Publications

Human Capital Accumulation at Work: Estimates for the World and Implications for Development. 2023. (American Economic Journal: Macroeconomics 15(3): 191-223; co-authored with Remi Jedwab, Paul Romer, and Roberto Samaniego)

We (i) study wage-experience profiles and obtain measures of returns to potential work experience using data from about 24 million individuals in 1,084 surveys and census samples across 145 countries; (ii) show that workers in developed countries accumulate twice as much human capital at work as those in developing countries; (iii) use a simple accounting framework to find that the contribution of work experience and education to human capital accumulation and economic development might be equally important; and (iv) employ panel regressions to investigate how changes in the returns over time correlate with several factors such as economic recessions, transitions, and human capital stocks.

The Gender Labor Productivity Gap across Informal Firms. 2023. (World Development https://doi.org/10.1016/j.worlddev.2023.106229; co-authored with Mohammad Amin)

This study uncovers a gender labor productivity gap among informal firms in 14 developing economies. The mean labor productivity of women-owned informal firms is approximately 15.6 percent (0.17 log points) lower than that of men-owned informal firms. The difference in productivity is larger at the lower quantiles of the labor productivity distribution than at the higher quantiles. The Kitagawa-Oaxaca-Blinder and quantile decomposition methods are used to estimate the aggregate “endowment” vs “structural” effects, and individual factors’ contribution to the productivity gap. Several policy-relevant findings are revealed. First, the labor productivity gap at the mean is significantly larger due to lower education, prior work experience, capitalization, and less protection from crime among women than men owners of informal firms. The smaller size of the women-owned firms and their higher return from operations under contracts narrow the mean productivity gap. Second, the productivity gap at the mean and different labor productivity quantiles can be substantially narrowed by providing more resources to women owners of informal firms, such as education, managerial experience, and physical capital, without improvements in their returns to women-owned informal businesses. Third, overall, there is evidence of “sticky floors” for women owners, but not “glass ceilings”. Fourth, there is heterogeneity in the contribution of individual factors to the productivity gap at different quantiles of the labor productivity distribution. Targeting policies to the relevant quantiles will improve their effectiveness. Fifth, there are important similarities and differences between groups of countries in low-income Africa, middle-income Africa, and Latin America, as far as the gender labor productivity gap and its drivers are concerned. Thus, an eclectic policy approach is needed, combining the broader findings of the literature with the prevailing local conditions. Last, the data do indicate that a majority of women- and men-owned informal businesses would like to formalize.

Export Intensity and Its Effect on Women’s Employment. 2023. (Kyklos https://doi.org/10.1111/kykl.12346; co-authored with Mohammad Amin)

Using firm-level survey data for 29,962 manufacturing firms in 141 developing and emerging countries, the impact of exports (as a percentage of sales) on the share of female workers at the firm is estimated. The impact is positive, large, and statistically significant. For the baseline specification, moving from a firm that does not export to one that does all its sales abroad is associated with a 6.6 percentage point increase in the share of female workers. This positive relationship is much stronger when competition in the domestic markets is low, social attitudes and mobility laws are more favorable to women's work outside the home, and the law-and-order situation is better. We argue that these heterogeneities serve as important checks against endogeneity concerns. We also provide results using the average share of exports in a country–industry cell as an instrument. The policy implications of our findings are discussed in detail.

Why Are Firms in High-income Economies More Productive than in Middle-income Economies? Decomposing the Firm Labor Productivity Gap. 2023. (Studies in Comparative International Development https://doi.org/10.1007/s12116-023-09387-y ; co-authored with Mohammad Amin and Usman Khalid)

Studies have noted that output per worker varies enormously across countries. Using firm-level survey data, the present paper contributes to the related literature by analyzing difference in labor productivity between firms in 22 upper middle-income and 11 high-income countries. Labor productivity in upper-middle-income countries is about 57.5% lower than in high-income countries. The Oaxaca-Blinder decomposition analysis of the productivity gap reveals that the gap is somewhat larger due to differences in the level of contributory factors (endowment effect) than due to differences in the returns to such factors (structural effect). That is, 55.2% of the productivity gap is due to endowment effect and the remaining 44.8% is due to structural effect. The biggest contributors via the endowment effect include tertiary education attainment, law and order, and quality management. Factors that contribute most via the structural effect include secondary education attainment, market size, and law and order. Thus, our results underline the importance of human capital, institutions and market size for the upper middle-income countries aspiring to become high-income countries.

