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This study quantifies the outflow of human capital associated with migration from Guatemala, El Salvador, and Honduras since 1990. To measure the outflow of skills and human capital and how this has changed over time, the study uses information on Northern Triangle migrants residing in the United States, a group that accounts for over 90 percent of all migrants from the three countries. The results suggest that these migrants are, in general, positively selected into migration. That is, based on their observable characteristics, the individuals would have a higher earnings distribution relative to individuals who do not migrate. The results show a decrease in selectivity between the 10-year cohort of migrants who arrived by 2000 and those who arrived by 2014. This finding may reflect increased access to migration networks by lower-income households and individuals. The data suggest that the loss in human capital associated with a 10-year outflow of adults, as measured by foregone local wages, represented 1.9 percent of gross domestic product in El Salvador, 1.5 percent in Honduras, and 1.0 percent in Guatemala.

Economic Development --- Human Capital --- Immigration --- International Economics and Trade --- Labor Markets --- Macroeconomics and Economic Growth --- Migration and Development --- Poverty Reduction --- Social Protections and Labor

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Honduras is Central America's second-largest country with a population of more than 8 million and a land area of about 112,000 square kilometers. The 20th century witnessed a profound economic transformation and modernization in Honduras. Honduras' persistent poverty is the result of long-term low per capita growth and high inequality, perpetuated by the country's high vulnerability to shocks. First, over the past 40 years the country has experienced modest growth rates marked by considerable volatility. Second, high levels of inequality have weakened the ability for growth to reduce poverty by limiting the extent to which a large segment of the population is able to fully access physical and human capital. Third, a large share of the population is vulnerable and exposed to regular shocks - both large and small which has exacerbated poverty by destroying or slowing asset accumulation. This systematic country diagnostic (SCD) explores the drivers of these development outcomes in Honduras, and reflects on the policy priorities that should underlie a development strategy focused on eradicating poverty and boosting shared prosperity. After identifying a number of critical factors affecting the country's development outcomes, the SCD concludes that there is a need for a comprehensive agenda that tackles simultaneously the problems that have kept the country in a low development equilibrium for many decades, as well as emerging challenges that have the potential not only to prevent progress but also worsen the current situation. The SCD also argues that the policy agenda needs to be ambitious and move away from marginal interventions in order to move Honduras from a situation where its economic potentials are just potentials to another where they become actuals.

Access to Education --- Access to Finance --- Administrative Costs --- Agricultural Sector --- Bank Accounts --- Capacity Building --- Capital --- Collateral --- Corruption --- Credit --- Debt --- Discrimination --- Economic Development --- Economic Growth --- Economic Opportunities --- Economies of Scale --- Educational Attainment --- Employment Opportunities --- Equality --- Equity --- Exchange Rates --- Expenditures --- External Shocks --- Extortion --- Family --- Finance and Financial Sector Development --- Financial Services --- Fiscal Policy --- Foreign Direct Investment --- Gender --- Governance --- Governance Indicators --- Health, Nutrition and Population --- Human Capital --- Human Rights --- Income Tax --- Inequality --- Informal Workers --- Interest Rates --- International Finance --- Job Creation --- Loans --- Macroeconomics and Economic Growth --- Monetary Policy --- Mortgages --- Nutrition --- Operating Costs --- Population Policies --- Poverty Reduction --- Private Investment --- Profitability --- Property Rights --- Public Investment --- Public-Private Partnerships --- Purchasing Power --- Purchasing Power Parity --- Remittances --- Risk Management --- Rural Poverty Reduction --- Savings --- Scholarships --- Small Businesses --- Social Development --- Social Responsibility --- Tariffs --- Tax Exemptions --- Unemployment --- Urban Areas --- Women

