nep-lam New Economics Papers
on Central and South America
Issue of 2023‒10‒30
five papers chosen by

  1. Signaling Specific Skills and the Labor Market of College Graduates By Busso, Matias; Montaño, Sebastián; Muñoz-Morales, Juan S.
  2. Well-being, time use, and women's empowerment after couple separation: Longitudinal evidence for Uruguay By Marisa Bucheli; Andrea Vigorito
  3. Willingness to pay for crime reduction: evidence from six countries in the Americas By Domínguez, Patricio; Scartascini, Carlos
  4. Fighting Global Warming: Is Trade Policy in Latin America and the Caribbean a Help or a Hindrance? By Dolabella, Marcelo; Mesquita Moreira, Mauricio
  5. Financial Aid and Social Mobility: Evidence from Colombia's Ser Pilo Paga By Juliana Londoño-Vélez; Catherine Rodriguez; Fabio Sanchez; Luis E. Álvarez-Arango

  1. By: Busso, Matias (Inter-American Development Bank); Montaño, Sebastián (University of Maryland); Muñoz-Morales, Juan S. (IÉSEG School of Management)
    Abstract: We use census-like data and a regression discontinuity design to study the labor market impacts of a signal provided by a government-sponsored award given to top-performing students on a nationwide college exit exam in Colombia. Students who can signal their high level of specific skills earn seven to ten percent more than identical students lacking such a signal. The signal allows workers to find jobs in more productive firms and sectors that better use their skills. The positive returns persist for up to five years. The signal favors workers from less advantaged groups who enter the market with weaker signals.
    Keywords: signaling, skills, wage returns, awards, college reputation, Colombia
    JEL: J20 J24 J31 J44 O15 D80
    Date: 2023–09
  2. By: Marisa Bucheli (Universidad de la República (Uruguay). Facultad de Ciencias Sociales. Departamento de Economía); Andrea Vigorito (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: Although many studies have assessed the effects of union dissolution on access to economic resources, on economic outcomes for adults, particularly custodial mothers, and on a broad set of educational and socioemotional outcomes for children, there is less literature analysing changes in other domains of women's quality of life that might be affected when couple separation occurs in households with small children. In this study, we analyse the effects of union dissolution (divorce and couple separation) on women's well-being and empowerment in the short run, based on two waves of Encuesta de Nutrición, Desarrollo Infantil y Salud (ENDIS), an official longitudinal study that followed Uruguayan households with children who were age 0 to 3 years in 2013. Specifically, we assess the effects of separation on economic and subjective well-being, time use and household workload, empowerment, and attitudes towards gender norms. To control for the potential selectivity of union dissolution, we carry out a combined PSM/difference-in-difference estimation. We find that, for women who are custodial mothers, union dissolution entails, on average, a net per capita household income loss of 29%, an increase in paid labour effort, and a decrease in time devoted to household work. At the same time, empowerment and traditional gender norms are scarcely affected by union dissolution, though equalizing gender norm attitudes predict union dissolution. After ruling out a set of potential channels related to substitution effects (such as increased school attendance, seeking help from relatives, or hiring domestic workers) that might explain the decrease in household workload, we provide suggestive evidence on the role of loosened gender norms following the exit of a male household member or more structured care arrangements with non-coresident fathers that needs to be tested in further research.
    Keywords: Uruguay, time use, separation, gender role attitudes, empowerment, ENDIS
    JEL: J12 J13 I30
    Date: 2023–06
  3. By: Domínguez, Patricio; Scartascini, Carlos
    Abstract: Crime levels are a perennial development problem in Latin America and a renewed concern in the United States. At the same time, trust in the police has been falling, and questions abound about citizens' willingness to support government efforts to fight crime. We conduct a survey experiment to elicit willingness to contribute toward reducing crime across five Latin American countries and the United States. We compare homicide, robbery, and theft estimates and find a higher willingness to contribute for more severe crimes and for higher crime reductions. In addition, we examine the role of information on the willingness to contribute by conducting two experiments. First, we show that exposing respondents to crime-related news increases their willingness to pay by 5 percent. Furthermore, while we document a 7 percent gap in willingness to pay for crime reduction between people who under- and over-estimate the murder rate, we find that this gap can be wholly eliminated by informing them about the actual level of crime. On average, our estimates suggest that households are willing to contribute around $140 per year for a 20 percent reduction in homicide. This individual-level predisposition would translate into additional investment in public security efforts of up to 0.5 percent of GDP.
    Keywords: willingness to pay;Cost of crime;Latin America;United States
    JEL: K42 H53 H27
    Date: 2022–10
  4. By: Dolabella, Marcelo; Mesquita Moreira, Mauricio
    Abstract: The dire prospects of global warming have been increasing the pressure on policymakers to use trade policy as a mitigation tool, challenging trade economists canonical “targeting principle.” Even though the justifications for this stance remain as valid as ever, it no longer seems feasible in a world that is already engaging actively in using trade policy for climate purposes. However, the search for second-best solutions remains warranted. In this paper, we focus on the climate benefits of tariff reform for a broad sample of Latin American and Caribbean countries, drawing on Shapiros (2021) insights about the environmental bias of trade policy. Using a partial equilibrium approach and GTAP 10-MRIO data for 2014, we show that even though there is evidence of a negative bias toward “dirty goods” in half of the countries studied, translating this into actionable tariff reforms is plagued by interpretation and implementation difficulties, as well as by jurisdictional and efficiency trade-offs. There are also questions about their efficacy in curbing greenhouse gas emissions.
    Keywords: International trade;Latin America and the Caribbean;Latin America andthe Caribbean
    JEL: F13 F14 F18 H23 Q56
    Date: 2022–08
  5. By: Juliana Londoño-Vélez; Catherine Rodriguez; Fabio Sanchez; Luis E. Álvarez-Arango
    Abstract: The paper studies the impact of financial aid on long-term educational attainment and labor market outcomes in Colombia. In 2014, the government launched a large-scale and generous student loan program called "Ser Pilo Paga." It offered full tuition coverage to students admitted to one of 33 government-certified high-quality universities known for superior test scores, graduation rates, and per-student spending. Notably, completing a bachelor's degree converted the loan into a grant. To qualify, students must score in the top 10% of the standardized high school exit exam and have below-median household wealth. Using RD and DD methodologies, we use nationwide administrative microdata linking all high school test takers, postsecondary attendees, and formal workers to estimate impacts up to eight years after high school. Financial aid improves college enrollment, quality, and attainment, particularly in STEM-related fields. The earnings gains are substantial, growing, and driven partly by high-quality universities improving students' skills, as demonstrated by their performance on Colombia's college graduation exam. A welfare analysis using the MVPF yields over $4.8 per dollar of government spending. Lastly, the program narrowed socioeconomic gaps in college attainment, skill development, and earnings among academically similar students without adversely affecting non-recipients, thereby promoting equity and efficiency.
    JEL: H52 I22 I23 I24 I26
    Date: 2023–09

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