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1. Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil

Author:
Andrés César, Matias Ciaschi, Guillermo Falcone, and Guido Neidhöfer
Publication Date:
07-2023
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper investigates whether the impact of trade shocks on employment and wages persists across generations. Using an instrumental variable strategy on survey data with retrospective information on parental employment, we study the consequences of increased Chinese import competition in Brazilian industries on individuals with differently exposed fathers. Results show that several years after the shock, children of more exposed fathers have lower education and earnings, lower chances of formal jobs, and are more likely to rely on social assistance. These effects are substantial for children from disadvantaged background, indicating that the shock had a negative impact on intergenerational mobility.
Topic:
Trade, Imports, Economic Competition, and Social Mobility
Political Geography:
Brazil and South America

2. Abortion Legalization in Uruguay: Effects on Adolescent Fertility

Author:
Wanda Cabella and Rafael-Andrés Velázquez-Pérez
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The Latin America and the Caribbean adolescent fertility rate is among the highest in the world: about 1.7 million children are born to teen mothers every year, and most of them are declared as being unintended pregnancies. The region also has the highest rate of unintended pregnancy of any world region, and nearly half of such pregnancies end in abortion. However, fewer than 18% of the region’s women live in countries where abortion is broadly legal. This paper estimates the causal effect of abortion legalization on adolescent fertility in Uruguay, using official data on legal abortions provided after the 2012 reform. We employed a difference-in-differences strategy, classifying states by whether they are responsive or unresponsive to the reform. The results suggest that abortion reform had a negative impact on the adolescent birth rate by 2.5 to 2.8 births per thousand adolescents aged 15–19 (4% decrease from the preintervention average). Additionally, we exploited variation in reform implementation intensity through the estimation of fixed-effect linear regression models and found consistent results. Our findings are robust to controlling for a concurrent large-scale program of contraceptive implants. We conclude that legislation aimed at enhancing rights and reducing avoidable deaths and complications from unsafe abortions may also have spillover effects that help reduce adolescent fertility.
Topic:
Public Health, Adolescence, Fertility, Abortion, and Gender
Political Geography:
South America and Uruguay

3. Costs and Benefits of Trade Shocks: Evidence from Chilean Local Labor Markets

Author:
Andres Cesar, Guillermo Falcone, and Leonardo Gasparini
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We study Chile’s labor market responses to trade shocks during 1996-2006, exploiting spatial and time variations in trade exposure arising from initial differences in industry specialization across local labor markets and the evolution of shocks across industries. We take advantage of China’s supply and demand’s worldwide shocks to instrument for Chinese import competition and demand for Chilean exports. Our main finding is that increasing manufacturing import competition implied a significant rise in labor informality in more exposed local markets, especially among young and unskilled workers. These groups also suffered significant relative wage losses. Meanwhile, locations that benefited most from the increased demand for primary products experienced a relative increase in employment, particularly among young individuals, and reallocation from self-employment towards salaried jobs in the formal sector, along with relative wage gains among old-age workers. Interestingly, these areas experienced a smaller increase in tertiary education enrollment rates than less exposed areas.
Topic:
Employment, Trade, Labor Market, and Informal Economy
Political Geography:
South America and Chile

4. The Short-Term Labor Market Impact of Venezuelan Immigration in Peru

Author:
Celia P. Vera and Juan Pablo Jiménez
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Peru is the second-largest recipient of Venezuelans worldwide. We combine newly available data on Venezuelans living in Peru and the Peruvian Household Survey to assess the impact of Venezuelan migration on natives’ wages and employment. The initial regression analysis exploits the variation in supply shifts across education-experience groups over time. It indicates that immigration in Peru had no adverse impact on native wages. However, the paper highlights that in Peru immigrants and natives with similar education and experience are likely to work in different occupations. The subsequent analysis based on occupational clustering confirms the null effect on wages and indicates that a 20% increase in immigrants decreases formal employment by 6%. We do not find evidence for changes in employment composition toward informality so that migration operates through the extensive margin of employment. We report evidence in favor of immigrants being a close substitute to the least productive natives, suggesting that firms substitute native formal labor for low-cost immigrant informal labor.
Topic:
Education, Immigration, Labor Market, and Informal Economy
Political Geography:
South America, Venezuela, and Peru

5. Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies

Author:
Carlo Lombardo, Lucía Ramírez-Leira, and Leonardo Gasparini
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America’s six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers.
Topic:
Income Inequality, Economy, Labor Market, Minimum Wage, and Informal Economy
Political Geography:
South America and Latin America

6. Going Green: Estimating the Potential of Green Jobs in Argentina

Author:
Natalia Porto, Pablo de la Vega, and Manuela Cerimelo
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper aims to identify and characterize the potential of green jobs in Argentina, i.e., those that would benefit from a transition to a green economy, using occupational green potential scores calculated in US O*NET data. We apply the greenness scores to Argentine household survey data and estimate that 25% of workers are in green jobs, i.e., have a high green potential. However, when taking into account the informality dimension, we find that 15% of workers and 12% of wage earners are in formal green jobs. We then analyze the relationship between the greenness scores (with emphasis on the nexus with decent work) and various labor and demographic variables at the individual level. We find that for the full sample of workers the green potential is relatively greater for men, the elderly, those with very high qualifications, those in formal positions, and those in specific sectors such as construction, transportation, mining, and industry. These are the groups that are likely to be the most benefited by the greening of the Argentine economy. When we restrict the sample to wage earners, the green potential score is positively associated with informality.
Topic:
Labor Market, Green Jobs, and Green Economy
Political Geography:
Argentina and South America

