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Discrimination in the labor market is an important issue in most countries of the world. In such a context, this paper uses nationally representative data from the 1990-2017 National Socio-Economic Characterization Survey to explore the gender wage gap and discrimination in Chile. Different versions of the well-known decomposition of Blinder and Oaxaca are applied to measure the wage gap and to decompose its possible causes and the variables involved. Finally, wage estimates are corrected for selection bias, and decomposition by income quantum is studied. The results of the different methodologies show a decrease in wage discrimination when we look at the full 1990-2017 period, but the decrease was mainly in the 1990-2003 period, and then has remained relatively constant until 2017. Wage discrimination reached 49.7% in 2017, where 45.2% corresponded to women's subpayments and 4.5% to men's overpayments, a structure that is maintained throughout the period studied. On the other hand, it shows that estimating uncorrected wage discrimination due to selection bias underestimates the wage discrimination suffered by women in Chile. Finally, it proves that a large part of wage discrimination occurs mainly in the extremes of lower and higher income distribution. This work also adds evidence to the fact that women who are active in the labor market have more years of education than men, but for reasons that classical theory cannot explain, they obtain a lower wage. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the changes in the Chilean economy specialization patterns mainly in the period of fastest economic growth and taking into account its relative abundance of productive factors. There are three important findings in this paper that are relevant for natural resources abundant, fast-growing economies. First, we find that even there is a great degree of heterogeneity in output and productivity growth across economic activities, the most dynamic sectors are those more intensive in natural resources. In contrast, labor-intensive sectors are more likely to experience economic contractions. Second, consistent with international evidence, our results suggest that significant changes in Chilean specialization patterns are possible only if the economy increases substantially the investment in both physical and human capital. Third, we do not find evidence that necessarily the tradable sector is an engine of growth. In fact, for a large part of the period under analysis, the non-tradable sector had experienced more rapid output and productivity growth than the tradable sector. This would be consistent with a number of structural reforms (privatization and liberalization of foreign direct investment) that favored expansion in non tradable sectors. [ABSTRACT FROM AUTHOR]

In this paper we consider an extension of Vasicek's (1991) model for new consumer fixed-payment credits in the Chilean banking system. Under the assumption that the economy experienced a complete business cycle during 2003-09, we are able to compute the so-called Long-Run Probability of Default (LRPD) which is 14.4% if we consider the number of defaulted credits or 12.9% if we weight default frequencies by loan size. In the model we allow a time-variant threshold which is a function of both macroeconomic factors and average-characteristics of incoming debtors. Also, counterfactual exercises indicate that credit standards for loan applications were relaxed during 2006-07, implying an increment on defaults. [ABSTRACT FROM AUTHOR]

Latin America faces a growing concentration of banking markets, situation that worries both the public and the media for its potential impact on competition, access to credit at competitive rates, and thus the potential impact on its economic and social development. This paper provides a brief literature review of banking competition in Latin American, and then assesses market power in the Chilean banking market. Using a novel dynamic reformulation of the static conduct parameter model, we conclude that intertemporal relationships in the supply and demand for credit are very important, so that the use of static models to measure competition would be misleading, delivering biased parameters' estimates. Finally, it is estimated that Chilean banks exert significant market power, especially in the long run, similar to a symmetric Cournot equilibrium of 40 banks, as the market had in the early 90's [ABSTRACT FROM AUTHOR]

Inflation has been constantly studied at national level because its negative effects over the economy, however this problem has generally been ignored at regional scale, mainly because the assumption that regions have a homogeneous inflation behavior. Expanding the Paredes and Aroca (2008) methodology to the temporal dimension and using National Statistics Institute (INE) data, this paper contributes with an estimation of regional housing inflation for Chilean regions. Main results suggest that regions besides bear different cost of living (higher for extreme regions than those in the center), are also showing heterogeneous speed in their price evolution process. This result suggests that effects of housing policies (and potentially other sectors policies) are heterogeneous between regions and more inefficient than those that could be implemented when taking account of the different regional inflation pattern. [ABSTRACT FROM AUTHOR]

