Channeling Resources to Improve Living Standards in Latin America
Paper Session
Sunday, Jan. 8, 2023 8:00 AM - 10:00 AM (CST)
- Chair: Juan Pablo Rud, Royal Holloway, University of London and IFS
Resource Windfalls and Local Labor Markets: Evidence from Peru
Abstract
Can transfers to local governments spur economic activity in low-income regions? We exploit plausibly exogenous variation in municipality budgets driven by the distribution of royalties among more than 1800 Peruvian districts between 2006 and 2019 to explore effects on local labor markets and household welfare. Combining administrative records of public employment and detailed individual data from surveys, we document increases inpublic expenditures, public and private employment, formality and household incomes. We show suggestive evidence that institutions mediate the effects on local labor markets and that transfers contribute to the development of the capacity of local government.The Effect of a Conditional Cash Transfer on Child Marriage: Evidence from Mexico
Abstract
In this paper I study the effect of a conditional cash transfer program in Latin America on the probability of marriage for children under 18 years old. I estimate the impact of Progresa/ Oportunidades leveraging the staggered implementation of the program. I find that the monetary transfer, conditional on school attendance, increased the probability of female beneficiaries being married. After five years of exposure to the program, beneficiary girls are, on average, almost 7 p.p more likely to be married than the control group. I find no effect for boys. These findings contrast with the previously documented positive effects of the program in education, which is usually associated with decreases in child marriage. To disentangle the effect of the monetary transfer from the education channel, I exploit the variation in household composition and find that non-eligible children in beneficiary households - who were only exposed to the increase in household income - were between 10 and 18p.p more likely to be married than their counterparts in non-treated villages. I reconcile the findings in a conceptual framework that helps rationalize how both education and marriage are increasing in response to the program.Forgone Investment amid Conflict: Evidence from Credit Microdata in Colombia
Abstract
We study the causal effect of conflict on investment using a unique administrative dataset from a large bank serving rural producers in Colombia. Our difference-in-difference strategy exploits the 2016 peace agreement between the Colombian government and insurgent group FARC, combined with pre-existing differences in FARC exposure across municipalities. We show that the number of business loans increases in municipalities with historical FARC presence after the peace agreement. More loan applications drive this increase, with no change in supply-side variables. However, higher investment is only observed in municipalities located close to markets and does not materialize before the peace agreement is finalized, despite a large decline in violence during the preceding negotiations period. A simple theoretical framework combined with rich information on the characteristics of loan applicants and projects (including credit scores and delinquency rates), as well as night-time lights, suggests that conflict hinders investment mostly by lowering project returns.Discussant(s)
Fabiola Alba
,
Columbia University
Luis Roberto Martínez
,
University of Chicago
Antonella Bancalari
,
University of St. Andrews and IFS
Fernando Aragon
,
Simon Fraser University
JEL Classifications
- I3 - Welfare, Well-Being, and Poverty
- O1 - Economic Development