bluuebunny/crossref_metadata_2025 huggingface dataset:
An Evaluation of the Peruvian "Youth Labor Training Program" - PROJOVEN
Authors: Díaz Juan José , Jaramillo Miguel
Published: March 2024

The "Youth Labor Training Program" (Programa de Capacitacion Laboral Juvenil - PROJoven) is an ongoing job-training program created in 1996 by the Ministry of Labor (Ministerio de Trabajo y Promocion del Empleo) in response to the precarious conditions of youth in the Peruvian labor market. The goals of the program are to improve employment opportunities of youth in poverty and to promote competition and higher quality of services in the vocational training system. In this paper, we present the main results of an evaluation of PROJoven impacts on program beneficiaries in terms of employment status (employed, paid employment and formal jobs), earnings (monthly and hourly) and weekly hours of work. The authors also provide an institutional analysis of the program, documenting the origins and rationale of the intervention, we explore how and why PROJoven was designed, and the political and economic environment at the time of its inception and afterwards.
Does Community Participation Produce Dividends in Social Investment Fund Projects?
Authors: Heinrich Carolyn , López Yeri
Published: March 2024

Social investment funds, a widely used tool of development efforts, aim to support and strengthen local capacity for effective implementation of social and economic infrastructure projects through participatory, community-driven approaches. This working paper investigates whether these participatory methods improve the outcomes of education projects and community members' perceptions of their effectiveness using data from an impact evaluation of the third phase of the Fondo Hondureño de Inversión Social (FHIS). The study also makes an important contribution with more carefully defined and explicit measures of individuals' participation in community projects. In regards to the outcome, the authors do not find statistically significant effects of the education projects on academic outcomes of school-aged youth, but they do observe positive, statistically significant relationships between the use of participatory methodologies and household opinions of the projects, as well as between households' level of participation and their opinions of the projects.
Innovation, R&D Investment and Productivity in Colombian Firms
Authors: Parra Torrado Mónica , Arbeláez María Angélica
Published: March 2024

This paper attempts to establish a formal relationship between innovation and productivity using Colombian firm-level data. It is found that the production of goods and services new to the firm and to the domestic market enhances firms' sales per worker, and innovation that results in introducing new goods and services to the international market boosts both sales and Total Factor Productivity (TFP). Innovation in processes likewise improves firms' productivity and sales. Finally, innovation in marketing and management increases sales per worker and enhances TFP when investment is made in Research and Development. The paper also studies the factors behind firms' decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.
Information Technology and Student Achievement: Evidence from a Randomized Experiment in Ecuador
Authors: Ponce Juan , Onofa Mercedes , Carrillo Paul E.
Published: March 2024

This paper studies the effects of information and communication technologies (ICT) in the school environment on educational achievement. To quantify these effects, the impact is evaluated of a project run by the municipality of Guayaquil, Ecuador, which provides computer-aided instruction in mathematics and language to students in primary schools. Using an experimental design, it is found that the program had a positive impact on mathematics test scores (about 0. 30 of a standard deviation) and a negative but statistically insignificant effect on language test scores. The impact is heterogeneous and is much larger for those students at the top of the achievement distribution.
Agricultural Insurance Revisited: New Developments and Perspectives in Latin America and the Caribbean
Authors: Wenner Mark D.
Published: March 2024

The purpose of this paper is to provide Bank staff interested in agricultural yield insurance market development, public officials responsible for financial market policy formulation and supervision, and insurance industry practitioners in Latin America and the Caribbean with a basic primer on the topic, an overview of previous experiences, and a set of guidelines and recommendations on how to develop viable and sustainable agricultural yield insurance markets. The paper relies heavily on the data and analysis stemming from a regional technical cooperation project financed by the Spanish Trust Fund, which conducted reviews and pre-feasibility studies in three countries--the Dominican Republic, Peru, and Uruguay--between 2003-2004. That work has been supplemented by an extensive economic literature review, fieldwork in Honduras, and numerous interviews and exchanges of opinions with leading authorities on the topic and key regional stakeholders.
Public Programs to Promote Firms' Exports in Developing Countries: Are There Heterogeneous Effects by Size Categories?
Authors: García Pablo M. , Volpe Martincus Christian , Carballo Jerónimo
Published: March 2024

Several countries have implemented programs to support their firms¿ internationalization efforts. Their impacts are likely to be heterogeneous over firm size categories because these programs are primarily intended and expected to benefit smaller companies. Whether this is or not the case is still an open question. In this paper we aim at filling this gap in the literature by providing evidence on the effects of trade promotion programs on the export performance of firms within different size segments using a rich firm-level dataset for Argentina over the period 2002-2006. We find that these effects are indeed larger for smaller firms.
The Plaintiff's Role in Enforcing a Court Ruling: Evidence from a Labor Court in Mexico
Authors: Kaplan David S. , Sadka Joyce
Published: March 2024

