nep-lam New Economics Papers
on Central and South America
Issue of 2023‒04‒03
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Lucky Women in Unlucky Cohorts: Gender Differences in the Effects of Initial Labor Market Conditions in Latin America By María Inés Berniell; Leonardo Gasparini; Mariana Marchionni; Mariana Viollaz
  2. Import competition and social mobility: Evidence from Brazil By Matías Ciaschi; Andrés César; Guillermo Falcone; Guido Neidhöfer
  3. The distributional effect of a migratory exodus in a developing country: the role of downgrading and regularization By Carlo Lombardo; Julián Martinez-Correa; Leonardo Peñaloza-Pacheco; Leonardo Gasparini
  4. The impact of COVID-19 on education in Latin America: long-run implications on poverty and inequality By Jessica Bracco; Leonardo Gasparini; Mariana Marchionni; Guido Neidhöfer
  5. Do governments stick to their announced fiscal rules? A study of Latin American and the Caribbean countries By Carolina Ulloa-Suarez; Oscar Valencia

  1. By: María Inés Berniell; Leonardo Gasparini; Mariana Marchionni; Mariana Viollaz
    Abstract: This paper assesses gender differences in the effects of adverse conditions at labor-market entry in a developing region. Using harmonized microdata from national household surveys for 15 Latin American countries, we build a synthetic panel of cohorts that potentially transition from school to work and observe their labor market outcomes 10 years later. We find that men who faced higher unemployment rates at ages 18-20 suffer a negative effect on employment at ages 27-30. In contrast, women from those same unlucky cohorts have higher employment rates and earnings. Our results are consistent with women acting as secondary workers in downturns. We also find that women from unlucky cohorts control a larger share of family income and are more likely to be the head of household 10 years after labor market entry, and that adverse initial labor market conditions are correlated to more egalitarian perceptions about gender roles later in life.
    JEL: J16 J21 J22 J31
    Date: 2022–11
  2. By: Matías Ciaschi; Andrés César; Guillermo Falcone; Guido Neidhöfer
    Abstract: There is a large body of literature studying the effects of trade shocks on worker’s job and wage losses. However, little is known about whether these effects transmit into the next generation. In this paper, we exploit the increased Chinese import competition in Brazil to evaluate how this shock affected children of exposed fathers. We use an specific survey module containing precise retrospective questions on parental employment and education, among other characteristics. Our findings suggest that children from more exposed fathers have less education and earnings in their adulthood. We also find a higher likelihood of having and informal or operational employment and social assistance dependence. Importantly, these effects are larger for children from low socioeconomic backgrounds, suggesting that the trade shock decreased intergenerational mobility and accentuated poverty traps.
    JEL: I24 J62 F14 F16 J23
    Date: 2022–11
  3. By: Carlo Lombardo; Julián Martinez-Correa; Leonardo Peñaloza-Pacheco; Leonardo Gasparini
    Abstract: We study the distributional effect of the massive exodus of Venezuelans in Colombia and how public policy can shape its impact. Using RIF-regressions in an instrumental variables approach, we find that the exodus had a larger negative effect on the lower tail of the natives’ wage distribution, increasing inequality in the host economy. We propose downgrading as the driving mechanism: due to formal restrictions, immigrants ended up working in more routine and lower-paying jobs than natives with similar characteristics. Finally, we show that a large-scale amnesty program reduced the magnitude of downgrading, mitigating the unequalizing impact of the exodus.
    JEL: D30 F22 J61 O15
    Date: 2022–11
  4. By: Jessica Bracco; Leonardo Gasparini; Mariana Marchionni; Guido Neidhöfer
    Abstract: The shock of the COVID-19 pandemic affected the process of human capital accumulation of children and youths. As a consequence of this disruption, the pandemic is likely to imply permanent lower levels of human capital. In this paper we provide new evidence on the impact of the COVID-19 and school closures on education in Latin America by exploiting harmonized microdata from a large set of national household surveys. In addition, we carry out some basic microsimulations to assess the potential effect of changes in human capital due to the COVID-19 crisis on future income distributions. We find that the pandemic is likely to have significant long-run consequences in terms of incomes and poverty if strong compensatory measures are not taken soon.
    JEL: O1 I31 I24
    Date: 2022–11
  5. By: Carolina Ulloa-Suarez (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, Sciences Po - Sciences Po); Oscar Valencia (Inter-American Development Bank)
    Abstract: This paper introduces a dataset that gathers information on whether and how Latin America and the Caribbean (LAC) have complied with or deviated from implemented fiscal rules. It provides annual data on fiscal rules for 14 LAC countries from 2000 to 2020, and it considers the design features of the rules and information about numerical compliance. It provides descriptive statistics reflecting the panorama of the fiscal rules implemented in LAC countries. Additionally, it calculates compliance rates across countries, years, and rules. On average, this study finds that compliance with rules aiming to constrain debt ratios and structural balances is the highest, while compliance with fiscal balance and expenditure rules is the lowest. Furthermore, the data collection process revealed that LAC countries still have room for discretion even when they subject their fiscal policy to rules. To address this problem, the paper proposes an adjusted compliance index that considers different elements that add degrees of discretion to the rule. The study finds that the numerical compliance rates of each country are likely to be overestimated once discretionary actions are accounted for.
    Keywords: Compliance, Fiscal policy, Latin America and the Caribbean National numerical fiscal rules
    Date: 2022–12

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