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Labor Market Regulation and Informality
Get PDFThis paper investigates informal employment in Brazil\u27s highly regulated labor market, focusing on the intensive margin of informality within formal firms. Using a comprehensive dataset of labor audits conducted from 1997 to 2012, we find that formal firms caught with informal workers face sustained slower growth. Informal workers are found across firms of all sizes, and their characteristics closely resemble those of formal employees. Building on these empirical findings, we develop a dynamic general equilibrium model where firms balance the flexibility of informality against potential costs. Our framework can be used to explore government policy implications and to examine the impact of audit strategies on informality, output, and workers welfare
Macroeconomic and Fiscal Effects of Increased Efficiency in Medicine Procurement: A General Equilibrium Analysis of the Colombian Health System
Get PDFThis study analyzes the macroeconomic and fiscal effects of greater efficiency in medicines procurement in Colombia, using both static (computable) and dynamic general equilibrium models. The findings indicate that implementing an efficient drug procurement policy could reduce the total health system spending, with potential savings of up to 8.4% in the short term and up to 10.8% in the long term. These savings could be reinvested within the health system, allocated to other sectors, or used to reduce tax burden on capital, consumption, or social contributions. The latter option would increase production by up to 1.1%, investment by 1.7% and consumption by 0.8%. Potential measures to achieve such efficiency gains include promoting and purchasing generic drugs, conducting joint procurement, and implementing price regulation
A Roadmap Framework for Industrial Decarbonization in Latin America and the Caribbean
Get PDFThis report examines the intricate landscape of industrial energy use and emissions in the Latin America and the Caribbean (LAC) region and explores potential avenues for decarbonization across key industrial subsectors. It presents a robust conceptual framework to empower stakeholders in LAC countries to develop sector-specific roadmaps for commercial and emerging industrial decarbonization technologies. Specifically, it explores three top energy-using industrial subsectors: food and beverages, iron and steel, and cement. The framework will help address the urgent challenges of industrial decarbonization in LAC. By offering tailored decarbonization roadmaps, the report provides decision makers with practical tools to navigate the complexities of transitioning toward sustainable industrial practices. This is particularly crucial given the region\u27s unique socio-economic and environmental characteristics, and its technology readiness levels. The policy gap analysis underscores the need for more comprehensive and integrated approaches to industrial decarbonization policies. A multi-step approach ensures that the roadmap is firmly rooted in context and informed by available data, synthesizing insights into cohesive, actionable strategies for industrial decarbonization. The report provides sample outlines for using the framework to develop decarbonization roadmaps for the three industrial subsectors studied. The findings not only contribute to advancing sustainability goals but will also play a pivotal role in mitigating the impacts of climate change, thus ensuring a more resilient and prosperous future for the LAC region
Research Insights: How Does Firm-Embedded Productivity Affect Cross-Country Income Differences?
Get PDFThe gap in productivity among countries is a fundamental factor contributing to income disparities across countries. Firm-embedded productivity, encompassing knowledge, expertise, patents, brands, and business models, contributes to approximately one-third of the variation in output per worker across countries. Country-specific factors, such as institutions and natural resources, account for the remaining variation. Policies that enhance firm- embedded productivity, such as tax incentives for R&D and research grants, can help reduce global income inequality
Evaluation of IDB Support in the Area of Citizen Security in the Region
Get PDFThe objective of this evaluation is to analyze the relevance, effectiveness, and sustainability of the results of the Inter-American Development Bank (IDB) program in Citizen Security (CS). The IDB\u27s work in CS is guided primarily by the 2012 conceptual framework and the Sector Framework documents (SFD) of 2014, 2017, and 2023. These documents prioritize five areas of intervention: (i) social and situational prevention, (ii) police professionalization, (iii) criminal justice, (iv) the penitentiary and rehabilitation system, and (v) governance. This evaluation analyzes (a) the relevance of the IDB\u27s CS interventions, that is, the alignment of operations with the needs and priorities of governments, and the IDB\u27s strategic pillars for the sector, as well as the alignment of the design of operations with empirical evidence and the realities and context of the countries; (b) the effectiveness of operations, measured in terms of the achievement of the results expected in the projects by area of intervention; and (c) the sustainability of the results achieved
Remote Sensing Analysis of Water Quality in Four Waterbodies of Latin America
