nep-lam New Economics Papers
on Central and South America
Issue of 2022‒08‒29
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Median Labor Income in Chile Revised: Insights from Distributional National Accounts By José De Gregorio; Manuel Taboada
  2. Ownership Networks and Earnings Inequality By Federico Huneeus; Borja Larrain; Mauricio Larrain; Mounu Prem
  3. Making a Maradona: Meat Consumption and Soccer Prowess By Martín A. Rossi; Christian A. Ruzzier

  1. By: José De Gregorio; Manuel Taboada
    Abstract: This study uses national accounts, household surveys, and administrative records to provide consistent distributional series, emphasizing labor income between 2006 and 2017. Our new methodology is able to correct the known limitations of different data sources and combine them coherently for the first time using Chilean data. In contrast to estimations in advanced economies we propose methods to estimate data that are not available, which could be use to estimate distributional series in other developing countries with limited official statistics. The validity of the imputations is verified by contrasting the results with various external references. On average, the underestimation of gross wages in the Chilean national household survey as compared to national accounts is 40%, significantly larger than other countries. About a quarter of this gap is attributed to the “missing rich” in the survey. For 2017, this equates to an estimated median gross income for dependent labor of CLP 600,000 and CLP 570,000 for all workers. The corrected mean-median income ratio (Gini) is 26% (17%) larger than in the raw survey of 2017, and falls only 6% (3%) between 2006 and 2017 compared with a larger decline of 12% (11%) in the original data.
    Date: 2022–03
  2. By: Federico Huneeus; Borja Larrain; Mauricio Larrain; Mounu Prem
    Abstract: We use matched employer-employee data together with data on the ownership networks of Chilean firms to document a novel relationship between inequality in labor income and ownership structures. Exploiting transitions of firms in and out of networks, we show that network afiliation is associated with higher inequality along two dimensions. First, network firms pay higher average wages than stand-alone firms, increasing between-firm inequality. Second, the dispersion of wages within a network firm is higher than within a stand-alone firm, increasing within-firm inequality. The effects are driven by increases in the wages of top workers, and by the entry of new top workers. Our findings shed light on the relationship between ownership structures and the distribution of labor income in the economy.
    Date: 2022–03
  3. By: Martín A. Rossi (Universidad de San Andrés); Christian A. Ruzzier (Universidad de San Andrés)
    Abstract: We provide novel evidence that poor individuals born in countries with high consumption of meat are more likely to show soccer prowess. Our findings are robust to controlling for population, per capita income, and interest in soccer. We posit that the combination of relatively cheap meat and low opportunity costs of engaging in a career in professional soccer can explain this association between meat consumption, low socioeconomic status, and soccer prowess. Access to cheap meat implies a higher quality diet, which allows for the development of the cognitive functions required to excel in soccer. Poverty implies a low opportunity cost of putting those improved cognitive functions to use in soccer.
    Keywords: Sports; Meat consumption; Soccer; Nutrition; Poverty; Cognitive functions.
    JEL: Z20 Z22 J22 J24
    Date: 2022–07

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