Does corporate social responsibility benefit society? Evidence from Latin America. 2022. (Emerging Markets Review https://doi.org/10.1016/j.ememar.2022.100944; co-authored with Gregmar Galinato and Marie Hyland)

This article measures the impact of firms' declaration of Corporate Social Responsibility (CSR) on education and environmental quality. We use 2006 data from the World Bank Enterprise Surveys, the sub-national Human Development Index and the World Health Organization which covers 10 countries in Latin America. We estimate Instrumental Variables regression models. We find that CSR declaration increases the probability of adopting community programs leading to a small, but significant, positive effect on education at the subnational level. Also, CSR declaration has no significant impact on our pollution measure, particulate matter, even when CSR increases the probability of adopting environmental programs.

Firms’ Behavior Under Discriminatory Laws and Women’s Employment in the Democratic Republic of Congo. 2023. (Feminist Economics 29(1): 70-96; co-authored with Silvia Muzi and Marie Hyland)

This article contributes to better understanding firms’ behavior in the presence of gender discriminatory laws and its linkages with labor market outcomes for women in a developing country setting. Using data collected through the World Bank Enterprise Surveys in the Democratic Republic of Congo, the study documents the existence of nonnegligible employer discrimination in the presence of discriminatory laws. Interestingly, discriminatory behaviors, and the related limitations in women’s autonomy, are more pervasive outside the capital city, Kinshasa, which suggests that differences in enforcement and social norms may be at play. The study also finds that, in those firms that do not enforce discriminatory laws, women benefit from better labor market outcomes, in terms of their representation among the upper echelons of management and their participation in the overall workforce. The positive relationship between nondiscriminatory behaviors and female employment is particularly strong in the manufacturing sector.

Does manager education play a role in the productivity of informal firms in developing economies? Evidence from firm-level surveys. 2022. (Review of Development Economics 26(2): 962-984; co-authored with Mohammad Amin)

The informal sector is dominant in developing economies, and the vast majority of the poor rely on it. There is much to learn about informal firms—the “businesses of the poor”—as little is known about the drivers of their performance. The present paper attempts to fill this gap in the literature by analyzing how labor productivity of informal firms in developing countries depends on the level of education of the manager or the main decision-maker of the firm. Using survey data for 3,854 informal or unregistered firms in 18 countries in Africa, Asia, and Latin America, we find that labor productivity is 28% to 33% higher when the manager has secondary or higher education versus only primary education or no education. The finding is robust to various robustness checks including parametric and semi-parametric specifications and confirmed using instrumental variables estimation.

Does mobile money enable women-owned businesses to invest? Firm-level evidence from Sub-Saharan Africa. 2021. (Small Business Economics https://doi.org/10.1007/s11187-021-00562-w; co-authored with Silvia Muzi).

This study connects two important findings in Sub-Saharan Africa. First, digital technologies such as mobile money have become widespread and have increased investment by businesses, especially in East Africa. Second, women-owned businesses in the region significantly lag behind their male counterparts in capital investments. Using data for 16 Sub-Saharan African economies, the study finds a positive relationship between mobile money use and investment by women-owned firms; the relationship is statistically insignificant for men-owned firms. This relationship is stronger for women-owned small and medium-sized enterprises. Potential channels are explored. Women-owned firms that use mobile money to transact with suppliers are more likely to invest. Mobile money use is also associated with a greater provision of customer credit and generally greater demand for more credit by women-owned firms. Such patterns are not observed for men-owned firms.