We analyze the outcomes of 332 cases from a labor court in Mexico in which a judge awarded money to a plaintiff who claimed to have been fired by a firm without cause. The judgments were enforced in only 40% of the cases. A plaintiff may try to enforce a judgment by petitioning the court to seize the firm's assets when the firm refuses to pay. Thirty eight percent of the enforced judgments required at least one seizure attempt. We estimate the parameters of post judgment games in which the worker does not know if a seizure attempt would ultimately succeed and show that these models explain the data well. We then simulate the effects of a policy that reduces worker costs of a seizure attempt. We find that this policy would increase the probability of enforcement, either by increasing the probability that the worker attempts an asset seizure or by inducing firms to pay voluntarily to avoid such seizure attempts. However, reducing worker costs of seizure attempts can only have a modest effect on enforcement probabilities because a high percentage of firms are able to avoid payment in spite of worker efforts to force collection.
Elderly Health and Salaries in the Mexican Labor Market
Authors: Parker Susan W.
Published: March 2024

The main purpose of this paper is to investigate the determinants of elderly health in the context of Mexico as a developing country and the relationship between health indicators and earnings in the labor market. The authors analyze the determinants of elderly health in Mexico, considering a number of different measures of health status, and use these indicators to evaluate the impact of health on the income of working elderly individuals. The results find that health measures have a strong negative effect on wages for male elderly workers. The lowest point estimations demonstrate that poor health lowers hourly earnings by 58 percent. These are sizable effects, particularly within the context of a developing country, which does not have a universal social security system. Poor health may also prevent others from working, and thereby contribute to high poverty rates among the elderly.
Geographical Exclusion in Rural Areas of El Salvador: Its Impact on Labor Market Outcomes
Authors: Calderón Martínez Lissette , Vides de Andrade Ana Regina , Lardé de Palomo Anabella
Published: March 2024

The main objective of this study is to examine the impact of geographic isolation of individuals living in El Salvador's rural areas on three labor market outcomes: labor force participation decision, sector of employment, and labor income. In this study, it is hypothesized that living in geographic isolation has a negative impact on rural workers' labor outcomes. The main results of this study indicate that the degree of geographic isolation does not discourage men from working; on the contrary, men living farther away from urban and maquila jobs are more likely to work. However, women living in greater isolation are highly concentrated in own-production agricultural activities, where women's skills are rewarded less than comparable men's skills. Through concentration into this sector, women living in geographic isolation obtain worse labor outcomes than men. When working in own-account nonagricultural production, geographic isolation also has a negative impact on men's labor income.
The Economic Effects of Unions in Latin America: Teachers' Unions and Education in Argentina
Authors: Ronconi Lucas , Sanguinetti Juan , Murillo Maria Victoria , Tommasi Mariano
Published: March 2024

This paper considers the effects of trade unions on the education sector in Argentina and the channels of union influence on the performance of this crucial sector. The authors find that those provinces where teacher unionism is fragmented, where union density is higher and where political relations with the governor are more conflictual, have more strikes (fewer class days). Based on estimates of education production functions both in this paper and elsewhere, we expect this to translate into lower student performance. The authors then find a number of weak conclusions related to the impact that unions have on several variables that affect students' performance (i.e., teachers' tenure, job satisfaction, class size, education budget and teachers' salaries). Reviewing these results, we conclude that the impact of unions on students' performance depends on the channel and kind of political market where unions operate, but not on the existence of unions per se.
Union Density Changes and Union Effects on Firm Performance in Peru
Authors: Torero Máximo , Saavedra-Chanduví Jaime
Published: March 2024

The paper documents the sharp reduction in union density in Peru between 1986 and 1998, in a context of large macroeconomic fluctuations, structural reforms and changes in the Collective Bargaining Law in 1993. The authors find that a blue-collar job, a permanent contract, higher education and working in a large firm increase the likelihood of unionization, but only before the legislative change. Using a panel of firms for the manufacturing sector for the period 1994-1996, a negative impact of unions on profits for all firm sizes is found. In the econometric analysis, a significant negative effect even after controlling for firm and sector characteristics and firm fixed effects is found. There is some evidence that this effect diminishes over time, consistent with the reduction in union density during that period, but the reduction is not robust to different specifications.
What Emigration Leaves Behind: The Situation of Emigrants and Their Families in Ecuador
Authors: Soruco Ximena , Piani Giorgina , Rossi Máximo
Published: March 2024

