How can research & policy address the challenges of a region with exceptionally high levels of interconnected inequalities?
The LAC initiative supports a growing number of faculty who examine the region’s human & economic development, pervasive inequalities, social protection & market integration.
Over the past seven decades, countries in Latin America and the Caribbean (LAC) have been marked by exceptionally high levels of multiple and interconnected inequalities. In addition to being the world’s most unequal region, LAC continues to struggle with lagging growth, persistent poverty, and vulnerability to shocks. The Covid-19 pandemic, for example, slashed regional GDP by 7 percent in 2020 – LAC’s worst economic shock since the 19th century independence period. In the post-pandemic period, amid slowing global growth and other challenges on the horizon, empirical and rigorous evidence can help LAC policymakers chart a course for inclusive growth, poverty reduction, and resilience.
Building on a long tradition of research and policy engagement in Latin America and the Caribbean, the faculty supported by EGC have strong networks with academics and policymakers in the region. These connections have resulted in rigorous research on LAC’s most significant challenges and opportunities – from conditional cash transfers to pension reforms, educational disparities, and early-childhood interventions often conducted in direct collaboration with governments.
Leveraging these experiences and strengths, the EGC Latin America and the Caribbean Initiative supports Yale faculty who study the region’s many facets of economic development, employing a range of quantitative methods. This includes work along five main themes.
The Latin America and the Caribbean Inequality Review (LACIR)
The LAC region’s high levels of inequality persist despite profound progress in recent decades: regional income per capita has more than doubled since 1960, while education has expanded, women’s participation in the labor force has surged, and the region’s economies have opened up to technological change and globalization. The Latin America and the Caribbean Inequality Review (LACIR), a collaborative effort between EGC, the Inter-American Development Bank, the London School of Economics, and the Institute for Fiscal Studies, was launched in 2021 to study why and how such progress coexists with persistent inequality. The interdisciplinary initiative brings together top scholars from diverse fields to provide a coherent and comprehensive overview of the inequality problem in Latin America, featuring a mix of new analysis, new data, and in-depth critical reviews of the academic literature. For more information, visit the official LACIR page.
Faculty interviews and highlights from EGC research:
Human Development
Early childhood is a critical period for children’s cognitive and socio-emotional development, two key dimensions of human capital. Yet in LAC, access to quality early childhood interventions remains highly unequal. In addition, educational inequalities – in terms of access, delivery, and quality as well as outcomes – are a major challenge for school systems across the region. Over the past decade, several Yale researchers have conducted research on early childhood development as well as education in LAC–leading to deep engagements with policymakers about putting research into practice at scale.
Faculty interviews and highlights from EGC research:
- “Early Childhood Development, Human Capital, and Poverty” (Costas Meghir and Orazio Attanasio, et al)
- “Early Stimulation and Nutrition: The Impacts of a Scalable Intervention” (Costas Meghir and Orazio Attanasio, et al)
- “Education Quality and Teaching Practices” (Costas Meghir, Marina Bass, and Ana Reynoso)
- “Estimating the Production Function for Human Capital: Results from a Randomized Controlled Trial in Colombia” (Costas Meghir and Orazio Attanasio)
- “Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Peru” (Chris Neilson, Matteo Bobba, Tim Ederer, Gianmarco Leon and Marco Nieddu)
- “O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries” (Chris Neilson, A. Altmejd, et al)
- “Smart Matching Platforms and Heterogeneous Beliefs in Centralized School Choice” (Felipe Arteaga, Adam J. Kapor, Christopher A. Neilson, and Seth D. Zimmerman)
- “Firm Sorting, College Major, and the Gender Earnings Gap” (Chris Neilson, Federico Huneeus, Conrad Miller and Seth Zimmerman)
- “The Equilibrium Effects of Public Provision in Education Markets: Evidence from a Public School Construction Policy” (Chris Neilson, Michael Dinerstein and Sebastian Otero)
- EGC Affiliate Spotlight: Chris Neilson
- EGC Voices in Development: Orazio Attanasio and Costas Meghir
Economic History and Institutions
The legacy of colonialism and slavery – as well as centuries of migration to and within the Americas – is inextricably linked to LAC’s development story. EGC affiliates and other Yale faculty have conducted extensive studies on the evolution of LAC’s economic, political and social development. In particular, EGC’s Bridging the Atlantic: Migrations and their Legacies Initiative examines the role of colonialists and other migrants in LAC’s economic development by tracking immigrant and slave flows from 1492 through today, as well as creating datasets with historical economic information in the region.
Faculty interviews and highlights from EGC research:
Social Protection Programs
Social protection programs, including conditional cash transfers (CCTs) and other forms of social assistance, are ubiquitous in LAC: approximately fifty percent of the region’s population is covered by some type of social protection. Yet many challenges remain. High levels of economic informality, for instance, mean that many households are reliant on non-contributory forms of social protection (such as CCTs) rather than contributory programs (i.e. social security or pensions) tied to formal employment. Moreover, existing social protection programs are often not flexible enough to identify and support people affected by sudden shocks, as shown by Covid-19. EGC faculty have studied various social protection programs across LAC, often in close collaboration with government partners, to help identify opportunities for measuring and strengthening their effectiveness.
Faculty interviews and highlights from EGC research:
- Pensions, Work and Informality: The impact of the 2008 Chilean Pension Reform (Attanasio, Meghir, et al)
- Using the infrastructure of a conditional cash transfer programme to deliver a scalable integrated early child development programme in Colombia: a cluster randomised controlled trial (with Orazio Attanasio, et al) British Medical Journal BMJ 2014
Trade, Markets, and Development
In a region characterized by high levels of economic informality and a high concentration of business ownership, the study of inequality in LAC is intricately tied to the study of firms, as well as the domestic and international markets in which they operate. Since the independence period, the roles of multinational companies and global trade have featured prominently in debates about the region’s economic development. EGC faculty have conducted innovative research on topics, including the role of free trade agreements, multinational firms, domestic exporters, and domestic market access in the region. These efforts overlap with EGC’s Markets and Development Initiative and its International Trade program.
Faculty interviews and highlights from EGC research:
- “Bridges Between Villages in Nicaragua Serve as Links to Markets” (Wyatt Brooks and Kevin Donovan)
- “The Dismantling of Capital Controls after Bretton Woods and Latin American Productivity” (Diana Van Patten)
- “(Indirect) Input Linkages” (Marcela Eslava, Ana Cecília Fieler, and Daniel Yi Xu)“
- “Multinationals, Monopsony, and Local Development: Evidence from the United Fruit Company” (Esteban Méndez-Chacón and Diana Van Patten)
- “Nonlinear Pricing in Village Economies” (Orazio Attanasio and Elena Pastorino)
- “Small firms and the pandemic: Evidence from Latin America” (Maria Elena Guerrero-Amezaga, John Eric Humphries, Christopher A. Neilson, Naomi Shimbergd, and Gabriel Ulyssea)
- EGC Affiliate Spotlight: Ana Cecília Fieler
- EGC Affiliate Spotlight: Diana Van Patten
- EGC Voices in Development: Kevin Donovan