Absent laws and missing women: Can domestic violence legislation reduce female mortality? 2021. (Review of Development Economics 25(4): 2113-2132; co-authored with Mohammad Amin and Augusto Lopez-Claros)

This study explores the relationship between the presence of domestic violence legislation and the adult mortality of women relative to men. Using a panel of 159 economies between 1990 and 2014, domestic violence legislation is found to be associated with a lower women-to-men adult mortality ratio. The most conservative estimate suggests a 2.3% decline relative to the mean sample value. These findings are extended to show that domestic violence legislation is also negatively correlated with physical violence by intimate partners for a cross-section of economies. Sensitivity analyses reveal that the findings are robust to different estimation methods and empirical specifications.

Can Government Spending Boost Firm Sales? 2021. (Kyklos 74(4): 488-511; co-authored with Gregmar Galinato and Wentao Zhang)

We estimate the effect of government spending on firm production as measured by the value of sales in developing economies. We contribute to the literature by exploring the relationship between the size and composition of government spending on firm sales by workforce size and market destination of goods using instruments based on political institutions and fractionalization. We use a unique firm-level dataset across developing economies coupled with national government spending data. After instrumenting for the fiscal policies, we find that an increase in the proportion of spending that alleviates market failures significantly boosts sales output especially in non-exporting small and medium sized firms but not in large exporting firms. Total government spending positively affects sales output for firms of all sizes and non-exporters. The effect of the composition of government spending on firm output is more elastic than the effect of the size of government spending. The results are explained by the role of government spending in increasing bank loan access, allowing for technological innovation, and augmenting human capital thereby increasing firm output.

The Labor Productivity Gap between Formal Businesses Run by Women and Men. 2020. (Feminist Economics 26 (4): 228-258; co-authored with Isis Gaddis, Amparo Palacios Lopez, and Mohammad Amin)

This study analyzes gender differences in labor productivity in the formal private sector, using data from 126 mostly developing economies. The results reveal a sizable unconditional gap, with labor productivity being approximately 11 percent lower among women- than men-managed firms. The analyses are based on women’s management, which is more strongly associated with labor productivity than women’s participation in ownership, which has been the focus of most previous studies. Decomposition techniques reveal several factors that contribute to lower labor productivity of women-managed firms relative to firms managed by men: Fewer women-managed firms protect themselves from crime and power outages, have their own websites, and are (co-)owned by foreigners. In addition, in the manufacturing sector, women-managed firms are less capitalized and have lower labor costs than firms managed by men.

The Drivers and Impacts of Water Infrastructure Reliability: A Global Analysis of Manufacturing Firms. 2019. (Ecological Economics 163: 143-157; co-authored with with Marie Hyland)

Inadequate infrastructure impedes the productivity of manufacturing firms, with negative consequences for the wider economy. This study examines how water infrastructure copes with severe weather fluctuations and analyzes the effect of unreliable water supplies on the productivity of manufacturing firms, focusing predominately on firms in developing economies. This is achieved using firm-level data from World Bank Enterprise Surveys covering over 16,000 manufacturing firms in a cross-section of 103 countries. The study finds that periods of significantly low rainfall lead to higher water outages. The overall impact is driven by the effects of drought on less-developed economies, with economies at higher levels of income benefiting from more resilient water infrastructure. Furthermore, we find that incidents of water outages lead to lower firm productivity for firms in less-developed economies. For the average firm located in a low or lower-middle income economy, one additional water outage incident per day in a typical month can lead to losses of approximately 8.2% of annual sales. This calls for increased policy focus on water infrastructure services, particularly in poorer countries where water infrastructure and firms seem to be particularly vulnerable to the vagaries of rainfall.

Unequal laws and the disempowerment of women in the labor market: evidence from firm-level data. 2019. (Journal of Development Studies 55(5):822-844; co-authored with with Silvia Muzi and Mohammad Amin)

Institutions are defined as the set of rules that govern human interactions. When these rules are discriminatory, they may disempower segments of a population in the economic spheres of activity. In this study, we explore whether laws that discriminate against women influence their engagement in the economy. We adopt a holistic approach where we explore an overall measure of unequal laws also known as legal gender disparities and relate it to several labour market outcomes for women. Using data for over 59,000 firms across 94 economies, we find that unequal laws not only discourage women’s participation in the private sector workforce, but also their likelihood to become top managers and owners of firms. Suggestive evidence indicates that access to finance, property ownership, business registration, and labour market constraints are pathways by which legal gender disparities disempower women in the private sector.

