1. Gustavo Leyva, Carlos Urrutia. "Informal labor markets in times of pandemic". Review of Economic Dynamics Volume 47, January 2023, Pages 158-185.
Abstract:
We document the evolution of labor markets of five Latin American countries during the COVID-19 pandemic, with emphasis on informal employment. We show, for most countries, a slump in aggregate employment, mirrored by a fall in labor participation, and a decline in the informality rate. The latter is unprecedented since informality had cushioned the decline in overall employment in previous recessions. Using a business cycle model with a rich labor market structure, we recover the shocks that rationalize the pandemic recession, showing that labor supply shocks and informal productivity shocks are essential to account for the employment and output loss and the decline in the share of informal workers.
2. Diego Aycinena, Alexander Elbittar, Andrei Gomberg and Lucas Rentschler, "Does free information provision crowd out costly information acquisition? Forthcoming in Games and Economic Behavior, 2023.
Abstract:
Conventional wisdom suggests that promising free information to an agent would crowd-out costly information acquisition. We theoretically demonstrate that this intuition only holds as a knife-edge case in which priors are symmetric. Indeed, when priors are asymmetric, a promise of free information in the future induces agents to increase information acquisition. In the lab, we test whether such crowding out occurs for both symmetric and asymmetric priors. Our results are qualitatively in line with the predictions: when priors are asymmetric, the promise of future free information induces subjects to acquire more costly information.
3. Andrei Gomberg, Romans Pancs and Tridib Sharma, Electoral Maldistricting, forthcoming in International Economic Review. 2023.
4. Isaac Mbiti, Mauricio Romero and youdi Schipper "Designing Effective Teacher Performance Pay Programs: Experimental Evidence from Tanzania", Forthcoming at Economic Journal, 2023.
Abstract:
We use a nationally representative field experiment in Tanzania to compare two teacher performance pay systems in public primary schools: a Pay for Percentile system (a rank-order tournament) and a “Levels” system that features multiple proficiency thresholds. Pay for Percentile can (under certain conditions) induce socially optimal effort among teachers, while Levels systems can encourage teachers to focus on certain students. Despite the theoretical advantage of the tournament system, we find that both systems
improved student test scores across the distribution of initial learning levels after two years. However, the Levels system is easier to implement and is more cost-effective.
5. Karthik Muralidharan, Mauricio Romero and Kaspar Wüthrich, "Factorial designs, model selection, and (incorrect) inference in randomized experiments", Forthcoming at The Review of Economics and Statistics, 2023.
Abstract:
Factorial designs are widely used to study multiple treatments in one experiment. While t-tests using a fully-saturated “long” model provide valid inferences, “short” model t-tests (that ignore interactions) yield higher power if interactions are zero, but incorrect inferences otherwise. Of 27 factorial experiments published in top-5 journals (2007–2017), 19 use the short model. After including interactions, over half of their results lose significance. Based on recent econometric advances, we show that power improvements
over the long model are possible. We provide practical guidance for the design of new experiments and the analysis of completed experiments.
6. Jose Maria Da-Rocha, Diego Restuccia, Marina M. Tavarez, "Policy distortions and aggregate productivity with endogenous establishment-level productivity", available online April 10,2023, European Economic Review.
Abstract:
What accounts for income per capita and total factor productivity (TFP) differences across countries? We study resource misallocation across heterogeneous production units in a general equilibrium model where establishment productivity and size are affected by policy distortions. We solve the model in closed form and show that policy distortions have a substantial negative effect on establishment productivity growth, average establishment size, and aggregate productivity. Calibrating a distorted benchmark economy to U.S. data, we find that empirically reasonable variations in distortions generate reductions in aggregate TFP of more than 24 percent while slightly increasing concentration in the establishment size distribution. If distortions in addition lower the exit rate of incumbent establishments, as supported by some empirical evidence, the aggregate TFP loss doubles to 48 percent.
7. Johansson, Christian, Anders Kärnä, and Jaakko Meriläinen. "Vox Populi, Vox Dei? Tacit Collusion in Politics." Accepted for publication in Economics & Politics. 2023.
Abstract:
We study competition between political parties in repeated elections with probabilistic voting. This model entails multiple equilibria, and we focus on cases where political collusion occurs. When parties hold different opinions on some policy, they may take different policy positions that do not coincide with the median voter's preferred policy platform. In contrast, when parties have a mutual understanding on a particular policy, their policy positions may converge (on some dimension) but not to the median voter's preferred policy. That is to say, parties can tacitly collude with one another, despite political competition. Collusion may collapse, for instance, after the entry of a new political party. This model rationalizes patterns in survey data from Sweden, where politicians on different sides of the political spectrum take different positions on economic policy but similar positions on refugee intake---diverging from the average voter's position, but only until the entry of a populist party.
8. Raul Prelleso,José María Da Rocha, María L.D. Palomares,U. Rashid Sumaila and Sebastian Villasante. "Building climate resilience, social sustainability and equity in global fisheries." August 7, 2023,Nature portfolio Journal.
