nep-lam New Economics Papers
on Central and South America
Issue of 2022‒09‒12
two papers chosen by

  1. New Perspectives on Inequality in Latin America By Fernández, Manuel; Serrano, Gabriela
  2. Hot Spots, Patrolling Intensity, and Robberies: Lessons from a three-year program in Uruguay By Cabrera, José María; Cid, Alejandro; Veneri, Federico

  1. By: Fernández, Manuel (Universidad de los Andes); Serrano, Gabriela (Universidad de los Andes)
    Abstract: Latin American countries have some of the highest levels of income inequality in the world. However, earnings inequality significantly changed over the last three decades, increasing during the 1980s and 1990s, declining sharply in the 2000s, and stagnating or even increasing in some countries during the last decade. Macroeconomic instability in the region in the 1980s and early 1990s, and the introduction of structural reforms like trade, capital, and financial liberalization, affected the patterns of relative demand and relative earnings across skill-demographic groups in the 1990s, increasing inequality. Significant gains in educational attainment, the demographic transition, and rising female labor force participation changed the skill-demographic composition of labor supply, pushing education and experience premium downward, but this was not enough to counteract demand-side trends. At the turn of the century, improved external conditions, driven by China's massive increase in demand for commodities boosted economies across Latin America, which began to grow rapidly. Growth was accompanied by a positive shift in the relative demand for less-educated workers, stronger labor institutions, rising minimum wages, and declining labor informality, a confluence of factors that reduced earnings inequality. In the aftermath of the global financial crisis, particularly after the end of the commodities price boom in 2014, economic growth decelerated, and the pace of inequality decline stagnated. There is extensive literature trying to explain the causes of earnings inequality dynamics during the last three decades in Latin America. We discuss this literature regarding themes, methodological approaches, and key findings, emphasizing the latest perspectives. The focus is on earnings inequality and how developments in labor markets have shaped it.
    Keywords: inequality, Latin America, education premium, experience premium, trade reforms, minimum wage, informality
    JEL: D31 D33 F16 J21 J23 J31 O54
    Date: 2022–07
  2. By: Cabrera, José María; Cid, Alejandro; Veneri, Federico
    Abstract: We study the effects of increasing police presence on crime by exploiting the quasi-experimental nature of a large-scale hot spots intervention in a Latin American country that had experienced a significant increase in crime over the last 30 years. We match geocoded data on crime and GPS data that signals the presence of police to 200x200 meters cells covering Montevideo, Uruguay. Employing a difference-in-differences (DiD) approach, our results suggest that the program effectively increased police presence in the designated areas and reduced crime. We found an overall elasticity of 0.47 - a 10% increase in police presence is associated with a decrease of 4.7% in robberies. This three-year intervention allows us to investigate heterogeneous effects by year of intervention and contexts. The program presented greater effects during the first year of the intervention; during 2017, a period associated with significant legal changes in the country's criminal policy, the program did not affect crime. In 2018, we observed positive results in police presence and crime reduction but at a reduced level. We associated this reduction in outcomes with program fatigue which could impact the sustainability of this type of intervention. This study may help policymakers identify the conditions under which hot spots policing programs work and the degree to which they are replicable and scalable.
    Keywords: Crime; Robberies; Police; Patrolling; Hot spots; Georeferenced; GPS; Difference-in-differences; Uruguay; Latin America
    JEL: J48 K42 O17
    Date: 2022–07–15

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