martes, 29 de mayo de 2012

Female Labor Force Participation and Informal Care of Adults: Evidence for a middle-income country

By:David Bravo
Esteban Puentes
The provision of elderly care is an issue of increasing importance in Latin American countries because of a aging population, decrease in household size, and increased complexity of care. Thus, it is important to analyze how the provision of informal care of other adults affects the welfare of women since they are usually responsible for this type of care. We analyze in this paper the relationship between providing informal care to adults and labor outcomes for a middle-income country with a rapidly aging population. This is one of the first studies to focus on middle-income countries and in Latin America. The results of this research show the importance of considering the endogeneity that exists between informal care and female labor participation. A partial correlation analysis shows a strong negative relationship between providing care and labor participation, however, when we use methods for endogeneity correction, the correlation does not hold. Additionally, we found that poor households are more likely to be involved in care giving activities, and that the presence of a spouse reduces the likelihood of provision of care.

The Political Economy of Distribution and Growth in Chile

By:Klaus Schmidt-Hebbel
This paper addresses the following questions on the political economy of distribution and growth in Chile. How does Chile compare to the world in government size, income distribution, and per capita GDP? Which is the relation between income distribution, government size and structure, and growth in a political-economy model of endogenous growth? How do changes in income distribution affect growth through changes in the size of government, in a model calibrated for Chile? Which are the dynamics of distribution and growth, when they are shaped by political leadership, the policy-making process, and the quality of institutions and policies? Under which conditions of such dynamics does a non-monotonic relation between income distribution and growth emerge, akin to the Kuznets curve? How do Chile’s leadership, policy-making process, and reforms affect equity and growth? Which are the political economy requirements for successful adoption of ten key reforms to support growth and equity in Chile?
Keywords:Fiscal Income distribution, economic growth, political economy

Inequality of Opportunities and Long Term Earnings Measures: Evidence for Chile

By:Dante Contreras
Osvaldo Larrañaga
Esteban Puentes
Tomás Rau
In this paper we assess the sensitivity of measures of inequality of opportunity to long-term earnings data. We compare indicators using four and seven year earnings with indicators that use the most commonly available yearly and monthly earnings. We argue that four and seven year earnings are preferable since they are a more precise measure of permanent income and are less affected by short-term variability. We use data available for Chile and found that the use of seven and four year earnings produces a 25% higher share of inequality of opportunity compared to yearly and monthly earnings measures. We find that parental education contributes most to income inequality in Chile. Finally, we perform Monte Carlo simulations, finding that our results are robust to several income processes.

Changes in wage structure in Mexico going beyond the mean: An analysis of differences in distribution, 1987-2008

By:Claudia Tello (AQR-IREA, Universitat de Barcelona, Spain)
Raul Ramos (AQR-IREA, Universitat de Barcelona, Spain)
Manuel Artís (AQR-IREA, Universitat de Barcelona, Spain)
This paper conducts an empirical analysis of the relationship between wage inequality, employment structure, and returns to education in urban areas of Mexico during the past two decades (1987-2008). Applying Melly’s (2005) quantile regression based decomposition, we find that changes in wage inequality have been driven mainly by variations in educational wage premia. Additionally, we find that changes in employment structure, including occupation and firm size, have played a vital role. This evidence seems to suggest that the changes in wage inequality in urban Mexico cannot be interpreted in terms of a skill-biased change, but rather they are the result of an increasing demand for skills during that period.
Keywords:wage inequality, quantile regressions, decomposition.

Fiscal Incidence, Fiscal Mobility and the Poor: A New Approach

By:Nora Lustig (Department of Economics, Tulane University)
Sean Higgins (Department of Economics, Tulane University)
Taxes and transfers can have significant impacts on poverty and inequality. All standard measures are by definition anonymous in the sense that we do not know the identity of winners and losers. That a given combination of taxes and transfers makes some of the poor poorer, however, may be important information to incorporate into a fiscal incidence analysis. The directional mobility literature provides a useful framework to identify which individuals are adversely/favorably impacted by a particular policy. This paper introduces a "fiscal mobility matrix" to identify winners and losers. We show that taxes and transfers can lower inequality and poverty (including the severity of poverty) but still make a subgroup of the poor worse off. We use Brazilian data to illustrate how indirect taxes make around 11 percent of the non-poor poor, 15 percent of the moderate poor extremely poor, and 4 percent of the extremely poor "ultra-poor" despite any cash transfers they receive, even when standard poverty and inequality indicators decline and overall taxes are progressive.
Keywords:fiscal incidence, taxes and transfers, inequality, poverty, redistribution, mobility

martes, 22 de mayo de 2012

Financial Development in Latin America and the Caribbean: The Road Ahead

SERGIO L. SCHMUKLERWorld Bank - Development Research Group (DECRG)


