2023-09-28 14:46:10 +00:00
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abstract: 'It is clear that in the transition out of the COVID-19 crisis in
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Colombia there will be great need for formal job creation. One source
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that has been widely discussed in policy circles is strengthening
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linkages of Colombian firms with Global Value Chains (GVCs). Another
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source that has received recent attention, and deservedly so, is digital
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infrastructure development (DID)-which can boost telework and virtual
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human capital accumulation. Reduction in poverty and inequality through
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more and better formal employment is an important aspect of a jobs and
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economic transformation (JET) agenda. In this paper, we explore-through
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a computable general equilibrium model (CGE) and a microsimulation
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framework-to what extent reforms of the type envisioned in the JET
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agenda and which could generate GVC linkages, as well as through DID,
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for Colombia, and we project their impact on poverty and inequality up
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to 2030. Our findings show limited impact of the three types of policy
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changes considered for GVCs-namely (i) fall in barriers for seamless
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business logistics, (ii) reductions in tariffs, and (iii) lower barriers
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to foreign direct investment (FDI). The impact of DID on inequality is
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also moot. There is however a modest impact on poverty reduction in the
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combined policy of digital infrastructure with a boost in skilled labor.
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This finding can be linked to different factors. First, there are
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relatively few direct jobs created to benefit households with low levels
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of human capital. Second, there might be indirect job creation through
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backward linkages to local suppliers by firms linked to GVCs, but this
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effect would be a general equilibrium effect that our CGE model with a
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partial equilibrium microsimulation distributional module does not fully
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capture. Third, the positioning of Colombian firms to latch onto GVCs,
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and also generate demand for local intermediate inputs and services, is
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not optimal. Fourth, DID may generate more general labor market
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opportunities through telework and virtual learning expansions but could
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also induce larger wage gaps as the skill premium rises so that the net
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effect on inequality is ambiguous.'
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affiliation: 'Kugler, MD (Corresponding Author), George Mason Univ, Schar Sch Policy
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\& Govt, Ctr Microecon Policy Res CMEPR, Arlington, VA 22201 USA.
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del Carpio, Ximena; Cuesta, Jose A., World Bank, Washington, DC 20433 USA.
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Kugler, Maurice D., George Mason Univ, Schar Sch Policy \& Govt, Ctr Microecon Policy
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Res CMEPR, Arlington, VA 22201 USA.
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Hernandez, Gustavo; Piraquive, Gabriel, Santafe Bogota, Div Estudios Especiales,
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Dept Nacl Planeac, Bogota, Colombia.'
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article-number: '43'
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author: del Carpio, Ximena and Cuesta, Jose A. and Kugler, Maurice D. and Hernandez,
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Gustavo and Piraquive, Gabriel
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author-email: 'xdelcarpio@worldbank.org
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jcuesta@worldbank.org
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mkugler@gmu.edu
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ghernandez@dnp.gov.co
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gpiraquive@dnp.gov.co'
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author_list:
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- family: del Carpio
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given: Ximena
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- family: Cuesta
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given: Jose A.
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- family: Kugler
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given: Maurice D.
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- family: Hernandez
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given: Gustavo
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- family: Piraquive
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given: Gabriel
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da: '2023-09-28'
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doi: 10.3390/jrfm15020043
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eissn: 1911-8074
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files: []
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issn: 1911-8066
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journal: JOURNAL OF RISK AND FINANCIAL MANAGEMENT
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keywords: 'COVID-19 pandemic; aggregate supply and demand shocks; income fall;
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poverty; inequality; JET; GVCs; productivity; formal employment; wages;
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CGE; microsimulations'
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keywords-plus: FOREIGN DIRECT-INVESTMENT; LABOR; GROWTH; PRICES; PLANTS
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language: English
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month: FEB
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number: '2'
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number-of-cited-references: '60'
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orcid-numbers: Kugler, Maurice/0000-0002-1977-5274
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papis_id: 8c2822c56f983eb0352daa9b4b9326d4
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ref: Delcarpio2022whateffects
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times-cited: '4'
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title: What Effects Could Global Value Chain and Digital Infrastructure Development
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Policies Have on Poverty and Inequality after COVID-19?
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000769714300001
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usage-count-last-180-days: '4'
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usage-count-since-2013: '14'
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volume: '15'
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web-of-science-categories: Business, Finance
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year: '2022'
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