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Globalization, Technological Change and Market Power in Latin America: Evidence for Chile and Colombia
Full text linkThis paper studies concentration and market power in Chile and Colombia and the role that globalization and automation have had in shaping these two phenomena. Using panels of firm surveys, we compute firm-level markups and industry-level concentration measures. Applying a difference in differences methodology that relies on variation across industries in exposure to robotization technology, import competition from China and tariff declines in US markets due to the signature of free trade agreements, we study the causal effects of these shocks on market power and concentration. We find that, while robotization technology has reduced markups on average, it has increased markups and total factor productivity of top industry firms; that the pro-competitive effect of Chinese imports has indeed led to a decrease in market power of domestic firms; and that increased export opportunities due to free trade agreements have led to an increase in market power, with interesting heterogeneities across the two countries
Digital Payments Adoption by Consumers and Firms: Implications for Financial Inclusion
Full text linkDigital payments have increasingly been adopted by consumers and firms in Latin America and the Caribbean. This policy research paper analyzes recent post-pandemic data on digital payments in the region to describe adoption patterns, measure adoption gaps, and identify adoption barriers. The data reveal a positive trend in the use of financial accounts for receiving wages, and of payment apps and digital wallets for purchases in-person and online. Despite increased average adoption, sizable gaps remain both between countries and within countries. At the consumer level, factors associated with delayed adoption include low income, old age, indigenous status, and rural location. At the firm level, factors include small size, retail sector, and limited credit access. Four types of adoption barriers appear to be important: technological, economic, informational, and behavioral. These observations are supported with detailed microdata from Mexico. The paper proposes policy solutions for achieving digital payments inclusion of vulnerable consumers and firms
Public Pensions and the Strategic Timing of Formal Employment
Full text linkWe study how public pensions impact lifecycle labor supply decisions. Our analysis centers on pension eligibility rules in Ecuador. We first use administrative data to document and unpack retirement spikes at eligibility ages. Next, we use survey data and regression discontinuity to investigate whether eligibility rules influence earlier-in-life decisions about when to work formally versus informally. We find discontinuous increases in transitions to formal employment at 50, consistent with forward-looking people timing employment to minimize social security contributions while maintaining benefit eligibility. Evidence suggests that small and family firms, where employees and employers may readily coordinate, help facilitate these transitions
Conditional Cash Transfers, School Progression and Academic Achievement in Jamaica
Full text linkCovering the full population of applicants to the Jamaican Conditional Cash Transfer Program (PATH), we explore whether receiving PATH during childhood causally affects school progression and academic performance at the primary, secondary and tertiary levels. To uncover causal associations, we exploit exogenous variation arising from the PATH eligibility criteria within a regression discontinuity design. We find that for both, boys and girls, PATH significantly increases the likelihood of completing primary and secondary school. Furthermore, among boys, PATH increased the likelihood of pursuing tertiary studies. However, conditional on primary school completion, PATH had no effects on academic performance at any educational level
Green IT Strategies: Innovating for a Sustainable Digital Future
Full text linkThis report explores the main areas of intervention of Green IT, such as the mapping of carbon emissions throughout the value chain, the virtualization of physical resources, the adoption of cloud computing services, and the design of green data centers that include sustainability criteria. Risks and consequences associated with greater digitalization are also identified, such as the rebound effect and the growth in the volume of data stored, even those without real use (“dark data”), as well as the ambivalent role of emerging technologies such as artificial intelligence and blockchain, whose potential to generate greater efficiency and lower environmental impact coexists with a high demand for energy and resources
Tech Report: Technology for Accesibility
No full textIn an increasingly digital context, technology has become a cornerstone of daily life, offering opportunities for the full inclusion of individuals in areas such as education, work, health and civic integration. Despite significant progress in recent years, important challenges remain. This report will analyze the definition of digital inclusion, the current landscape in Latin America and the Caribbean (LAC), regional initiatives and best practices for implementation. It will also look at different applications and technological tools designed to improve the quality of life of people with disabilities. Finally, a reflection on future trends and perspectives will be discussed, taking into account emerging technological advances and socio-cultural changes in the region
Education Spending and Economic Growth: Short and Long-term Effects
Full text linkThis paper examines the short- and long-term effects of education expenditure on economic growth using a global panel of 107 countries from 1970 to 2019. Employing a CS-ARDL model with an error correction framework, we estimate dynamic responses to both aggregate and disaggregated real education spending across primary, secondary, and tertiary levels. The results show that public investment in education has a statistically significant and positive impact on real GDP per capita, both in the short and long run. The long-run elasticity is highest for aggregate expenditure and comparable across primary and secondary education, while it is lower for tertiary education. We further explore heterogeneity in long-run effects and find that higher educational achievement, proxied by PISA scores, amplifies the growth impact of education spending. Simulations confirm that countries with higher PISA scores experience faster and stronger returns on investment. These findings underscore the role of education quality in enhancing the productivity of public education spending and support targeted policy efforts to improve both the quantity and quality of educational investment
Extended School Say Policies. Why, When and How?
Full text linkThis publication analyzes Extended School Day (ESD) policies, assessing their relevance in Latin America and the Caribbean (LAC), as well as their implementation in various international contexts. Various JEE formats, their objectives and potential contributions to the education system are presented. Cases of implementation in Latin America, Europe and Asia are analyzed, with special emphasis on Croatia, which has successfully implemented JEE thanks to the influence of other countries\u27 policies and its innovative educational vision. The analysis is enriched with the findings of the Study Tour to Croatia, organized by the Inter-American Development Bank and the Croatian government, where education authorities from LAC and Europe exchanged experiences and lessons learned that serve as a basis for formulating contextualized recommendations aimed at maximizing the impact of JEE in the region. The document also explores how the integration of technology into JEE policies can enhance their results. Finally, the text includes a practical guide for planning, implementing and evaluating JEE policies, highlighting the importance of strategic planning, continuous monitoring and evidence-based evaluation
Aerospace Industry: Current Status and Trends of the Global Value Chain
Full text linkThe aerospace industry, characterized by its high value-added nature and strong ties to national governments, plays a crucial role in global value chains (GVCs). This sector has seen significant growth in international trade, particularly in Latin America and the Caribbean (LAC), where countries like Brazil and Mexico have developed substantial industrial structures. The industry\u27s dynamics are influenced by technological advancements, market trends, and geopolitical factors, which present both opportunities and threats to LAC countries. To enhance their competitive advantages, these countries must focus on strengthening their technological capabilities, fostering innovation, and implementing strategic policy recommendations. The report provides an in-depth analysis of the aerospace industry\u27s current status, trends, and the potential for LAC countries to leverage their strengths in this evolving marke
Low Pass-Through from Inflation Expectations to Income Growth Expectations: Why People Dislike Inflation
Full text linkUsing a large, nationally representative survey of US consumers, we estimate a causal 20 percent pass-through from inflation expectations to income growth expectations for the average consumer, with considerable heterogeneity in pass-through associated with sociodemographic factors. The results also indicate that higher inflation expectations cause an increase in consumers\u27 likelihood to search for higher-paying jobs but do not change the likelihood of asking for a raise, suggesting that consumers recognize significant wage rigidity with their current employer. In a calibrated search-and-matching model, we find that demand and supply shocks combined with incomplete pass-through produce a strong negative relationship between expected inflation and expected utility. Taken together, the survey results and model analysis provide a labor market account of why people dislike inflation