Decomposing the Labor Productivity Gap between Migrant-Owned and Native-Owned Firms in Sub-Saharan Africa. 2019. (Journal of Development Studies 55:9, 2065-2082; with Mohammad Amin and Amparo Palacios Lopez)

Migration studies have been primarily based on the movement of individuals from developing to developed economies, with a focus on the impact of migrants on host country wages. In this study we take a different angle by exploring the labour productivity of migrant-owned firms versus native-owned firms in 20 African economies using firm-level data. We find that labour productivity is 78 per cent higher in migrant-owned firms than native-owned firms. Using the Oaxaca-Blinder decomposition method we find that structural effects account for 80 per cent of the labour productivity gap. Returns to manager education largely explain the productivity advantage of migrant-owned firms over native-owned firms. Interactions with the government, access to finance, informality, and power outages are also considerable contributors to the labour productivity gap.

The Burden of Water Shortages on Informal Firms. 2018. (Land Economics, 95(1): 91-107)

The informal sector in developing economies is a significant source of livelihood for a sizable portion of the population. This study uncovers the effect of poor water infrastructure on the productivity of informal firms. This is achieved using firm-level data for 12 developing economies between 2009 and 2014. The findings indicate that an increase of one standard deviation of the total duration of water shortages in a month can lead to annual average losses of about 14.5 percent of the monthly sales per worker for the average informal firm in the sample that uses water for business activities.

Competition or Cooperation? Using Team and Tournament Incentives for Learning Among Female Farmers in Rural Uganda. 2018 (World Development 103: 216-225; co-authored with Kathryn Vasilaky)

This study explores the behavioral learning characteristics of smallholder female farmers in Uganda by quantifying the amount of information learned under different incentive schemes. The paper shows how competitive versus team incentives compare in motivating Ugandan farmers to learn and share information relevant to adopting a new agricultural technology. We find that tournament-based incentives provide greater outcomes in terms of total information learned than threshold-based team incentives. Furthermore the order of the incentive – whether the tournament precedes or follows the team incentive scheme – does not affect the volume of information learned. New information introduced between rounds was learned by more individuals under team incentives than under tournament incentives. The study provides direct practical policy recommendations for improving learning in the context of agriculture in Uganda

Does Mobile Money Use Increase Firms' Investment? Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania. 2018 (Small Business Economics 51: 687-708; co-authored with Silvia Muzi and Jorge Rodriguez Meza)

Private investment can be an important engine of economic growth in East African countries that are plagued with adverse economic conditions, despite recent growth rates. Against this backdrop, there has been substantial penetration of mobile money, moving beyond simple person-to-person exchanges towards adoption by private firms. This study explores whether there is a relationship between firm adoption of mobile money and firm investment. Using firm-level data that are nationally representative of the private sector in three East African countries—Kenya, Tanzania, and Uganda—a positive relationship is found between mobile money use and firm’s purchase of fixed assets. This relationship is attributed to reduced transaction costs, increased liquidity, and increased credit worthiness associated with the use of mobile phone financial services. The finding is largely driven by small- and medium-sized enterprises (SMEs).

The Challenge of Addressing Consumption Pollutants with Fiscal Policy. 2017 (Environment and Development Economics 22(5): 624-647 ; co-authored with Gregmar Galinato)

The authors develop a theoretical model that elucidates the relationship between the quality of governance, the composition of government spending and pollution as a by-product of the consumption process. In particular, they determine the impact of government spending that alleviates market failure such as subsidies to the poor which reduce credit market failure and environmental regulations to correct for pollution externality. It is found that a shift in government spending towards goods that alleviate market failure has countervailing effects – consumption pollution rises due to increases in income, but consumption pollution also falls due to increasing environmental regulations. Conditional on the government adopting a democratic regime, the effect through environmental regulations outweighs the effect through income leading to lower consumption pollution. The authors estimate an empirical model and find that the results support their theoretical predictions.

