Rodrigo R. Soares

Mortality Reductions, Educational Attainment, and Fertility Choice

This paper develops a model where reductions in mortality are the main force behind economic development. The model generates a pattern of changes similar to the demographic transition, where gains in life expectancy at birth are followed by reductions in fertility and increases in the rate of human capital accumulation. The onset of the transition is characterized by a critical level of life expectancy at birth, which marks the movement of the economy from a Malthusian equilibrium to an equilibrium with investments in human capital and the possibility of long-run growth.

Evaluating the Impact of Community-Based Health Interventions: Evidence from Brazil's Family Health Program

This paper analyzes the direct and indirect impacts of Brazils Family Health Program, using municipality level mortality data from the Brazilian Ministry of Health, and individual level data from the Brazilian household survey. We estimate the effects of the program on mortality and on household behavior related to child labor and schooling, employment of adults, and fertility. We find consistent effects of the program on reductions in mortality throughout the age distribution, but mainly at earlier ages. Municipalities in the poorest regions of the country benefit particularly from the program. For these regions, implementation of the program is also robustly associated with increased labor supply of adults, reduced fertility, and increased school enrollment. Evidence suggests that the Family Health Program is a highly cost-effective tool for improving health in poor areas.

Household Choices of Child Labor and Schooling: A Simple Model With Application to Brazil

This paper argues that conflicting results from previous literature—related to the effect of economic conditions on child labor—derive from different income and substitution effects implicit in different types of income variation. We use agricultural shocks to local economic activity in Brazil (coffee production) to distinguish between increases in household income and increases in the opportunity cost of time. Results show that higher household wealth is associated with lower child labor and higher schooling. Nevertheless, temporary increases in local economic activity are associated with higher child labor and lower schooling, particularly for children with poor economic backgrounds.

The Development Impact of the Illegality of Drug Trade

This paper reviews the unintended consequences of the war on drugs, particularly for developing countries, and weighs them against the evidence regarding the efficacy of prohibition to curb drug use and trade. It reviews the available evidence and presents new results that indicate that prohibition has limited effects on drug prevalence and prices, most likely indicating a combination of inelastic drug demand (due to its addictive properties) and elastic supply responses (due to black markets). This should turn the focus to the unintended consequences of drug prohibition. First, the large demand for drugs, particularly in developed countries, generates the possibility of massive profits to potential drug providers. This leads to the formation of organized crime groups, which use violence and corruption as their means of survival and expansion and which, in severe cases, challenge the state and seriously compromise public stability and safety. Second, prohibition and its derived illegal market impose greater costs on farmers than on drug traffickers. In many instances, this entails the transfer of wealth from poor peasants to rich (and ruthless) traders. Third, criminalization can exacerbate the net health effects of drug use. These consequences are so pernicious that they call for a fundamental review of drug policy around the world.

Access to Justice and Entrepreneurship: Evidence from Brazil’s Special Civil Tribunals

Entrepreneurship is usually identified as an important determinant of aggregate productivity and long-term growth. The determinants of entrepreneurship, nevertheless, are not entirely understood. A recent literature has linked entrepreneurship to the development of the justice system. This paper contributes to this literature by evaluating the role of access to justice in determining the incidence of entrepreneurship. We explore the creation of special civil tribunals in the Brazilian state of São Paulo during the 1990s. Special civil tribunals increased the geographic presence of the justice system, simplified judicial procedures, and increased the speed of adjudication of disputes. Using census data and an instrumental variables strategy, we find that implementation of special civil tribunals led to increased entrepreneurship among individuals with higher levels of education. Results do not seem to be related either to other changes in public goods provision at the local level or to preexisting trends.

Life expectancy and welfare in Latin America and the Caribbean

This paper analyses the recent evolution of life expectancy in Latin American and Caribbean countries, and evaluates how much it has contributed to the overall improvements in welfare. We argue that increases in life expectancy between 1960 and 2000, which were largely independent of income, represented gains in welfare comparable to the ones derived from income growth. For countries in the region, estimates of welfare improvements accounting for health increase the numbers obtained from income alone by 40% on average. The available evidence suggests that improvements in public health infrastructure - such as provision of treated water and sewerage services - and large-scale immunization programs may have been the key factors behind the mortality reductions observed in the period.

