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When forming expectations, households may be influenced by the possibility that the information they receive is biased. In this paper, we study how individuals learn from potentially-biased statistics using data from both a natural and a survey-based experiment obtained during a period of government manipulation of inflation statistics in Argentina (2006-2015). This period is interesting because of the attention to inflation information and the availability of both official and unofficial statistics. Our evidence suggests that rather than ignoring biased statistics or navively taking them at face value, households react in a sophisticated way, as predicted by a Bayesian learning model, effectively de-biasing the official data to extract all its useful content. We also find evidence of an asymmetric reaction to inflation signals, with expectations changing more when the inflation rate rises than when it falls. These results are useful for understanding the formation of inflation expectations in less extreme contexts than Argentina, such as the United States and Europe, where experts may agree that statistics are unbiased but households do not.

Zonder onderwerpscode: economie

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We study the interaction between job and soft skills training on expectations and labor market outcomes in the context of a youth training program in the Dominican Republic. Program applicants were randomly assigned to one of 3 modalities: a full treatment consisting of hard and soft skills training plus an internship, a partial treatment consisting of soft skills training plus an internship, or a control group. We find strong and lasting effects of the program on personal skills acquisition and expectations, but these results are markedly different for young men and young women. Shortly after completing the program, both male and female participants report increased expectations for improved employment and livelihoods. This result is reversed for male participants in the long run, a result that can be attributed to the program's negative short-run effects on labor market outcomes for males. While these effects seem to dissipate in the long run, employed men are substantially more likely to be searching for another job. On the other hand, women experience improved labor market outcomes in the short run and exhibit substantially higher levels of personal skills in the long run. These results translate into women being more optimistic, having higher self-esteem and lower fertility in the long run. Our results suggest that job-training programs of this type can be transformative - for women, life skills mattered and made a difference, but they can also have a downside if, like in this case for men, training creates expectations that are not met.

Zonder onderwerpscode: economie

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It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 percent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supply-side factors seem to have limited explanatory power relative to demand-side factors, and are only relevant to explain part of the fall in wage premia for high-school graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (non-tertiary educated) workforce, although employment patterns by sector suggest that other within-sector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highly-educated workers.

Economic Theory & Research --- Education --- Employment structure --- Inequality --- Labor Markets --- Labor Policies --- Public Sector Development --- Secular trends --- Skill composition --- Tertiary Education --- Wage skill premium

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This paper validates a recently proposed method to estimate intra-generational mobility through repeated cross-sectional surveys. The technique allows the creation of a "synthetic panel" - done by predicting future or past household income using a set of simple modeling and error structure assumptions - and thus permits the estimation of lower and upper bounds on directional mobility measures. The authors validate the approach in three different settings where good panel data also exist (Chile, Nicaragua, and Peru). In doing so, they also carry out a number of refinements to the validation procedure. The results are broadly encouraging: the methodology performs well in all three settings, especially in cases where richer model specifications can be estimated. The technique does equally well in predicting short and long-term mobility patterns and is robust to a broad set of additional "stress" and sensitivity tests. Overall, the paper lends support to the application of this approach to settings where panel data are absent.

Gender --- Housing & Human Habitats --- Mobility --- Poverty --- Poverty reduction --- Poverty Reduction Strategies --- Pseudo-panels --- Science Education --- Scientific Research & Science Parks --- Services & Transfers to Poor --- Synthetic panels --- Chile --- Nicaragua --- Peru

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We study the interaction between job and soft skills training on expectations and labor market outcomes in the context of a youth training program in the Dominican Republic. Program applicants were randomly assigned to one of 3 modalities: a full treatment consisting of hard and soft skills training plus an internship, a partial treatment consisting of soft skills training plus an internship, or a control group. We find strong and lasting effects of the program on personal skills acquisition and expectations, but these results are markedly different for young men and young women. Shortly after completing the program, both male and female participants report increased expectations for improved employment and livelihoods. This result is reversed for male participants in the long run, a result that can be attributed to the program's negative short-run effects on labor market outcomes for males. While these effects seem to dissipate in the long run, employed men are substantially more likely to be searching for another job. On the other hand, women experience improved labor market outcomes in the short run and exhibit substantially higher levels of personal skills in the long run. These results translate into women being more optimistic, having higher self-esteem and lower fertility in the long run. Our results suggest that job-training programs of this type can be transformative - for women, life skills mattered and made a difference, but they can also have a downside if, like in this case for men, training creates expectations that are not met.