An Exploration of the Relationship between Police Presence, Crime and Firms in Developing Countries. 2016 (Development Policy Review 34(5): 691-719)

Economic theory predicts that a rise in police presence will reduce criminal activity. However several studies in this field have found mixed results. This study adds to the literature by exploring the relationship between the size of the police force and crime experienced by firms. Using survey data for about 12,000 firms in a cross‐section of 27 developing countries it is found that increasing the size of the police force is negatively associated with crime experienced by firms. Results are confirmed using a panel of firms for a subset of countries for which data are available. It is also found that this negative relationship is stronger under certain macroeconomic circumstances.

Does Paternity Leave Matter for Female Employment in Developing Economies? Evidence from firm-level data. 2016 (Applied Economics Letters 23(16): 1145-1148; co-authored with Alena Sakhonchik and Mohammad Amin)

Analysis using firm-level data for a sample of 33,302 firms in 53 developing countries shows that women’s employment among private firms is significantly higher in countries that mandate paternity leave versus those that do not. A conservative estimate suggests an increase of 6.8 percentage points in the proportion of women workers associated with mandating paternity leave. The empirical specification is immune to spurious correlations that affect the level of women and men employment equally and also robust to a large number of controls for country and firm characteristics.

Women Managers and the Gender-Based Gap in Access to Education: Evidence from Firm-Level Data in Developing Countries. 2016 (Feminist Economics 22(3): 127-153; co-authored with Mohammad Amin)

A number of studies explore the differences in men's and women's labor market participation rates and wages. Some of these differences have been linked to gender disparities in education access and attainment. The present paper contributes to this literature by analyzing the relationship between the proclivity of a firm having a top woman manager and access to education among women relative to men in the country. The study combines the literature on women's careers in management, which has mostly focused on developed countries, with the development literature that has emphasized the importance of access to education. Using firm-level data for seventy-three developing countries in 2007–10, the study finds strong evidence that countries with a higher proportion of top women managers also have higher enrollment rates for women relative to men in primary, secondary, and tertiary education.

Are Large Informal Firms More Productive than the Small Informal Firms? Evidence from Firm-Level Surveys in Africa. 2015 (World Development 74: 374-385; co-authored with Mohammad Amin)

Using data for over 500 informal or unregistered firms in seven countries in Africa, this study explores how labor productivity varies between small and large informal firms. We find robust evidence that small informal firms have higher labor productivity than large informal firms. Thus, even though poor performance of informal firms is typically attributed to their small size vis-a`-vis registered or formal sector firms, incremental increases in the size of informal firms does not necessarily imply a narrowing of the formal–informal firm productivity gap.

The Time Cost of Documents to Trade. 2015 (International Trade Journal 29: 254-272; co-authored with Mohammad Amin).

The article shows that the number of documents required to export and import tend to increase the time cost of shipments. However, the increase in the time cost of increased documentation is much larger for countries that are relatively poor and large in size. One interpretation here is that the relatively rich countries that have more resources and the relatively small countries that rely more on trade invest more in building efficient documentation systems. Our findings suggest caution in interpreting how input-based measures, such as the number of required documents to trade, affect outcome measures.

Entrepreneurship and the Allocation of Government Spending Under Imperfect Markets. 2015 (World Development 70(2015):108-121)

Previous studies have established a negative relationship between total government spending and entrepreneurship activity. However, the relationship between the composition of government spending and entrepreneurship has been woefully under-researched. We fill this gap by empirically exploring the relationship between government spending in social and public goods and entrepreneurial activity under the assumption of credit market imperfections. By combining macroeconomic government spending data with individual level entrepreneurship data we find a positive relationship between increasing the share of social and public goods at the cost of private subsidies and entrepreneurship while confirming a negative relationship between total government consumption and entrepreneurial activity.