Get PDFThe pilot study introduces remote sensing methods for monitoring water quality to measure, understand, and manage impacts on vulnerable water bodies that are part of the IDBs Water and Sanitation portfolio. The water bodies selected for this study include: Guanabara Bay in Río de Janeiro, Brazil; Lake Titicaca in Bolivia and Peru; Ypacaraí Lake near Asunción, Paraguay; and the Río Reconquista Basin near Buenos Aires, Argentina. This study focuses on the development and implementation of an automated remote sensing data processing chain enabling detection of phytoplankton abundance (chlorophyll-a) as a proxy for pollution by organic and inorganic nutrients, as well as sediments (and turbidity or water clarity), which are the major water quality issues identified across the IDBs Water and Sanitation portfolio. In addition to providing a baseline assessment of water resources at four select locations over time, the collected remote sensing data will be used to rapidly assess changes in water quality conditions resulting from socioeconomic changes introduced by local and regional responses to the Covid-19 pandemic and associated lockdown conditions. Remote sensing applied to water quality monitoring is a valuable emerging technology that can provide geospatial data about water quality and nutrient, bacterial, and industrial pollution from urban and rural sources. The methodology presented in this paper uses cloud computing, which allows rapid monitoring deployment and scalable coverage across numerous watersheds and geographies. Although this paper presents a comprehensive analysis of this entirely new source of water quality data across the sites and locations of interest, a more detailed analysis can be performed by examining different timeframes (e.g., entire data set or monthly aggregates) within these watersheds. Additional insights may be revealed by further combining the water quality data sets of this work with other sources of information, including local sensors, information from water and sanitation utilities, and a more detailed analysis of the timing of location conditions and their local impacts
Language Models and Google Trends: An Application to Tourism in the Andean Countries
Get PDFUsing Google Trends data, this study leverages high-frequency unstructured data to characterize tourism demand in the Andean countries. The paper explores real-time data to monitor trends in the tourism industry, leveraging language models to identify suitable search terms. The document presents a methodology based on keywords related to tourism products in Bolivia, Colombia, Ecuador, Peru, and Venezuela between 2010 and 2023. Results show decline and recovery trends in the interest in traveling to these destinations. Additionally, trends for local tourist destinations and specific products are analyzed. The real-time data-driven results can guide industrial policies in the region, emphasizing the importance of understanding and adapting to changing dynamics of tourism demand in the Andean Region
Barriers to Immigrant Assimilation: Evidence on Grading Bias in Ecuadorian High Schools
Get PDFWe investigate the assimilation of immigrant youth in Ecuador. Focusing on formal schooling and employing administrative data from high schools, we document subtle ways by which assessment biases against students with an immigrant background play a significant role in this assimilation process. We find that, after holding constant performance on blindly scored proficiency tests, teacher-assigned grades in Mathematics and Spanish are consistently lower for students from immigrant families. We show that these results are robust with respect to the omission of socio-emotional and behavioral traits that are likely valued by teachers. These differentials are larger for male students and those attending urban schools. While these grading differentials have direct impact over high school graduation rates, they may also discourage future human capital investments, potentially leading to lower college attendance, distorted choice of major, and sub-optimal labor market outcomes, which are all well know elements for the economic assimilation of immigrants
Debiasing Policymakers: The Role of Behavioral Economics Training
Get PDFBehavioral biases often lead to suboptimal decisions, a vulnerability that extends to policymakers who operate under conditions of fatigue, stress, and time constraints and with significant implications for public welfare. While behavioral economics offers strategies like default adjustments to mitigate decision-making costs, deploying these policy interventions is not always feasible. Thus, enhancing the quality of policy decision-making is crucial, and evidence suggests that targeted training can boost job performance among policymakers. This study evaluates the impact of a behavioral training course on policy decision-making through a randomized experiment and a survey test that incorporates problem-solving and decision-making tasks among approximately 25,000 participants enrolled in the course. Our findings reveal a significant improvement in the treated group, with responses averaging 0.6 standard deviations better than those in the control group. Given the increasing prevalence of such courses, this paper underscores the potential of behavioral training in improving policy decisions and advocates for further research through additional experimental studies
South-Southeast Executive Working Groups: A dedicated Instance for Inter-Institutional Coordination Among the Cultural and Creative Industries of South-Southeast Mexico
Get PDFDuring the year 2023, the Inter-American Development Bank (IDB) implemented permanent interinstitutional executive work tables in three states of Southern-Southeastern Mexico: Yucatán, Chiapas, and Oaxaca. This effort focused on addressing the bottlenecks that limit the growth of the cultural and creative sector in the region. This publication concisely presents the replicable methodology designed by the IDB to carry out the project, as well as its impact, lessons learned, and recommendations resulting from this initiative