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Wage Inequality in Latin America: Learning from Matched Employer-Employee Data
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Inequality in Latin America fell substantially in the early 2000s. In this paper, we take advantage of administrative matched employee-employed data in Brazil, Chile and Ecuador to examine whether these inequality trends held in the formal sector, as well. We document a significant decrease in the log variance of earnings in Brazil and Ecuador in the early 2000s, whereas inequality in Chile between 2008 and 2015 remained largely flat. In this context, we find that inequality among salaried workers is largely a between-firm phenomenon across these three countries. We expand on our descriptive analysis and estimate an additive worker and firm fixed effects model to understand the driving factors behind inequality in the region. We find a significant decline in between-firm inequality in Brazil and a modest one in Chile. We last focus our attention on the commodities and manufacturing sectors, which were directly exposed to two large external shocks, the commodity-boom and the ''China Shock". We find an increase in inequality in the former sector accompanied by an reduction in inequality in the latter across the region.
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MPRC People
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Sergio Urzua, Ph.D.
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Sergio Urzua Publications
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John Haltiwanger featured in The Wall Street Journal on Job Loss during COVID-19
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When fewer firms open, it can weigh heavily on the job market.
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Maureen Cropper talks about Clean Air Act on Resources for the Future
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Cropper discusses a recent working paper that assesses the full benefits and costs of the groundbreaking law’s many programs to protect the environment.
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Katharine Abraham comments on Misleading Economic Data during COVID-19 on The New York Times
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The tools we have to understand what is happening to the economy are becoming distorted or harder to interpret.
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John Haltiwanger featured in Barron's on New Economic Indicators during COVID-19 Pandemic
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Two new indicators designed to gauge economic activity on a real-time basis show that the U.S. has already experienced an economic crisis sharper than the 2008 recession and continues to deteriorate.
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Melissa Kearney's research illuminates COVID recovery potential
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We must deliberately spend and invest in ways that will strengthen our capitalist economy and expand economic security, she writes
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Katharine Abraham featured in Bloomberg on Job Saving after the COVID-19 Hit
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States' short-time compensation, or shared-work programs, are effective in helping retain trained staff members during COVID-19 outbreak
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Katharine Abraham featured in The New York Times on Unemployment due to COVID-19 Outbreak
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Economists expect as many as a record 20 million job losses and an unemployment rate of around 15% in the April job report
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How Ending a Conditional Cash Transfer Program Impacts Children’s School Enrollment: Evidence from Mexico
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Susan W. Parker, Public Policy
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Resources
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Seed Grant Program
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Seed Grants Awarded
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Melissa Kearney analyzes COVID-19 Social Insurance on EconoFact
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Cash payments provide a financial lifeline through this time of income loss. Workers in the hardest-hit industries have low earnings and few savings.
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