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1. Energy poverty on the flip side of energy subsidies

Author:
Julian Puig and Leonardo Gasparini
Publication Date:
04-2025
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper examines the relationship between energy subsidies and energy poverty (EP). Understanding this relationship is important because subsidies are often justified from an equity perspective to protect the most vulnerable households. Argentina, which has subsidized residential energy consumption since the early 2000s, is used as the case study. Since then, the energy subsidy policy has experienced two well-defined phases: massive and universal subsidies until 2015, followed by an attempt at reduction and targeting. This context, combined with notable regional disparities -including variations in income levels, climatic conditions, energy prices, and residential energy consumption patterns (e.g., electricity vs. piped gas)- makes this case study particularly compelling. EP is analyzed both unidimensionally and multidimensionally. Under both measures, EP follows a U-shaped pattern that reflects the phases of energy subsidies: a significant decrease between 2005 and 2013, followed by a considerable increase by 2018. The paper also highlights the key role of regional disparities which is crucial for interpreting the results beyond the Argentine case. Based on the findings, the paper contributes with globally relevant insights on the link between energy subsidy policies and EP.
Topic:
Poverty, Gas, Electricity, Subsidies, and Energy
Political Geography:
Argentina and South America

2. Revisiting Distributional Effects of Energy Subsidies in Argentina

Author:
Octavio Bertín, Thomas García, Francisco Pizzi, Alberto Porto, Julian Puig, and Jorge Puig
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We review the distributional incidence of residential energy subsidies using the attractive case of Argentina, a developing country that has massively subsidized electricity in recent decades. Using multiple data sources, we explore two central dimensions, usually omitted in previous research. On the one hand, we focus on geography given that previous studies mostly focus on the Buenos Aires Metropolitan Area (i.e., AMBA), the most populated region in the country. However, Argentina’s territorial heterogeneity demands further analysis, given that the stage of electricity distribution introduces heterogeneities between jurisdictions. On the other hand, we focus on the subsidies’ financing given that previous studies do not focus on the net incidence. Our results indicate that: regional disparities in the costs of electricity distribution and the prices set by the distribution companies are key drivers of the distributional incidence. Also omitting subsidies’ financing may lead to overestimating the belief about their redistributive effect.
Topic:
Development, Electricity, Subsidies, and Distributive Incidence
Political Geography:
Argentina and South America

3. Local Economic Development Through Export-Led Growth: The Chilean Case

Author:
Andrés César and Guillermo Falcone
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We study the causal impact of export growth on Chilean local economic development during 2000–2006 by exploiting spatial and temporal variations in local exposure stemming from the interaction of past differences in industry specialization across local labor markets and the evolution of tariffs cuts and exports across industries. We find that growing exports implied a significant reduction in labor informality and labor income gains in more exposed local markets, driven by job creation and wage growth in the formal sector. These effects concentrate on senior skilled workers. Exposed locations also exhibit a greater relative decline in the poverty rate.
Topic:
Poverty, Employment, Economic Growth, Tariffs, Exports, Economic Development, Labor Market, Wages, and Informality
Political Geography:
South America and Chile

4. The Long-Run Effects of Conditional Cash Transfers: the Case of Bolsa Familia in Brazil

Author:
Luis Laguinge, Leonardo Gasparini, and Guido Neidhöfer
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Conditional Cash Transfers (CCTs) have become a key antipoverty policy in Latin America in the last 25 years. The ultimate goal of this kind of programs is to break the intergenerational transmission of poverty through the promotion of human capital accumulation of children in vulnerable households. In this paper, we explore this issue by estimating the long-run effects of the largest CCT in Latin America: the Brazilian Bolsa Familia. Through a combination of the two-stage-two-sample method and a difference-in-differences approach, we find evidence consistent with a positive long-run impact of Bolsa Familia among former beneficiaries. In particular, we find a significant positive effect on education and labor income, and a negative effect on the likelihood of being a current beneficiary of this social transfer.
Topic:
Poverty, Human Capital, Cash Transfers, and Bolsa Familia
Political Geography:
Brazil and South America

