Investigación – TREES | Universidad de los Andes

Consejos para construir una propuesta de investigación sólida

trees — Tue, 23 Apr 2024 01:15:19 +0000

The socioeconomics of COVID and lockdowns outside advanced economies: the case of Bogota

trees — Thu, 18 Jan 2024 16:35:21 +0000

Using Bogota’s system of socioeconomic division, the “strata”, we show that falling ill with a serious case of COVID has been over eight times more likely for an individual in the lowest stratum, where the poorer population concentrates, compared to one in the highest. Other pieces of evidence are consistent with this being driven by more exposure to contagion, at least partly driven by people in the lower strata being: 1) Less likely to be in occupations fit for telework; 2) Not only more vulnerable ex ante but also disproportionately hit by the economic effects of the crisis, and therefore pushed to go to work; 3) Subject to more crowding at home; 4) Less likely to recognize a high risk of contagion. The mechanisms that we quantify will imply a widening of the socioeconomic gaps resulting from the pandemic, in one of the world’s most unequal societies.

Market Concentration, Market Fragmentation, and Inequality in Latin America

trees — Thu, 18 Jan 2024 16:16:27 +0000

Inequality in Latin America is much higher than in Europe and the US. The income distribution in the region is also much more skewed, displaying a thicker left tail. And, like those comparison economies, it also exhibits a long right tail. We illustrate the link between this bipolar character of inequality in the region and the similarly bipolar character of the distribution of productive units, where income is generated.

The firm size distribution in Latin America is dominated by a plethora of tiny businesses, which absorb several times more employment than in the US and Europe and exhibit a much lower relative productivity, while its upper tail exhibits higher market concentration. 34% of the distance in the 50/10 personal income gap between Latin America and the US is explained by a higher concentration of workers in the categories with poorer relative income and productivity: self-employment and employment in micro establishments. In the right tail of the income distribution, the larger 90/50 personal income gap in the region compared to the US is fully explained by the larger relative income of business owners of large firms with high relative markups.

It shows that market concentration in the region is large and tied to small labor shares. It is also closely tied to the extreme dispersion of productivity and the prevalence of low productivity businesses. The central message is that high inequality in the region is deeply rooted in the productivity problem.

EMEs and COVID-19: Shutting Down in a World of Informal and Tiny Firms

trees — Thu, 18 Jan 2024 15:39:11 +0000

Emerging economies are characterized by an extremely high prevalence of informality, small-firm employment and jobs not fit for working from home. These features factor into how the COVID-19 crisis has affected the economy. We develop a framework that, based on accounting identities and actual data, quantifies potential job and income losses during the crisis and recovery for economies with different economic organization structures. Our analysis incorporates differential exposure of jobs across categories of firm-size and formality status, as well as sectors and occupations. We account for the direct supply shock caused by lockdowns, the idiosyncratic demand shock suffered by sectors that rely on high contact with their costumers, the transmission of both shocks through IO linkages, and the overall aggregate demand effect derived from these shocks. Applying our framework to data for Colombia, which exhibits an employment distribution similar to that of other emerging market countries, in particular Latin America, we find that well over 50% of jobs are at risk in the initial stages of the crisis. Because informal jobs and those not fit for telework are at higher risk, this number goes down to 33% if the US employment distribution is imposed on the Colombian data. As the crisis deepens, the risk of unemployment grows. However, informality rebounds quickly in the recovery, an employment at risk is quickly reduced to 20% of the baseline, all concentrated in formal jobs. Our findings point to the importance of action to maintain formal matches from dissolving, given their scarcity and rebuilding difficulty, while protecting the poor and the informal via income transfers.

The Costs of Bureaucracy and Corruption at Customs: Evidence from the Computerization of Imports in Colombia

trees — Wed, 17 Jan 2024 15:41:25 +0000

Customs face a difficult tradeoff between, on one side, collecting tariff revenues and preventing smuggling, and on the other side, avoiding creating additional barriers to trade. They also tend to concentrate discretionary power in the hands of officials whose decisions can bear high costs for the firms, creating room for rent extraction. In this context, information technologies can limit direct interactions, reduce transaction costs and allow local businesses to better take of the benefits of international trade. We assess the effects of the computerization of import transactions on plants’ growth in Colombia. The reform occurred sequentially in the different customs between 2000 and 2005, allowing us to use a triple-difference strategy, comparing the change in outcome variables of plants that were importing before the beginning of the reform, to the one of firms that were not importing (less likely to be affected by changes at customs). We find that the computerization of imports led to an increase of 6 log points in the firms’ value added along with consequent increases in employment, productivity and tax collection. However, it generated winners (importing firms) and losers (non-importing firms). Our investigation of the channels reveals a reduction in corruption judiciary cases at treated customs, as well as a reduction of time to clear customs and its unpredictability. Our results support growing evidence of the high potential of proper use of information technologies to improve efficiency and tackle corruption in public administration with important consequences for the economy.

