Income and bargaining effects on education and health

In this paper, we examine the impacts of the reform in the rural pension system in Brazil in 1991 onschooling and health indicators. In addition, we use the reform to investigate the validity of the unitarymodel of household allocation by testing if there were uneven impacts on those indicators depending onthe gender of the recipient. The main conclusion of the paper is that the reform had significantly positiveeffects on the outcomes of interest, especially on those co-residing with a male pensioner, indicating thatthe unitary model is not a well-specified framework to understand family allocation decisions. Thehighest impacts were on school attendance for boys, literacy for girls and illness for middle-age people.We explore a collective model as defined by Chiappori (1992) as one possible alternative representationfor the decision-making process of the poor rural Brazilian families. In the cooperative Nash equilibrium,the reform effects can be divided into two pieces: a direct income effect and bargaining power effect. Thedata support the existence of these two different effects

Correcting the fixed-effect estimator for endogenous switching

In this paper, we propose a two-step estimator for panel data models in which a binary covariateis endogenous. In the first stage, a random-effects probit model is estimated, having theendogenous variable as the left-hand side variable. Correction terms are then constructed andincluded in the main regression.

What are the links between aid volatility and growth ?

This paper adds to aid volatility literature in three ways: First it tests the validity of the aid volatility and growth relationship from various aspects: across different time horizons, by sources of aid, and by aid volatility interactions with country characteristics. Second, it investigates the relationship by the level of aid absorption and spending. Third, when examining the relationship between International Development Association aid volatility and growth, it isolates International Development Association aid volatility due to the recipient country's performance from that due to other sources. The findings suggest that, in the long run, on average, aid volatility is negatively correlated with real economic growth. But the relationship is not even. It is stronger for Sub-Saharan African countries than for other regions and it is not present in middle-income countries or countries with strong institutions. For economies where aid is fully absorbed, aid volatility matters for long-run growth; economies with full aid spending also bear a negative impact of aid volatility on long-run growth. Where aid is not fully absorbed, or where it is not fully spent, the aid volatility relationship is not significant. Looking at International Development Association aid separately, the volatility arising from the recipient country's International Development Association performance does not have a causal relationship with growth. In policy terms, the results suggest that low- income countries with weak institutions, especially in Sub-Saharan Africa, could benefit from reduced aid volatility or from being better prepared for the volatility that is there.Economic Conditions and Volatility,Development Economics&Aid Effectiveness,Emerging Markets,Gender and Health,Achieving Shared Growth

The causal effect of family size on child labor and education

This paper investigates the causal relationship between family size and child labor and educationamong brazilian children. More especifically, it analyzes the impact of family size on child labor,school attendance, literacy and school progression. It explores the exogenous variation in familysize driven by the presence of twins in the family. The results are consistent under the reasonableassumption that the instrument is a random event. Using the nationally representative brazilianhousehold survey (Pnad), detrimental effects are found on child labor for boys. Moreover,significant effects are obtained for school progression for girls caused by the exogenous presenceof the young siblings in the household.

Municipalities secession and uncertainty on public goods provision

This paper investigates the causes of municipalities secession in Brazil. The theoretical modelproposes that the median voter is not fully informed about the efficiency effect of secession on publicgood provision and uses the break up decision undertaken by neighbor’s municipalities within thestate to account for his voting. Our empirical results confirms that prediction

Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football

We propose a model to study non-compete agreements and evaluate their quantitative effects. We explore an exogenous policy change that removed non-compete clauses in the market for Brazilian footballers, the Pele Act of 1998. The Act raised players’ lifetime income but changed the wage profile in a heterogeneous way, reducing young players’ salaries. We structurally estimate the model’s parameters by matching wages and turnover profiles in the post Act period. By changing a single parameter related to the non-compete friction, we can match the changes in the age-earnings profile. We then show that the bulk of income gains is due to distributional forces, with efficiency gains playing a minor role

The beautiful gain: what can Brazilian football tell us about the effect of non-compete clauses on wages?

With the 1998 Pelé Law eliminating transfer fees for players whose contracts had expired, Brazilian football provides an ideal setting to test the effect of non-compete agreements on wages. This analysis reveals that older players gained the most, whereas the wages of young players fell, which has wider implications for policies on the use of non-competes amongst low- and high-income employees, write Bernardo Guimarães, João Paulo Pessoa, and Vladimir Ponczek (all Sao Paulo School of Economics-FGV)

O efeito do estigma sobre os beneficiários de programas de transferência no Brasil

Este artigo investiga o impacto do estigma sobre as decisões econômicas dos indivíduosbeneficiados por algum programa de transferência federal. Estigma é definido aqui como adesutilidade resultante em participar de algum programa de transferência. Em particular,estima-se que o estigma afeta positivamente a procura por novos empregos e redução dodesemprego dentro da família, bem como implica em maior assiduidade escolar. Istocontrasta com Moffit (1983) que sugere que o estigma reduz o número de horastrabalhadas. Em termos de políticas públicas, o trabalho sugere que os governos levem emconsideração este efeito quando decidirem implementar determinados programas detransferência de renda