Regional employment and wages. The effects of transport costs and market potential. An application for Argentina

Economic activity in Argentina shows a high degree of concentration, in 1993 almost 46% of GDP was generated in an area representing just 0.14% of the country. When looking at the manufacturing sector the concentration is still higher. The new economic geography models developed since the early nineties explain the location of economic activity across regions as the result of two opposite forces, centripetal and centrifugal. As trade costs are reduced, the relative strength of these two forces changes, such that we might also expect changes in the regional structure of production and wages. How trade liberalising policies might have affected the structure of production and wages across regions is the topic we try to make a contribution. The evidence points out that the further reduction of trade barriers during the nineties might have had a small effect on the regional structure of employment and wages across counties, at least in the short-run.Economic Geography; Market Potential; Spatial agglomeration; Increasing returns; Transport costs

Poverty impacts of changes in the price of agricultural commodities, recent evidence from Argentina

With a large share of the population with low and medium-low incomes, the increase in agricultural commodities prices can potentially hurt an important part of the population through a raise in the price of goods that weights heavily in households expenditures, those that constitute the food-basket. The ex-ante evidence shows that this is the case. A less obvious channel, through changes in labour income would benefit more middle income households. Export taxes appears having limited effectiveness, while the elimination of the VAT on food and beverages would be enough to compensate for most of the negative effects of the increase in the world price of agricultural commoditie.Con una alta proporción de la población con ingresos bajos y mediosbajos, el aumento de los precios de los commodities agrícolas puede afectar negativamente a una parte importante de la población, por medio del aumento en el precio de bienes que tienen una alta participación en el gasto de los hogares, aquellos que constituyen la canasta alimenticia. La evidencia ex-ante muestra que este sería el caso. Un canal menos evidente, por medio de cambios en los ingresos laborales, beneficiaría más a los hogares de ingresos intermedios. Los impuestos a la exportación parecen tener una eficacia limitada, mientras que la eliminación del IVA en alimentos y bebidas sería suficiente para compensar por la mayor parte de los efectos negativos del aumento de los precios mundiales de los commodities agropecuarios.http://www.aaep.org.ar/anales/works/works2013/moncarz.pdfFil: Moncarz, Pedro Esteban. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas. Instituto de Economía y Finanzas; Argentina.Economía, Econometrí

Minimum wage and education premium in Argentina: 2004-2014

During the period 2004 to 2014, as Argentina was recovering from one of its most important economic crisis, there was an important reduction of the education wage premiun, Among the reasons for this behavior we find out that the increase in the minimum wage played an important role. However, while the average wage premium fell during the period here analyzed, there was an increase in the dispersion of wages, especially for informal workers. In this last regards, the relative minimum wage appears to have also influenced.Durante el período de 2004 a 2014, a medida que Argentina recuperaba de una de sus más importantes crisis económicas, hubo una reducción importante de la prima salarial a la educación. Engre las razones de este comportamiento encontramos que el aumento en el salario mínimo jugó un papel importante. Sin embargo, mientras que la prima salarial promedio se redujo durante el período aquí analizado, hubo un aumento en la dispersión de los salarios, especialmente para los trabajadores informales. En este último respecto, la evolución del salario mínimo relativo parece también haber influido.http://www.aaep.org.ar/anales/works/works2016/moncarz.pdfFil: Moncarz, Pedro Esteban. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Moncarz, Pedro Esteban. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina.Economía, Econometrí

Vertical Fiscal Transfers and the Location of Economic Activity across a Country Regions.Theory and Evidence for Argentina.

