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12041. Poverty in Latin America

Author:
Leonardo Gasparini, María Emma Santos, and Leopoldo Tornarolli
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Despite some progress in recent decades, poverty remains a top social concern in Latin America. A large proportion of Latin Americans live with very low incomes and are deprived in other fundamental welfare dimensions such as education, health, housing and sanitation. The measurement of income and multidimensional poverty in the region has advanced significantly in recent decades. In particular, there has been a remarkable increase in the availability of microdata from national household surveys and of poverty statistics published by governments and other institutions. Yet, the measurement of poverty in Latin America still has some limitations that should be addressed in the years to come. This chapter discusses the measurement of monetary and multidimensional poverty in Latin America, and documents the main patterns and trends. By providing an updated assessment of the level, changes and characteristics of poverty in the region we expect to contribute to the more ambitious debate on its determinants and policy implications. The rest of the chapter is organized as follows. In Section 2 we describe the data sources and main methodological issues regarding the measurement of income poverty, while in Section 3 we document the main patterns and trends over the recent decades. We repeat the sequence for the measurement of multidimensional poverty: Section 4 for methodological issues and Section 5 for evidence. The paper concludes in Section 6 with some brief concluding remarks.
Topic:
Poverty, Income Inequality, Economy, and Sanitation
Political Geography:
Latin America

12042. Scalable Early Warning Systems for School Dropout prevention: Evidence from a 4.000-School Randomized Controlled Trial

Author:
Francisco Haimovich, Emmanuel Vazquez, and Melissa Adelman
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Across many low- and middle-income countries, a sizable share of young people drop out of school before completing a full course of basic education. Early warning systems that accurately identify students at risk of dropout and support them with targeted interventions have shown results and are in widespread use in high-income contexts. This paper presents impact evaluation results from an early warning system pilot program in Guatemala, a middle-income country where nearly 40 percent of sixth graders drop out before completing ninth grade. The pilot program, which was implemented in 17 percent of Guatemala’s primary schools and largely leveraging existing government resources, reduced the dropout rate in the transition from primary to lower secondary school by 4 percent (1.3 percentage points) among schools assigned to the program, and by 9 percent (3 percentage points) among program compliers. Although the effect size is relatively modest, the low cost of the program (estimated at less than US$3 per student) and successful implementation at scale make this a promising and cost-effective approach for reducing dropout in resource-constrained contexts like Guatemala.
Topic:
Education, Management, Schools, Dropout Prevention, Early Warning, and Impact Evaluation
Political Geography:
Central America and Guatemala

12043. Social Mobility and Economic Development: Evidence from a Panel of Latin American Regions

Author:
Guido Neidhofer, Matias Ciaschi, Leonardo Gasparini, and Joaquín Serrano
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We explore the role of social mobility as a driver of economic development by constructing a panel data set that includes measures of intergenerational mobility of education at the sub-national level in Latin America. First, we map the geography of educational mobility for 52 Latin American regions, as well as its evolution over time. Then, through a novel weighting procedure that considers the participation of cohorts to the economy in each year, we estimate the effect of changes in mobility on economic indicators, such as income per capita, poverty, child mortality, and luminosity. Hereby, we control for several covariates, including migration, educational expansions, initial conditions, and unobserved cross-regional heterogeneity. Our findings show that increasing social mobility had a significant and robust impact on the development of Latin American regions.
Topic:
Development, Economic Growth, Economic Mobility, Equality, and Equality of Opportunity
Political Geography:
Latin America

12044. 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

12045. The COVID-19 Curtain: Can Past Communist Regimes Explain the Vaccination Divide in Europe

Author:
Inés Berniell, Yarine Fawaz, Anne Laferrere, Pedro Mira, and Elizaveta Pronkina
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
As of November 2021, all former Communist countries from Central and Eastern Europe exhibit lower vaccination rates than Western European countries. Can institutional inheritance explain, at least in part, this heterogeneity in vaccination decisions across Europe? To study this question we exploit novel data from the second wave of the SHARE (Survey of Health, Ageing, and Retirement in Europe) Covid-19 Survey fielded in Summer 2021 that covers 27 European countries and Israel. First, we document lower Covid-19 vaccine take-up amongst individuals above 55 years old who were born under Communism in Europe. Next, we turn to reunified Germany to get closer to a causal effect of exposure to Iron curtain regimes. We find that exposure to the Communist regime in East Germany decreases one’s probability to get vaccinated against Covid-19 by 8 percentage points, increases that of not wanting the vaccine by 4 percentage points. Both effects are quite large and statistically significant, and they hold when controlling for individual socio-economic and demographic characteristics. We identify low social capital -measured as voluntary work, political engagement, trust in people- as a plausible channel through which past Communist regimes would still affect individuals’ preferences for Covid-19 vaccination.
Topic:
Communism, Public Health, Vaccine, and COVID-19
Political Geography:
Europe and Post-Soviet Europe

