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Series 2007
07-01. Kaplan,
D., E. Piedra, and E. Seira. "Are
Burdensome Registration Procedures an Important
Barrier on Firm Creation? Evidence from
Mexico" 
Abstract: There has been increasing
concern that the difficulty of obtaining
firm operation licences in developing countries
may decrease firm creation and increase
informality. We estimate the effect on new
firm creation/registration of a program
that speeds up firm registration procedures
and makes them more transparent. The program
was implemented in Mexico in different municipalities
at different dates. Our preferred estimates
suggest that new firm registration increased
by around 4% in eligible industries. Most
of the effect is temporary, being concentrated
on the first 10 months after the program
is implemented. This suggests that the program’s
effect may operate through registering existing
firms instead of spurring creation of new
ones. We compare this magnitude to some
benchmarks to assess its size.
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07-02. Melissas,
N. "The Trader, the
Market Maker, his Guru and her Information"
Abstract: This paper argues that a guru possessing
a multi-dimensional informational advantage may want to
truthfully report her opinion to the media to learn more
out of the actions of other, sometimes better-informed
traders.
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07-03. Melissas,
N. "Gurus,
Opinion Polls and Social Learning"
Abstract: This paper analyzes cheap
talk in an investment model with information
externalities. In contrast to Gossner and
Melissas (2006), I allow for (i) competition
effects, (ii) positive network externalities
and (iii) more than one interviewed player.
In the presence of competition effects, a
player will never truthfully reveal her information
about the realized state of the world. In
the presence of positive network externalities,
however, there exists a parameter range where,
under mild additional conditions, the unique
equilibrium is the separating one. Finally,
using numerical computations, I show that
for a sufficiently large number of interviewed
players there exists a separating equilibrium
in my entire parameter range.
07-04. Aguilar,
G., and S. Rendón. "Employment
and Deadweight Loss Effects of Observed Non-Wage
Labor Costs"
Abstract: To assess the employment
effects of labor costs it is crucial to have
reliable estimates of the labor cost elasticity
of labor demand. Using a matched firm-worker
dataset, we estimate a long run unconditional
labor demand function, exploiting information
on workers to correct for endogeneity in the
determination of wages. We evaluate the employment
and deadweight loss effects of observed employers'
contributions imposed by labor laws (health
insurance, training, and taxes) as well as
of observed workers' deductions (social security,
and income tax). We find that non-wage labor
costs reduce employment by 17% for white-collars
and by 53% for blue-collars, with associated
deadweight losses of 10% and 35% of total
contributions, respectively. Since most firms
undercomply with mandated employers' and workers
contributions, we find that full compliance
would imply employment losses of 4% for white-collars
and 12% for blue-collars, with respective
associated deadweight losses of 2% and 6%.
07-05. Domínguez,
D. "Lower
bounds and recursive methods for the problem
of adjudicating conflicting claims"
Abstract: For the problem of adjudicating
conflicting claims, we study lower bounds
on the awards of each agent. We propose extending
a lower bound by performing the following
operation: (i) for each problem, assign the
lower bound and revise the problem accordingly;
(ii) assign the bound of the revised problem.
The "recursive-extension" of a bound
is the lower bound obtained by recursive application
of this operation. We provide necessary and
sufficient conditions on a lower bound for
there to be a unique rule satisfying its recursive-extension.
We show that, under these conditions, the
rule satisfying the recursive-extension of
a bound is the unique rule satisfying the
following property: the awards assigned by
a rule should be obtainable in two ways: (i)
directly applying the rule to the problem
or (ii) first assigning the bound and revising
the problem accordingly, and then applying
the rule to the revised problem. Then, we
study whether this procedure leads to well-behaved
lower bounds.
07-06. Juárez,
L. "The
Effect of an Old-Age Demogrant on the Labor
Supply and Time Use of the Elderly and Non-Elderly
in Mexico"
Abstract: This paper investigates
the effect of a generous demogrant for the
elderly that started in 2001 in Mexico City
on the labor supply and time use of the elderly
and of non-elderly family members who live
with them. Using data for the period 2000-2004
and a triple differences approach, I find
that prime-age women reduce both their housework
and market work time significantly, but only
if they live with an age-qualifying woman
in a poor neighborhood after the program started.
In contrast, the program seems to have no
significant effect on the time use of prime-age
men. My results suggest that some of the public
resources devoted to the elderly could actually
spill over to other age groups, especially
in countries where extended families are common,
and that the gender of the potential beneficiary
matters for outcomes.
07-07. Juárez,
L. "Altruism,
Exchange and Crowding Out of Private Support
to the Elderly: Evidence from a Demogrant
in Mexico"
Abstract: This paper uses a recent
demogrant for the elderly in Mexico City to
estimate the effect of an exogenous increase
in the income of older individuals on the
amount of private transfers they receive.
My results show that not controlling for the
endogeneity of income replicates the positive
or small negative effects of income on the
amount of private transfers received obtained
by previous work. In contrast, my instrumental
variables strategy yields negative and significant
income effects, not far from the minus one
implied by altruistic models, suggesting that
a change in the public resources for elderly
could be neutralized by the response of private
transfers.
07-08. Chatterji,
S., and I. Lobato, "Transformations
of the State Variable and Learning Dynamics"
Abstract: This article studies
dynamics in a model where agents forecast
a one dimensional state variable via ordinary
least squares regressions on the lagged values
of the state variable. We study the stability
properties of alternative transformations
of the state variable that the agent can endogenously
set forth. We study the consequences on the
economy's stability of the typical transformations
that an econometrician would attempt, such
as differencing, detrending, or taking instantaneous
concave transformations, such as logarithms.
Surprisingly, for the considered class of
economies, we found that these transformations
are destabilizing, whereas alternative transformations,
which an econometrician would never consider,
such as convex transformations, are stabilizing.
Therefore, we ironically find that in our
set-up, an active agent, who is concerned
about learning the economy's dynamics and
transforms the state variable, in an attempt
to improve forecasting, is more likely to
deviate from the steady state than a passive
agent.
07-09. Rendón,
S., and A. Cuecuecha, "International
Job Search: Mexicans in and out of the U.S."
Abstract: It is argued that migration
from Mexico to the US and return migration
are determined by international wage differentials
and preferences for origin. We use a model
of job search, savings and migration to show
that job turnover is a crucial determinant
of the migration process. We estimate this
model by Simulated Method of Moments (SMM)
and find that migration practically disappears
if Mexico has American arrival rates while
employed. Doubling migration costs reduces
migration rates in half, while subsidizing
return migration in $300 reduces migration
rates of older migrants but increases migration
rates of younger migrants.
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