This study seeks to identify, measure and analyze possible discriminatory behaviors in southern Ecuador. There are three main findings. First, emigration is perceived as a social problem. Second, emigrant families are seen as economically "irrational" because they are not perceived to be investing remittances in productive and sustainable activities; emigrants are additionally portrayed as "irresponsible" because they leave their families in search of better living conditions. Third, emigrants' children are perceived as doing worse in school than their peers and as living outside the society at large. Observed discrimination follows a cultural pattern: persons closer to the dominant culture are proportionately more likely to discriminate against emigrants and their families, and women show more discriminatory attitudes than men.
Quality of Life in Buenos Aires Neighborhoods: Hedonic Price Regressions and the Life Satisfaction Approach
Authors: Tetaz Martín , Cruces Guillermo , Ham Andrés
Published: March 2024

This paper studies quality of life for urban neighborhoods and their determinants in the Buenos Aires Metropolitan Area (AMBA). First, hedonic price regressions for residential prices are augmented with neighborhood characteristics, based on a real estate database with indicators on each property's distance to public facilities and amenities, and on a smaller survey with greater detail. Second, following recent developments in the field of happiness research, the document assesses the importance of different neighborhood characteristics on quality of life by interacting objective and subjective indicators. The results indicate a strong but not perfect correlation between real estate prices, income levels and neighborhood characteristics, suggesting scope for welfare-improving policy interventions.
Water Expansions in Shantytowns: Health and Savings
Authors: Schargrodsky Ernesto , Galiani Sebastián , González Rozada Martín
Published: March 2024

This paper examines the effects of the expansion of the water network in urban shantytowns in Argentina. The authors find large reductions in the presence, frequency, and severity of diarrhea episodes among children in the households reached by network expansions relative to the control group. Moreover, expanded water connections induce savings, as these families are able to substitute piped water for more expensive and distant sources of water. These health and savings effects are also important for households that previously had clandestine self-connections to the water network, which were free but of low quality.
The Impact of Internet Banking on the Performance of Micro and Small Enterprises in Costa Rica: A Randomized Controlled Experiment
Authors:   Comisión Asesora en Alta Tecnología
Published: March 2024

This paper uses a randomized controlled experiment in Costa Rica to determine whether IB use by Banco Nacional de Desarrollo's micro and small enterprise (MSE) clients has an impact on their performance, measured in terms of productivity, increase in sales, and cost reduction. Results from the intervention group surveys indicate that Internet use is limited in MSEs' daily operations because of limited access to computers and the relatively low penetration of Internet services in employees' activities. In addition, firms have limited knowledge about the uses of the Internet as a business development tool. These results contrast with the reported benefits obtained by a small group of firms. Those benefits include reduced costs, higher sales, and better contact with customers.
Low-Income Housing Finance in Colombia
Authors: Fajardo Johanna , Arbeláez María Angélica , Camacho Carolina
Published: March 2024

This paper explores the role played by policy instruments in access to housing finance by low-income households. It also analyzes the impact of housing credit and subsidies on both the quality of life and the quality of dwelling of the beneficiaries. Using the Quality of Life Surveys conducted in Colombia in 2003 and 2008, the study finds that policy instruments aimed at easing access of low-income households to affordable housing such as subsidies and loan guarantees have played a modest role in increasing the use of mortgages as a source of funding. Despite this, subsidies were found to have had a significant impact on both the quality of dwelling and the quality of life. Therefore, this paper suggests promoting the use of both instruments by improving their design and targeting.
The Emergence of Successful Export Activities in Mexico: Three Case Studies
Authors: Fouquet Anne , Aragón Edgar , Campos Marcia
Published: March 2024

This paper consists of three case studies of the emergence of three successful export activities in Mexico: avocado production, the manufacture of catheters, and call center outsourcing. Each case study discusses how companies, associations, and governments at various levels have addressed market failures and facilitated the provision of public goods necessary for each activity. The case studies additionally profile first movers in each activity and describe the positive externalities they provide to imitators, particularly diffusion of export knowledge. Also include in each case study is a counterfactual case of a less successful activity (mangos, stem cell banking, and other types of business process outsourcing, respectively) and a section on policy implications.
Are Uruguayan Housing Policies Reaching the Poor?: An Assessment of Housing Deficit, Housing Informality and Usage of Housing Programs in Uruguay
Authors: Garabato Natalia , Ramada Magdalena
Published: March 2024