Argentina has an important system of vertical transfers with a compensatory aim including the convergence across sub-national regions. However, there still exist high levels of asymmetries among the country provinces. Extending Martin and Rogers’ FCM including non- tradable goods and public employment we analyse the effect on economic activity location that follows to changes on the regional distribution of transfers. An increase in the share of transfers a region receives positively effect the production of manufactures the higher are: transaction costs of goods produced under increasing returns to scale; the share of transfers that goes directly to consumers instead of local governments; the elasticity of substitution between differentiated goods; the share of consumers’ expenditure on manufactures via-as-vis on non- traded goods.federalism, vertical fiscal transfers, economic location

Fiscal Transfers, Public Sector Wage Premium and the Effects on Private Wages

We examine the relationship between federal transfers, the existence of a wage premium for the public sector and its effects on private wages in Argentina. The empirical analysis is based on the theoretical presumption that federal fiscal transfers to the different regions are being used to finance more public employment therefore discouraging private activity. The results suggest that the public sector pays a wage premium relative to the private sector. This premium is increasing in the level of per capita federal transfers. There is no evidence of an overall positive effect on wages in the private manufacturing sector. However, we find a significant positive relationship between federal transfers and wages paid to workers with less formal education; for jobs requiring a technical or profesional qualification the relationship is negative. These results broadly support the hypothesis that the private sector faces harder competition in the labour market in provinces which receive larger transfers from the central government.Inter-governmental Transfers, Labour Markets, Wage Premium, Fiscal Policy

Effects on welfare and poverty of the increase in international prices of agricultural commodities. A simulation exercise for Argentina, México and Uruguay

With a large share of households with low and medium-low income, the increase in agricultural commodity prices has the potential to hurt a sizable part of the population through a rise in the price of the consumption basket. Ex-ante this is the case. A less obvious channel, through changes in labor income would be more beneficial to middle-income households in Argentina and Uruguay, and to low income ones in Mexico. Overall, in Argentina and Mexico all households experience losses, between 3% and 7.5% of their initial expenditure in the former case, and between 10% and 12% in the latter. In both cases, poorer households are the most affected. In Uruguay, instead, households at the upper end of the distribution would benefit with the increase in the international price of agricultural commodities, with low-income households losing as much as 7.5%. In terms of poverty, the increases would be between 19% and 34%, with Uruguay being the most affected and Argentina the least. Increases in indigence would be even greater, between 29% (Argentina) and 52% (Mexico). Also, the results show that households in a situation of indigence and/or poverty, would move in average further away from the threshold lines, meaning that within each category, poor and indigent households become more homogeneous among them.www.bcu.gub.uyFil: Barone, Sergio. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Descalzi, Ricardo. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Moncarz, Pedro. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Moncarz, Pedro. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina.Economía, Econometrí

¿Cómo casi destruir un mercado sin querer y no fallar en el intento? El caso del impuesto sobre los automóviles de lujo en Argentina

Under the pressure of a growing capital outflow, by the end of 2013 the Argentine government implemented what was known as the tax on "luxury cars". Even when not explicitly declared, the main objective was to reduce imports of most expensive cars to reduce the trade deficit of the automotive sector, which was contributing heavily to the capital account deficit. Even when the policy could be categorized as "successful" in terms of reducing a USD 4.5 billion deficit in 2013 to one of just over USD 0.7 billion in 2014, it had a devastating and lasting impact on the internal market, that just in 2013 had achieved a record in sales. We obtain that during the first year of the implementation of the tax, the overall impact on sales of models reached by the tax was 53.7%. Despite some differences, the negative impact took place throughout the whole year. Not surprisingly, cars reached by the highest tax rate were most affected, as well as carmakers that produce more expensive varieties. However, even when the measure may have been designed to have a direct impact on a small part of the market, the negative effects extended to the whole market.Bajo la presión de una creciente salida de capitales, a fines del año 2013 el gobierno argentino implementó lo que se conoció como el impuesto a los "autos de lujo". Aunque no declarado explícitamente, el objetivo principal era reducir las importaciones de los automóviles más caros para reducir el déficit comercial del sector automotriz, que contribuía de manera importante al déficit de la cuenta de capital. Más allá del hecho de que la política podría calificarse de "exitosa" en cuanto a la reducción de un déficit de USD 4.500 millones en 2013 a uno de poco más de USD 700 millones en 2014, tuvo un impacto devastador y duradero en el mercado interno, que apenas un año antes, en 2013, había alcanzado un récord de ventas. Los resultados muestran que durante el primer año de la aplicación del impuesto, el impacto global en las ventas de los modelos alcanzados por el mismo fue del 53,7%. A pesar de algunas diferencias, el impacto negativo se produjo a lo largo todo el año 2014. No sorprende que los automóviles alcanzados por la tasa del 50% fueran los más afectados, así como los fabricantes de modelos más caros. Sin embargo, incluso cuando la medida puede haber sido diseñada para tener un impacto directo en una pequeña parte del mercado, los efectos negativos se extendieron a la totalidad del mismo.

