nep-lam New Economics Papers
on Central and South America
Issue of 2023‒07‒31
three papers chosen by

  1. Bridging the Gap: Mismatch Effects and Catch-Up Dynamics in a Brazilian College Affirmative Action By Rodrigo Oliveira; Alei Santos; Edson R. Severnini
  2. Tax policies, informality, and real wage rigidities By Andres García-Suaza; Fernando Jaramillo; Marlon Salazar
  3. Gender Differences in the Effect of High School Peers on College Major Choices: Evidence from Chile By Valdebenito, Rocio

  1. By: Rodrigo Oliveira; Alei Santos; Edson R. Severnini
    Abstract: Affirmative action in higher education can lead to mismatch, where students admitted through preferential treatment struggle academically due to inadequate preparation before college. Although some students may face initial challenges, by providing access to quality education for talented individuals who might have otherwise been overlooked due to systemic disadvantages, these programs may enable students to bridge the gap and catch up to their peers. In this study, we examine the effects of a quota-type affirmative action policy on gaps in college outcomes between potential beneficiaries and non-beneficiaries. Using comprehensive administrative data from a leading Brazilian university which implemented affirmative action in 2005, we find that compared to their non-quota peers, potential quota beneficiaries are less likely to progress smoothly through college and less likely to graduate, a result that is mostly driven by those who would not be admitted to the university otherwise. Notably, however, most of these differences shrink as the students progress through college, suggesting a catch-up effect between those groups. While potential quota students initially face challenges, resulting in a reduced course load in their early college years, they compensate by taking more credits in later years to ultimately graduate.
    JEL: I23 I24 I28 J15
    Date: 2023–06
  2. By: Andres García-Suaza; Fernando Jaramillo; Marlon Salazar
    Abstract: Developing countries have a vast informal sector generally associated with low productivity levels. The response of informal employment to tax policies might depend on labor market rigidities. This paper proposes a theoretical framework consisting of a search and matching model with segmentation in the labor market to understand how tax policies and enforcement interact to determine the size of the formal sector. The analytical results show that decreasing payroll taxes increases formal employment demand, and enforcement expenditure decreases informal employment offers. The model suggests that a tax policy combination leads to a significant impact on informality reduction. Moreover, the magnitude of the effect of tax policies depends on real wage rigidities, i.e., when the economy faces high real wage rigidities, the tax policies have a higher effect on informality reduction. **** RESUMEN: Los países en desarrollo presentan un sector informal relevante asociado con bajos niveles de productividad. Los efectos de las políticas tributarias sobre los niveles de informalidad dependen de las rigideces del mercado laboral. En el presente artículo se propone un modelo de busqueda y emparejamiento en un mercado laboral segmentado para entender la interaccion entre las políticas tributarias y la aplicacion de la ley sobre el sector formal. Los resultados analíticos muestran que, disminuir los impuestos a la nomina genera aumentos en la demanda de empleo formal, mientras que un aumento en el gasto de auditar a las empresas disminuye la oferta de empleo informal. El modelo sugiere un impacto significativo en la reduccion de la informalidad al combinar las políticas tributarias. Ademas, la magnitud del efecto de las políticas depende de las rigideces en los salarios reales. De esta forma, cuando la economía presenta altas rigideces en los salarios reales, las políticas tributarias tienen un mayor efecto sobre la reducción de la informalidad.
    Keywords: Informality, payroll taxes, fiscal policy, enforcement, search frictions, shirking, Informalidad, Impuestos a la nómina, Política fiscal, Aplicación de la ley, Busqueda y Emparejamiento
    JEL: E26 E62 J21 J46 J31 O17 K42
    Date: 2023–07
  3. By: Valdebenito, Rocio
    Keywords: Labor and Human Capital, Institutional and Behavioral Economics, Research Methods/Statistical Methods
    Date: 2023

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