7. Heterogeneous Effects of Forced Migration on Female Labor Supply

Author:
Julian Pedrazzi and Leonardo Penaloza
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
In this paper we analyze the impact of Venezuelan migration on the female labor supply in Colombia. Using a instrumental variable approach we found significant drops in the female labor supply, mainly on those women with lower qualifications. In contrast, we observe significant increases for high-skilled women with family responsibilities, such as childcare. These results are consistent with a redistribution of time use, where women spend fewer hours on household tasks and more time in the labor market. Our results provide novel evidence of the consequences of forced migration between developing countries on the female labor supply.
Topic:
Gender Issues, Migration, Labor Issues, and Employment
Political Geography:
Colombia, South America, and Venezuela

8. Routinization and Employment: Evidence for Latin America

Author:
Leonardo Gasparini, Irene Brambilla, Guillermo Falcone, Carlo Lombardo, and Andres Cesar
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We study changes in employment by occupations characterized by different degree of exposure to routinization in the six largest Latin American economies over the last two decades. We combine our own indicators of routine task content based on information from the Programme for the International Assessment of Adult Competencies (PIACC) with labor market microdata from harmonized national household surveys. We find that the increase in jobs was decreasing in the automatability of the tasks typically performed in each occupation, and increasing in the initial wage, a pattern more consistent with the traditional skill-biased technological change than with the polarization hypothesis.
Topic:
Labor Issues, Employment, Automation, and Job Creation
Political Geography:
South America, Latin America, and North America

9. The Evolution of the Earnings Distribution in a Volatile Economy: Evidence from Argentina

Author:
Andres Blanco, Bernardo Diaz de Astarloa, Andres Drenik, Christian Moser, and Danilo Trupkin
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper studies earnings inequality and dynamics in Argentina between 1996 and 2015. Following the 2001–2002 crisis, the Argentine economy transitioned from a low- to a highinflation regime. At the same time, the number of collective bargaining agreements increased, and minimum wage adjustments became more frequent. We document that this macroeconomic transition was associated with a persistent decrease in the dispersion of real earnings and cyclical movements in higher-order moments of the distribution of earnings innovations. To understand this transition at the micro level, we estimate processes of regular wage adjustments within job spells. As the Argentine economy transitioned from low to high inflation, the monthly frequency of regular wage adjustments almost doubled, while the distribution of changes in regular wages morphed from having a mode close to zero and being positively skewed to having a positive mode and being more symmetric.
Topic:
Income Inequality, Inflation, Volatility, and Wages
Political Geography:
Argentina and South America

10. Exports “Brother-boost”: The Tradecreation and Skill-upgrading Effect of Venezuelan Forced Migration on Colombian Manufacturing firms

Author:
Carlo Lombardo and Leonardo Penaloza-Pacheco
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper studies the impact of a massive skilled labor supply shock on Colombian manufacturing firms’ exports, the Venezuelan exodus. We exploit crosssectional and time variability of Venezuelan forced migrants’ settlements in Colombian sub-national areas through an enclave instrumental variables approach to account for the selection of immigrants’ location. Using yearly customs data from 2013 to 2019, we find that the Venezuelan migration improved Colombian manufacturing firms’ export performance, particularly to high-income countries of the OECD located in North America and low-income countries. This effect was stronger for firms that exported less prior to the exodus (2012). Furthermore, using a detailed yearly panel of manufacturing firms from 2013 to 2019 we identify the potential labor market driving mechanism of the trade-creation effect: immigrants lowered exporting firms’ blue-collar wages, and allowed them to upgrade their labor force skill composition, namely firms were able to hire workers more compatible with exports to developed destinations.
Topic:
Manufacturing, Trade, Skills, and Forced Migration
Political Geography:
Colombia, South America, and Venezuela

11. The distributional effect of a massive exodus in Latin America and the role of downgrading and regularization

Author:
Carlo Lombardo, Julian Martinez-Correa, Leonardo Penaloza-Pacheco, and Leonardo Gasparini
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The massive displacement of Venezuelan citizens to Colombia is the second most important episode of forced migration in the world. We study the impact of this demographic shock on the Colombian income distribution exploiting the geographical heterogeneity in the intensity of migration. We use RIF regressions in an instrumental variables approach to account for the non-random pattern of location of immigrants. We find that despite the fact that Venezuelan immigrants are relatively skilled compared to native Colombian workers, the exodus had a larger negative effect on the lower tail of the wage distribution, implying increases in income inequality and poverty. We link this result to a sizeable downgrading of (mostly unregistered) Venezuelan recent migrants who work in more routine tasks and earn lower wages than natives with similar characteristics. We also explore a large regularization program for immigrants and find that it was associated to a reduction in the extent of downgrading, and hence, to a mitigation of the unequalizing impact of the exodus.
Topic:
Migration, Income Inequality, and Labor Market
Political Geography:
Colombia, South America, and Venezuela

12. A decomposition method to evaluate the ‘paradox of progress’ with evidence for Argentina

Author:
Javier Alejo, Leonardo Gasparini, Gabriel Montes-Rojas, and Walter Sosa-Escudero
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The ‘paradox of progress’ is an empirical regularity that associates more education with larger income inequality. Two driving and competing factors behind this phenomenon are the convexity of the ‘Mincer equation’ (that links wages and education) and the heterogeneity in its returns, as captured by quantile regressions. We propose a joint least-squares and quantile regression statistical framework to derive a decomposition in order to evaluate the relative contribution of each explanation. The estimators are based on the ‘functional derivative’ approach. We apply the proposed decomposition strategy to the case of Argentina 1992 to 2015.
Topic:
Economics, Education, Inequality, Quantile Regression, and Paradox of Progress
Political Geography:
Argentina and South America