Hâle Utar, 28 March 2021

The Mexican Drug War, including the ostentatious killings and the targeting of civillians, has been amply covered in the media. What is less known are the economic impacts of the violence, particularly at the firm level. This column presents evidence from Mexican firms, focusing on the differing experiences of ‘blue-collar’ and ‘white-collar’ organisations. The results suggest that violence can cause a negative labour supply shock, particularly in sectors that more frequently employ lower-skilled female workers.

Felipe Barrera-Osorio, Paul Gertler, Nozomi Nakajima, Harry Patrinos, 18 December 2020

Parents play an important role in their children’s educational experiences and outcomes, but they often face challenges when supporting their children through school. This column examines the effects of parental involvement programmes implemented at scale by the national government of Mexico. The results suggest that low-cost, group-based information interventions can increase parental engagement in schools, change parenting behaviour at home, and improve children’s behaviour in school. The impacts were particularly large for indigenous families, suggesting that parental involvement programmes can help improve school-family relationships for the most excluded populations

Fernando Arteaga, Desiree Desierto, Mark Koyama, 04 December 2020

When the galleon San José sank in a typhoon in 1694, it was carrying a cargo worth 2% of the GDP of the entire Spanish empire. Fernando Arteaga, Desiree Desierto and Mark Koyama tell Tim Phillips about how bribes sank Spanish treasure ships.

Fernando Arteaga, Desiree Desierto, Mark Koyama, 25 October 2020

The Spanish Crown had a monopoly on the trade route between Manila and Mexico for more than 250 years. The ships that sailed this route were “the richest ships in all the oceans”, but much of the wealth sank at sea and remain undiscovered. This column uses a newly constructed dataset of all of the ships that travelled the route to show how monopoly rents that allowed widespread bribe-taking would have led to overloading and late ship departure, thereby increasing the probability of shipwreck. Not only were late and overloaded ships more likely to experience shipwrecks or to return to port, but the effect is stronger for galleons carrying more valuable, higher-rent cargo. This sheds new light on the costs of rent-seeking in European colonial empires.

David Argente, Chang-Tai Hsieh, Munseob Lee, 13 September 2020

Cross-country price indexes are an essential tool for comparing living standards in different countries. But those indexes are constructed from data that does not always account for heterogeneity in shopping behaviour, the uneven quality of products, and variety availability. This column compares barcode-level data on prices and quantities for consumer packaged goods in the US and Mexico, and finds that Mexican real consumption relative to the US is larger than previously estimated. It highlights the importance of addressing sampling, quality, and variety biases in international price comparisons.

Gianluca Benigno, Andrew Foerster, Christopher Otrok, Alessandro Rebucci, 19 April 2020

Borrowing constraints can amplify business cycle dynamics and create significant challenges for countries facing negative economic shocks. Based on a new estimated model of sudden stop crises, this column argues that financial crises are often followed by a quick but partial rebound. Thereafter, economies can experience a very protracted period of stagnation. A similar trajectory may be likely for the current COVID-19 crisis, as many countries will face financial frictions in responding to the economic downturn.

Piritta Sorsa, Jens Arnold, Paula Garda, 13 January 2020

Economic growth in Latin America has been persistently lower and more erratic than the emerging economies of Asia, largely due to low productivity borne out of both weak competition and a large informal economy. This column analyses the various factors that have caused these conditions to exist in several Latin American countries, and how policies to counteract them have fared. For significant progress, a detailed strategy of simplifying regulations, easing administrative burdens, encouraging market entry, and reducing trade barriers is required to formalise workers and encourage market competition.

Sebastian Edwards, 30 November 2019

In a few decades, Chile experienced dramatic economic growth and the fastest reduction of inequality in the region. Yet, many Chilean citizens feel that inequality has greatly increased. Such feelings of 'malestar' triggered the violent social unrest of October 2019. This paper explains this seeming paradox by differentiating ‘vertical’ (income) inequality from ‘horizontal’ (social) inequality. It argues that the neoliberalism that created Chile’s economic growth is no longer effective and that Chile may be headed towards adopting a welfare state model.

Damian Clarke, Hanna Mühlrad, 12 November 2018

Women’s health is frequently cited when debating the merits of abortion legislation. However, the arguments are often based on evidence which is correlational or drawn from small or non-representative samples of women. This column explores the impacts of abortion legislation on women’s health using the universe of health records from Mexico, where abortion was legalised in the Federal District of Mexico while sanctions on abortion were increased in other regions of the country. It documents immediate reductions in rates of hospitalisation of women with the legalisation of abortion.

