Through substitution and income effects, remittances can alter an individual's allocation of time between market activities and household production, decreasing labor supply.
... See More + This paper uses propensity score matching and household surveys for 2006 and 2014 to estimate the impact of remittances on labor supply in the three countries of the Northern Triangle (El Salvador, Guatemala, and Honduras). The results show that remittances are associated with a reduction in labor force participation, particularly among women. This effect is largest for Salvadoran women (13 percentage points). A sensitivity analysis finds that the negative effect on labor force participation rates of men in El Salvador and Guatemala and women in El Salvador is robust to potential selection bias. Receiving remittances is also associated with a lower likelihood of young adults being in school or at work, with this effect being robust to selection bias for young men in Guatemala. At the same time, the evidence suggests that remittances may be supporting small enterprises and self-employment in El Salvador and Guatemala. The analysis does not find robust evidence of remittances affecting the labor supply in Honduras in 2014.
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Policy Research Working Paper WPS8597 SEP 20, 2018
Sousa,Liliana Do Couto; Garcia Suaza,Andres FelipeDisclosed
Most evaluations of public works programs in developing countries study their effects on poverty reduction and other labor market outcomes (job creation, earnings, and participation).
... See More + However, very few look at other collateral effects, such as the incidence of violence. Between 2009 and 2014, El Salvador implemented the Temporary Income Support Program, which aimed to guarantee a temporary minimum level of income to extremely poor urban families for six months, as well as provide beneficiaries with experience in social and productive activities at the municipal level. Making use of a panel data set at the municipal level for 2007 to 2014, with monthly data on different types of crime rates and social program benefits by municipalities, this paper assesses the effects of the program on crime rates in municipalities in El Salvador. There are several possible channels through which the Temporary Income Support Program can affect crime. Since the program is associated with cash transfers to beneficiaries, a reduction in economically motivated crimes is expected (income effect). But since the program enforces work requirements and community participation, this could generate a negative impact on crime, because the beneficiaries will have less time to commit crime and because of community deterrence effects. Overall, the paper finds a robust and significant negative impact of the Temporary Income Support Program on most types of crimes in the municipalities with the intervention. Moreover, the negative effects of the program on some types of crime rates hold several years after participation. Positive spillover effects for municipalities hold within a radius of 50 kilometers.
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Policy Research Working Paper WPS8384 MAR 27, 2018
This study quantifies the outflow of human capital associated with migration from Guatemala, El Salvador, and Honduras since 1990. To measure the outflow of skills and human capital and how this has changed over time, the study uses information on Northern Triangle migrants residing in the United States, a group that accounts for over 90 percent of all migrants from the three countries.
... See More + The results suggest that these migrants are, in general, positively selected into migration. That is, based on their observable characteristics, the individuals would have a higher earnings distribution relative to individuals who do not migrate. The results show a decrease in selectivity between the 10-year cohort of migrants who arrived by 2000 and those who arrived by 2014. This finding may reflect increased access to migration networks by lower-income households and individuals. The data suggest that the loss in human capital associated with a 10-year outflow of adults, as measured by foregone local wages, represented 1.9 percent of gross domestic product in El Salvador, 1.5 percent in Honduras, and 1.0 percent in Guatemala.
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Policy Research Working Paper WPS8334 FEB 12, 2018
Del Carmen Hasbun,Giselle Eugenia; Sousa,Liliana Do CoutoDisclosed
Doing Business 2018 is the 15th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it.
... See More + This economy profile presents the Doing Business indicators for El Salvador. Doing Business presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies; for 2018 El Salvador ranks 73. Doing Business measures aspects of regulation affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this year’s ranking. Data in Doing Business 2018 are current as of June 1, 2017. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.
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Doing Business 2018 is the 15th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it.
... See More + This economy profile presents the Doing Business indicators for El Salvador Doing Business presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies; for 2018 El Salvador ranks 73. Doing Business measures aspects of regulation affecting 11 areas of the life of a business. Ten of these areas are included in this year's ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this year's ranking. Data in Doing Business 2018 are current as of June 1, 2017. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.
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The earthquake risk in El Salvador is more significant than the hurricane risk. Economic assets such as residential and non-residential buildings are at risk.
... See More + These assets that are exposed to natural disasters are referred to as a country’s Building Exposure. Risk reduction interventions could be prioritized in the highest risk ranked province of Usulutan.To learn more, visit: collaboration.worldbank.org/groups/cdrp.
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This Technical Note was prepared in the context of a World Bank Financial Sector Assessment Program (FSAP) mission in the Republic of El Salvador in March 2016.
... See More + This FSAP Development Module focused on (i) financial systems issues, including competition and efficiency; (ii) financial inclusion and non-bank financial institution issues, (iii) public sector banks, (iv) financial system infrastructure, including payments, remittances transfers, and credit information systems; (v) capital market and private pensions development issues; and (iv) insurance. The Technical Note describes the background and current situation of the public sector and development banks, and continues with specific recommendations directly linked with the assessment and diagnosis performed. The document contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap.