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In this note we estimate the short-term economic impact of the COVID-19 crisis on Brazilian families vis-a-vis labor shocks. The analysis, using a microsimulation model which incorporates subnational shocks from a computable general equilibrium growth model, shows that over 30 million workers in Brazil may see significant reductions in their labor income in 2020 due to the COVID-19 pandemic. Two-thirds of these workers are informal workers or own-account workers, groups without access to unemployment protection. These household shocks would reduce average per capita income by 7.6 percent, with the largest impact on the second and third quintiles of the income distribution. These income shocks are inequality-increasing: without any mitigation measures, inequality would increase by 4 percent. The country's first line of defense, its existing unemployment insurance system, reduces the income shock to 5.3 percent. Even so, an additional 8.4 million Brazilians could fall into poverty. The policy responses announced by the government, and particularly the Auxilio Emergencial (AE) transfer, have the potential to fully absorb the labor income shock for the poorest 40 percent and reduce poverty. Yet, these results reflect annualized income, obscuring the sharp reduction in monthly income if demand shocks persist after the AE ends. Looking towards the next phase of the response, considering extensions of AE that are either less generous or more restricted provide a fiscally prudent approach for continuing to support Brazil's most vulnerable.

Business Cycles and Stabilization Policies --- Coronavirus --- COVID-19 --- Employment and Unemployment --- Income Distribution --- Inequality --- Informal Sector --- Labor Market --- Labor Markets --- Macroeconomics and Economic Growth --- Poverty --- Social Protections and Assistance --- Social Protections and Labor --- Unemployment

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Honduras is Central America's second-largest country with a population of more than 8 million and a land area of about 112,000 square kilometers. The 20th century witnessed a profound economic transformation and modernization in Honduras. Honduras' persistent poverty is the result of long-term low per capita growth and high inequality, perpetuated by the country's high vulnerability to shocks. First, over the past 40 years the country has experienced modest growth rates marked by considerable volatility. Second, high levels of inequality have weakened the ability for growth to reduce poverty by limiting the extent to which a large segment of the population is able to fully access physical and human capital. Third, a large share of the population is vulnerable and exposed to regular shocks - both large and small which has exacerbated poverty by destroying or slowing asset accumulation. This systematic country diagnostic (SCD) explores the drivers of these development outcomes in Honduras, and reflects on the policy priorities that should underlie a development strategy focused on eradicating poverty and boosting shared prosperity. After identifying a number of critical factors affecting the country's development outcomes, the SCD concludes that there is a need for a comprehensive agenda that tackles simultaneously the problems that have kept the country in a low development equilibrium for many decades, as well as emerging challenges that have the potential not only to prevent progress but also worsen the current situation. The SCD also argues that the policy agenda needs to be ambitious and move away from marginal interventions in order to move Honduras from a situation where its economic potentials are just potentials to another where they become actuals.

Access to Education --- Access to Finance --- Administrative Costs --- Agricultural Sector --- Bank Accounts --- Capacity Building --- Capital --- Collateral --- Corruption --- Credit --- Debt --- Discrimination --- Economic Development --- Economic Growth --- Economic Opportunities --- Economies of Scale --- Educational Attainment --- Employment Opportunities --- Equality --- Equity --- Exchange Rates --- Expenditures --- External Shocks --- Extortion --- Family --- Finance and Financial Sector Development --- Financial Services --- Fiscal Policy --- Foreign Direct Investment --- Gender --- Governance --- Governance Indicators --- Health, Nutrition and Population --- Human Capital --- Human Rights --- Income Tax --- Inequality --- Informal Workers --- Interest Rates --- International Finance --- Job Creation --- Loans --- Macroeconomics and Economic Growth --- Monetary Policy --- Mortgages --- Nutrition --- Operating Costs --- Population Policies --- Poverty Reduction --- Private Investment --- Profitability --- Property Rights --- Public Investment --- Public-Private Partnerships --- Purchasing Power --- Purchasing Power Parity --- Remittances --- Risk Management --- Rural Poverty Reduction --- Savings --- Scholarships --- Small Businesses --- Social Development --- Social Responsibility --- Tariffs --- Tax Exemptions --- Unemployment --- Urban Areas --- Women

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