During the 1980s and 1990s, the financial sector was the Achilles heel of Latin America and the Caribbean (LAC). Since then, LAC’s financial systems have continued to gain in soundness, depth and diversity, becoming more integrated and competitive, with new actors, markets, and instruments springing up, and financial inclusion broadening. For all the gains, however, many challenges remain. There is still a nagging contrast between the intensity of financial sector reforms that LAC implemented since the early 1990s and the actual size and depth of LAC’s financial systems. For example, bank credit has stagnated and only few firms actively use equity and bond markets. This study takes an in-depth stock-taking of LAC’s financial systems and a forward-looking assessment of the region’s financial development issues. Rather than going in detail into sector-specific issues, the study focuses on the main architectural issues, overall perspectives, and interconnections inherent to globalized financial systems. The value added of the study thus hinges on its holistic view of the development process, its broad coverage of the financial services industry (not just the banking sector), its emphasis on benchmarking, its systemic perspective, and its explicit effort to incorporate the lessons from the 2008-09 global financial crisis.

Rising Food Prices and Children’s Welfare

By:Nora Lustig (Division of Policy and Practice,UNICEF)
After three consecutive decades of decline, world prices of food commodities have risen over the past few years at an alarming pace. Rising food prices are a cause of major concern because high food prices bring significant and immediate setbacks for poverty reduction, nutrition, social stability, inflation and a rules-based trading system. Food prices are unique since food is unlike any other good. Food is essential for survival; it is the most basic of basic needs
Keywords:child poverty, child disparities, policy design, measuring poverty, development strategies,food prices,basic needs,poverty reduction, nutrition, social stability

Health Perceptions in Latin America

By:Eduardo Lora
This is the first study that uniformly analyzes health perceptions in all of Latin America and tests in a systematic way their relation to economic conditions at the country, income group and individual levels. The study uses three types of health self-assessment questions: i) health satisfaction; ii) health status on a scale of 0- 10; and iii) the EuroQol 5D instrument (EQ-5D), which asks about mobility, self- care, usual activities, pain/discomfort, and anxiety/depression. The empirical analysis finds support for the hypothesis that cultural differences between countries prevent cross-national comparisons of health perceptions, but it does not find support for the widely held view that the same applies within countries, presumably because the poor are more tolerant of their health problems.

Protecting Workers against Unemployment in Latin America and the Caribbean: Evidence from Argentina

By:Martín Gonzalez Rozada
Lucas Ronconi
Hernan Ruffo
This paper takes advantage of several reforms that provide time and cross sectional variation to identify the effects of unemployment insurance and severance payments on the duration of unemployment and on the separation probability in Argentina. Administrative data permits analysis of the duration of unemployment of covered spells with detailed information about transfers and their duration, while household surveys permit the study of separation probability and transitions to informal jobs, which are not observed in administrative data. It is found that unemployment duration increases significantly when unemployment insurance transfers are higher or are provided for a longer period; the effects of severance pay on unemployment duration are less robust. On the other hand, higher severance pay is found to reduce separation probability, while unemployment insurance transfers have a positive but small effect on separations.

The impact of the occupations and economic activities on the gender wage gap using a counterfactual framework

By:Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
This paper presents a methodology to estimate the individual gender wage gap as the difference between wages of the women and their counterfactuals defined by Coarsened Exact Matching. If the women show a higher wage than comparable men, then it is called positive gap. Using eight surveys between 1992 and 2009 for Chile, a stable average of 44% of women show positive gap. This group is considered interesting from the policy perspective because they can provide lessons to decrease the negative discrimination observed on women. Additional analysis shows that the occupations such as Managers, Professionals and Technicians and Associated Professionals always increase the positive gap. Finally, the most successful economic activity to increase the positive gap is Finance and Insurance Activities.
Keywords:Gender earnings gap, statistical discrimination, occupational sorting