Missing data in the structural gravity: estimation bias due to the omission of internal trade

Fil: Moncarz, Pedro Esteban. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Moncarz, Pedro Esteban. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina.Fil: Vaillant, Marcel. Universidad de la República. Facultad de Ciencias Sociales. Departamento de Economía; Uruguay.Fil: Flores, Manuel. Universidad de la República. Facultad de Ciencias Sociales. Departamento de Economía; Uruguay.In the last decade there has been an intense development in trade models aiming to explain the determinants of bilateral trade. A seminal theoretical and methodological contribution is Anderson and van Wincoop (2003), who introduced the concept of multilateral resistance and structural gravity. However, there is still an important gap between the theoretical developments of the structural gravity model and its empirical applications. The main two issues are: the presence of zeros in bilateral trade and the missing data problem of own production oriented to the own market. The presence of zero trade has been considered in Santos Silva and Tenreyro (2006) and Helpman, Melitz and Rubinstein (2008), but the effects of the lack of internal transactions in the estimation of the gravity model has not been much studied, even when its relevance can be thought to be of greater importance, because the great heterogeneity across countries in terms of their degrees of openness. The objective of the paper is, through the use of state of the art tools, analyze and characterize the consequence of the omission of internal transactions in the estimation of trade proximities (trade costs) and on the values of multilateral resistances, which in turn will affect the comparative static effects derived from different trade policy measures.Fil: Moncarz, Pedro Esteban. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Moncarz, Pedro Esteban. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina.Fil: Vaillant, Marcel. Universidad de la República. Facultad de Ciencias Sociales. Departamento de Economía; Uruguay.Fil: Flores, Manuel. Universidad de la República. Facultad de Ciencias Sociales. Departamento de Economía; Uruguay.Economía, Econometrí

Regional employment and wages. The effects of transport costs and market potential. An application for Argentina

Economic activity in Argentina shows a high degree of concentration, in 1993 almost 46% of GDP was generated in an area representing just 0.14% of the country. When looking at the manufacturing sector the concentration is still higher. The new economic geography models developed since the early nineties explain the location of economic activity across regions as the result of two opposite forces, centripetal and centrifugal. As trade costs are reduced, the relative strength of these two forces changes, such that we might also expect changes in the regional structure of production and wages. How trade liberalising policies might have affected the structure of production and wages across regions is the topic we try to make a contribution. The evidence points out that the further reduction of trade barriers during the nineties might have had a small effect on the regional structure of employment and wages across counties, at least in the short-run.

Rising commodity prices and welfare in Brazil. A short-run analysis using a SAM price model

During the 2000's, and from a macro perspective, Brazil benefited greatlybecause the increasing prices of agricultural commodities in world markets, as well as the price of oil and other primary commodities, which the country exports intensively. However, because the impacts these commodities might have on consumer prices, it is possible to envisage redistributive effects. We model the responses of consumer and factor prices using a Social Accounting Matrix model, which can be adapted to develop a price model that captures theinterdependences among activities, households, and factors. An advantage of theproposed methodology is, among others, that it allows us to estimates a full set of effects, including changes in government transfers and payments by social security. The results show that following an increase in the international prices of primary commodities, the responses of internal prices, of goods and factors, mean a welfare loss over the entire household per capita expenditure distribution, with those in the middle being the least affected. However, the differences among households are not very important. Inequality indices show little responsiveness to the simulated shocks.http://www.bcu.gub.uy/Comunicaciones/Paginas/JAE-2017.aspxFil: Moncarz, Pedro Esteban. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Moncarz, Pedro Esteban. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina.Fil: Barone, Sergio. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Descalzi, Ricardo Luis. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; ArgentinaEconomía, Econometrí