpretation only when several very specific criteria are met. Annual measures of indicators such as labor participation rates differ from their 12-month- or quarterly averages except when those who participate in a month or quarter also participate the other 11 months or three quarters. The same apply to unemployment rates and poverty rates. We propose several methods to accurately annualize sub-annual data. Some rely on ancillary questions often included in household surveys, others require econometric techniques such as predictive mean matching. Using data for Colombia we present annual measures of labor participation, occupation, unemployment, per capita labor income, average per capita household income, the Gini coefficients of labor income and per-capita household income, and moderate and extreme poverty rates.
    Keywords: annualization, employment, income distribution, income poverty, Gini coefficient, labor income, labor participation, poverty, unemployment
    Date: 2021
  6. By: Cesar Salinas (Indiana University)
    Abstract: Developing countries are facing the Covid-19 epidemic with particular challenges, such as their economic and labor force composition. In this research I will extend the so-called SIR-macro model with demand and supply effects to study how the size of the informal sector impact the ability of these countries to respond to the epidemic. Lockdown policies are useful to control the health crisis but these are less effective in informal markets. As a result, infection and death rates will not decrease as expected, and since informal activities are not counted in the calculation of the GDP, this would exacerbate the size of the recession. Finally, in order to generate similar results to an economy with only formal markets, the economy with informal markets has to implement more severe containment policies.
    Keywords: COVID-19, informality, recessions, SIR macro model
    Date: 2021–09

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