Unemployment in Bolivia: Risks and Labor Market Policies

By:Werner Hernani
Maria Villegas
Ernesto Yanez
This paper attempts to evaluate the effectiveness of Bolivia’s labor market institutions, particularly the Plan Nacional de Empleo de Emergencia (PLANE). It is found that unemployment as conventionally defined may not be the most important problem in Bolivia’s labor market, as the non-salaried market is always an alternative. While un- employment durations and unemployment scarring consequences are relatively low, labor market regulations and labor market programs do not help to increase the size of the formal market, apparently as a result of Bolivia’s rigid labor markets and labor policies based mainly on temporary employment programs. Such programs, however, may have helped to smooth consumption. Given the country’s high level of infor- mality, protection policies are second best to active policies specifically designed to increase the productivity/employability of vulnerable populations.

viernes, 11 de mayo de 2012

Decomposing the Rural-Urban Differential in Student Achievement in Colombia Using PISA Microdata

By:Ramos, Raul (University of Barcelona)
Duque, Juan Carlos (Universidad EAFIT)
Nieto, Sandra (University of Barcelona)

Despite the large number of studies that draw on Programme for International Student Assessment (PISA) microdata in their analyses of the determinants of educational outcomes, no more than a few consider the relevance of geographical location. In going some way to rectify this, our paper examines the differences in educational outcomes between students attending schools in rural areas and those enrolled in urban schools. We use microdata from the 2006 and 2009 PISA survey waves for Colombia. The Colombian case is particularly interesting in this regard due to the structural changes suffered by the country in recent years, both in terms of its political stability and of the educational reform measures introduced. Our descriptive analysis of the data shows that the educational outcomes of rural students are worse than those of urban students. In order to identify the factors underpinning this differential, we use the Oaxaca-Blinder decomposition and then exploit the time variation in the data using the methodology proposed by Juhn-Murphy-Pierce. Our results show that most of the differential is attributable to family characteristics as opposed to those of the school. From a policy perspective, our evidence 

Unemployment in Bolivia

By:Werner L. Hernani-Limarino (Fundación ARU)
Maria Villegas (Fundación ARU)
Ernesto Yanez (Fundación ARU)

This paper attempts to evaluate the effectiveness of Bolivia’s labor market institutions, particularly the Plan Nacional de Empleo de Emergencia (PLANE). It is found that unemployment as conventionally defined may not be the most important problem in Bolivia’s labor market, as the non-salaried market is always an alternative. While un-employment durations and unemployment scarring consequences are relatively low, labor market regulations and labor market programs do not help to increase the size of the formal market, apparently as a result of Bolivia’s rigid labor markets and labor policies based mainly on temporary employment programs. Such programs, however, may have helped to smooth consumption. Given the country’s high level of infor-mality, protection policies are second best to active policies specifically designed to increase the productivity/employability of vulnerable populations.
Keywords:Bolivia, Unemployment, Labor Policies, Impact Evaluation.

Evolution of poverty in Bolivia: a multidementional approach

By:Werner L. Hernani-Limarino (Fundación ARU)
Paul Villarroel (Fundación ARU)

This document constructs a multidimentional measure of poverty for Bolivia based on the new 2008 constitution's fundamental rights, which can be measured in surveys; it also documents the changes in poverty observed in the last decade, in a multidimensional approach. Particulary, we extend the analysis made by Hernani Limarino (2010) on the evolution of poverty in monetary dimensions with a complementary analysis of five other non-monetary dimentions: access to education, short term social security (health), long term social security (pensions), housing and basic household services. The Analysis shows that non-monetary poverty has remained in high levels, and quite elusive despite the reduction in poverty according to monetary measures has decreased.
Keywords:Bolivia, Multidimensional Poverty.

