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Labor Market and Macroeconomic Dynamics in Latin America amid COVID: The Role of Digital-Adoption Policies

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creativeworkseries.issn1564-698X
dc.contributor.authorFinkelstein Shapiro, Alan
dc.contributor.authorNuguer, Victoria
dc.contributor.authorNovoa Gomez, Santiago
dc.date.accessioned2024-04-08T20:52:56Z
dc.date.available2024-04-08T20:52:56Z
dc.date.issued2023-12-01
dc.description.abstractThis paper analyzes how a policy that lowers firm digital-adoption costs shapes the labor-market and economic recovery from COVID-19 in Latin America (LA) using a framework with firm entry and unemployment, where salaried firms can adopt digital technologies and the employment and firm structure embodies key features of LA economies. Using Mexico as a case study, the model replicates the response of the labor market and output at the onset of the COVID recession and in its aftermath, including the dynamics of labor-force participation and informal employment. A policy-induced permanent reduction in the cost of adopting digital technologies at the trough of the recession bolsters the recovery of GDP, total employment, and labor income, and leads to a larger expansion in the share of formal employment compared to a no-policy scenario. In the long run, the economy exhibits a reduction in total employment but higher levels of GDP and labor income, greater average firm productivity, a larger formal employment share, and a marginally lower unemployment rate. Finally, as a side effect, the policy exacerbates the differential between formal and informal labor income, both as the economy recovers from the COVID recession and in the long run.en
dc.identifierhttp://documents.worldbank.org/curated/en/099218502022412749/IDU10abd1e4619afc14b5d194171dab35c8f61fe
dc.identifier.citationThe World Bank Economic Review
dc.identifier.doi10.1596/41394
dc.identifier.issn0258-6770 (print)
dc.identifier.issn1564-698X (online)
dc.identifier.urihttps://hdl.handle.net/10986/41394
dc.languageEnglish
dc.language.isoen_US
dc.publisherPublished by Oxford University Press on behalf of the World Bank
dc.relation.ispartofseriesWorld Bank Economic Review
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.subjectCOVID
dc.subjectBUSINESS CYCLES
dc.subjectSELF-EMPLOYMENT AND INFORMALITY
dc.subjectUNEMPLOYMENT AND LABOR FORCE PARTICIPATION
dc.subjectINFORMATION AND COMMUNICATION TECHNOLOGIES (ICT)
dc.titleLabor Market and Macroeconomic Dynamics in Latin America amid COVIDen
dc.title.subtitleThe Role of Digital-Adoption Policiesen
dc.typeJournal Article
dspace.entity.typePublication
okr.associatedcontenthttps://academic.oup.com/wber/article/38/1/161/7249989 Journal website (version of record)
okr.crossref.titleLabor Market and Macroeconomic Dynamics in Latin America amid COVID: The Role of Digital-Adoption Policies
okr.date.disclosure2024-04-08
okr.date.lastmodified2024-02-02T00:00:00Zen
okr.doctypeJournal Article
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099218502022412749/IDU10abd1e4619afc14b5d194171dab35c8f61fe
okr.guid099218502022412749
okr.identifier.docmidIDU-0abd1e46-9afc-4b5d-9417-dab35c8f61fe
okr.identifier.doi10.1093/wber/lhad019
okr.identifier.doihttps://doi.org/10.1596/41394
okr.identifier.externaldocumentum34250873
okr.identifier.internaldocumentum34250873
okr.identifier.report187527
okr.import.id3845
okr.importedtrueen
okr.language.supporteden
okr.pagenumber161-184
okr.pdfurlhttp://documents.worldbank.org/curated/en/099218502022412749/pdf/IDU10abd1e4619afc14b5d194171dab35c8f61fe.pdfen
okr.peerreviewAcademic Peer Review
okr.region.geographicalLatin America
okr.topicSocial Protections and Labor::Employment and Unemployment
okr.topicSocial Protections and Labor::Skills Development and Labor Force Training
okr.topicIndustry::General Manufacturing
okr.topicInformation and Communication Technologies::Information Technology
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume38 (1)
relation.isJournalIssueOfPublication1585dc00-eb69-435e-b7d2-cc9fff48d2e3
relation.isJournalIssueOfPublication.latestForDiscovery1585dc00-eb69-435e-b7d2-cc9fff48d2e3
relation.isJournalOfPublicationc41eae2f-cf94-449d-86b7-f062aebe893f
relation.isJournalVolumeOfPublicatione61ff3e4-3429-4e9a-9ad1-6f7798ddae5b
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