This document surveys the Uruguayan housing market, first describing the main housing programs and policies, then comparing their design with households' characteristics and needs. The document additionally measures Uruguay's housing deficit, using the basis deficit as well as quantitative and qualitative deficits, and provides a definition of housing informality that captures most irregular housing situations, thus delineating the size and attributes of the informal housing market. Considering both the housing deficit and informality permits an understanding of which population segments have the most urgent housing needs and whether they are currently eligible for participation in housing programs. Finally, the study considers how many households eligible for housing programs actually make use of them.
China's Emergence in the World Economy and Business Cycles in Latin America
Authors: Cesa-Bianchi Ambrogio , Pesaran M. Hashem , Rebucci Alessandro , Xu TengTeng
Published: March 2024

This paper investigates how changes in trade linkages between China, Latin America, and the rest of the world have altered the transmission of international business cycles to Latin America. Evidence based on a GVAR model for five large Latin American economies shows that the long-term impact of a China GDP shock on the typical Latin American economy has increased by three times since the mid-1990s, while the long-term impact of a US GDP shock has halved, while the transmission of shocks to Latin America and the rest of emerging Asia GDP (excluding China and India) has not changed. These changes owe more changes in China's impact on Latin America's traditional and largest trading partners than to increased direct bilateral trade linkages boosted by the decade-long commodity price boom. These findings have important implications for both Latin America and the international business cycle.
Inequality and Mexico's Labor Market after Trade Reform
Authors: Bouillon César P.
Published: March 2024

The main purpose of this paper is to measure the contributions of the changes in the labor market to the increase in inequality experienced by Mexico after the 1985 trade and financial liberalization. To do so, the paper uses data from Mexican household surveys (Encuesta Nacional de Ingreso Gasto de los Hogares de México) produced by the Mexican Institute for Statistics, Geography and Informatics (Instituto Nacional de Estadística, Geografía e Informática) for 1984 and 1994. The paper applies a counterfactual methodology to measure the effects on inequality of changes in labor force participation, unemployment, structure of employment, and mean labor income by economic sector and education level.
On Endogenous Risk, the Amplification Effects of Financial Systems and Macro Prudential Policies
Authors: Powell Andrew , Majnoni Giovanni
Published: March 2024

The recent global financial crisis has put the spotlight on macro-prudential policies to protect firms and households from problems emanating from the financial sector. This paper proposes an analytical framework that combines exogenous and endogenous risks, the latter seen as stemming from frictions in financial markets. Arguing that endogenous risks may be systemic and costly, the paper employs a database of emerging market corporate bond spreads and finds evidence that endogenous risks are present and have amplified the effects of financial crises. Larger financial systems are found to exacerbate the impact of crises, and weaker financial systems are found to exacerbate particularly the impact of banking crises. The results suggest that policymakers should monitor time-varying systemic risks using both price and quantity signals and take actions in good times to mitigate potential amplifying effects at times of stress.
Sub-National Revenue Mobilization in Latin American and Caribbean Countries: The Case of Argentina
Authors: Artana Daniel , Auguste Sebastián , Cristini Marcela , Moskovits Cynthia , Templado Ivana
Published: March 2024

This paper analyzes sub-national revenues in Argentina. Following a discussion of the recent evolution of government revenues and their vertical imbalance, the paper then analyzes the most important taxes collected by federal, provincial and local governments. Subsequently considered are the determinants of sub-national revenues and the impact of the 2001-2002 crisis. It is found that automatic transfers improve collections of the cascade sales tax and the property tax by enlarging the disposable income of the private and public sector of the provinces favored by the regional redistribution of income, while discretionary transfers reduce own-source revenue effort and encourage public investment. The paper concludes by analyzing options to improve sub-national revenue mobilization and offering specific proposals, particularly in regard to improving the cascade provincial sales tax.
Unemployment in Bolivia: Risks and Labor Market Policies
Authors: Yáñez Ernesto , Villegas María , Hernani-Limarino Werner L.
Published: March 2024

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.
Prudent Banks and Creative Mimics: Can We Tell the Difference?
Authors: Miller Marcus , Maier Antonia , Powell Andrew
Published: March 2024

The recent financial crisis has forced a rethink of banking regulation and supervision and the role of financial innovation. This paper develops a model where prudent banks may signal their type through high capital ratios. Capital regulation may ensure separation in equilibrium, but deposit insurance will tend to increase the level of capital required. If supervision detects risky behavior ex ante then it is complementary to capital regulation. However, financial innovation may erode supervisors' ability to detect risk and capital levels should then be higher. Regulators, however, may not be aware their capacities have been undermined. The paper argues for a four-prong policy response with higher bank capital ratios, enhanced supervision, limits to the use of complex financial instruments and Coco's. The results may support the institutional arrangements proposed recently in the United Kingdom.
A Short-Term Cost-Effectiveness Evaluation of Better-Quality Daycare Centers
Authors: Carvalho Mirela de , Franco Samuel , Barros Ricardo , Mendonça Rosane , Rosalém Andrezza
Published: March 2024