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This technical note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016.
... See More + The Salvadoran financial system lags behind its peers in terms of depth put it outperforms them in terms of competition and efficiency. Given the country’s relative low financial depth but competitive environment, there is room for expansion and financial development which can provide greater funding for the productive activities of the private sector. This technical note takes four main approaches to examine the extent of competition and efficiency of the Salvadoran banking sector. First, it examines bank entry and exit regulations and bank transparency to determine whether the existing framework promotes contestability and competition. Second, the note evaluates the degree of concentration in the banking sector and estimates direct measures of competition by calculating the H-statistic for the Salvadoran banking sector and by comparing it to those obtained for its regional peers. Third, the note evaluates efficiency by examining the behavior of bank spreads, profitability and financial intermediation margins and costs. Fourth, the note looks into the different segments of the loan market to evaluate how efficiently credit is being allocated. Finally the note ends with some policy recommendations. The document contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap.
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This Technical Note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016.
... See More + Despite the challenging economic environment, El Salvador has made significant strides towards a more inclusive financial sector. However, El Salvador faces a number of challenges, including regulatory weaknesses and uncertainty, anti-competitive practices, and a fragile security situation that impacts investment and innovation. The country still presents low levels of access to and use of a range of financial services. The financial sector is diversified, but some challenges need to be overcome to increase competition and innovation. There seem to be no excessive legal barriers to entry for new banks and the framework allows for a diverse range of large and small deposit-taking entities. The microfinance sector is diverse and competitive and reforms are underway to strengthen regulation and supervision, but capacity is an issue. Also, the microfinance prudential regulation should be improved to be in line with international good practices and standards. Reforms are needed to spur the use of electronic accounts and transactions and to improve the draft rules for simplified accounts. Further progress could be made by allowing bank and nonbank financial institutions access to and use of telecommunications infrastructure on a non-discriminatory basis. An effective consumer protection legal, regulatory and supervisory framework is needed to ensure healthy financial inclusion. The Note contains technical analysis underpinning the FSAP findings and recommendations. Given the requested focus on digital finance and consumer protection, certain areas relevant to financial inclusion – notably small and medium enterprise finance, financial education, microfinance regulation and supervision– have been addressed in an abbreviated manner in this Technical Note. Although this Note incorporates some insights from the Technical Notes covering Financial Infrastructure, Non-Bank Savings and Credit Institutions (NBSCI) and Public Banks, not all related issues are incorporated in this Note, so the other Technical Notes should be read for a more comprehensive view of Salvadoran financial inclusion.
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This note was prepared in the context of a World Bank Financial Sector Assessment Program (FSAP) mission in El Salvador in March 2016. Since the last FSAP, the national payments system (NPS) has consolidated and expanded.
... See More + The real-time gross settlement (RTGS) systems owned and operated by the Banco Central de Reserva de El Salvador (BCR) is the backbone of the NPS and is widely subscribed by both banks and supervised non-bank financial institutions. In 2013, the BCR launched a service for government disbursements called Sistema de Pagos Masivos (SPM). ATM and POS terminal deployment in El Salvador is below the average for the Latin America and the Caribbean, but above the average for lower-middle income countries. Notwithstanding these positive developments, the payments system remains exposed to certain risks and presents areas of inefficiency that the BCR aims to address comprehensively and in stages through a revised national payment system strategy. The note contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap.
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This Technical Note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016.
... See More + This FSAP Development Module focuses on (i) financial systems issues, including competition and efficiency; (ii) financial inclusion and non-bank financial institution issues, (iii) public sector banks, (iv) financial system infrastructure, including payments, remittances transfers, and credit information systems; (v) capital market and private pensions development issues; and (iv) insurance. This note is arranged as follows: Section I gives the Background and Current Situation. Section II describes Extension of the Regulatory Perimeter and Section III discusses about Select Latin American Experiences on Supervision Of NBSCI. The document contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap.
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This technical note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016.
... See More + The capital markets in El Salvador continue to remain relatively small but have played a larger role in financing real sector needs in the last 5 years. The investor base is dominated by institutional investors. Two pension funds represent the primary investors in the securities market, followed by banks and insurance companies. The integration with Panama is a welcome development and will help improve opportunities for Salvadoran investors and issuers. The regulation and supervision of capital markets is shared, respectively, between the Central Bank (BCR) and the Financial Superintendency (SSF) and this required stronger coordination. The document contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap.
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This Financial Sector Assessment (FSA) summarizes the developmental aspects of the 2016 FSAPreport for the Republic of El Salvador. A World Bank mission visited San Salvador from March 6 to 16, 2016 to review the developmental aspects of the Financial Sector Assessment Program(FSAP) conducted in 2010.1 As previously agreed with the authorities, this FSAP DevelopmentModule focused on (i) financial systems issues, including competition and efficiency; (ii) financial inclusion and non-bank financial institution issues, (iii) public sector banks, (iv) financial system infrastructure, including payments, remittances transfers, and credit information systems; (v) capital market and private pensions development issues; and (vi) insurance.
