nep-lam New Economics Papers
on Central and South America
Issue of 2023‒06‒12
two papers chosen by
Maximo Rossi
Universidad de la República

  1. The distributional implications of short-term income mobility: evidence for Latin America By Martín Trombetta
  2. The Dynamics of Labour Market Polarization in Chile: An Analysis of the Link Between Technical Change and Informality By Delaporte, Isaure; Peña, Werner

  1. By: Martín Trombetta (Universidad Nacional de General Sarmiento)
    Abstract: In recent years, a branch of the economic literature has analyzed household income movements in longitudinal datasets. Previous research has shown that household income is considerably more volatile in Latin America than in developed economies, though little is known so far about the distributional implications of such income changes. This paper exploits the unique database built in Beccaria et al. (2022) from Latin American household surveys for seven countries in 2002-2015 to analyze the impact of household income movements on income distribution. I combine the analysis from traditional indicators in the literature with a novel methodology that quantifies this precise phenomenon and allows for comparisons and rankings across population groups and countries. My results show that Latin American economies feature less equalizing mobilitythan developed countries, although variability between countries is considerable. Moreover, the mobility pattern observed benefitted essentially all households other than those in the right tail of the income distribution. Finally, I provide more specific results for population groups defined in terms of gender and educational attainment.
    Keywords: income mobility, income distribution, Great Gatsby curve, mobility curve.
    JEL: D31 O15 J60
    Date: 2023–05
    URL: http://d.repec.org/n?u=RePEc:aoz:wpaper:241&r=lam
  2. By: Delaporte, Isaure; Peña, Werner
    Abstract: In spite of the growing literature on polarization, relatively little is known about the individual-level patterns underlying the decline of routine occupations and its link with informal employment in a middle-income country context. To shed light on this, we examine the ows of formal and informal workers into and out of routine and non-routine occupations over the period 1980-2015 in Chile. Using rich longitudinal data from the Social Protection Survey of Chile, we first reconstruct individuals' occupational trajectories by classifying individuals into different states at a monthly frequency. We then use a series of multilevel competing risk event history models and a decomposition ow approach to study the ows underlying the decline of routine occupations over time. Our results suggest a process of displacement and occupational downgrading for routine manual workers: workers in routine manual formal employment become increasingly unemployed or use informality as a buffer against job loss, and workers in routine manual informal employment become unemployed or transit to non-routine manual informal occupations. By contrast, workers in routine cognitive occupations seem to be relatively more protected against job displacement and occupational downgrading. Lastly, we find that the decrease in the share of routine occupations in Chile is mostly due to a decrease in the in ow transition rate from unemployment as well as an increase in the out ow transition rates to unemployment and informality.
    Keywords: Occupations, Tasks, Routinization, Labour Market Displacement, Unemployment, Informality
    JEL: E24 E26 J21 J23 J24 O30
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:zbw:glodps:1262&r=lam

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