Thermal stress and financial distress: Extreme temperatures and firms’ loan defaults in Mexico

trees — Wed, 17 Jan 2024 15:10:39 +0000

The frequency and intensity of extreme weather events are likely to increase with climate change. Although a growing body of literature shows that extreme weather harms economic outcomes, there is a lack of evidence about how it affects firms’ credit performance and credit use. This question is relevant for low and middle-income economies, where institutions are less prepared to deal with informational asymmetries and credit markets are shallow. We fill this gap by exploiting an extraordinarily detailed data set with loan-level information for the universe of loans extended by commercial banks to private firms in Mexico. We find that anomalous days of extreme heat increase credit delinquency rates. The effect is concentrated in the agricultural sector, but there is also an impact on non-agricultural industries that rely heavily on local demand. Our results are consistent with general equilibrium effects originated in agriculture that expand to other sectors in agricultural regions.

Weak State Trap

trees — Tue, 16 Jan 2024 14:31:17 +0000

Development outcomes come in ‘clusters’ that seem difficult to exit. Using original data from Colombia, we present evidence of the interconnection between two critical political components: state weakness and clientelism. State weakness creates the right environment for clientelism to ourish. Clientelism sets in place a structure of incentives for politicians and citizens that is detrimental to building state capacity. We show that vote buying, as a measure of clientelism, and tax evasion, as a measure of state weakness, are highly correlated at the individual level. We also report evidence that both practices are widely accepted in society, a result consistent with a deeply entrenched relationship of mutually reinforcing in uences. Finally, we propose a set of mechanisms that underlie the hypothesis that a weak state and widespread clientelism are part of a political equilibrium with multiple feedback loops. Our results suggest that state weakness is a trap that is likely hard to exit.

Wealth gradients in early childhood cognitive development in five Latin American countries

trees — Tue, 16 Jan 2024 14:26:31 +0000

Research from the United States shows that gaps in early cognitive and non-cognitive ability appear early in the life cycle. Little is known about this important question for developing countries. This paper provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, we use the same measure of receptive language ability for all five countries. We find important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where we can follow children over time, there are few substantive changes in scores once children enter school. Our results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on our measure of cognitive development.

Understanding how socioeconomic inequalities drive inequalities in COVID-19 infections

trees — Fri, 12 Jan 2024 16:54:22 +0000

Across the world, the SARS-CoV-2 (COVID-19) pandemic has disproportionately affected economically disadvantaged groups. This differential impact has numerous possible explanations, each with significantly different policy implications. We examine, for the first time in a low-or middle-income country, which mechanisms best explain the disproportionate impact of the virus on the poor. Combining an epidemiological model with rich data from Bogotá, Colombia, we show that total infections and inequalities in infections are largely driven by inequalities in the inability to work remotely and in within-home secondary attack rates. Inequalities in isolation behavior are less important but non-negligible, while access to testing and contract-tracing plays practically no role. Interventions that mitigate transmission are often more effective when targeted on socioeconomically disadvantaged groups.

Assessing Multiple Inequalities and Air Pollution Abatement Policies

trees — Fri, 12 Jan 2024 16:37:29 +0000

Addressing inequality is recognized a worldwide development objective. The literature has primarily focused on examining economic or social inequality, but rarely on environmental inequality. Centering the discussion on economic or social factors does not provide a holistic view of inequality because it is multidimensional and several facets may overlap imposing a disproportionate burden on vulnerable communities. This study investigates the magnitude of air quality inequality in conjunction with economic and social inequalities in Bogotá (Colombia). It explores where inequalities overlap and assesses alleviation measures by tackling air pollution. We develop a composite index to estimate performance in socioeconomic and air quality characteristics across the city and evaluate inequality with a variety of measures. Using an atmospheric chemical transport model, we simulate the impact of three air pollution abatement policies: paving roads, industry fuel substitution, and diesel-vehicle renewal on fine particle concentrations, and compute their effect on inequality. Results show that allocation of air quality across Bogotá is highly unequal, exceeding economic or social inequality. Evidence also indicates that economic, social and air quality disparities intersect, displaying the southwest as the most vulnerable zone. Paving roads is found to be the most progressive and cost-effective policy, reducing overall inequality between 11 and 46 percent with net benefits exceeding US$1.4 billion.