Three essays in regional economicsthe case of colombia

Abstract

This doctoral thesis consists of three essays that are framed within the research fields of geographical economics and regional economics. The first essay of the PhD thesis begins with (Chapter 1) entitled “Market Potential and Income Disparities across Colombian Departments: Analysis for the period 1990-2015”. This chapter focuses on the analysis of the role played by market potential in the spatial income structure observed in Colombia over the period 1990-2015. Based on the geographical economics theory we derive the so called nominal wage equation which establishes a relationship between nominal wages and a distance weighted sum of the volume of economic activities in surrounding locations which is usually known as market potential. The estimation of this equation using Colombian departamental data over the period 1990-2015 reveals that market potential plays a crucial role in explanation of the spatial distribution of per capita income. Moreover the results also show that access to markets became more important over the course of the period under analysis which is pointing to a process of spatial concentration of economic activities in Colombia where the agglomeration forces are more important than the dispersion ones. Finally, two important channels that might be affecting the shaping of the spatial distribution of income were devised, physical and human capital. The second essay of the thesis (Chapter 2) is entitled “The Effects of Transfers of Royalties to Subnational Governments on Regional Formal Employment in Colombia” Based on the aforementioned, we extend the investigation (Chapter 2) discussing the effects of the transfers of royalties to the municipalities on regional formal employment during the period 2002-2018. This chapter evaluates the effects that royalties have on formal employment in Colombia. This chapter allowed to conclude that the General SGR Royalties System allowed to redistribute the amount of royalties and use that important source of revenue, to boost regional and municipal growth, increase equity between regions given the redistribution and decrease poverty rates via formal employment. In addition, we find that the increase in the participation of royalties for the municipalities that received lesser proportions before the reform, formal employment became more dynamic. The final essay of this thesis (Chapter 3), is entitled “Labor Market Opportunities for the Demobilized in Colombia” In this essay, we address an issue of relevance in the national and international context, since, after a process of internal armed conflict of more than 50 years in Colombia, peace is signed with the oldest and richest guerrilla of the world. This chapter allows us to understand some aspects in common as well as others associated with the labor market that will mean significant efforts in public policy. The results of this chapter of the thesis suggest that, in Colombia, given the different variables included in the model, the labor market does not generate stimuli for the incorporation of the reinserted population. In addition to this result, the essay concludes that this population is more likely fall into recidivism and engage in informal activities. This situation enables the demobilized population to be close to returning to illegality.