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Latin America & Caribbean

Do Latin American Firms Invest in R&D?

Asif Islam's picture

The rewards of innovation for developing nations do not require much convincing. Poverty alleviation, faster economic growth, greater job creation, and higher worker remuneration are just some of the potential benefits. The idea of innovation as a key driver of development can be traced back to the seminal works of economists such as Joseph Schumpeter. Thus, it is no surprise that on July 30 and 31, 2013 a group of innovation leaders from 18 countries gathered in Santiago, Chile for the first pan Latin American Innovation Summit. The event was kicked off by Sebastian Piñera, then President of Chile, who had announced a national innovation budget of $1 billion. What about the private sector? An important driver of innovation is Research and Development (R & D) spending by businesses.  Evidence shows that firms that invest in R&D and other innovation-related activities have higher productivity and are more capable of making technological advances than firms that do not.  So, where do Latin American firms stand on R & D investment?

Wealth gradients in early childhood cognitive development in five Latin American countries

LTD Editors's picture

Following is an abstract from World Bank Policy research working paper no 6779 by Norbert Schady (Inter-American Development Bank), Jere Behrman (University of Pennsylvania), Maria Caridad Araujo (Inter-American Development Bank), Rodrigo Azuero (University of Pennsylvania), Raquel Bernal (Universidad de Los Andes), David Bravo (Universidad de Chile), Florencia Lopez-Boo (Inter-American Development Bank), Karen Macours (Paris School of Economics & World Bank), Daniela Marshall (University of Pennsylvania), Christina Paxson (Brown University), and Renos Vakis (World Bank).

Research from the United States shows that gaps in early cognitive and noncognitive abilities appear early in the life cycle. Little is known about this important question for developing countries. A recent World Bank owrking  paper, Wealth gradients in early childhood cognitive development in five Latin American countries,  provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, the paper uses the same measure of receptive language ability for all five countries. It finds important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where panel data to follow children over time exists, there are few substantive changes in scores once children enter school. These results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on the measure of cognitive development.

Using CCTs to Reduce Child Labor and Improve the Quality of Work that Children Perform

Ximena Del Carpio's picture

Does an increase in household wealth decrease child labor in poorer households? Available literature in economics suggests that when poorer households need to make their ends meet, they tend not to dispense on child labor. And as households’ income increases, child labor declines in favor of schooling. However, if schools are few and far, and their infrastructure and teachers’ performance are deficient, there is less incentives for parents to send their children to school. Child labor would then appear as a sensible option, not only for increasing family’s current income but also for training children in skilled work. Thus, an appropriate question is: To what extent and under what conditions an increase in household wealth can either decrease or increase child labor in poor households?

Schooling in Haiti: Persistent Challenges and Glimmers of Success at the 1-year Anniversary

Peter Holland's picture

 A school girl in Haiti.  Photo © World Bank
The one-year anniversary of Haiti’s catastrophic earthquake gives us pause to reflect on the progress of the reconstruction efforts, despite the tremendous challenges the country has faced.   The human tragedies (one million still homeless, about 150,000 infected with cholera) compounded by the ongoing political standoff can be despairing.  Still, there are some glimmers of success that provide some motivation for those of us working to transform and modernize Haiti.  The findings from our recent working paper provide a bit more confidence that we are heading in the right policy direction in Haiti’s education sector.  Given the country’s data-scarce environment, this kind of objective reassurance is hard to come by, and very welcome. 

Eliminating poverty in old age: are social pensions the answer?

Jean-Jacques Dethier's picture

Poverty in old age is prevalent in a large number of Latin American countries. Universal minimum pensions would be an effective and administratively simple way to substantially reduce poverty among the elder generation.

Photo: © Charlotte Kesl / World Bank
Alleviating poverty in old age requires a different approach from other age groups. Since poverty reduction efforts through labor market or education policies are ineffective, the only available instrument is to directly transfer money so the elderly can purchase goods and services. In rich countries, pension systems transfer money from the rich to the poor and often include a minimum pension that contributes significantly to reducing poverty.  But in developing countries, pension systems have such a low coverage that they cannot deal with old-age poverty.  In Latin America, which has what social scientists call a “truncated welfare state” - with income redistribution for the better-off and exclusion for those in need—most poor people are not covered by pension systems.