Carmen A. Li

Consumption Smoothing and Vulnerability in Russia

Applying bootstrapped quantile regression to the Russian Longitudinal Monitoring Survey (RLMS) data, we examine the channels through which individuals experience and seek to cope with changes in consumption. We find that married individuals living in small households, with educated heads in urban areas are better equipped to smooth consumption. Investigating the impact of idiosyncratic shocks, we find that the labour market is an important transmission mechanism allowing households to smooth their consumption but also exposing them to risk, mainly through job loss. Outside of pension payments, the formal social safety net does not facilitate consumption smoothing, thus heightening the importance of informal coping institutions. It transpires that both support from relatives/friends and home production act as important insurance mechanisms for the most vulnerable. In contrast with previous findings, it would seem that regardless of its historical, political and social roots, the garden plots and dachas, often romanticized in Russian literature, do provide a means by which ‘urban’ Russians are able to cope with economic fluctuations. We finish by stressing the important policy lessons for Russias developing market economy.

Debt arrears in Latin America: Do political variables matter?

Political instability and debt problems characterise Latin America in the last two decades. This article estimated a logit model of debt arrears including economic as well as political variables. Our results suggested that both economic and political indicators affected debt repayment in Latin America during 1971–86. We also cast a shadow on the viewpoint that authoritarian and military regimes have an advantage over democratically elected governments with regard to debt related issues.

Inflation and Exchange Rate Regimes in Mexico

The paper presents a version of the exchange-rate-regime model of inflation. Quarterly data from Mexico from 1946 to 1995 are used to estimate and test a simultaneous-equation model for wage inflation, price inflation and industrial production, taking account of the Lucas critique and the statistical properties of the data. The main finding is that, after the fall of the fixed-exchange-rate regime in 1976, there was a Barro-Gordon type inflation bias owing to the inability of policymakers to commit to low inflation. There is no significant evidence of political business cycles in inflation. Copyright 2000 by Blackwell Publishing Ltd

Voluntary affiliation to Peru's individual accounts pension system

One important aspect in the design of social protection is coverage. In Peru, as in most Latin American countries, social security coverage is mandatory only for workers in the formal sector. This article investigates the determinants of voluntary affiliation to Perus individual accounts pension system. It is found that married males with more than high-school level education living in high income households and with other family members already affiliated to the individual accounts pension system have a higher likelihood of voluntary affiliation. Although the results suggest that family-based safety nets might be substitutes for voluntary participation in the individual accounts pension system, nonetheless, extending pension coverage and addressing poverty remain as challenges for government involvement.