Rethinking Earnings Determinants in the Urban Areas of Bolivia

This paper analyzes the factors that explain earnings in levels and inequality in the urban areas of Bolivia, considering not only the usual individual characteristics (education, experience, gender, and ethnicity) but also firm characteristics. Given the information available at the firm level in the household surveys, two simple models were developed: one for independent workers (for which there is relatively detailed firm-level data), and the other for dependent workers (where firm variables were approximated by sector, size, and by the legal condition of the workers). The main econometric results show that: i) earnings regressions that include only individual variables present highly biased (overestimated) coefficients; ii) firm characteristics are fundamental factors for explaining earnings for independent workers, almost doubling R2 and explaining 45.5% of observed earnings inequality; and iii) firm proxies for dependent workers are also relevant; however, they explain wages at a lower percentage (11.8%), which may be due to non-detailed firm data and to the relatively higher importance of education for these workers. These new findings represent a contribution to the empirical literature on earnings determinants for urban Bolivia as well as to the vision of labor income and poverty problems.earnings (wages), firm characteristics, inequality, Bolivia

Sources of Comparative Advantages in Brazil

Based on the Heckscher-Ohlin-Vanek model, this paper investigates relative factor abundance in Brazil, as revealed by its international trade. We study two different time periods: one characterized by high trade barriers (1980 to 1985) and the trade liberalization period (1990 to 1995). Two alternative methodologies are used: the estimation of factor intensity regressions on net exports and the direct computation of factor content in net exports. In the factor intensity regression, we incorporate techno- logical changes that might have occurred over time, and those turned out to be significant. Both methods yield the same results: the Brazilian in- ternational trade reveals relative abundance in capital, land and unskilled labor, and scarcity in skilled labor, with qualitatively equivalent results for the two time periods studied.

Informality and Productivity in Bolivia: A Gender Differentiated Empirical Analysis

The urban labor market in Bolivia can be divided into 4 main sectors: 1) the public sector, 2) the formal private sector, 3) self-employed informals, and 4) informal workers. Although incomes are generally higher in the public sector and in the formal private sector, there is a strong preference in Bolivia for being informally self-employed. Two thirds of both men and women in urban areas respond that they would prefer to be self-employed rather than a salaried employee, and few see any advantage of becoming formal under the current institutional set-up. Currently, half of all economically active women in urban areas are informally self-employed, while this is the case for only one third of men. This implies that women are actually closer to the desired state than men, according to their own preferences. The real problem for women is not that they are informally self-employed, but rather that the profitability of their informal enterprises is low. On average, monthly profits of female micro-entrepreneurs is about 40% lower than those of male micro-entrepreneurs. This report uses quantitative information from about 600 micro and small enterprises to break down and understand this gender gap in profitability, and the results show that almost the whole gap is due to the fact that women operate their businesses on a much smaller scale (with less productive capital and fewer employees) than men. Why do female entrepreneurs operate on a smaller scale? One partial explanation is that they do not want to grow, because the business then would loose some of the features that make a micro-business particularly attractive for women (not to depend on others, to be able to care for children simultaneously, flexible working hours, and daily revenues). More important, however, is the lack of access to capital. Micro and small businesses operated by women have only a third of the operating capital of male operated businesses. There are two main reasons for this. First, women generally have fewer opportunities to accumulate capital, both because their household and reproductive work takes time away from paid work, and because they tend to earn less than men when they do work for money. Second, they do not have access to credit on reasonable terms. Access by itself is not the problem, as there is a very active micro-credit industry in Bolivia, but the terms are so unattractive that women try to avoid it if at all possible. The interest rates are high (20-40% per year); the group-lending practices increases the risk for the borrower, as they may end up paying other group members’ debt also; and they are typically required to assist at compulsory training courses twice a month, which is demanding for busy women running both a business and a household. Banks offer loans at more reasonable terms, but the requirements are difficult for micro-entrepreneurs to comply with (especially proof of a monthly pay check) and the risk is large as an entire house is often put up as collateral for even a small loan. Capital and credit is not a binding constraint in all sectors, however. On average, returns to additional capital investments are estimated to be relatively high (internal rates of return of over 20%) in the food sales sector, the textile clothing sector, and the camelid clothing sector. In contrast, they are estimated to be negative for grocery stores and the transport sector, which have experienced overinvestment to the extent that the returns to both capital and labor in these two sectors have been severely depressed. Even in the sectors where returns to capital are relatively high, a doubling of productive capital would not lead to a doubling of monthly profits. In fact, estimation results show strongly diminishing returns to scale, which means that micro-enterprises have little incentive to grow. Under the current institutional setup in Bolivia, it makes more economic sense to have several identical micro-enterprises in the family rather than one larger enterprise, and this is indeed often observed in practice. This is partly due to the characteristics of the sectors (for example, several small stores can capture a larger market due to the geographical dispersion), but it is mostly due to the tax-system, which becomes very demanding, both in terms of bureaucratic procedures and in terms of tax burden, as soon as an enterprise grows past a certain threshold. Under the current institutional set up, micro-entrepreneurs perceive no benefits from becoming formal, and indeed estimation results confirm that formality would lower the monthly profits of micro-enterprises (less than 3 workers and less than $1000 in operating capital) by 30-40%. Slightly bigger firms (3-5 workers), however, may benefit from getting a NIT and thus be able to offer facturas to the clients.Informality, Productivity, Gender, Bolivia