12046. 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

12047. Introducing MACEDA: new micro-data on an indigenous self-determination conflict

Author:
Pedro Cayul, Alejandro Corvalán, Dany Jaimovich, and Matteo Pazzona
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This article introduces MACEDA, a micro-level data set on the self-determination (SD) conflict between the Chilean state and the indigenous Mapuche. Although SD disputes are one of the most common conflicts in the world, and indigenous movements represent about 40% of all SD movements, this is the first micro-data focused on an indigenous SD conflict. MACEDA covers the period 1990-2016, including more than 2,600 events collected from local media. As indigenous conflicts are much less violent in terms of casualties, we take a flexible definition of conflict, based on its constituent events, and we discuss the comparability and generalization of our approach. To illustrate the usefulness of these micro-data in the analysis of conflict-related theories, we present a descriptive empirical analysis on the strategies of indigenous resistance, and we discuss how the data can be used in the causal analysis of conflicts.
Topic:
War, Conflict, Peace, Indigenous, Data, and Self-Determination
Political Geography:
South America and Chile

12048. Can adjustment costs in research derail the transition to green growth ?

Author:
Laura Nowzohour
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Adjustment costs are a central bottleneck of the real-world economic transition essential for achieving the sizeable reduction of greenhouse gas (GHG) emissions set out by policy makers. Could these costs derail the transition process to green growth, and if so, how should policy makers take this into account? I study this issue using the model of directed technical change in Acemoglu, Aghion, Bursztyn, and Hemous (2012), AABH, augmented by a friction on the choice of scientists developing better technologies. My results show that such frictions, even minor, materially affect the outcome. In particular, the risk of reaching an environmental disaster is higher than in the baseline AABH model. Fortunately, policy can address the problem. Specifically, a higher carbon tax ensures a disaster-free transition. In this case, the re-allocation of research activity to the clean sector happens over a longer but more realistic time horizon, namely around 15 instead of 5 years. An important policy implication is that optimal policies do not act over a substantially longer time horizon but must be more aggressive today in order to be effective. In turn, this implies that what may appear as a policy failure in the short-run | a slow transition albeit aggressive policy | actually re ects the efficient policy response to existing frictions in the economy. Furthermore, the risk of getting environmental policy wrong is highly asymmetric and `robust policy' implies erring on the side of stringency. Details
Topic:
Environment, Sustainable Development Goals, Economic Growth, Sustainability, Anthropocene, and Green Transition
Political Geography:
Global Focus

12049. Crime, inequality and subsidized housing: evidence from South Africa

Author:
Roxana Elena Manea, Patrizio Piraino, and Martina Viarengo
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
We study the relationship between housing inequality and crime in South Africa. We create a novel panel dataset combining information on crimes at the police station level with census data. We find that housing inequality explains a significant share of the variation in both property and violent crimes, net of spillover effects, time and district fixed effects. An increase of one standard deviation in housing inequality explains between 9 and 13 percent of crime increases. Additionally, we suggest that a prominent post-apartheid housing program for low-income South Africans helped to reduce inequality and violent crimes. Together, these findings suggest the important role that equality in housing conditions can play in the reduction of crime in an emerging economy context.
Topic:
Crime, Development, Inequality, and Housing
Political Geography:
Africa and South Africa

12050. Financing energy innovation: internal finance and the direction of technical change

Author:
Joëlle Noailly and Roger Smeets
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Achieving the goals of the Paris Agreement and of climate neutrality by 2050 in the European Union will require mobilizing financial investments towards clean energy innovation. This study examines the role of internal finance (cash flows and cash holdings) and financing constraints for innovation in energy technologies. We construct a dataset for 1,300 Europeans combining balance-sheet information and patenting activities in renewable (REN) and fossil-fuel (FF) technologies and estimate the sensitivity of patenting activities to's internal finance. We use count estimation techniques and control for a large set of-specific characteristics and market developments in REN and FF technologies. We find that patenting activities ofs specialized in REN innovation are significantly more sensitive to a shock in cash flows thans specializing in FF innovation. Hence, our results emphasize that innovatives in clean energy may be particularly vulnerable to financing constraints. We discuss the implications of these results for energy transition policies aiming to redirect finance towards clean energy R&D.
Topic:
Environment, Science and Technology, European Union, Finance, Sustainable Development Goals, Innovation, and Energy
Political Geography:
Europe