nep-lam New Economics Papers
on Central and South America
Issue of 2021‒11‒15
two papers chosen by
Maximo Rossi
Universidad de la República

  1. The distributional effect of a massive exodus in Latin America and the role of downgrading and regularization By Carlo Lombardo; Julian Martinez-Correa; Leonardo Peñaloza-Pacheco; Leonardo Gasparini
  2. A multidimensional approach to measuring economic insecurity: the case of Chile By Prieto, Joaquin

  1. By: Carlo Lombardo (CEDLAS-IIE-FCE-UNLP); Julian Martinez-Correa (CEDLAS-IIE-FCE-UNLP); Leonardo Peñaloza-Pacheco (Cornell University and CEDLAS-IIE-FCE-UNLP); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET)
    Abstract: The massive displacement of Venezuelan citizens to Colombia is the second most important episode of forced migration in the world. We study the impact of this demographic shock on the Colombian income distribution exploiting the geographical heterogeneity in the intensity of migration. We use RIF regressions in an instrumental variables approach to account for the non-random pattern of location of immigrants. We find that despite the fact that Venezuelan immigrants are relatively skilled compared to native Colombian workers, the exodus had a larger negative effect on the lower tail of the wage distribution, implying increases in income inequality and poverty. We link this result to a sizeable downgrading of (mostly unregistered) Venezuelan recent migrants who work in more routine tasks and earn lower wages than natives with similar characteristics. We also explore a large regularization program for immigrants and find that it was associated to a reduction in the extent of downgrading, and hence, to a mitigation of the unequalizing impact of the exodus
    JEL: F14 F22 F16 F23 J61 L60
    Date: 2020–11
    URL: http://d.repec.org/n?u=RePEc:dls:wpaper:0290&r=
  2. By: Prieto, Joaquin
    Abstract: This paper proposes a strategy to measure economic insecurity in countries in the Global South. It builds a 'Multidimensional Economic Insecurity Index' (MEII) that combines four indicators of economic vulnerability that cause stress and anxiety: unexpected economic shocks, unprotected employment or non-workers in the household, over-indebtedness and asset poverty. The index offers a measure that directly relates economic uncertainty to stress and anxiety due to the lack of protection and buffers to face an unexpected economic shock. The MEII is applied to Chile using Survey of Household Finances (SHF) cross-sectional data (2007, 2011, 2014 and 2017). The results show that i) about half of the Chilean households experienced, on average, two or more economic vulnerabilities during the last decade with an intensity of 2.3 vulnerabilities, and ii) economic insecurity affects households on the entire income distribution, even in the highest income deciles groups. By identifying the groups of households most affected by economic insecurity and its trend in recent years, applying the MEII in countries such as Chile provides relevant information to monitor, evaluate and improve social safety nets besides labour market regulations.
    Keywords: economic insecurity; Global South; multidimensional index; survey of households financies; well-being
    JEL: I31 D63
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:112490&r=

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