The group’s main objective is to analyze the state and dynamics of the primary labor market variables, as well as to explore certain topics, such as the links between gender and labor market participation, the evaluation of policies that affect the labor market and the impact of different labor market institutions. The iecon has a long tradition of carrying out labor market studies, and therefore has an extensive accumulation of work in regard to this topic from diverse theoretical perspectives, using both macro and microeconomic approaches.
Concretely, the research projects being carried out focus on: labor supply decisions and informality within the home; active employment policies; the impact of social assistance programs on different variables, particularly on informality; worker participation, labor unions and firm performance; the effects of the minimum wage on employment; and labor costs, dual labor markets and asymmetric shocks.
In addition, the Labor Economics group is in charge of the undergraduate course of the same name at the FCEyA.
Using an experimental-questionnaire method combined with randomized information treatments, this paper analyzes the drivers of individual inequality aversion. We elicit inequality aversion by asking a sample of more than 1800 Uruguayan students to choose a society for a hypothetical grandchild. Participants make a sequence of choices between imagined societies characterized by varying levels of average income and income inequality. In addition, we prime competing narratives regarding the sources of inequality in society. The main findings are that (1) the prevalence of inequality aversion is high: Most participants’ choices revealed inequality-averse preferences; (2) inequality aversion is increasing in the position of the hypothetical grandchild in the income distribution, like a normal good; (3) participants are more likely to accept inequality when it results from effort rather than luck independently of their grandchild’s position; (4) the effect of social mobility on inequality aversion depends on the grandchild’s income position: Mobility opportunities reduce (increase) inequality aversion if participants expect their grandchild’s income to increase (fall). The latter result is consistent with the idea that mobility may impact the desire for more or less redistribution through rational expectation and risk aversion.
We analyze the share and quality of publications of southern-based authors in top development economic journals between 1990 and 2019. We consider researchers as southern if they are based in low, lower-middle and upper-middle income countries (LIMCs), according to the World Bank country classification. Our results indicate that 74% of publications in top development journals are written by researchers not based in southern countries. Northern-based researchers’ prevalence is amplified by the fact that they are more often cited than their counterparts from developing countries. Southern-based researchers’ marginalization is also shown by the composition of editorial teams in development journals: only 17% of the editors of our selected journals are based in LIMCs. Interestingly, we find a strong correlation between the composition of the editorial board and the origin of publications. Despite the lower share of southern-based researchers, collaborations between northern- and southern-based researchers have grown significantly in the past thirty years, suggesting a potential decline in the relative academic isolation of southern scholars that may work to boost quality research and access to academic development.
This article considers how changes in Latin American countries’ age structures may affect
their long-term economic performance through the impact on labor supply, dependency ratios,
and productivity. It analyzes fourteen Latin American countries using population projections
for 2015–2050 and considering three scenarios. The basic scenario assumes constant sex- and
age-specific behavior concerning employment, while the other two scenarios imply increases
in female activity rates and significant human capital accumulation. The results illustrate the
heterogeneity of Latin American countries. In some of them, major productivity increases can
only be achieved through substantial changes in the incorporation of women into the labor
market, and especially in the educational level of the population as a whole. However, in most
of the region’s countries, the demographic factor is still favorable and there is scope to exploit
the demographic dividend.
Assumptions of the traditional income poverty measure have strong implications not confirmed by the evidence, but this measure is still widely used in gender poverty analysis. We explore the boundaries of the gender analysis of monetary poverty based on the currently available information (household surveys for 16 Latin American countries). Our results indicate that departing from the conventional methodology has more influence on women than men, worsening female indicators. Households emerge as crucial venues for income support for low income partnered women and for women with no access to any income, whose autonomy is seriously compromised due to this fact.
Between 2016 and 2018, we observe in Uruguay a steep decline of almost 20 percent in the number of total births, leading to the collapse of the adolescent fertility rate after decades of relative stagnation. We estimate the quantitative contribution on birth rates, especially teen births, of a policy of expanded availability of subdermal contraceptive implants. We exploit the expansion schedule of a large-scale policy of free-of-charge access to subdermal implants in the country's public health system through an event study to capture causal effects. We use detailed birth administrative records for the past 20 years. We document an average reduction of 3 percent in the birth rate in public health facilities across the two years after the policy was implemented in each department. These reductions were notably higher among teens and first births. Although changes in women's fertility decisions are a multicausal phenomenon, we claim that the expanded availability of subdermal contraceptive implants accounted for one-third of the teen and young women's birth collapse.