Studies of the effects of pre-school programs on child development in developing countries have found scant impact. This study was conducted to reconcile the importance of daycare for child development with the empirical estimates of small effects. Using a random sample of 500 children from 100 daycare centers in the Municipality of Rio de Janeiro (Brazil), the study combines a flexible function relating child development to daycare center quality. A hedonic cost function permits an evaluation of the cost-effectiveness of better-quality daycare centers. The study finds that the developmental age of children attending high-quality services is greater than that of children attending low quality centers. It also finds that quality improvement can be measured in a number of ways, with different cost implications or impacts on child development.
Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?: Cross-Country Evidence on Bonanzas in Capital Inflows and Bonanza-Boom-Bust Cycles
Authors: Caballero Julián
Published: March 2024

This paper asks whether bonanzas (surges) in net capital inflows increase the probability of banking crises and whether this is necessarily through a lending boom mechanism. A fixed effects regression analysis indicates that a baseline bonanza, identified as a surge of one standard deviation from trend, increases the odds of a banking crisis by three times, even in the absence of a lending boom. Thus, a bonanza raises the likelihood of a crisis from an unconditional probability of 4.4 percent to 12 percent. Larger windfalls of capital (two-s.d. bonanzas) increase the odds of a crisis by eight times. The joint occurrence of a bonanza and a lending boom raises these odds even more. Decomposing flows into FDI, portfolio-equity and debt indicates that bonanzas in all flows increase the probability of crises when the windfall takes place jointly with a lending boom. Thus, windfalls in all types of flows exacerbate the deleterious effects of credit. However, surges in portfolio-equity flows seem to have an independent effect, even in the absence of a lending boom. Furthermore, emerging economies exhibit greater odds of crises after a windfall of capital.
Contracting Institutions and the Insertion of LAC in International Production Networks
Authors: Blyde Juan S.
Published: March 2024

This paper examines the role of contracting institutions on the insertion of developing countries in international production networks and particularly on the prospects of LAC to source goods beyond the region's traditional patterns of specialization. We show that LAC's insertion in global production networks is biased towards arm's-length transactions in industries that tend to be labor-intensive and that do not typically require relation-specific investments. We also show that the countries that have been able to diversify their export successfully in international production networks have not focused exclusively on arm's-length transactions but engage in both types of sourcing via arm's-length and intra-firm trade. Results from an econometric model indicate that taking advantage of offshoring opportunities arising from capital- and contract-intensive industries requires fostering the quality of contractual institutions. Increasing the quality of contracting institutions is likely to improve first the chances of supplying contract-intensive activities through FDI, but further increases may potentially induce additional offshoring through local contractors.
(In)Formal and (Un)Productive: The Productivity Costs of Excessive Informality in Mexico
Authors: Busso Matías , Levy Algazi Santiago , Fazio Maria Victoria
Published: March 2024

The laws that regulate relations between firms and workers in Mexico distinguish sharply between salaried and non-salaried workers, and they are at the root of the existence of informality. This paper provides a clear definition of informality, distinguishing it from illegality. Using Mexico's Economic Census, the paper shows that the majority of firms are informal but legal, that there are more small formal firms than large ones, and that some large firms are informal. It also shows that informality and illegality increased in the period 1998-2008. Using a simple model of monopolistic competition to measure the productivity losses due to distortions that misallocate resources, the paper finds that one peso of capital and labor allocated to formal and legal firms is worth 28 percent more than if allocated to illegal and informal firms, and 50 percent more than if allocated to legal and informal firms. The paper concludes arguing that the distortions in the labor market created by informality reduce total factor productivity.
Foreign Aid in the Aftermath of Large Natural Disasters
Authors: Noy Ilan , Becerra Oscar , Cavallo Eduardo A.
Published: March 2024

This paper examines Official Development Assistance (ODA) in the aftermath of large natural disasters between 1970 and 2008. Using an event-study approach, the paper finds that while the median increase in ODA is 18 percent compared to pre-disaster flows, the typical surge is small in relation to the size of the affected economies. Moreover, aid surges typically cover only 3 percent of the total estimated economic damages caused by the disasters. The main determinants of post-disaster aid surges are found to be the intensity of the event itself and the recipient country's characteristics such as level of development, country size and stock of foreign reserves. The paper does not find evidence that political considerations or strategic behavior on the part of donors determine the size of post-disaster aid surges.
Birth Registration and the Impact on Educational Attainment
Authors: Corbacho Ana , Brito Steve , Osorio Rivas Rene
Published: March 2024