Abstract:
Although the Paris Agreement establishes targets to limit global warming—including carbon market mechanisms—little research has been done on developing operational tools to achieve them. To cover this gap, we use CO2 permit markets towards a market-based solutions (MBS) scheme to implement blue carbon climate targets for global fisheries. The scheme creates a scarcity value for the right to not sequester blue carbon, generating an asset of carbon sequestration allowances based on historical landings, which are considered initial allowances. We use the scheme to identify fishing activities that could be reduced because they are biologically negative, economically inefficient, and socially unequitable. We compute the annual willingness to sequester carbon considering the CO2e trading price for 2022 and the social cost of carbon dioxide (SC-CO2), for years 2025, 2030 and 2050. The application of the MBS scheme will result in 0.122 Gt CO2e sequestered or US$66 billion of potential benefits per year when considering 2050 SC-CO2. The latter also implies that if CO2e trading prices reach the 2050 social cost of carbon, around 75% of the landings worldwide would be more valuable as carbon than as foodstuff in the market. Our findings provide the global economy and policymakers with an alternative for the fisheries sector, which grapples with the complexity to find alternatives to reallocate invested capital. They also provide a potential solution to make climate resilience, social sustainability and equity of global fisheries real, scientific and practical for a wide range of social-ecological and political contexts.
9. Emilio Gutiérrez, David Jaume and Martin Tobal. "Do Credit Supply Shocks Affect Employment in Middle-Income Countries?" (joint with David Jaume and Martín Tobal). American Economic Journal: Economic Policy. 15(4):1-36. 2023.
Abstract:
This paper studies the extent to which increases in bank credit supply available for small and medium firms can foster formal employment in Mexico. We use a detailed dataset containing loan-level information for all loans extended by commercial banks to private firms in Mexico during the 2010-2016 period, when the economy was relatively stable. To obtain exogenous variation in credit supply, we exploit differences in the regional presence of Mexican banks across local labor markets by combining pre-existing market shares with national-level changes in banks’ credit supply, after accounting for local credit demand shocks. Then, we use employment registry data to compare changes in the number of formal workers registered by small and medium firms in local labor markets differently exposed to these shocks. We find that credit supply shocks have a large impact on formal employment: a positive credit shock of one standard deviation increases yearly employment growth by 0.45 percentage points (13 percent of the mean). Our results differ from the null to small effects identified by previous literature for developed countries, suggesting that credit supply shocks play a more prominent role for employment creation (and destruction) in low and middle-income countries.
10. Shaun McRae, "Residential Electricity Consumption and Adaptation to Climate Change by Colombian Households". Economics of Disasters and Climate Change, Vol. 7, July 2023, 253–279.
Abstract:
This paper provides the first empirical estimates of the relationship between temperatures and household electricity consumption in Colombia, using electricity billing and weather data from 2010 to 2019. I find that higher temperatures (or higher values of the heat index) increase electricity consumption, with the largest effects observed for high-income households in regions with hot climates. However, I show that there has been partial convergence between low- and high-income households, with the effect of temperature on electricity consumption in lower-income neighborhoods more than doubling between 2011 and 2019. These results align with survey evidence of increased air conditioning adoption. Nevertheless, further growth in air conditioning adoption and use is required to alleviate the health effects of more frequent and severe heatwaves due to climate change.
11. Fontini Christia, Horacio Larreguy, Elizabet Parker-Margyar & Manuel Quintero. “Empowering women facing gender-based violence amid COVID-19 through media campaigns”, Nature Human Behaviour 7, 1470-1752 (2023).
Abstract:
COVID-19 heightened women’s exposure to gender-based and intimate partner violence, especially in low-income and middle-income countries. We tested whether edutainment interventions shown to successfully combat gender-based and intimate partner violence when delivered in person can be effectively delivered using social (WhatsApp and Facebook) and traditional (TV) media. To do so, we randomized the mode of implementation of an intervention conducted by an Egyptian women’s rights organization seeking to support women amid COVID-19 social distancing. We found WhatsApp to be more effective in delivering the intervention than Facebook but no credible evidence of differences across outcomes between social media and TV dissemination. Our findings show little credible evidence that these campaigns affected women’s attitudes towards gender or marital equality or on the justifiability of violence. However, the campaign did increase women’s knowledge, hypothetical use and reported use of available resources.
12. Romain Ferrali, Guy Grossman and Horacio Larreguy. “Can low-cost, scalable, online interventions increase youth informed political participation in electoral authoritarian contexts?” Science Advances, Vol. 9 No. 26. 28 Jun 2023.
Abstract:
Young citizens vote at relatively low rates, which contributes to political parties de-prioritizing youth preferences. We analyze the effects of low-cost online interventions in encouraging young Moroccans to cast an informed vote in the 2021 elections. These interventions aim to reduce participation costs by providing information about the registration process and by highlighting the election’s stakes and the distance between respondents’ preferences and party platforms. Contrary to preregistered expectations, the interventions did not increase average turnout, yet exploratory analysis shows that the interventions designed to increase benefits did increase the turnout intention of uncertain baseline voters. Moreover, information about parties’ platforms increased support for the party closest to the respondents’ preferences, leading to better-informed voting. Results are consistent with motivated reasoning, which is surprising in a context with weak party institutionalization.
13. Horacio Larreguy and Shelley Liu. “Education, Democratic Erosion, and Political Participation in Stable but Developing Democracies: Evidence from Senegal”. Accepted at the Political Science Research and Methods.
14. José Ramón Enríquez, Horacio Larreguy, John Marshall, and Alberto Simpser. “Mass Political Information on Social Media: Facebook Ads, Electorate Saturation, and Electoral Accountability in Mexico. Accepted at the Journal of the European Economic Association.
15. Mai Hassan, Horacio Larreguy and Stuart Russell. “Who Gets Hired? Political Patronage and Bureaucratic Favoritism”. Accepted at the American Political Science Review.