This paper is concerned with the ownership structure of corporate debt from Chilean firms. Specifically, we examine the relation between specific firm factors and bank debt use for a sample of 168 listed Chilean firms between 1997 and 2008. More exactly, it is found that bank loans are related positively to growth opportunities, collaterals and the risk of the projects, and negatively related to firm size and the quality of projects. We find also that the positive incidence of growth opportunities becomes negative in large firms. [ABSTRACT FROM AUTHOR]

Chile has an unsatisfactory distribution of household income and although its public expenditure (in health, education and housing) and its redistributive policy using direct transfers, have helped reduce poverty; they have not however reduced inequality strongly. The data shows that autonomous household income distribution has improved only marginally after taking into account incomes net of taxes and cash subsidies. With this initial position, the paper determines the impact of the income distribution and the incidence on the economy, which would occur if there was a potential tax increase for households in the richest quintile and a simultaneous transfer of this amount to households in the poorest quintile. This is explored with a computable general equilibrium model using Chilean data, which estimates the direct and indirect effects of this redistribution. It shows that 3.85 points increase in the effective tax rate to the richest quintile raises the income in the poorest quintile at 61.6% and reduces the Gini coefficient from 0.49 to 0.47. However, this kind of strategy to improve equity has important general equilibrium effects, notably a fall in investment and wages according to distinct skill levels. [ABSTRACT FROM AUTHOR]

This paper econometrically analyses the factors that determined the dynamics of real estate price in the Metropolitan Area of Chile during the period 1990-2007. The results show that variables such as age and size are statistically significant determinants of property prices; access to Metro stations tends to capitalize on a nonlinear manner; and both household income and aggregate income are economically significant. The price decomposition reveals that between 68% and 71% of price level is explained by determinants related to attributes of the dwelling, while about 68% of the observed price growth during 1990 and 2007 is result of macro-financial determinants. During 2006 and 2007, the evolution of housing prices is not significantly different from that predicted by the model. These results are robust to alternative estimates by housing type and different sample sub periods. [ABSTRACT FROM AUTHOR]

This paper compares the cost of electricity generation with a coal fired plant and a wind mill in Chile's Central Interconnected System. To the standard costs of coal generation (capital investment and fuel) we add local and global environmental externalities. The environmental cost of generating with coal is US$17/MWh, and the total cost is US$78/MWh. Wind generation is considerable more expensive, US$136/Mwh. [ABSTRACT FROM AUTHOR]

Chile has pioneered the implementation of emission offseting programs pursuing simultaneously economic growth and environmental protection. In this paper, emission trading programs implemented in Santiago of Chile are analyzed and its relevance for developing countries is evaluated. It is argued that emission trading programs can be the best tool to deal with air pollution problems even in cases in which the institutional capacities are not well developed. Moreover, the inclusion of the transport system into the emission trading programs and the possibility of moving towards a system of interpollutant exchange are both nouvelle and relevant elements in the context of air pollution control policies. However, these innovations involve rather more complex elements in the design of emission trading programs. [ABSTRACT FROM AUTHOR]

This paper analyzes the wage gap between non-indigenous peoples and Mapuches in Chile. This gap is broken down into endowment and discriminatory components. Participation and wage equations are estimated by gender and ethnic group and the results are controlled for sample selection bias. The results show significant differences in endowments that favor the non-indigenous peoples, both male and female. The hypothesis of discrimination against Mapuches cannot be rejected for males, but it can for females. However, male discrimination did not increase between 2000 and 2006. The results suggest that a policy directed at reducing wage differences by increasing human capital among the Mapuches might have ambiguous effects and that the labor market generates incentives for the Mapuches to migrate to the cities. [ABSTRACT FROM AUTHOR]

This paper reports new experimental evidence on the effect of economics training on two different dimensions of social cooperation: trust and reciprocity, which are measured by means of the Trust Game. We employ sampling and matching procedures joined with recruiting by selective invitation in order to separate the effect of studying economics from the potential effect of self selection of preferences by those who choose economics as their career. Our sample is formed by university students of economics and other disciplines with little or no economic content in Chile. We find that the amounts sent by economists in the first stage of the Trust Game were significantly smaller than those sent by their peers from other disciplines, suggesting that economists trusted others significantly less than their counterparts. We also find that economists are less likely to return the promised amounts, which indicates a reduced tendency to reciprocate the trust shown by others. [ABSTRACT FROM AUTHOR]