The drivers of educational attainment have been the subject of much research both in the developed and the developing world. Yet, nothing is known about the effect of birth registration on schooling outcomes. Birth registration is not only a fundamental human right but also a requirement to obtain additional documents of legal identity and access many government benefits. Using data for the Dominican Republic, this paper is the first to shed light on the causal impact of the lack of birth registration on education. Controlling for potential endogeneity and standard socioeconomic determinants of education, this paper finds that children without documents of birth registration do not face lower chances of entering the schooling system. Yet, the absence of birth registration becomes a critical obstacle to graduate from primary school and translates into fewer years of overall educational attainment.
Life Skills, Employability and Training for Disadvantage Youth: Evidence from a Randomized Evaluation Design
Authors: Villa Juan Miguel , Taboada Bibiana , Ripani Laura , García Brígida , Ibarrarán Pablo
Published: March 2024

This paper presents an impact evaluation of a revamped version of the Dominican youth training program Juventud y Empleo. The paper analyzes the impact of the program on traditional labor market outcomes and on outcomes related to youth behavior and life style, expectations about the future and socio-emotional skills. In terms of labor market outcomes, the program has a positive impact on job formality for men of about 17 percent and there is also a seven percent increase in monthly earnings among those employed. However, there are no overall impacts on employment rates. Regarding non-labor market outcomes, the program reduces teenage pregnancy by five percentage points in the treatment group (about 45 percent), which is consistent with an overall increase in youth expectations about the future. The program also has a positive impact on non-cognitive skills as measured by three different scales. Scores improve between 0.08 and 0.16 standard deviations with the program. Although recent progress noted in the literature suggests that socio-emotional skills increase employability and quality of employment, the practical significance of the impacts is unclear, as there is only weak evidence that the life skills measures used are associated to better labor market performance. This is an area of growing interest and relevance that requires further research.
To Redistribute or Not: A Politician`s Dilemma
Authors: Velasques de Paula Machado Fabiana
Published: March 2024

A prerequisite for the adoption of redistributive policies in a democracy is that there be elected representatives who are either committed to or who have an incentive to advocate for such policies. To evaluate the prospects of such an outcome, this paper develops a theory exploring two fundamental factors at play during elections - the critical political stage where citizens choose their representatives. The first is the lack of information about the policy inclinations of candidates. The second refers to two motivations compelling candidates into politics (and possibly at odds with each other): the opportunity to implement one's favored policies or to extract rents. Results indicate the existence of an equilibrium where high inequality and low redistribution can coexist. The theory's assumptions and outcomes are explored empirically using individual-level data collected in presidential election years in Brazil.
Employment and Taxes in Latin America: An Empirical Study of the Effects of Payroll, Corporate Income and Value-Added Taxes on Labor Outcomes
Authors: Lora Eduardo , Fajardo Johanna
Published: March 2024

This paper empirically explores the effects of payroll taxes, value-added taxes and corporate income taxes on a variety of labor market outcomes such as employment, unemployment, informality, and wages. Using national-level data on labor variables for 15 Latin American countries, the results indicate that the effects of each tax are distinctly different and may depend on several aspects of labor and tax institutions. Payroll taxes reduce employment and increase labor costs when their benefits are not valued by workers, but otherwise increase labor participation and do not raise labor costs. Value-added taxes increase informality and reduce skilled labor demand. In contrast, corporate income taxes may help reduce informality, especially among low-education workers but, when tax enforcement capabilities are strong, may reduce labor participation and employment of medium- and high-education workers.
Workable Environmentally Related Energy Taxes
Authors: Panadeiros Monica , Navajas Fernando , Natale Oscar
Published: March 2024

This paper models an energy tax reform process out of a status quo and towards environmentally related excises, distinguishing between uniform and non-uniform tax components, positive and normative tax structures, and adopting a non- Ramsey specification. The model is implemented for Argentina, Bolivia and Uruguay, and a rebalancing of fuel taxes is found where gasoline and diesel are the main drivers, due in part to higher estimates of the environmental costs of diesel relative to gasoline than those found in Parry and Strand (2010) for Chile. Environmental (mostly local) gains of the reform are significant, while fiscal impacts are positive and large. They do not, however, include double dividend effects because of price increases in widespread energy inputs triggered by the reform exercise. The tax reform has a positive distributive impact in Uruguay, while large pre-existing price distortions tend to produce negative impacts in Argentina and Bolivia.
Interest Rates and Business Cycles in Emerging Economies: The Role of Financial Frictions
Authors: Fernández Martín Andrés , Gulan Adam
Published: March 2024