We examine levels of enforcement of conditions for two transfer programs and estimate how they affect teenagers’ time allocation, and in particular, time devoted to school attendance, labor supply and home production. We develop a structural discrete choice model in which young individuals and their parents decide how to allocate their time, including whether to attend school. They also choose how many hours to work in the market, how much time to devote to home production and leisure activity. To estimate the model, we use household panel data which combines administrative records and surveys covering the period of 2005–2012 in Uruguay, during which two consecutive CCT programs were introduced with different designs. Our model captures the share of individuals who are in school, who are working, who are both studying and working, as well as those who neither study nor work; we also capture the share and number of hours devoted to market work and home production, and individuals’ GPA distribution. The policy experiments performed indicate that school attendance can be increased by raising the level of enforcement and by sending the cash transfer to the teenagers rather than to their parents.
Based on detailed administrative tax records, we implement a bunching design to explore how individual taxpayers respond to personal income taxation in Uruguay. We estimate a very modest elasticity of taxable income at the first kink point (0.06) driven by a combination of gross labour income and deductions responses. Taxpayers use personal deductions more intensively close to the kink point and underreport income to the tax authority. Our results suggest that the efficiency costs of taxation are not necessarily large in contexts characterised by limited deduction opportunities. Policy efforts should be directed at broadening the tax base and improving enforcement capacity.
We estimated the impact of the minimum wage on wages, unemployment, and formal-informal sector mobility for women in the domestic-work sector in Uruguay. Applying the density-discontinuity design developed by Jales (2017), we used cross-sectional data for the period 2006–2016 from the National Household Survey and found that the minimum wage had significant effects on labor outcomes, with almost 20% of women increasing their wages to reach the minimum. This effect was observed in both the formal and informal sector, though the latter was not covered by the policy. We also showed a decline in employment in the domestic sector as well as a significant effect on formal-informal sector mobility with negative impacts on formal employment. We present suggestive evidence those effects were offset by other labor policies undertaken in the analysis period.
The disincentive effects of social assistance programs on registered (or formal) employment are a first-order policy concern in developing and middle-income countries. We study the impact of a conditional cash transfer (CCT) program in Uruguay on the employment of adult members in beneficiary households in a context of high informality. Our research design relies on the sharp discontinuity introduced by program eligibility rules around a poverty score threshold combined with longitudinal administrative data. We find reductions of about 6 percentage points (a 13% drop) in formal labor force participation among all beneficiaries and of 8.7 percentage points (a 19% drop) for single mothers. The implied elasticity of participation in the formal sector with respect to the net-of-tax rate is about 0.78 for the full sample and about 1.3 for single mothers...
In this article, we present a new command, qcte, that implements several methods for estimation and inference for quantile treatment-effects models with a continuous treatment. We propose a semiparametric two-step estimator, where the first step is based on a flexible Box–Cox model, as the default model of the command. We develop practical statistical inference procedures using bootstrap. We implement some simulations to show that the proposed methods perform well. Finally, we apply qcte to a survey of Massachusetts lottery winners to estimate the unconditional quantile effects of the prize amount, as a proxy of nonlabor income changes, on subsequent labor earnings from U.S. Social Security records. The empirical results reveal strong heterogeneity across unconditional quantiles.
This paper develops generalized method of moments-based (GMM-based) Lagrange multiplier tests for nonlinear hypotheses that are robust to locally misspecified possibly nonlinear alternatives. The procedure is based on an initial consistent GMM estimator of the parameters under a given set of nonlinear restrictions. The new test for one particular set of nonlinear hypotheses is consistent and has correct asymptotic size independently of whether the other, also nonlinear hypotheses, are correct or locally misspecified. To illustrate the usefulness of our proposed tests we consider testing rational expectations hypotheses using U.S. data.
This paper analyzes the channels of change of subjective well-being (SWB), and how are the effects of a social intermediation program. We develop a simple theoretical model to link SWB with the individual and reference wealth, the effort and the level of aspirations. After to overcome selection issues with an instrumental variable to identify causal effects, we find a negative impact on SWB being the main channel of this change is subjective relative wealth, i.e., the relation between the individual and the reference wealth. There is no effect through other theoretical channels, but the results on SWB are heterogeneous by psychological features; they are higher among those with low aspiration levels and external locus of control. Finally, we disentangle the main program characteristics that might generate this effect giving relevant information for the policymakers.