South America

Lora, E., 2020. Income Changes after Inter-city Migration.Abstract
Using panel data for workers who change jobs, changes in several labor outcomes after inter-city migration are estimated by comparing workers in similar circumstances who move to a new city –the treatment group—with those who stay in the same city –the control group. After matching the two groups using Mahalanobis distances over a wide range of covariates, the methodology of “difference-in-difference treatment effects on the treated” is used to estimate changes after migration. On average, migrants experience income gains but their dedication to formal employment becomes shorter. Income changes are very heterogenous, with low-wage workers and those formerly employed by small firms experiencing larger and more sustained gains. The propensity to migrate by groups of sex, age, wage level, initial dedication, initial firm size and size of city of origin is significantly and directly correlated with the expected cumulative income gains of migration, and inversely with the uncertainty of such gains.

Venezuela: How an Oil Rich Country Went Bust and the Roadmap to Get It Back on Track

Venezuela is currently undergoing the worst economic crisis in its history. By the end of 2016, more than 30% of the gross domestic product (GDP) it had three years ago will be lost. Poverty has soared to record levels. Monthly inflation rates are gradually approaching hyperinflation. Shortages of basic food staples and medicines are rampant. In order to promote a better understanding of the causes, magnitudes, and possible remedies of the crisis, the Center for International Development (CID) at Harvard University launched a research initiative on Venezuela at the end of 2015. In this Growth... Read more about Venezuela: How an Oil Rich Country Went Bust and the Roadmap to Get It Back on Track
Hausmann, R. & Klinger, B., 2007. Structural Transformation in Chile. Publisher's VersionAbstract
The main finding of this analysis is that Chile’s pattern of specialization implies little opportunities for easy movements to new activities. Chile is specialized in an extremely sparse part of the product space and has a relatively unsophisticated export package. Past growth has been surprisingly strong given this pattern of specialization, as has been performance in the services sector, and it appears that there does remain some room to continue growing through quality upgrading in existing products. However, Chile has little room to increase its market share in existing products, and its current export package does not offer a path to future structural transformation and growth. Furthermore, this isn’t due to Chile’s status as a natural resource-based economy, as the country lags in these dimensions even when compared to countries like Canada, Australia, and New Zealand. Movements to new sectors are necessary, but will be difficult given this pattern of specialization. This suggests that there should be some scope for public investment in the study and coordination of new export activities to fuel long-term economic growth.
Hausmann, R., Rodrik, D. & Rodriguez-Clare, A., 2005. Toward a Strategy for Economic Growth in Uruguay, Publisher's VersionAbstract
The Uruguayan economy is recovering from the 2002 financial crisis that disrupted its banking system, caused a collapse of its currency and seriously affected its fiscal solvency. The crisis was clearly associated with the collapse of the Argentine economy and its concomitant currency, banking and debt crises. Both were also related to the sudden stop that followed the Russian crisis of 1998, which prompted an important realignment of the real in January 1999, a fact that had exerted enormous pressure on bilateral exchange rates within Mercosur. In this post-crisis period, Uruguay now faces several challenges to attain a sustainable growth path. This report proposes a series of recommendations towards this end. Implementing a strategy to accelerate growth inevitably involves interventions at both the macro and the micro level. The macro level involves the maintenance of a stable and competitive real exchange rate, so as to create a stable and encouraging environment for export growth. The authors take up each of these elements of the growth strategy. They first focus on the design of incentive policies for economic diversification and promotion. Then they discuss next the macroeconomic complements, with special emphasis on maintaining a competitive and stable real exchange rate.
Hausmann, R. & Klinger, B., 2007. Growth Diagnostic: Paraguay.Abstract

Paraguay’s growth history is characterized by prolonged periods of stagnation, interrupted by a few small recessions and growth accelerations. These dynamics reveal that growth in Paraguay has been dependent on latching on to particular export goods enjoying favorable external conditions, rather than driven by macroeconomic or political cycles. Moreover, the country currently has significant room for further export growth in existing products, as well as many new export products that are nearby and have high potential. But these available channels to generate sustained growth have all gone unexploited. Our growth diagnostic indicates that the underlying obstacles that have prevented the country from developing many of the available opportunities are related to two constraints: the provision of infrastructure and a lack of appropriability due to corruption and a poor regulatory environment. The current environment is one where the only activities that can survive have to be un-intensive in infrastructure, and either unintensive in transactions requiring an efficient business environment or at least at a scale where informality and corruption is a viable alternative to institutional blockages. We provide policy recommendations that will help alleviate these problems, focusing on not only on institutional and infrastructure reforms in the abstract, but outlining a process of learning from the relevant private sector actors what sector-specific needs in the areas of regulations and infrastructure are the most important for achieving accelerated growth in Paraguay.

Levy-Yeyati, E. & Montane, M., 2020. Specificity of Human Capital: An Occupation Space Based on Job-to-Job Transitions.Abstract
Using job transition data from Argentina’s Household Survey, we document the extent to which human capital is specific to occupations and activities. Based on workers’ propensity to move between occupations/industries, we build Occupation and Industry Spaces to illustrate job similarities, and we compute an occupation and industry similarity measures that, in turn, we use to explain wage transition dynamics. We show that our similarity measures influence positively post-transition wages. Inasmuch as wages capture a worker´s marginal productivity and this productivity reflects the degree to which a worker matches the job’s skill demand, our results indicate that a worker´s human capital is specific to both occupation and activity: closer occupations share similar skill demands and task composition (in other words, demand similar workers) and imply a smaller human capital loss in the event of a transition.
Revised May 2020.