Countercyclical country interest rates have been shown to be both a distinctive characteristic and an important driving force of business cycles in emerging market economies. In order to account for this, most business cycle models of emerging market economies have relied on ad hoc and exogenous countercyclical interest rate processes. This paper embeds a financial contract à la Bernanke et al. (1999) in a standard small open economy business cycle model that endogenously delivers countercyclical interest rates. The model is then applied to the data, drawn from a novel panel dataset for emerging economies that includes financial data, namely sovereign and corporate interest rates as well as leverage. It is shown that the model accounts well not only for countercyclical interest rates, but also for other stylized facts of emerging economies` business cycles, including the dynamics of leverage.
Steelplant Technological Development in Latin America: A Comparative Study of the Selection and Upgrading of Technology in Plants in Argentina, Brasil, Colombia, Mexico and Peru
Authors: Maxwell Philip
Published: March 2024

The steel industry is a classic symbol of industrialization. It has been taken as such in Latin America and promoted as a "leading sector" carrying with it the flag of national pride and prestige. This paper is based on five detailed case-studies of individual Latin American steel firms, namely: Acindar, in Argentina (the leading private-sector Argentine firm which produces non-flat products), USIMINAS in Brazil (one of the big three Brazilian state steel firms, producing flat products), AHMSA in Mexico (the largest state steel firm producing both flat and non-flat products), Acerías Paz del Rio in Colombia (the largest Colombian steel firm, producing mainly non-flat products), and the state-owned Siderúrgica de Chimbóte in Peru, later renamed SIDERPERU.
Sub-national Revenue Mobilization in Latin American and Caribbean Countries: The Case of Colombia
Authors: Sánchez Torres Fabio , España Eljaiek Irina , Zenteno Jannet
Published: March 2024

This paper surveys the evolution and implications of fiscal decentralization in Colombia in recent decades. After describing the fiscal decentralization process and its impact on sub-national finances, the paper presents the evolution of departmental public finances, departmental vertical imbalances and the proposal to levy a VAT surcharge and a retail sales tax for the departments. The paper subsequently describes the evolution of municipal finances and municipal vertical imbalances, then includes calculations of the effective rates of the property and land tax and the industry and commerce tax, estimating the municipal tax burden, the efficiency rate of tax collection, and the determinants of both. The paper concludes with policy recommendations.
On the Institutionalization of Congress(es) in Latin America and Beyond
Authors: Palanza Valeria , Scartascini Carlos , Tommasi Mariano
Published: March 2024

This paper proposes an agenda for the study of the determinants and the processes by which strong policymaking institutions emerge, with emphasis on the most central democratic institution: the legislature. It reviews extant theories of institutionalization, and proposes further ways of specifying and studying the concept. It emphasizes the notion that investments and beliefs are the driving force of Congress institutionalization and of its relevance in the policymaking process. Making use of several indicators of Congress institutionalization, it provides evidence suggesting that Congress institutionalization has an impact on the qualities of public policies and on economic and social development outcomes. It also explores some "constitutional" factors that may promote Congress institutionalization. Given that a central theoretical argument of this paper is that the institutionalization of legislatures is a process that includes various self-reinforcing dynamics, the paper also undertakes the preliminary steps in developing a comparative case study of the evolution of Congress institutionalization in two Latin American countries: Argentina and Chile.
Capital Controls or Real Exchange Rate Policy?: A Pecuniary Externality Perspective
Authors: Otrok Christopher , Chen Huigang , Rebucci Alessandro , Benigno Gianluca , Young Eric R.
Published: March 2024

In the aftermath of the global financial crisis, a new policy paradigm has emerged in which old-fashioned policies such as capital controls and other government distortions have become part of the standard policy tool kit (so called macro- prudential policies). On the wave of this seemingly unanimous policy consensus, a new strand of theoretical literature contends that capital controls are welfare enhancing and can be justified rigorously because of second-best considerations. Within the same theoretical framework adopted in this fast-growing literature, this paper shows that a credible commitment to support the exchange rate in crisis times always welfare-dominates prudential capital controls, as it can achieve unconstrained allocation.
Boys' Cognitive Skill Formation and Physical Growth: Long-term Experimental Evidence on Critical Ages for Early Childhood Interventions
Authors: Barham Tania , Macours Karen , Maluccio John A.
Published: March 2024

