nep-lam New Economics Papers
on Central and South America
Issue of 2022‒11‒28
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Intergenerational Mobility in the Land of Inequality By Diogo G. C. Britto; Alexandre Fonseca; Paolo Pinotti; Breno Sampaio; Lucas Warwar
  2. The Health Benefits of Solar Power Generation: Evidence from Chile By Nathaly Rivera; Elisheba Spiller; J. Cristobal Ruiz-Tagle
  3. Social Mobility and Economic Development By Neidhöfer, Guido; Ciaschi, Matías; Gasparini, Leonardo; Serrano, Joaquín
  4. Economic Disasters and Inequality By Bruno Coric; Rangan Gupta

  1. By: Diogo G. C. Britto; Alexandre Fonseca; Paolo Pinotti; Breno Sampaio; Lucas Warwar
    Abstract: We provide the first estimates of intergenerational income mobility for a developing country, namely Brazil. We measure formal income from tax and employment registries, and we train machine learning models on census and survey data to predict informal income. The data reveal a much higher degree of persistence than previous estimates available for developed economies: a 10 percentile increase in parental income rank is associated with a 5.5 percentile increase in child income rank, and persistence is even higher in the top 5%. Children born to parents in the first income quintile face a 46% chance of remaining at the bottom when adults. We validate these estimates using two novel mobility measures that rank children and parents without the need to impute informal income. We document substantial heterogeneity in mobility across individual characteristics - notably gender and race - and across Brazilian regions. Leveraging children who migrate at different ages, we estimate that causal place effects explain 57% of the large spatial variation in mobility. Finally, assortative mating plays a strong role in household income persistence, and parental income is also strongly associated with several key long-term outcomes such as education, teenage pregnancy, occupation, mortality, and victimization.
    Keywords: intergenerational mobility, inequality, Brazil, migration, place effects
    JEL: J62 D31 I31 R23
    Date: 2022
  2. By: Nathaly Rivera; Elisheba Spiller; J. Cristobal Ruiz-Tagle
    Abstract: Renewable energy can yield social benefits through local air quality improvements and their subsequent effects on human health. We estimate some of these benefits using data gathered during the rapid adoption of large-scale solar power generation in Chile over the last decade. Relying on exogenous variation from incremental solar generation capacity over time, we find that solar energy displaces fossil fuel generation, primarily coal-fired generation, and curtails hospital admissions, particularly those due to lower respiratory diseases. These effects are noted mostly in cities downwind of displaced fossil fuel generation and are present across the most vulnerable age groups. Our results document the existence of an additional channel through which renewable energy can increase social welfare.
    Date: 2022–11
  3. By: Neidhöfer, Guido; Ciaschi, Matías; Gasparini, Leonardo; Serrano, Joaquín
    JEL: O15
    Date: 2022
  4. By: Bruno Coric (University of Split, Faculty of Economics, Cvite Fiskovica 5, 21000 Split, Croatia; CERGE-EI Foundation Teaching Fellow, 110 Jabez Street No. 1004, Newark, NJ 07105, USA); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: This paper analyses the dynamic effects of economic disasters, captured by cumulative decline in output of at least 10 percent over 1 or more years, on disposable income inequality of a sample of 99 countries over the annual period of 1960 to 2017. Based on impulse response functions derived from a robust local projections method, we find that economic disasters increase inequality by 4%, with the overall effect being statistically significant and highly persistent over a period of 20 years following the shock. When we repeat the analysis by categorizing the 99 countries based on income groups and regions, we find that the strongest effects are felt by high-income countries (8%), and in Europe, Central Asia and North America (16%) taken together, as primarily driven by ex-socialist economies. Though of lesser magnitude, statistically significant increases in inequality are also observed for low-, and upper-middle-income economies, and the regions of Latin America and Caribbean, Middle East and North Africa (MENA) and South Asia, and to some extent also for Sub-Saharan Africa. Our findings have important policy implications.
    Keywords: inequality, economic disasters, local projection method
    JEL: C22 D63 Q54
    Date: 2022–11

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