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Mr. Antonio David, Mr. Takuji Komatsuzaki, and Samuel Pienknagura

legislation are associated with statistically significant increases in both poverty and inequality indicators over the medium-term. These effects appear to be economically small. Large changes in the employment protection reforms index lead to increases in poverty rates of about one percentage point over five years. Similarly, inequality increases by about 1 percent over the same period. Figure 22. Effects of Structural Reforms on Poverty and Inequality Shaded area is 90 percent confidence interval for Driscoll-Kraay standard errors. The bottom charts in the

Mr. Antonio David, Mr. Takuji Komatsuzaki, and Samuel Pienknagura
This paper estimates the macroeconomic effects of structural reforms in Latin America and the Caribbean (LAC) using the dataset constructed by Alesina et al. (2020). We find that large changes in the reform index have positive effects on GDP and employment that reach 2 percent after 5 years. Furthermore, reforms boost investment, exports, imports, and reduce export concentration, in addition to favoring tradable sectors. Nonetheless, the results also indicate that the effects of reforms have not been uniform across different segments of the population. These findings bring to the forefront the need to consider accompanying policies to ensure that reforms promote inclusive growth. Moreover, evidence from country case studies using the synthetic control method point to heterogeneous effects of reforms on income per capita.