nep-lam New Economics Papers
on Central and South America
Issue of 2023‒10‒16
three papers chosen by
Maximo Rossi, Universidad de la República

  1. Farm size and income distribution of Latin American agriculture: new perspectives on an old issue By Gáfaro, Margarita; Ibáñez, Ana María; Sánchez Ordóñez, Daniel; Ortiz, María Camila
  2. Mandatory helmet use and the severity of motorcycle accidents: no brainer? By Blanco, Magdalena; Cabrera, José María; Carozzi, Felipe; Cid, Alejandro
  3. Credit Supply Shocks and Firm Dynamics: Evidence from Brazil By Samuel Bazzi; Marc-Andreas Muendler; Raquel F. Oliveira; James E. Rauch

  1. By: Gáfaro, Margarita; Ibáñez, Ana María; Sánchez Ordóñez, Daniel; Ortiz, María Camila
    Abstract: Latin American and Caribbean countries have historically been known for their rates of land inequality, highest in the world. However, these countries also exhibit a high degree of heterogeneity in their patterns of land concentration and average farm sizes. These cross-country differences play a determining role in productivity of farms and the distribution of agricultural income. Constructing a new data-set matching agricultural census and household survey data, we provide suggestive evidence on the positive relationship between farm size and farm income and wages. We identify the prevalence of small farms and the resulting low agricultural incomes as an important mechanism contributing to high income inequality in agricultural regions. Low labor productivity in small farms appears as a key explanatory factor.
    JEL: N0 R14 J01
    Date: 2023–09–01
  2. By: Blanco, Magdalena; Cabrera, José María; Carozzi, Felipe; Cid, Alejandro
    Abstract: We study the impact of mandatory motorcycle helmet use laws on the severity and volume of road accidents in Uruguay by exploiting a change in the enforcement of the traffic law. Using a differences-in-differences design based on an unexpected change in policy, we report a sharp increase in helmet use and a 5 percentage point reduction in the incidence of serious or fatal motorcyclist accidents from a baseline of 11%. The benefits of helmet use are disproportionately borne by groups more likely to experience serious injuries such as males or young drivers. We find no evidence of other responses in terms of either the volume or type of accidents, suggesting motorcyclists' behaviour did not respond to differences in risk. We show that additional costs of enforcement for the relevant government agencies were negligible and estimate the health benefits of the policy.
    Keywords: law enforcement; safety and accidents; helmet use
    JEL: I12 I18 R41 H89
    Date: 2022–03–01
  3. By: Samuel Bazzi; Marc-Andreas Muendler; Raquel F. Oliveira; James E. Rauch
    Abstract: We explore how financial constraints distort the entry decisions among otherwise productive entrepreneurs and limit growth of promising young firms. A model of liquidity-constrained entrepreneurs suggests that the easing of credit constraints can induce more entry of firms with greater long-run growth potential than the easing of conventional entry barriers would bring about. We explore this growth mechanism using a large-scale program to expand the supply of credit to small and medium enterprises in Brazil. Local credit supply shocks generate greater firm entry but also greater exit with no effect on short-run employment growth in the formal sector. However, credit expansions increase average capability among entering firms, which enter at larger size, survive longer, and grow faster. These firm dynamics are more pronounced in areas with weaker credit markets ex ante and consistent with local bank branches using cheap targeted credit lines to expand lending more broadly. Our findings provide new evidence on the general equilibrium effects of credit supply expansions.
    JEL: D21 D22 D92 L25 L26 M13 O12
    Date: 2023–09

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