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Skills to Advance Sustainability: Lessons Learned from Latin America and the Caribbean
Full text linkLatin America and the Caribbean (LAC) face significant challenges in the context of climate change, but they also have a unique opportunity to lead the transition toward more sustainable and low-carbon economies. To achieve this, it is essential to have a workforce capable of adapting to the demands of both emerging sectors and traditional ones that are undergoing changes, thereby contributing effectively to the economic transformation required by the green transition. However, the region faces a considerable gap between the skills available and those required to meet these objectives. Thus, this document primarily addressed to public policy makers proposes a guide to developing the human capital the region needs in order to succeed in the green transition
Amazonia Bond Issuance Guidelines: Guidance for Labeled Bonds Dedicated to Financing the Economic, Environmental, and Social Development of the Amazonia Region
No full textThe Inter-American Development Bank and the World Bank jointly developed the Amazonia Bond Issuance Guidelines to provide guidance and suggestions for the issuance of capital market instruments to finance investments in projects that support the transition to net-zero deforestation in the Amazonia region and help the local population pursue better livelihoods while preserving the ecosystem. While existing guidelines and principles provide best practices for bond issuances, they do not specifically address the unique challenges and priorities of the Amazonia region that Amazonia Bonds should finance. This document assists in closing the financing gap by providing definitions of Amazonia Bonds and guidance for the issuance process
Landscape of Non-contributory Cash Transfers in Latin America and the Caribbean, before and after the Covid-19 pandemic
Full text linkThe Covid-19 pandemic altered the landscape of non-contributory cash transfer programs in Latin America and the Caribbean. Governments in the region widely utilized cash transfers to support households and individuals during the crisis. Using standardized household survey data from 13 countries, we examine changes in the share of the population covered by cash transfers between 2019 and 2022. Our findings show that, after the crisis, the percentage of individuals covered by non-contributory cash transfers was 7.6 percentage points higher compared to pre-pandemic levels, a relative increase of about 30%. The average monthly per capita transfer almost doubled, from US62 (2017 PPP). Cash transfer programs reached 33.2% of the total population, or about 180 million individuals, up from 135 million before the pandemic. This expansion was driven by increased coverage of urban residents, targeted efforts to reach the older population, and the implementation of unconditional cash transfers instead of other program types. Despite this expansion, a significant coverage gap remains among the poorest, with 31.4% of individuals earning less than US$3.65 per day left uncovered (while cash transfer programs have expanded among higher income groups). The region still faces the challenge of developing more flexible and adaptive systems, including to address shocks. Meeting this challenge requires intensifying efforts to create comprehensive and interoperable databases to enhance coverage, especially for those most in need. It also requires creating mechanisms that allow for more seamless entry and exit from existing programs to better address the dynamic nature of poverty and vulnerability
Putting the Passenger First: What Works and What does not Work in Urban Mobility Reforms in Latin America and the Caribbean
Full text linkThe Latin American and Caribbean region offers a rich history of innovative policies and investments in urban mobility. We review some of these experiences with the aim of extracting lessons that can provide guidance to policymakers in the design and implementation of successful urban transport reforms. Special emphasis is placed on users\u27 welfare and how different policies impinge on their interests and behavior. Many reforms have faced difficulties by not considering the consequences of policy initiatives on users\u27 welfare, especially their impact on time costs. Another relevant theme discussed in this document is that modern high-quality transit systems are expensive and fare revenues will generally not be sufficient to fund an ambitious reform. If public funds are not available, it is advisable to reduce the scope and scale of reform. Fortunately, there are many low-cost options to improve urban mobility. Furthermore, some pricing policies can improve mobility while raising revenues at the same time; resources that can then be used to subsidize transit services. While the optimal policy package will depend on the specific circumstances of each city and the available funding, what cannot be overlooked is the interest of users and passengers. Policymakers must always place themselves in their shoes and think through how their intended intervention will affect their travel experience, time and financial cost
Wages, Market Power and Labor Productivity: Evidence from Uruguay
Full text linkThis paper examines the relationship between wages and market power at the firm level. We derive firm-specific measures of labor market power and present a natural decomposition of wage changes into shifts in labor market power and labor productivity. Our findings indicate that 50-60 percent of the variation in nominal wages is attributable to price changes, while the remaining portion, reflecting changes in real wages, is explained mainly by changes in market power and, to a lesser extent, by changes in labor productivity. Moreover, we show that firms with greater market power tend to pay higher wages, suggesting rent-sharing between employers and employees, at the cost of higher prices for consumers