Non-Agricultural Labor from Rural Farmers in Bolivia: Determinants and Effects

This paper analyses non-agricultural work supplied by rural households in Bolivia. It is shown that roughly 50% of all rural households complement their incomes through non-agricultural work, but that households in the lowlands are more likely to do so than households in the highlands. Since non-agricultural work pays several times better than agricultural work, access to this source of complementary income constitutes an important opportunity to escape rural poverty.Rural labor markets, Bolivia, non-farm labor

Quinoa: An Option for Improving Rural Income in Bolivia

This research examines the production of quinoa as an option for improving rural incomes in the Altiplano of Bolivia; due to, on one hand, the grain is aligned perfectly to the customs and traditions of work and family of the habitants of this region, on the other hand, international demand for the product has increased substantially generating good economic opportunities and better prices. Through microsimulation is observed that in the the Southern Highlands households would benefit from the production and marketing of quinoa, and may even significantly increase these revenues (decreasing poverty levels) increasing the productivity of the land or substituting other crops by it. However, in other highland areas the grain production has a modest impact in terms of income and poverty. These differences explain why just the Southern Highlands produces a variety high demand, "la quinua real" while in other areas the other agricultural activities are relatively more profitable alternatives.Quinua; Rural income; Altiplano; Bolivia

Mercado Laboral y Reformas en Bolivia

El estudio presenta un panorama de las reformas sociales y económicas implementadas en Bolivia desde 1985, en su relación e incidencia con el funcionamiento del mercado de trabajo. Inicialmente, se destaca la efectividad de las llamadas Reformas Estructurales, aplicadas durante 1985-2005, en la generación de la estabilidad macroeconómica; en la captación de inversión extranjera directa, en la apertura de mercados y en la disminución de la pobreza (medida por Necesidades Básicas Insatisfechas). Sin embargo, se observa que las medidas destinadas a crear empleos decentes fueron escasas y los rubros favorecidos por las reformas crearon pocas fuentes de trabajo. El nuevo gobierno, que ascendió al poder en 2006, aumentó los programas sociales y revirtió varias reformas implementadas durante 1985-2005. No obstante, las políticas públicas se concentraron en los mismos rubros que las anteriores reformas, descuidando los problemas en torno a la generación de buenos empleos en Bolivia. En este escenario, la fuerza laboral urbana continuó con su propia dinámica de expansión, sobrepasando en muchos casos la demanda laboral. Como resultado, muchos trabajadores no-calificados generaron sus propios empleos, con bajos ingresos y productividad. En contraste, los trabajadores calificados fueron favorecidos por las reformas y los sectores beneficiados por éstas; lo que condujo a un aumento en el premio salarial por calificación en el tiempo. Por otro lado, la fuerza laboral rural siguió empleada en su mayoría en el sector agropecuario de subsistencia; no obstante, la migración campo-ciudad llevó a la disminución de la población ocupada en estas regiones y, desde aquí, promovió algunas mejoras en la productividad e ingresos. El estudio concluye señalando que las reformas no han generado mejores empleos, siendo fundamental establecer políticas que dinamicen la demanda laboral, mejorando el clima de negocios y propiciando mayores inversiones que busquen expandir principalmente el sector industrial, ya que es intensivo en mano de obra no-calificada, puede beneficiarse del mercado mundial y del desarrollo tecnológico, y está concentra en las áreas urbanas.Bolivia, ingresos laborales, salarios, desigualdad, políticas sociales

Employment and labor regulation: evidence from manufacturing firms in Bolivia, 1988-2007

This paper analyzes the effects of labor regulation on employment for Bolivian registered manufacturing firms during 1988 to 2007. By estimating job flows we find that firms with high temporary worker rates (as a proxy of lower labor regulation costs) are those with both higher job reallocation rates and higher net employment growth, and only they contributed to employment growth during the country economic downturn, 1998-1999. In addition, by estimating demand functions we find that labor regulation changes (measured through the compulsory basic salary and the major labor costs derived from the new pension law) entailed costs in terms of permanent employment losses.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS

Amplified Fiber-Optic Recirculating Delay Lines

Experimental and theoretical results on single- and double-amplified recirculating delay lines are presented. One of our aims is to emphasize their application as filters, showing a wide flexibility of design. Analysis of their performance in the spectral and time domains have been carried out. A novel method of understanding the behavior of double structures has been developed and successfully tested with experimental results employing Er-doped fiber amplifiers as delay lines.Publicad

ABERTURA COMERCIAL, DESIGUALDADE SALARIAL E SINDICALIZAÇÃO

This paper presents a new assessment the Stolper-Samuelson Theorem, relaxing the neoclassical hypothesis of perfect factor mobility and wage flexibility. We build a model economy in which some sector face imperfect competition and workers are unionized in those sector, so that wages are not flexible. The model predicts that the impact of trade openness on wage differentials is smaller in unionized sector, since they suffer two opposite effect. First, we have the standard Stolper-Samuelson effect. The second effect relates to the additional partial adjustment process between wages and employment due to the unionization, dampening down the Stolper-Samuelson effect, since it restricts factor mobility between sectors, thus reducing wages changes. For unionized sectors, we construct an alternative version of the mandates wages empirical model incorporating the effects of wage bargaining. We test the new model for the United States and we found evidence of a positive impact of trade openness on wage differentials for that economy.