... See More + The reportsummarizes the diagnostic findings, progress made since the last FSAP, and recommendations forfurther regulatory, institutional and market development actions. The executive summary, following next, lists the main highlights and conclusions of this FSAP mission.
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Financial Sector Assessment Program (FSAP) 113097 NOV 01, 2016
This economy profile presents the Doing Business indicators for El Salvador. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2017 is the 14th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2016 El Salvador ranks 86. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. Doing Business 2017 presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. The data in this report are current as of June 1, 2016 (except for the paying taxes indicators, which cover the period January–December 2015).
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The study uses a cluster-randomized trial among 1,578 children from 979 households in rural El Salvador to test the impacts of TOMS shoe donations on children's time allocation, school attendance, health, self-esteem, and aid dependency.
... See More + Results indicate high levels of usage and approval of the shoes by children in the treatment group, and time diaries show modest evidence that the donated shoes allocated children's time toward outdoor activities. Difference-in-difference and ANCOVA estimates find generally insignificant impacts on overall health, foot health, and self-esteem but small positive impacts on school attendance for boys. Children receiving the shoes were significantly more likely to state that outsiders should provide for the needs of their family. Thus, in a context where most children already own at least one pair of shoes, the overall impact of the shoe donation program appears to be negligible, illustrating the importance of more careful targeting of in-kind donation programs.
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Policy Research Working Paper WPS7822 SEP 14, 2016
The Government of El Salvador has procured a ten-year import, export, and transit verification project. The procurement arrangement is governed by a Concession Contract for Goods Inspections Services through the Use of Non-Intrusive Equipment and Services.
... See More + The project will add transparency, reduce processing times and paperwork, and enhance the accuracy of customs valuation and duty procedures. This series showcases how the World Bank Group supports the development and implementation of public-private partnerships. This support comes in the form of public sector loans, private sector finance, sector and transaction advice, guarantees, and output-based aid.
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The Enterprise Surveys (ES) focus on many aspects of the business environment. These factors can be accommodating or constraining for firms and play an important role in whether an economy’s private sector will thrive or not.
... See More + An accommodating business environment is one that encourages firms to operate efficiently. Such conditions strengthen incentives for firms to innovate and to increase productivity, key factors for sustainable development. A more productive private sector, in turn, expands employment and contributes taxes necessary for public investment in health, education, and other services. Questions contained in the ES aim at covering most of the topics mentioned above. The topics include infrastructure, trade, finance, regulations, taxes and business licensing, corruption, crime and informality, access to finance, innovation, labor, and perceptions about obstacles to doing business. This document summarizes the results of the Enterprise Survey for El Salvador. Business owners and top managers in 719 firms were interviewed March 2016 to August 2016.
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This economy profile for Doing Business 2016 presents the 11 Doing Business indicators for El Salvador. To allow for useful comparison, the profile also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2016 is the 13th edition in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2015 El Salvador ranks 86. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies from Afghanistan to Zimbabwe and over time. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. The data in this report are current as of June 1, 2015 (except for the paying taxes indicators, which cover the period from January to December 2014).
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This Country Data Report summarizes the data from the Worldwide Governance Indicators (WGI) project for El Salvador. The WGI report six aggregate governance indicators for over 200 countries and territories over the period 1996-2014, covering: i) voice and accountability, ii) political stability and absence of violence, terrorism, iii) government effectiveness, iv) regulatory quality, v) rule of law, and vi) control of corruption.
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This study uses Twitter data to provide a more nuanced understanding of the public reaction to the 2011 reform to the propane gas subsidy in El Salvador.
... See More + By soliciting a small sample of manually tagged tweets, the study identifies the subject matter and sentiment of all tweets during six one-month periods over three years that concern the subsidy reform. The paper shows that such an analysis using Twitter data can provide a useful complement to existing household survey data and even potentially replace survey data if none were available. The finding show that when people tweet about the subsidy, they almost always do so in a negative manner; and there is a decline in discussion of topics about the reform subsidy, which coincides with increase in support for the subsidy as reported elsewhere. Therefore, the study concludes that decreasing discussion of the subsidy reform indicates an increase in support for the reform. In addition, the gas distributor strikes of May 2011 may have contributed to public perception of the reform more than previously acknowledged. This study is used as an opportunity to provide methodological guidance for researchers who wish to undertake similar studies, documenting the steps in the analysis pipeline with detail and noting the challenges inherent in obtaining data, classification, and inference.
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Policy Research Working Paper WPS7399 AUG 19, 2015
Seabold,Skipper; Rutherford,Alex; De Backer,Olivia; Coppola,AndreaDisclosed
