nep-lam New Economics Papers
on Central and South America
Issue of 2023‒01‒09
five papers chosen by

  1. Trust towards Migrants By Gandelman, Néstor; Lamé, Diego
  2. Do Trade Agreements Contribute to the Decline in Labor Share? Evidence from Latin American Countries By González Rozada, Martín; Ruffo, Hernán
  3. Lasting Scars: The Unequal Impacts of Unemployment in Latin America By Alves, Guillermo; Varvasino, Joaquín
  4. The politics of pension policy responses to COVID-19: comparative insights from Chile, Bolivia and Peru By Carrera, Leandro; Angelaki, Marina
  5. How early nutrition and foundational cognitive skills interconnect? Evidence from two developing countries By Alan Sánchez; Marta Favara; Margaret Sheridan; Jere Behrman

  1. By: Gandelman, Néstor; Lamé, Diego
    Abstract: Using a standard trust game, we elicit trust and reciprocity measures in a representative sample of adult players in Montevideo, the capital city of Uruguay, a country that exhibits relatively better levels of tolerance towards migrants than other Latin American countries. We find no statistically significant differences in trust levels of Uruguayans towards countrymen versus migrants. In reciprocity, we find only marginally significant differences attributable to the nationality of the players.
    Keywords: Trust;Reciprocity;Experimental games;Migrations
    JEL: C9 J15
    Date: 2021–09
  2. By: González Rozada, Martín; Ruffo, Hernán
    Abstract: In this paper, we explore the role of trade in the evolution of labor share in Latin American countries. We use trade agreements with large economies (the United States, the European Union, and China) to capture the effect of sharp changes in trade. In the last two decades, labor share has displayed a negative trend among those countries that signed trade agreements, while in other countries labor share increased, widening the gap by 7 percentage points. We apply synthetic control methods to estimate the average causal impact of trade agreements on labor share. While effects are heterogeneous in our eight case studies, the average impact is negative between 2 to 4 percentage points of GDP four years after the entry into force of the trade agreements. This result is robust to the specification used and to the set of countries in the donor pool. We also find that, after trade agreements, exports of manufactured goods and the share of industry in GDP increase on average, most notably in the case studies where negative effects on labor share are significant. A decomposition shows that all the reduction in labor share is explained by a negative impact on real wages.
    JEL: C01 C10 F10 F16
    Date: 2021–12
  3. By: Alves, Guillermo; Varvasino, Joaquín
    Abstract: We study the impact of the unemployment rate at the time of labor market entrance on the labor outcomes of individuals of different social origin in 18 Latin American countries. Higher unemployment increases the probability of being unemployed, decreases the likelihood of being a firm owner, and increases the chances of being a self-employed farmer. These effects persist even ten years after the start of the labor career and differ depending on the social origin of individuals. The effects on the chances of being unemployed are only observed for individuals of lower social origin. Higher unemployment rates at the beginning of their careers also make these individuals much less likely to have their own business compared to those of higher social origin. In contrast, the effect of early unemployment rates on the increased likelihood of being a farmer is more pronounced among individuals of high social origin.
    Keywords: Desempleo, Investigación socioeconómica,
    Date: 2022
  4. By: Carrera, Leandro; Angelaki, Marina
    Abstract: The COVID-19 pandemic has sparked a debate around the world on whether pension systems should be used to support individuals in economic distress. In Latin America, Chile, Bolivia and Peru have passed legislation allowing withdrawals from pension pots, yet with some significant variation. We argue that these measures cannot be simply understood because of the COVID-19 emergency alone but should also take into consideration the combination of legacies from previous pension re-reforms and the political institutional setting. We find that where previous re-reforms have been difficult to implement or have not been implemented at all and the institutional setting makes change difficult, measures that lead to a significant amount of savings being withdrawn may be favoured by political actors as a way to break the stalemate. By contrast, where re-reforms have been largely implemented and the political institutional setting poses few barriers to change, withdrawals may be more limited.
    Keywords: institutions; policy legacies; pensions; Latin America; Covid-19; coronavirus; CUP deal
    JEL: R14 J01
    Date: 2022–10–10
  5. By: Alan Sánchez (Grupo de Análisis para el Desarrollo (GRADE)); Marta Favara (University of Oxford); Margaret Sheridan (University of North Carolina); Jere Behrman (University of Pennsylvania)
    Abstract: We use unique data collected in Ethiopia and Peru as part of the Young Lives Study to investigate the relationship between early undernutrition and four foundational cognitive skills, the first two of which measure executive functioning: working memory, inhibitory control, long-term memory, and implicit learning. We exploit the rich longitudinal data available to control for potential confounders at the household level and for time-invariant community characteristics. We also exploit the availability of data for paired-siblings to obtain household fixed-effects estimates. Overall, we find robust evidence that stunting is negatively related with the development of executive functions, predicting reductions in working memory and inhibitory control by 12.6% and 5.8% of a standard deviation. Our results shed light on the mechanisms that explain the relationship between early nutrition and school achievement tests suggesting that good nutrition is an important determinant of children’s learning capacities.
    Keywords: foundational cognitive skills; early nutrition; executive functions; Ethiopia; Peru
    JEL: I15 I25 J24
    Date: 2022–12–16

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