Evidence from developed country data suggests that cognitive and non-cognitive skills contribute to improved labor market outcomes. This paper tests this hypothesis in a developing country by using an individual-level data set from Peru that incorporates modules to measure cognitive and non-cognitive skills. The paper estimates a structural latent model with unobserved heterogeneity to capture full ability rather than just measured skill. It also applies standard ordinary least squares techniques for comparison. The analysis confirms that cognitive and non-cognitive skills are positively correlated with a range of labor market outcomes in Peru. In particular, cognitive skills positively correlate with wages and the probability of being a wage worker, white-collar, and formal worker, with verbal fluency and numeric ability playing particularly strong roles. The results are robust to methodology. The patterns are less uniform for non-cognitive skills. For instance, perseverance of effort (grit) emerges strongly for most outcomes regardless of methodology. However, plasticity—an aggregation of openness to experience and emotional stability—is only correlated with employment, and only when using the structural latent model. The ordinary least squares method also finds that the disaggregated non-cognitive skills of kindness, cooperation, emotional stability, and openness to experience emerge significantly, mostly for the wage estimates. The different results derived from the ordinary least squares and the structural model with latent skills suggest strong measurement bias in most non-cognitive skills measurement. These findings, although only correlational because of the use of a single cross-section, suggest that recent efforts by the Peruvian government to incorporate non-cognitive skill development into the school curriculum are justified.

This paper attempts to establish a formal relationship between innovation and productivity using Colombian firm-level data. It is found that the production of goods and services new to the firm and to the domestic market enhances firms' sales per worker, and innovation that results in introducing new goods and services to the international market boosts both sales and Total Factor Productivity (TFP). Innovation in processes likewise improves firms' productivity and sales. Finally, innovation in marketing and management increases sales per worker and enhances TFP when investment is made in Research and Development. The paper also studies the factors behind firms' decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.

This paper attempts to establish a formal relationship between innovation and productivity using Colombian firm-level data. It is found that the production of goods and services new to the firm and to the domestic market enhances firms' sales per worker, and innovation that results in introducing new goods and services to the international market boosts both sales and Total Factor Productivity (TFP). Innovation in processes likewise improves firms' productivity and sales. Finally, innovation in marketing and management increases sales per worker and enhances TFP when investment is made in Research and Development. The paper also studies the factors behind firms' decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.

Political reservation for disadvantaged groups is believed to be a way of improving targeting of publicly provided goods to those groups. This paper examines the impact of political reservations for women and scheduled castes and tribe (SC/ST) candidates in local governments in West Bengal, India between 1998-2004 on targeting to landless, low caste and female-headed households. It differs from existing literature by differences in geographic coverage, time span, and use of self-reported household benefits across a broad range of programs. Reservation of chief executive (pradhan) positions in local government for women was associated with a significant worsening of within-village targeting to SC/ST households, and no improvement on any other dimension of targeting. Reservation of pradhan posts for SC/ST members was associated with a significant increase in benefits received by the village as a whole, improvement in intra-village targeting to female-headed households, and to the group (SC or ST) of the pradhan. The effects of women's reservations are not consistent with simple citizen-candidate or elite capture models of electoral politics. They are consistent with a more complex hypothesis of capture-cum-clientelism which is weakened by election of politically inexperienced women to reserved pradhan posts.

Abstract: The main objective of this paper is to establish a formal relationship between innovation and performance using Colombian firm-level data. We find that, as predicted by the literature, the production of goods and services new to the firm and to the domestic market enhances firms´ productivity and sales. In the same way, innovation in management and marketing boosts firms´ productivity and sales. However, contrary to theoretical predictions, the production of goods and services new to the international market has a strong negative impact on TFP, although it largely increases sales when firms invest in R&D. We also study the factors behind the firms´ decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.

Este documento presenta la evaluacion de dos programas ejecutados por el SENA - Formacion Tecnica y Tecnologica (FTyT) y Formacion Especializada del Recurso Humano Vinculado a las Empresas (FE). En el caso de FTyT se emplea un enfoque cuantitativo mientras que en el caso de FE se emplea adicionalmente un enfoque cualitativo. Se encuentra que el programa de FTyT del SENA ha tenido un impacto positivo y significativo algunos aspectos relacionados con las condiciones laborales de sus beneficiarios, por ejemplo en empleabilidad, en calidad del empleo y en movilidad relativa de ingresos. Tambien se encuentra que los beneficiarios son menos propensos a continuar estudios universitarios. No se encuentra un efecto significativo en nivel de ingresos, en movilidad ocupacional ni en condiciones de vida. No obstante el hallazgo de efectos positivos, se recomienda contraponer los resultados de este estudio con un analisis costo-beneficio que incorpore los costos directos e indirectos del programa. La evaluacion de impacto cualitativa del programa de FE permite concluir que, en promedio, las empresas del grupo de control observaron un mayor indice de rotacion laboral a pesar que tanto el numero promedio de empleados nuevos, asi como el numero promedio de empleados desvinculados son menores en comparacion con los promedios observados para el caso de las empresas del grupo de empresas beneficiarias del programa. La metodologia de diferencias en diferencias muestra que el indice de rotacion laboral es significativo a un nivel de confianza del 90%, lo que permite corroborar parcialmente y en terminos estadisticos el analisis descrito previamente. Sin embargo, el soporte comun sobre el cual se realizan las estimaciones es bajo (10 empresas), y el resultado no puede ser validado estadisticamente. Sobre la promocion de actividades de capacitacion, se establece a partir de las pruebas de comparacion de medias que solo para la variable que mide el numero de empleados existen diferencias estadisticamente significativas entre ambos grupos.

This paper examines recent changes in the structure of Argentine exports and the implications for future growth. The authors find that the current export structure of Argentina is not conducive to future growth because it is dominated by low-productivity goods that tend to be exported by low-income countries. The productivity content of Argentine exports has increased recently although, as of 2004, these changes have been relatively minor. The authors identify products with characteristics similar to those currently exported by Argentina and which are more likely to foster growth because they would shift the structure of exports more the efficiency frontier. Those products include chemicals and primary products with some degree of value added, including partly processed meat, fish and grains. If economic growth is to be fostered by developing new export products and by increasing the value added of existing exports, there will be a need for sector-specific analysis to address possible market failures. The analysis should focus on issues such as the provision of public goods needed for production (including infrastructure, but also complex intangibles such as sector-specific legislation), possible impediments to effective coordination, sector-specific and economy wide externalities, or barriers to information. This last source of potential market failure is critical to a successful policy framework for exports and growth.