A Matter of Transparency: The Top One Percent in the Americas

By Nora Lustig

Americas Quarterly - A Matter of Transparency: The Top One Percent in the Americas »
What is the income share of the region's super-rich? It may be hard to believe, but this question can be answered only for Canada and the United States. Thanks to the tax transparency of these two...

lunes, 7 de mayo de 2012

Does the gender wage gap exist among male and female workers with similar human capital? A Coarsened Exact Matching for Chile between 1992 and 2009

By:Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)


This paper estimates the gender wage gap for Chile between 1992-2009, but using by first time a matching comparison. In order to contribute to the empirical literature, this paper uses a novel technique called Coarsened Exact Matching which imposes the comparison among comparable workers. The results suggest that the wage gap exists, but it is lower than previous estimations, specially when only comparable workers are considered. This result opens the discussion about how well estimated is the gap when exist a high heterogeneity between male and female workers. The results also show a increment in wage gap from 2000. Finally, only the 58% of comparable male workers earns more wage than similar females workers. However, this 58% presents larger differential than its comparable 42% of female workers. This differential is also growing during the last years.
Keywords:Gender wage gap, matching comparison, Coarsened Exact Matching

Análisis de la evolución y caracterización de la demanda de educación universitaria en Colombia

By:Jhon James Mora
Cecilia Albert Verdú;


En este estudio se analizan los principales factores microeconométricos que determinan la demanda de educación universitaria en Colombia con datos provenientes de las Encuestas de hogares (ENH y ECH) realizadas por el DANE. La metodología utilizada consiste en la estimación robusta de modelos de elección discreta. Entre los resultados más relevantes destaca la importancia que tienen, en la demanda de educación universitaria, el género, el nivel educativo y la situación en el mercado laboral de los padres, la composición familiar y la renta. De ahí, que no se cumpla el principio de igualdad de oportunidades educativas, que, como lo señala Barr (1993), establece que cualquier individuo pueda recibir tanta educación como cualquier otro, con independencia de características propias como el género, características de su entorno más cercano, familia y/o la renta, entre otras.

Spatial division of labor in Chile 1992-2002

By:Miguel Atienza (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
Marcelo Lufin (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
Mauricio Sarrias (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)


The article describes functional specialization of the Chilean municipalities ("comunas"), controlling for their industrial mix between 1992 and 2002 with information from the Population and Housing Censuses. The analysis of global and local spatial auto-correlation of indices of functional specialization shows the existence of a pattern of spatial division of labor characterized by the strong specialization of the Metropolitan Region in occupations of higher cognitive-cultural skills. In contrast, the other "comunas" are specialized in routine physical functions that require medium or low levels of qualification. This pattern raises doubts about the validity of the current development strategy of the country.
Keywords:Division of labor, industrial mix, occupational mix, regional inequality

sábado, 5 de mayo de 2012

Cambios en la informalidad en el mercado de trabajo argentino, 2004 – 2010

By: Groisman, Fernando Vergara, Albano Calero, Analía Verónica URL: Labor informality verified a marked decrease in the period 2004 -2010 accompanying the fall in unemployment. However, the informal employment is still at around 45% in the employment structure in Argentina. The aim of this paper is to analyze the changes in the composition of informal workers in the period 2004 -2010 in Argentina. The results obtained allow to state that there was a marked reduction in the incidence of informal employment in line with the favorable economic development. However, the reduction of informality was not so widespread in the major components thereof. Specifically, it was observed that the groups that showed the largest reductions were those of self-employed and unregistered employees in small establishments. This warrants further research addressing the persistence of informality in larger establishments. Keywords: segmented labor market; informal employment JEL: J4

jueves, 3 de mayo de 2012


By Anna Jankowska, Arne Nagengast and José Ramón Perea


Rapid and sustained economic growth in the emerging world has brought new members,
notably China, into the group of middle-income countries. Reaching this level of income,
however, has historically presented countries with a new set of challenges to
development, resulting in slowing growth and an entrapment in what is known as the
middle-income trap. Limited income convergence in Latin America has at least partly been due
to its reduced capacity to engage in a structural transformation conducive to higher productivity.
In contrast, emerging Asia offers a few examples of these “virtuous” productive transformations.
With these two references in mind, we build a comparative analysis based on the following
points: First, we illustrate differences in the process of structural transformation, both with
regard to sector productivity and employment absorption. Second, we adopt the Product Space
methodology to compare the structural transformation that took place in both regions. Finally,
we consider the role played by Productive Development Policies (PDP) in shaping the process of
structural transformation, through a comparative review of these policies in Korea, Brazil and
Mexico. In short, the analysis allows us to gauge the role that the economic specialisation of a
country plays in facilitating transitions to more advanced stages of economic development.
JEL Classification: F10, F40, L5, O4.
Keywords: Exports, middle-income trap, product space.