Abstract: I examine how couples' decision-making shapes the aggregate and distributional impacts of local trade shocks. Using the PSID, I document two novel facts about the China Trade Shock: (i) a couple moves only when the husband is exposed to the shock; and (ii) the wife's labor force participation rises when her husband is exposed and falls when she is exposed herself. I then build a quantitative spatial model in which couples choose jointly where to live and whether the wife works. In the model, the shock raises real wages and draws more people into work. I compare this baseline economy with an economy populated only by single individuals, calibrated to the same short-run aggregate moments. In my model, the wife's labor supply responds to the rise in relative wages between men and women, so aggregate employment gains are 15.4% smaller in the long run. At the same time, 14.9% more people move to a different state because husbands are the main earners and unexposed wives move with their spouse. As the China Trade Shock hits male-intensive manufacturing, joint decision-making redistributes gains from wives to husbands and, through wages, from married to single women.
Abstract: I examine whether exporting to more gender-equal countries changes gender equality within exporting firms. I combine matched employer-employee and customs data for Chile with natural disasters in importing countries, which shift firms' export shares. Firms that export to more gender-equal destinations employ a larger share of women but have fewer women among their top earners, widening the gender wage gap. Firms exporting to the most gender-equal countries have a 10% higher share of female employment than other exporters. To understand these facts, I build a quantitative heterogeneous-firm trade model in which firms hire women and men as workers and managers, and three channels can shape whom firms hire: gender-equal destinations may demand products that happen to use more women, their buyers may reward firms for employing women, and destinations with few shared business hours may make female managers costlier. Without these channels, firms' selection into destinations accounts for only about 7% of the estimated association between destinations' gender equality and female employment. When buyers reward gender equality, Chile's trading partners matter: lower trade costs with more gender-equal countries raise the share of female employment, whereas lower trade costs with less gender-equal countries reduce it. Since 2016, Chile has included gender chapters in its trade agreements, mostly with Latin American partners that are less gender-equal than Chile. Including them in agreements with more gender-equal partners would at least double the chapters' effect on female employment.
(Draft pending disclosure by the Central Bank of Chile)
Abstract: We study how parents adjust their labor supply following family separation and how child support shapes these adjustments in a context of high labor informality. In such settings, child support policies tied to observable earnings can create incentives to work informally. We build a new dataset from child support and family court records in Ecuador, then link it to administrative labor-market and census data. Using a matched difference-in-differences design comparing separating parents with similar parents in stable unions, we find that formal employment among fathers, who are the child support payers, declines by 5% one year after separation, while mothers’ formal employment increases by 6%. Two additional pieces of evidence suggest that household dissolution alone cannot explain fathers’ decline in formal employment. First, fathers’ formal employment also declines relative to individuals who separate without entering child support. Second, a similar decline occurs when child support begins without contemporaneous household dissolution. We find that fathers’ lower formal employment largely reflects reallocation toward informal work, while mothers increase their overall labor-market attachment. To inform child support policy design, we specify and estimate a new model of household employment and separation that incorporates how formality matters for both the amount of child support set and its enforcement. The model shows that the enforcement mechanism matters more for fathers’ sector choices than how obligation amounts are set.
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Abstract: We study worker--firm sorting and labor-market dynamics in the Chilean formal sector using matched employer--employee administrative data. Using an AKM earnings decomposition, we find that assortative matching is highly nonlinear and concentrated in the upper tail: high-type workers are disproportionately employed at high-paying firms, while allocations across most of the market are nearly random. This nonlinear sorting is linked to sharply heterogeneous mobility regimes. High-type workers experience long job tenures and strong attachment to formal employment, while low-type workers cycle across short-lived jobs and non-employment. Earnings dynamics amplify these differences: high-type workers benefit from steep within-job growth and upward firm mobility, while low-type workers rely on frequent transitions to generate modest gains. We identify heterogeneous job ladders as a central mechanism driving cumulative earnings inequality.
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Abstract: This paper documents the rapid increase in immigration to Chile experienced in the past few years. Our main purpose is to characterize the immigrant population and to analyze their assimilation into the local labor market. We find that immigrants are, on average, younger than native-born workers and have higher labor force participation rates, suggesting that Chile's foreign-born population consists mostly of economic migrants. We also find that foreign-born are distributed across all skill levels, unlike other countries that have received larger shares of low-skilled immigrants. However, most foreign-born are overqualified for the jobs they hold, despite being, on average, more educated than the native-born. Although immigrants face an adjustment period upon arrival, their unemployment rate does not differ substantially from that of the native-born. Additionally, foreign-born and native-born have a similar distribution of employment across economic sectors, employment status, and informality. We conclude that immigrants have integrated well into the labor market, suggesting immigration could contribute to long-term economic growth in Chile.
Abstract: This essay seeks to contribute to the credit-channel literature by studying how the effects of foreign shocks can be amplified in the economy due to the existence of financial constraints at the firm-level in a small open economy as Chile. For this purpose, this study analyzes the evolution of Chilean manufacturing firms between 1995 and 2005 thanks to a panel based on the Annual National Survey of Industries, measures of financial constraints built on the work by Rajan and Zingales (1998) and pays special attention to the Asian crisis, an episode that hit particularly hard the Chilean economy in terms of contraction of the credit flow. Regarding the exit probability, during the Asian crisis firms with liquidity needs were more likely to leave the market. On the intensive margin side, the number of workers, wage-bill, total income, and value-added were more negatively affected by this crisis in financially constrained firms.
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Abstract: This paper studies returns to work experience in Chile, providing evidence in support of their relevance for human capital dynamics. Using the methodology proposed by Lagakos et al. (2018), several waves of the Socioeconomic Characterization Survey are exploited in order to provide a rich cross-section characterization. The findings suggest that, on average, workers maximize returns to experience throughout the initial years after entering the work force. Additional results deliver further evidence in favor of greater returns for workers with higher-educational level and for those who are employed in cognitive occupations. Furthermore, this article also provides evidence that under this criterion returns to experience exhibit a relevant gender gap in favor of male workers. In addition, it assesses how macroeconomic conditions affect the accumulation of these returns. After conducting an econometric analysis to avoid possible collinearity between age, time, and birth cohort effects, estimated returns are lower along the first years, while higher at the end of the workers' productive period. The life-cycle wage-growth profile documented by the literature for Chile is consistent with estimates for other countries with similar levels of development. Nevertheless, throughout the median of the individual's working life, returns are marginally lower than expected given the country's income level.
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Abstract: We use matched employer-employee data from the Chilean Internal Revenue Service to analyze within and between-sector job transitions in formal employment in Chile between 2005 and 2016. We find a large degree of worker mobility between sectors. In fact, for workers who separate from their jobs, the likelihood of finding a job in a new sector is on average similar to the likelihood of staying in the origin sector. However, average mobility hides significant heterogeneity between workers who change jobs frequently and those with more stable career paths. On average, both direct and indirect employment transitions are linked to wage gains, especially if workers shift to a new sector. This suggests that for a large group of workers the wage costs of moving across sector are relatively small.
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