Welfare costs of crime and common violence

Purpose - – Negative effects of crime encompass several different dimensions. As a result, there is no existing methodology capable of dealing with all the relevant issues simultaneously and the interpretation of the estimates currently available lacks theoretical foundation. The purpose of this paper is to provide a unified view of the meaning and relationship between the various dimensions of the welfare cost of crime and violence available in the literature. Design/methodology/approach - – The paper develops a theoretical model of crime and illustrates the different interpretations of welfare costs of crime and violence within this unified framework. This theoretical benchmark is then used as a benchmark to review the empirical literature on the topic. Findings - – The analysis suggests that the most commonly estimated dimension of the welfare cost of crime - related to the total loss associated with crime - although relevant as an illustrative tool, is not very useful from a policy perspective. The literature should therefore move closer to the idea of estimating marginal costs and benefits in order to become policy relevant. Research limitations/implications - – Policy-oriented research related to optimal law enforcement should move in the direction of estimating the marginal willingness to pay of individuals for reductions in crime. This should be compared to the marginal cost of alternative policies in order to guide public policy in the area. Originality/value - – This survey rationalizes in economic terms the estimates from the existing methodologies, highlights some of their limitations, and points out potential directions for future research. It provides one of the first unified views of the various dimensions of welfare cost of crime and violence that have been presented in the literature.

Allocation of children's time along gender lines: Work, school, and domestic work in Brazil

We develop a model that characterizes all possible allocations of childrens time between work and school, analyzing the relationship between market work, household chores, and Brazilian childrens school enrollment. If pure market work is analyzed, we find that girls are less likely to work and more likely to exclusively attend relative to boys with similar characteristics. If the definition of work includes household chores, girls are less likely to be exclusively in school and more likely to work compared to boys. The results reveal that girls disproportionately carry out domestic responsibilities, which could hinder their school achievements. Furthermore, family structures with fewer preschool-aged siblings and with more adults present alleviate the pressure to displace girls’ time away from school and toward domestic activities.

Fighting employment informality with schooling

Viele Entwicklungsländer versuchen den hohen Anteil informeller Beschäftigung durch schärfere Kontrollen gesetzlicher Auflagen, befristete Arbeitsverträge oder Anpassungen bei der Besteuerung von Kleinunternehmen zurückzudrängen. Als langfristig effektiver könnten sich jedoch Maßnahmen zur Förderung von Bildung und Qualifikation erweisen. Hochqualifizierte Arbeitskräfte werden typischerweise in größeren, kapitalintensiveren Unternehmen eingesetzt, die meist formelle Arbeitsverhältnisse anbieten. Wenn qualifizierte und ungelernte Arbeitskräfte im Produktionsprozess komplementär sind, steigen auch die Löhne für geringqualifizierte Tätigkeiten, was zur weiteren Verringerung der Informalität beiträgt.Developing countries have long been struggling to fight informality, focusing on instruments such as labor legislation enforcement, temporary contracts, and changes in taxes imposed on small firms. However, improvements in the labor force’s schooling and skill level may be more effective in reducing informality in the long term. Higher-skilled workers are typically employed by larger firms that use more capital, and that are more likely to be formal. Additionally, when skilled and unskilled workers are complementary in production, unskilled workers’ wages tend to increase, adding yet another force toward reducing informality.

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

This paper studies the effect of changes in economic conditions on crime. We exploit the 1990s trade liberalization in Brazil as a natural experiment generating exogenous shocks to local economies. We document that regions exposed to larger tariff reductions experienced a temporary increase in crime following liberalization. Next, we investigate through what channels the trade-induced economic shocks may have affected crime. We show that the shocks had significant effects on potential determinants of crime, such as labor market conditions, public goods provision, and income inequality. We propose a novel framework exploiting the distinct dynamic responses of these variables to obtain bounds on the effect of labor market conditions on crime. Our results indicate that this channel accounts for 75 to 93 percent of the effect of the trade-induced shocks on crime.