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on Central and South America |
| By: | Franziska Disslbacher; Salvatore Morelli; Matteo Targa |
| Abstract: | Using the novel GC Wealth Project Data Warehouse, this paper shows that wealth inequality has increased since the early 2000s in roughly 60% of the countries in our sample, although trends are not uniform across countries. While the largest gains in wealth shares accrue to the top 10%, relative losses are borne by the bottom 50% and the middle 40% alike. We reveal substantial variation of estimates across data sources and units of analysis, which complicates international comparison of wealth inequality. Yet, core trends at the country level are generally robust. Individual-based series generally report higher inequality than household-based ones. Regional patterns reveal sharp increases in inequality in Latin America, North America, India, and China, while Europe and Asia-Pacific exhibit more stable trends. Incorporating Forbes billionaire data extends coverage to low-income countries and Africa—where, notably, billionaire wealth relative to GDP has remained stable, marking a distinct exception to global patterns. |
| JEL: | D3 D31 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:lis:lwswps:55 |
| By: | Holzheu, Kerstin (Sciences Po, Paris); Muñoz-Morales, Juan (IÉSEG School of Management) |
| Abstract: | Life-cycle wage growth varies substantially across countries. We examine the role of the firm productivity distribution by introducing a random-search model that disentangles firm heterogeneity, on-the-job learning, and labor-market frictions. Estimates for Brazil, Colombia, and the United States reveal two distinct disadvantages: a long left tail of low-paying firms in Brazil and a highly compressed firm ladder in Colombia. Counterfactuals show that equating each country's firm distribution to that of the United States closes most of the cross-country gap in life-cycle wage growth: Brazil's wage growth rises from 73 to 103 percent of the U.S. value, and Colombia's from 52 to 115 percent. These results are robust to alternative distributional assumptions, education residualization, and external discipline on the productivity tail. |
| Keywords: | labor markets, income profiles, developing countries |
| JEL: | J24 J31 J63 J64 E24 O11 O12 O15 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18970 |
| By: | Klaus Desmet; Dávid Krisztián Nagy; Esteban Rossi-Hansberg |
| Abstract: | This paper studies how human capital shapes the economic geography of development. We propose a model in which human capital acquisition costs vary across space, and regions with higher human capital invest more in human-capital-augmenting technology. Locations are interconnected through costly migration and trade. Using data on local income and schooling, we quantify the model at a 1° x 1° resolution globally. Over two centuries, the model mostly predicts persistence in the spatial distribution of development. Proportionally lowering education costs in sub-Saharan Africa raises local outcomes but lowers global welfare, while the same policy in Latin America improves global welfare. An alternative policy that equalizes educational costs across sub-Saharan Africa generates worse outcomes, as population shifts within the region toward less productive areas. These results are driven by the estimated negative correlation between education costs and local fundamentals, as well as spatial inefficiencies due to externalities. |
| Keywords: | human capital; geography; development; education policy; global inequality; dynamic spatial models |
| JEL: | E24 F10 I24 J24 O11 O18 O33 R12 R23 |
| Date: | 2026–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:103849 |
| By: | Pedro Carneiro; Yyannu Cruz-Aguayo; Francesca Salvati; Norbert Schady |
| Abstract: | We study how poorly-behaved children affect learning and other outcomes of their peers using data from a unique experiment in Ecuador. Within each school, students were randomly assigned to classrooms in every grade for seven consecutive grades, between kindergarten and 6th grade. Children with persistent behavioral problems lower the math and language achievement of their classmates. The more poorly-behaved children there are in a classroom, the larger is their negative impact on the achievement of their classmates. These negative impacts are larger for younger children, and they persist for at least two years after exposure to a poorly-behaved peer. There are no dynamic complementarities in the impact of poorly-behaved peers: impacts are similar for children who were and were not previously exposed to poorly-behaved peers (and for high and low ability children). We find indirect evidence that children with persistent behavioral difficulties are passed around schools. |
| Keywords: | disruption, peers, random classroom assignment |
| JEL: | I24 I25 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13032 |
| By: | Ellora Derenoncourt (Princeton University and NBER); Francois Gerard (University College London); Lorenzo Lagos (Brown University); Claire Montialoux (Sciences Po) |
| Abstract: | How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal-wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies. |
| Keywords: | Brazil |
| JEL: | J23 J46 J88 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:pri:cepsud:351 |
| By: | Ellora Derenoncourt (Princeton University and NBER); Francois Gerard (University College London); Lorenzo Lagos (Brown University); Claire Montialoux (Sciences Po) |
| Abstract: | We study the role of union heterogeneity in shaping wages and inequality among unionized workers. Using linked employer-employee data from Brazil and job moves across multi-firm unions, we estimate over 4, 800 union-specific pay premia. Unions explain 3–4% of earnings variation. While unions raise wages on average, the standard deviation in union effects is large (6–7%). Validating our approach, wages fall in markets with higher vs. lower union premia following a nationwide right-to-work law. Linking premia to detailed data on union attributes, we find that unions with strike activity, collective bargaining agreements, internal competition, and skilled leaders secure higher wages. High-premium unions compress wage gaps by education while the average union exacerbates them. Post right-to-work, however, worker support for high-premium unions falls when between-group bargaining differentials are large. Our findings show that unions are not a monolith—their structure and actions shape their wage effects and, consequently, worker support. |
| Keywords: | Brazil |
| JEL: | J31 J51 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pri:cepsud:350 |