Germano Wallerstein

This paper examines the heterogeneous effects of international trade on within-country inequality by decomposing trade's impact into two distinct channels: firm entry into export markets and the increase in average export values. Using matched employer-employee data covering the universe of formal workers and exporting firms in Brazil, I document a novel fact: these two adjustment margins differ fundamentally in their skill composition of labor. Export market entry increases demand for white-collar workers relative to blue-collar workers, while the converse holds for expansion of exporters. I develop a quantitative trade model that incorporates this heterogeneity, where the relative importance of these margins critically determines how trade affects the skill premium. In the model, the entry margin dominates during initial phases of trade liberalization, explaining the significant increase in skill premium observed in many developing economies following large trade liberalization episodes. Using the model, I find that trade explains 37% of the rise of the skill premium in Brazil between 1995 and 2002, while it contributed to 5% of its decrease between 2003 and 2014.

This paper studies how increases in agricultural productivity shape urban structural transformation. Leveraging data on the hierarchical structure of Brazil's urban network and the introduction of genetically modified soybeans, we measure the extent to which cities are affected by productivity changes in their downstream rural areas. We find that higher agricultural productivity leads to a greater share of employment in services of more connected cities. We further distinguish service sectors by the strength of their agglomeration economies, measured by the elasticity of productivity to city size, and by their income elasticity in consumption. The results show that agricultural productivity shifts urban production towards service sectors characterized by high agglomeration economies and higher income elasticities. These findings uncover a new channel through which agricultural productivity affects structural transformation across space.

Multilocation firms are ubiquitous and account for a substantial share of employment across countries. This paper, uncovers new facts on multilocation firms organize production across space. We show that multilocation firms specialize across locations; that this specialization correlates with location-specific occupational distributions and firms; and that firms are more likely to expand to locations that are abundant in the occupations that they lack. We interpret these patterns through the lens of a model in which workers are complementary within the firm but substitutable across locations, and firms endogenously choose their set of locations. In the model, differences in factor prices across locations incentivize geographical expansion, amplifying productivity differences across firms. We then quantify how this mechanism shapes the aggregate productivity effects of place-based policies.