The Double Crisis: Insecurity and Humanitarian Plight at the Colombia-Venezuela Border

In 2019, Dr. Annette Idler wrote Borderland Battles: Violence, Crime, and Governance at the Edges of Colombia’s War (Oxford University Press, 2019). Based on her extensive research on this issue, her book reveals why the Colombian-Venezuelan borderlands are enabling crucial, but largely unacknowledged interactions between Venezuela’s devastating crisis and ongoing political...

Read more about The Double Crisis: Insecurity and Humanitarian Plight at the Colombia-Venezuela Border
Hausmann, R., Ganguli, I. & Viarengo, M., 2014. Marriage, Education, and Assortative Mating in Latin America. Applied Economic Letters , 21 (12) , pp. 806-811. Publisher's VersionAbstract
In this article, we establish facts related to marriage and education in Latin American countries. Using census data from IPUMS International, we show how marriage and assortative mating patterns have changed from 1980 to 2000 and how the patterns in Latin America compare to the United States. We find that in Latin American countries, highly educated individuals are less likely to be married than the less educated, and the pattern is stronger for women. We also show that while it has been increasing over time, there is less positive assortative mating in Latin America than in the United States.
Hausmann, R., Ganguli, I. & Viarengo, M., 2018. Career dynamics and gender gaps among employees in the microfinance sector. Publisher's VersionAbstract

While microfinance institutions (MFIs) are increasingly important as employers in the developing world, there is little micro-level evidence on gender differences among MFI employees and MFIs’ relation to economic development.

We use a unique panel dataset of employees from Latin America’s largest MFI to show that gender gaps favouring men for promotion exist primarily in the sales division, while there is a significant gender wage gap in the administrative division. Among loan officers in the sales division, the gender gap in promotion and wages reverses.

Finally, female employees tend to work with clients with better loan terms and a history of loans with the institution.

Pan, C.I., 2019. Tax Avoidance in Buenos Aires: The Case of Ingresos Brutos.Abstract
This study presents evidence of tax avoidance in Buenos Aires, Argentina. I exploit a break in the tax scheme of the most controversial tax, Ingresos Brutos (gross income), between the city and the greater area, which are otherwise identical law and regulation-wise for the studied population. When possible, workers would rather travel longer distances to their jobs than face the tax burden. Given that this type of avoidance is costly, results suggest that Ingresos Brutos might be acting as a binding constraint to growth for businesses.
"City Design, Planning & Policy Innovations" book cover
Barrios, D. & Santos, M.A., 2019. Is There Life After Ford?. In City Design, Planning & Policy Innovations: The Case of Hermosillo. Inter-American Development Bank, pp. 131-53. Publisher's VersionAbstract

This publication summarizes the outcomes and lessons learned from the Fall 2017 course titled “Emergent Urbanism: Planning and Design Visions for the City of Hermosillo, Mexico” (ADV-9146). Taught by professors Diane Davis and Felipe Vera, this course asked a group of 12 students to design a set of projects that could lay the groundwork for a sustainable future for the city of Hermosillo—an emerging city located in northwest Mexico and the capital of the state of Sonora. Part of a larger initiative funded by the Inter-American Development Bank and the North-American Development Bank in collaboration with Harvard University, ideas developed for this class were the product of collaboration between faculty and students at the Graduate School of Design, the Kennedy School’s Center for International Development and the T.H. Chan School of Public Health.

Written by Miguel Angel Santos and Douglas Barrios—two Growth Lab research fellows—the fourth chapter titled “Is There Life After Ford?” focuses on Hermosillo’s economic competitiveness and, specifically, the reasons behind the city’s economic stagnation. It sees the city’s overreliance on the automobile industry as a primary concern. Based on two methodologies developed at the Growth Lab—the Growth Diagnostic and the Economic Complexity Analysis—this piece proposes alternative pathways for Hermosillo’s future economic growth.

Lora, E., 2019. Empleo Femenino en las Ciudades Colombianas: Un Método de Descripción Estadística.Abstract

Este trabajo propone una metodología de descomposición estadística para describir en
forma coherente las dimensiones del empleo femenino según la estructura del mercado
laboral y según la estructura productiva de las ciudades. La metodología se utiliza
para analizar el empleo femenino “pleno y decente” en 23 ciudades colombianas entre
2008 y 2016. Según la estructura laboral, se encuentra que la brecha de género en el
empleo pleno y decente se debe a diferencias en la participación laboral y en la
formalidad del empleo, más que a diferencias entre hombres y mujeres en el desempleo
o en la dedicación al empleo. Según la estructura productiva, se encuentra que la
orientación por sexo y la composición del empleo sectorial de las ciudades tienen
influencia modesta en las diferencias entre ciudades en la generación de empleo
femenino pleno y decente, ya que éstas resultan sobre todo de las diferencias en la
capacidad de generación de para ambos sexos. La metodología también se usa para
analizar los cambios en el período. Se sugieren posibles extensiones de la metodología
propuesta e implicaciones para futuras investigaciones.
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Female Employment in Colombian Cities: A Method of Statistical Description

This paper proposes a methodology of statistical decomposition to describe in a
coherent way the dimensions of female employment according to the structure of the
labor market and according to the productive structure of cities. The methodology is
used to analyze "full and decent" female employment in 23 Colombian cities between
2008 and 2016. According to the labor structure, it is found that the gender gap in full
and decent employment is due to differences in labor participation and in the
formality of employment, rather than differences between men and women in
unemployment or dedication to employment. According to the productive structure, it
is found that the orientation by sex and the composition of sectoral employment in
cities have a modest influence on the differences between cities in the generation of full
and decent female employment, since these are mainly the result of differences in
cities’ capacities to generate employment for both sexes. The methodology is also used
to analyze changes in the period. Potential extensions of the proposed methodology
and implications for future research are suggested.

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