The Gender Perspective in AquaFund
Full text linkWomen and girls use water for domestic activities and home-caring for vulnerable family members, as well as taking care of small cattle and agricultural production. Given their active use of water, women tend to be truly knowledgeable about current water sources, their quality and reliability, and any restrictions on their use. On the other hand, men use water for productive activities. Although women supply almost half of all agricultural labor in low-and middle-income countries, their agricultural productivity is on average 20 percent to 30 percent lower than male farmers. Therefore, agricultural activities supervised by men often take priority over those conducted by women. There is a need to integrate women in the planning, decision making and governance of water and sanitation services. They should be considered not only as beneficiaries and users, but also as active players in decision-making bodies, such as water committees, and water and sanitation operators, as well as workers in infrastructure projects. This report compiles a sample of the projects and Technical Cooperations that have been funded by AquaFund, organized according to the thematic areas of action of the Inter-American Development Bank (IDB)\u27s Water and Sanitation Division (WAS). The percentage of strategic alignment with gender of operations in the 2018-2021 period inside the IDB\u27s WAS Division is reviewed to continue deepening gender actions and strategies in operations promoted by AquaFund
Approach Paper. Extended Country Program Evaluation: Ecuador 2018-2025
Full text linkExtended Country Program Evaluations (XCPEs) evaluate the relevance, effectiveness, and sustainability of the IDB Groups support in a country. The IDB Group Office of Evaluation and Oversight (OVE) prepares XCPEs pursuant to a "Country Product Protocol". XCPEs are independent evaluations that cover the two prior Bank country strategies and corresponding country program and aim to answer not only the question of what happened but also how and why. The XCPE will evaluate the IDB Groups performance in Ecuador in the 20182025 period. The XCPE will cover the 20182021 and 20222025 country strategies, with a review period that runs from 27 June 2018 until 31 December 2024. The XCPE will evaluate the IDB Groups performance in Ecuador in the 20182025 period. The XCPE will cover the 20182021 and 20222025 country strategies, with a review period that runs from 27 June 2018 until 31 December 2024
Currency Risk Premia and Exporter Dynamics
Full text linkWe propose a novel mechanism to explain the incomplete pass-through of exchange rates to exporter prices and quantities, based on the relationship between exporters\u27 dynamic pricing strategies and currency risk premia. When domestic currency risk premium increases, the relative value of current foreign currency cash flows rises compared to future ones. Consequently, exporters who set prices in customer markets are inclined to increase markups today, leading to higher prices in response to elevated risk premia. This risk-based explanation provides a new perspective on the exchange rate disconnect puzzle, suggesting that a higher currency risk premium dampens the direct impact of exchange rate changes on export prices. We test this mechanism empirically using firm-product level data from Colombian exporters on prices and quantities
Policies to Promote the Inclusion and Well-being of People with Disabilities: Evidence and Knowledge Gaps
No full textIn the past few years, the evidence-base regarding the inclusion of people with disabilities has advanced considerably, both in high- and low-to-mid income countries. This policy brief focuses on the lessons learned from rigorous studies in education, social protection and labor markets and identifies the key knowledge gaps relevant for Latin America and the Caribbean
The exchange rate passthrough to domestic prices, new evidence from Colombia
Full text linkThis paper calculates the exchange rate pass through (ERPT) with time constant and time varying coefficients for Colombia between 2006 and 2023. It then estimates the ERPT during four specific depreciation events during the period of analysis: the 2008 financial crisis, the 2014-2016 fall in international fuel prices, the COVID-19 pandemic and the post-COVID recovery. A Bayesian Vector Autoregressive model with exogenous variables (BVARX) model with time constant and time varying coefficients is used for the exercise. The results for time constant coefficients show that a 1 percentage point (p.p.) increase in the depreciation of the exchange rate leads to an increase in imported, producer and consumer inflation of 0.42 p.p., 0.15p.p., and 0.01 p.p. respectively in the first month of the shock. Time varying coefficient results suggest that the nature and the size of the shock result in a heterogeneous ERPT and monetary policy response. Moreover, higher ERPT in imported inflation and producer inflation does not seem translate into higher ERPT in consumer inflation. Further studies could look at: First, the nature of the ERPT on different types of inflation and why this is heterogeneous in a time varying analysis. Second, how the combined effect of different factors in the Colombian economy led to different monetary policy responses in each of the four episodes under analysis