Autor: Tiago Cavalcanti

WP 108 Less Inequality, More Welfare? A Structural Quantitative Analysis for Brazil

Abstract – This article studies how the recent fall in wage inequality in Brazil affected individual allocations and welfare. It first documents the evolution of wage inequality in the country between 1996 and 2009. Then, it constructs a parsimonious structural model of the Brazilian economy, which is based on a standard Yaari perpetual youth model in which agents are heterogenous in their skills and on their idiosyncratic labor productivity. The model is calibrated to match, besides other statistics, the skill wage premium, the share of skilled workers in the labor force and the cross sectional variance on unobservable wage inequality in Brazil in 1996 and 2009. Our simulations show that the fall in wage inequality in Brazil from 1996 to 2009 generated an average welfare gain equivalent to a 2.24 percent permanent increase in annual consumption. The gains were distributed unevenly: While welfare gains were large for poor individuals (e.g., about 16 percent in permanent consumption for the first income decile), workers in the top of the income distribution experienced, in general, welfare losses (e.g, a loss of 6 percent in permanent consumption for the last income decile). Using counterfactual exercises we also study the importance of different structural factors which shaped inequality on individual welfare. Download do Paper Ano: 2017 Working-paper: 108 Tiago Cavalcanti Ler todos os Posts de Tiago Cavalcanti’s Share...

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WP 107 Access to Long-Term Credit and Productivity of Small and Medium Firms: A Causal Evidence

Abstract – This letter assesses the impact of a variation in access to a targeted loan program from Brazil’s development bank on investment and productivity. Results suggest that eligible firms increased their relative investment rate and productivity, but results are robust only for permanent rather than temporary improvements in access to credit. Download do Paper Ano: 2017 Working-paper: 107 Tiago Cavalcanti Ler todos os Posts de Tiago Cavalcanti’s Share...

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WP 106 Winning the Oil Lottery: The Impact of Natural Resource Extraction on Growth

Abstract – This paper provides evidence of the causal impact of oil discoveries on local development. Novel data covering the universe of oil wells drilled in Brazil allow us to exploit a quasi-experiment: Municipalities where oil was discovered constitute the treatment group, while municipalities with drilling but no discovery are the control group. The results show that oil discoveries signicantly increase per capita GDP and have positive local spillovers. Workers relocate from informal agriculture to higher value-added activities in formal services, increasing urbanization. The results are consistent with greater local demand for non-tradable services driven by highly paid oil...

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WP 105 Family Planning and Development: Aggregate Effects of Contraceptive Use

Abstract – What is the role of family planning interventions on fertility, savings, human capital investment, and development? To examine this, endogenous unwanted fertility is embedded in an otherwise standard quantity-quality overlapping generations model of fertility and growth. The model features costly fertility control and families can (partially) insure against a fertility risk by using costly modern contraceptives. In the event of unexpected pregnancies, households can also opt to abort some pregnancies, at a cost. Given the number of children born, parents decide how much education to provide and how much to save out of their income. We fit the model to Kenyan data, implement several family planning policies and decompose their aggregate effects. Our results suggest that given a small budget (up to 0.5 percent of GDP), legalizing and subsidizing the price of abortion is a more cost-effective policy for improving long-run living standards and reducing inequality than policies that either subsidize the price of modern contraceptives or subsidize basic education. Download do Paper Ano: 2017 Working-paper: 105 Tiago Cavalcanti Ler todos os Posts de Tiago Cavalcanti’s Share...

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WP 082 – (Mis)Allocation Effects of an Overpaid Public Sector

Tiago Cavalcanti & Marcelo Rodrigues dos Santos Resumo Executivo O estudo de Tiago Cavalcanti (University of Cambridge e Insper) e Marcelo Rodrigues dos Santos (Insper) tem como objetivo investigar possíveis problemas de alocação, ou “misallocation”, gerado pelas diferenças de salários e benefícios relativamente mais generosos no setor público os potenciais efeitos de reformas do governo sobre a estrutura salarial e de aposentadoria dos funcionários públicos. A presença de um governo grande não gera necessariamente problemas de alocação na economia, caso o setor público seja produtivo e os fatores de produção (como o capital e o trabalho) sejam pagos de...

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