Impact of the Uruguayan Conditional Cash Transfer Program

We analyze the impact of conditional cash payments on school enrollment, child labor and labor supply implemented between 2005 and 2007 to the poorest Uruguayan households. Targeting income discontinuities are not observed around the thresholds to particiConditional cash transfer program, targeting method, propensity score matching

Assessing the Distributive Impact of More than Doubling the Minimum Wage: The Case of Uruguay

This paper analyzes the role of the sharply increases in the minimum wage after 2004 in Uruguay in the slight decrease on wage inequality. We Önd no impact of the miminum wage increases on wage inequality. This results can be explained by the low starting level of the minimum wage or lack of compliance with it. The Uruguayan experience shows that the minimum wage is not always e§ective as a redistribution instrument.minimum wage, wage inequality, IV, semiparametric estimation

Distributive Effects of Regional Trade Agreements on the "Small Trading Partners": Mercosur and the case of Uruguay and Paraguay

Although trade integration has potential benefits for developing countries, it is disputed whether trade liberalization processes are, per se, sufficient for poverty reduction and inequality abatement. Abundant work has analyzed the link between tariff reduction, poverty levels and inequality in both developed and developing countries. Gains from trade are generally observed. Still, those benefits from integration are generally unevenly distributed.In our analysis we explore how gains from trade have been distributed in the two minor trade partners of MERCOSUR: Uruguay and Paraguay. We study the link between trade, poverty and inequality by analyzing the impact of trade liberalization through two main transmission channels: prices and income. Our papers show that in the case of Mercosur, the effect of trade on poverty (and income inequality) varies per country and per region. In particular, we conclude that trade integration policies cannot be regarded as a poverty-alleviating policy, per se. --regional trade agreements,poverty,inequality

And What About the Family Back Home? International Migration and Happiness

In this study we use data on subjective well being and migration in Cuenca, one of the Ecuador's largest cities. We examine the impact of migration on the happiness of the family left behind. We use the propensity score matching estimator to take into account the endogeneity of migration. Our results indicate that migration reduces the happiness of those left behind. We also find that the monetary inflows (remittances) that accompany migration do not increase happiness levels among recipients. These results suggest that the family left behind cannot be compensated, for the increase in unhappiness that it sustains on account of the emigration of loved ones, with remittances from abroad. --Happiness,migration,remittances

Assessment of the Distributive Impact of National and External Trade Reforms in Brazil

This paper quantifies the distributional and poverty effects of national and external trade reform in Brazil using household survey data. We estimate the consumption and labor impact of the Mercosur trade reform following the methodology suggested by Porto (2006). In order to analyze the impact of external trade reforms over the Brazilian economy, we focus a major exported good: broiler. Results show that trade liberalization benefits more low income individuals. This result is largely explained by two major observations: the fact that consumption good prices decreased as Brazil enter Mercosur and a close to zero labor income effect. Additionally, we find that poverty indicators decreased after national trade liberalization (both for women and men). We obtained no significant inequality effects after national trade reforms. We analyze the impact on poverty and inequality of a 10% increase the broiler world price. In general terms, we find an increase in poverty of two points and no effect on income inequality. --internal and external trade reform,poverty,inequality

Water nationalization: network access, quality, and health outcomes

In the case of natural monopolies there tends to be a trade-off between a higher quality of output provided by private firms, and a better access for poor consumers provided by public firms. This is partly the reflection of differences in objectives by private and public firms. The former tend to be product-driven, whereas the latter tend to base decisions on political agendas (Chong and Lopez de Silanes, 2005). The objective of this paper is to explore the impact on network access, water quality, and health outcomes of Uruguay's nationalization of water services. An important advantage of focusing on nationalization rather than privatization is that it avoids selection bias due to cherry-picking by firms or governments at the time of privatization. Indeed, nationalization in Uruguay affected all previously privatized firms, as water was declared "part of the public domain". Results suggest that the change in ownership led to an increase in the sanitation rate, as well as improvements in water quality. It was also accompanied by a decline in water-related child mortality, although this latter effect tends not to be statistically significant across specifications.minimum wage, wage inequality, IV, semiparametric estimation

Polarization and the Middle Class

There is an increasing literature that discusses how to measure the middle class. Some approaches are based on an arbitrary deÖnition such as income quartiles or the poverty line. Recently, Foster and Wolfson developed a methodology which lacks of arbitrariness that enables us to compare the middle class of two di§erent income distributions. We apply this new tool jointly with a complementary method ñrelative distribution approach- to household income data in 1994-2004 and 2004-2010, to analyze the evolution of the middle class and polarization in Uruguay. During the Örst period, which is characterized by an increasing income inequality, we Önd that the middle class declined and income polarization increased. In the second one, where the Uruguayan economy experienced a recovery from the downturn su§ered in 2002, we Önd that the middle class rose and polarization decreased. However, this last result is attenuated when we do not consider the household income imputation because of the new health system implemented in 2008.income polarization, middle class, inequality, social policies, bipolarization

Un análisis de comportamiento a nivel de agente de la encuesta de expectativas de inflación del BCU

Inflation expectations are key unobservable variables for decision-making, especially in managing monetary policy. Understand how to formulate them, if they are rational or adaptive is vital. This study answers these questions through a panel data analysis of the micro data from the inflation expectation survey of the Central Bank of Uruguay. The main findings indicate: i) a low predictive power of the analysts surveyed in the 12-month horizon; ii) a convergence of the individual forecasts to the released monthly median iii) an overweight of the inflation target ceiling and the dynamics of the inflation, and iv) a underweight of monetary policy instruments. With respect to the evidence of rationality, we find the partial use of available information and in some cases, there is a systematic bias.inflation expectations, rationality, forecast error

Impactos Sociales en Uruguay de la Liberalización del Comercio Mundial de la Carne

In this work we quantify the impact of trade liberalization in the global beef markets over labor income, employment and poverty levels in Uruguay. The adjustment of local beef prices after an external shock to the worldwide price levels is imperfect. Estimations indicate that 76% of a certain shock to the export prices is transmitted to the price paid to the local producers. Shortterm local price dynamics show that the transmission is pretty low paced Price changes after trade liberalization imply that men become better off, in particular those who are highly educated and work in the agricultural sector. For the case of women, increases in labor income after trade liberalization are mild. We do not observe poverty impacts after trade liberalization. Additionally, changes in employment levels are almost immaterial. We conclude that income concentration is lower in the case of men and higher for the case of women.wages, employment, poverty, liberalization, trade

Wage Gap in Uruguay

This study applies the extension of the Machado and Mata (2005) decomposition developed by Albrecht, Vuuren y Vroman (2009) to analyze the gender wage gap in Uruguay. The wage gap is increasing the upper part suggesting a glass ceiling in Uruguay. We also find a positive selection effect.Gender, quantile regression, selection