5. Children living with disabilities and mother’s labor supply in developing countries: evidence from Argentina

Author:
Laura Carella, Rafael-Andrés Velázquez-Pérez, Natalia Porto, and Ana Clara Rucci
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
A child’s disability increases childcare demands causing two opposing effects on the mother’s labor supply: while some types of disability require additional time spent reducing labor supply, othersrequire additional expenses increasing labor supply. This paper studies the effect of a child’s disability on mothers’ labor supply using data from the 2019-20 IPUMS MICS of Argentina. Four measures of disability are used: children with a functional disability (based on Washington Group criteria); children with functional difficulties for seeing, hearing, or walking; children with difficulties in the remaining functional domains; and children with a disability certificate or pension. The results suggest that having a child with disability certificate or pension reduces a mother’s probability of participating in the labor force. No significant effect is found for mothers of a child with a functional disability. However, this arises from two opposing effects: a negative effect on mother’s labor supply of children with difficulties for seeing, hearing, or walking and a positive effect on mothers of children with difficulties in the remaining functional domains. The evidence also shows heterogeneous effects depending on the mother’s education. The (dis)incentive to participate is present for non-graduated mothers, while the effect is not statistically significant for graduated ones.
Topic:
Children, Disability, Labor Market, Workforce, and Motherhood
Political Geography:
Argentina and South America

6. Effects of Hiring Credits on the Argentine Labor Market

Author:
Octavio Bertín, Guillermo Cruces, Diego Chaves-González, Ignacio Lunghi, and Azul Menduiña
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This study assesses the impact of a hiring credit policy introduced in Argentina in 2014 on various labor outcomes of firms. The reform established differentiated labor cost reductions in the employers contributions to be paid for their new employees, according to the size that firms had at a date prior to the announcement of the policy. Using a differences-in-differences approach and employer-employee administrative data, we analyze the intervention’s effects. Our results show a significant 4.1 percentage point increase in employment growth rates for small firms compared to medium-sized ones, persisting for several years post-reform. This paper also explores the relationship between the intervention’s effects and sector labor informality; we find a significant 6.2 percentage point increase in employment growth rates for firms in high-informality sector, whereas no significant effect is found for firms in lowinformality sectors.
Topic:
Employment, Labor Market, Wages, and Hiring Credits
Political Geography:
Argentina and South America

7. The European Union Deforestation Regulation: The Impact on Argentina

Author:
Pablo de la Vega
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We analyze the potential economic impacts in Argentina of the European Union Deforestation Regulation (EUDR), which as of January 2025 will prohibit the export to the European Union of certain raw materials and related products if they involve the use of deforested land. A dynamic computable general equilibrium model is used to simulate the impact of such regulation on the Argentine economy. The results suggest that the potential macroeconomic impacts are limited. As a consequence of the EUDR, between 2025 and 2030, GDP would be reduced by an average of 0.46% with respect to the baseline scenario. However, of greater magnitude is the potential environmental impact. Deforested hectares would be reduced by 6.64% and polluting gas emissions by 0.39%.
Topic:
European Union, Regulation, Exports, Trade, and Deforestation
Political Geography:
Europe, Argentina, South America, and Latin America

8. Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil

Author:
Andrés César, Matias Ciaschi, Guillermo Falcone, and Guido Neidhöfer
Publication Date:
07-2023
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper investigates whether the impact of trade shocks on employment and wages persists across generations. Using an instrumental variable strategy on survey data with retrospective information on parental employment, we study the consequences of increased Chinese import competition in Brazilian industries on individuals with differently exposed fathers. Results show that several years after the shock, children of more exposed fathers have lower education and earnings, lower chances of formal jobs, and are more likely to rely on social assistance. These effects are substantial for children from disadvantaged background, indicating that the shock had a negative impact on intergenerational mobility.
Topic:
Trade, Imports, Economic Competition, and Social Mobility
Political Geography:
Brazil and South America

9. The Short-Term Labor Market Impact of Venezuelan Immigration in Peru

Author:
Celia P. Vera and Juan Pablo Jiménez
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Peru is the second-largest recipient of Venezuelans worldwide. We combine newly available data on Venezuelans living in Peru and the Peruvian Household Survey to assess the impact of Venezuelan migration on natives’ wages and employment. The initial regression analysis exploits the variation in supply shifts across education-experience groups over time. It indicates that immigration in Peru had no adverse impact on native wages. However, the paper highlights that in Peru immigrants and natives with similar education and experience are likely to work in different occupations. The subsequent analysis based on occupational clustering confirms the null effect on wages and indicates that a 20% increase in immigrants decreases formal employment by 6%. We do not find evidence for changes in employment composition toward informality so that migration operates through the extensive margin of employment. We report evidence in favor of immigrants being a close substitute to the least productive natives, suggesting that firms substitute native formal labor for low-cost immigrant informal labor.
Topic:
Education, Immigration, Labor Market, and Informal Economy
Political Geography:
South America, Venezuela, and Peru

10. Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies

Author:
Carlo Lombardo, Lucía Ramírez-Leira, and Leonardo Gasparini
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America’s six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers.
Topic:
Income Inequality, Economy, Labor Market, Minimum Wage, and Informal Economy
Political Geography:
South America and Latin America