Susan W. Parker, Tom Vogl, 30 June 2018

The short-term success of cash transfers as a form of direct aid has been well recognised in recent research. This column combines Mexican census data with data on a major conditional cash transfer programme to analyse the longer-term effects on the subsequent generation. It finds that such programmes had important positive effects on education and labour market outcomes for men and women, suggesting conditional transfer programmes are successful in raising the children of recipients out of poverty.

Christoph Albert, Joan Monras, 29 June 2018

Immigrants usually spend part of their time, savings, and income in their country of origin and not where they currently live. This column uses US data to argue that the resulting difference in consumption patterns relative to natives has profound implications for the types of cities that immigrants are attracted to. It shows that immigrants redistribute economic activity towards large, expensive cities. These cities tend to be more productive, so immigrants have a positive effect on overall output.

Sarra Ben Yahmed, Pamela Bombarda, 24 June 2018

Trade liberalisation has been shown to affect formality rates in labour markets. This column exploits the Mexican trade liberalisation episode in the 1990s, to explore the labour market impact of reductions in import tariffs across gender and sectors. Within disaggregated tradable sectors, the probability of working formally has increased for both men and women in Mexico. Considering regional adjustments,exposure to trade liberalisation has had different effects across genders and tradable versus non-tradable sectors.

Osea Giuntella, Matthias Rieger, Lorenzo Rotunno, 02 February 2018

The majority of obese adults are now found in developing countries This column presents new evidence on the effects of trade on obesity in Mexico. The results indicate that across Mexican states, a one standard deviation increase in the unhealthy share of food imports from the US increases the likelihood of individuals being obese by about 5 percentage points. As developing countries around the world open up their food markets to industrialised countries, they may be accelerating their ongoing nutrition transition and imposing high future costs on their health systems.

Jessica Baier, Jörg Baten, 19 November 2017

Studies have found that the occurrence of natural resources can increase the risk of civil war and interstate conflict. This column uses data from 50 countries beginning in 1890 to show that silver mining can also have substantial effects on interpersonal violence during peacetime. Across many different countries and periods, an economy's increasing dependence on silver has increased the homicide rate.

Leonardo Iacovone, Mariana Pereira-López, Marc Schiffbauer, 30 October 2017

In spite of its potential, the use of digital technology is still basic in most developing countries. This column presents evidence that firms in Mexico facing higher external competition have used IT more intensively and efficiently. External competition has encouraged them to make the necessary complementary investments in innovation and organisational changes.

Khulan Altangerel, Jan van Ours, 06 October 2017

The Immigration Reform and Control Act of 1986 was the first major reform intended to control and deter illegal immigration to the US through legalisation of unauthorised immigrants, increased border security, and sanctions on employers that hired unauthorised immigrants. This column uses data from an annual survey of Mexican households to show that the Act had a negative and significant effect on undocumented migration. However, since the Act’s legalisation programme was active for only a few years, its long-term effects appear to have been limited.

Gordon Hanson, Chen Liu, Craig McIntosh, 04 October 2017

Rising inequality and stagnating manufacturing wages have many in the Western world questioning whether immigration may be responsible. This column takes a close look at data for the US, and reveals that tighter immigration controls are unlikely to improve the fortunes of low-skilled workers. Long-term demographic changes in the Americas imply that the pressure from illegal immigrants on US labour markets is already abating and will continue to do so.

Tom Krebs, Pravin Krishna, William Maloney, 22 September 2017

Research on economic mobility has failed to disentangle the underlying economic drivers. In particular, opportunities for upward movement represent welfare-enhancing mobility, while risky income shocks represent welfare-reducing mobility. This column presents a framework for differentiating between these factors, and applies the model to Mexican data. Results show that opportunity and risk are equally important drivers of income mobility, with large but opposing welfare effects. This challenges the idea that societies with higher measured income mobility are better.

Antoine Bouët, David Laborde, 06 September 2017

During his election campaign, Donald Trump repeatedly announced that he would impose tariffs on imports from China, Mexico, and Germany. This column evaluates the likely outcomes should the US instigate trade wars by imposing such tariffs. In all scenarios, the net effect on US welfare and GDP is either zero or negative. Such trade wars would also have wider negative effects for the trading partners, and potentially, the world economy.



CEPR Policy Research