This paper presents empirical evidence on the existence of wage discrimination concerning indigenous population in Chile in the period 1996-2006, using data from the Casen survey. The results show that wage discrimination has remained stable during the last ten years (12%). Using bootstrapping techniques it is possible to construct a confidence interval for the wage discrimination measure, which allows to conclude that it is statistically significant. On the other hand, in the same period, the wage gap dropped from 32.5% to 24.9%, this decline is basically explained by the leveling of human capital endowment between the two groups. The estimations are sensitive to the correction for selection bias, which points out the relevance of including this variable in the wage gap decomposition. [ABSTRACT FROM AUTHOR]

In this paper, we jointly estimate markup values and earnings distribution for the main factors of production in the Chilean manufacturing industry during the nineties. Results show that labor and input providers receive 21% and 16% of the earnings obtained by the firm in imperfect final markets, respectively. The rest is captured by the firm owners. [ABSTRACT FROM AUTHOR]

This paper explores whether payout ratios of Chilean companies are explained by the extent of potential agency conflicts between controlling and minority shareholders. I use both panel data regression analysis and an event study to test different hypothesis related to the effect of corporate governance on payout policies. The results show that in the context of an emerging economy, such as Chile, that presents high ownership concentration and extensive use of conglomerates and pyramid structures, the rent-seeking theory of the effect of agency problems on payout policies seems to be especially relevant. Companies that present a higher degree of coincidence between cash flow rights and control rights tend to have more generous dividend policies. On the other hand, unexpectedly high dividend announcements made by companies with potentially higher agency conflicts present higher abnormal returns. [ABSTRACT FROM AUTHOR]

Between 1988 and 1998 Chile's average economic growth reached 7.8%. Nonetheless, growth decelerated sharply after the Asian Crisis; since 1998 the average economic expansion was only 3.7%. Along with this deceleration, the volatility of the economy was cut by more than half. Using a formal empirical analysis, this paper investigates the role that the adoption of both a floating exchange rate scheme and the use of the Structural Surplus Rule had in transforming Chile into a less volatile economy. Our results show that the introduction of the fiscal rule allowed for a reduction in the volatility of GDP growth by one third. On the other hand, the introduction of the flexible exchange rate mechanism contributed to reduce the volatility by one quarter. Thus, jointly, both policy reforms diminished the volatility of the Chilean economy by almost 60%. These results are robust to alternative specifications and endogeneity problems in some of the explanatory variables. [ABSTRACT FROM AUTHOR]

This paper quantifies the impact on firms of having excessive short-term debt when they face an unanticipated increase in the cost of refunding. Using a panel data set of Chilean firms, for the period 1994-2003, we find that when firms face liquidity shocks, either domestic or foreign, those firms with a higher maturity mismatch invest relatively less. This effect is significant and it is equivalent to a drop of 6% of the average investment of the firms in the sample. Additionally, we find that this effect is offset in those firms that have access to international markets, through either the issuance of ADR or foreign ownership. [ABSTRACT FROM AUTHOR]

This paper presents a robust finding for the relationship between money growth and inflation in Chile: inflation causes (precedes) money and not the other way around. This result holds irrespectively of the way in which monetary policy was conducted, the sample period, the choice of monetary aggregate, the consideration of conditional second moments, or the inclusion of inflation targets. A simple theoretical model is used to motivate why money and inflation are not necessarily correlated. [ABSTRACT FROM AUTHOR]

This paper examines the impact of the school reinforcement program that "Un Techo Para Chile" offers to the poorest communities in the Metropolitan Region, in Chile. The data were taken from a survey specially designed by the authors. The effects of the program on low-income students attending elementary education show an increase in mathematics and language grades during the academic period 2004-2003. The impact of the program is estimated using parametric methods. The robustness of the results is analyzed with non-parametric estimations and using different control groups. The main results indicate that the program has a positive impact on student's grades. In addition, the grades obtained in 2003 did not determine student's participation in the program during 2004. [ABSTRACT FROM AUTHOR]