The effects of early life circumstances on cognitive skill formation are important for later human capital development, labor market outcomes and well-being. In this paper, we test the hypothesis that the first 1,000 days are the critical window for both cognitive skill formation and physical development by exploiting a randomized conditional cash transfer (CCT) program in Nicaragua. We find that boys exposed in utero and during the first 2 years of life, have better cognitive, but not physical, outcomes when they are 10 years old compared to those also exposed, but in their second year of life or later. These results confirm that interventions that improve nutrition and/or health during the first 1,000 days of life can have lasting positive impacts on cognitive development for children. The finding that the results differ for cognitive functioning and anthropometrics highlights the importance of explicitly considering cognitive tests, in addition to anthropometrics, when analyzing impacts on early childhood development.
Energy Intensity: A Decomposition and Counterfactual Exercise for Latin American Countries
Authors: Jimenez Mori Raul Alberto , Mercado Díaz Jorge Enrique
Published: March 2024

This paper investigates trends in energy intensity in Latin American countries over the last 40 years. It applies the Fisher Ideal Index to decompose the energy intensity into the relative contributions of energy efficiency and the activity mix, and then analyzes the determinants of these energy indexes through panel data regression techniques. Finally, the paper compares the performance of Latin American countries to that of a similar set of countries chosen through the synthetic control method. The authors find that the energy intensity in Latin American countries has decreased about 20 percent, closing the gap with respect to its synthetic counterfactual. In both Latin American countries and its synthetic control, efficiency improvements drive these changes, while the activity mix component does not represent a clear source of change. The regression analysis shows that per capita income, petroleum prices, fuel-energy mix, and GDP growth are main determinants of energy intensity and efficiency, while there are no clear correlations with the activity component.
Are Environmentally Related Taxes Effective?
Authors: Vela Mauricio A. , Miller Sebastián J.
Published: March 2024

This paper focuses on the question of whether the magnitude of long-established environmentally related taxes (ERT) is related to countries environmental performance. While environmental taxes efficiencies have previously been discussed, those taxes contribution to reducing pollution and improving environmental quality has not been fully explored. This paper therefore analyzes the effectiveness of environmental taxes by examining the environmental performance of 50 countries from all regions in association with the amount of revenues from environmentally related taxes each country collects. Using a cross-section regression and a panel dynamic regression, the paper finds that countries with higher revenues from these types of taxes also exhibit higher reductions in CO2 emission, PM10 emissions, and energy consumption and production from fossil sources.
Re-estimating the Gender Gap in Colombian Academic Performance
Authors: Muñoz Juan Sebastián
Published: March 2024

This paper presents evidence of the relationship between the disparity in the academic performance of boys and girls in Colombia and the country's excessively high school dropout rates. By using the OLS and trimming for bounds techniques, and based on data derived from the PISA 2009 database, the presented findings show that the vast majority of this gender-related performance gap is explained by selection problems in the group of low-skilled and poor male students. In particular, the high dropout rate overestimates male performance means, creating a selection bias in the regular OLS estimation. In order to overcome this issue, unobservable male students are simulated and bounding procedures used. The results of this analysis suggest that low-income men are vulnerable to dropping out of school in the country, which leads to overestimating the actual performance levels of Colombian men.
The Impact of Agricultural Extension for Improved Management Practices: An Evaluation of the Uruguayan Livestock Program
Authors: Maffioli Alessandro , Mullally Conner
Published: March 2024

Management is an important input into agricultural production, as it a determinant of the uptake and proper implementation of productive technologies and practices. While there is a large literature on evaluations of extension programs meant to improve management practices in agricultural development, there is no consensus on the extension modalities that are most effective. This paper adds to the literature on extension interventions by evaluating the Uruguayan Livestock Program (ULP), a publicly funded, privately delivered extension program designed to improve management practices among cattle breeders. Using an eight year panel constructed by combining data from the Uruguayan livestock traceability system with a registry of ULP participants, we place bounds on the impact of the program on production and sales of calves by ULP beneficiaries using inverse probability weights estimated using propensity scores for selection into the ULP and selection into the dataset. Results show that the ULP increased calf production by between 11.36 and 15.3 calves on average in 2009 and 2010 and increased calf sales minus purchases by 4.35 on average over the same time span. Internal rates of return suggest these are moderately sized economic impacts. We examine the aspects of the ULP's design that might account for its positive but modest effects.
Does Child Care Pay?: Labor Force Participation and Earnings Effects of Access to Child Care in the Favelas of Rio de Janeiro
Authors: Deutsch Ruthanne
Published: March 2024

This study undertakes an econometric analysis of data on the use of child care services and labor force participation drawn from a survey of 1,720 households in 15 'favelas' or slums, in Rio de Janeiro. The analysis examines the impact that access to child care services has on female labor force participation and final earnings.