Government Spending and Air Pollution in the US. 2015 (International Review of Environmental and Resource Economics 8(2): 139-189 ; co-authored with Ramón López)

This study examines the effect of the composition of federal and state government spending on various important air pollutants in the United States using a newly assembled data set of government expenditures. The results indicate that a reallocation of spending from private goods to social and public goods by state and local governments reduces air pollution concentrations while changes in the composition of federal spending have no effect. An increase in the share of social and public goods spending by state and local governments by 1 standard deviation reduces sulfur dioxide concentrations by 2–3%, particular matter 2.5 concentrations by 3–5%, and ozone concentrations by 2–6% of their respective standard deviations. The results are robust to various sensitivity checks.

Data: Expenditure Data, Online Appendix

Does Mandating Non-discrimination in Hiring Practices Influence Women’s Employment? Evidence Using Firm-level Data. 2014 (Feminist Economics 21(4): 28-60; co-authored with Mohammad Amin)

This study explores the relationship between mandating a nondiscrimination clause in hiring practices along gender lines and the employment of women versus men in fifty-eight developing countries. Using data from the World Bank’s Enterprise Surveys (2006–10), the study finds a strong positive relationship between the nondiscrimination clause and women’s relative to men’s employment. The relationship is robust to a large number of controls at the firm and country level. Results also show sharp heterogeneity in the relationship between the nondiscrimination clause and women’s versus men’s employment, with the relationship being much bigger in richer countries and in countries with more women in the population as well as among relatively smaller firms.

Are There More Female Managers in the Retail Sector? Evidence From Survey Data in Developing Countries. 2014 (Journal of Applied Economics, XVII (2): 213-228 ; co-authored with Mohammad Amin)

Using firm-level data for 87 developing countries, the paper analyzes how the likelihood of a firm having female vs. male top manager varies across sectors. The service sector is often considered to be more favorable towards women compared with men vis-à-vis the manufacturing sector. While our exploration of the data confirm a significantly higher presence of female managers in services vs. manufacturing, the finding is entirely driven by the retail firms with little contribution from other service sectors such as wholesale, construction and other services. We also find that the greater presence of female managers in the retail sector vs. manufacturing is much higher among the relatively small firms and firms located in the relatively small cities. These findings could serve as useful inputs for the design of optimal policy measures aimed at promoting gender equality in a country.

Use of Imported Inputs and the Cost of Importing: Evidence from Developing Countries. 2015 (Applied Economics Letters, 22 (6): 488-492; co-authored with Mohammad Amin)

For a representative sample of manufacturing firms in 26 countries, the article shows that changes in the cost of importing over time is significantly and negatively correlated with changes in the percentage of firm’s material inputs that are of foreign origin. Furthermore, we show that there may be a non-linear relationship between import costs and imports. These findings are important as recent studies point towards a significant positive effect of imported inputs on productivity and growth. We hope that the present article inspires more work on the determinants of imported input usage especially in developing countries.

Do Government Private Subsidies Crowd Out Entrepreneurship? 2014. European Economics Letters, 3(1): 22-25. (cited in Harvard Business Review, Wall Street Journal)

Although several studies have found a negative relationship between government spending and entrepreneurship, much debate remains regarding the components of government spending responsible for this association. We contribute to the literature by specifically exploring the relationship between government private subsidies and entrepreneurship. By combining macro-economic government spending data with individual level entrepreneurship data, we find a negative association between the share of private subsidies and entrepreneurship. However, findings are less straightforward when we delve deeper into the components of private subsidies and its association with different kinds of entrepreneurship.

Harvard Business Review Blogs: Bigger Government Doesn’t Always Mean Less Wall Street Journal Blogs: Government Subsidies Can Hold Back Entrepreneurship

Economic Growth and Crime Against Small and Medium Sized Enterprises in Developing Economies. 2014 (Small Business Economics, 43(3) 667-695)

Several studies have explored the relationship between economy-level crime rates or individual-level crime and economic growth. However, few studies have examined the relationship between economic growth and crime against firms. Using data for about 12,000 firms in 27 developing countries this study finds that economic growth is negatively associated with crime. This relationship is stronger for small and medium firms than large firms. The study also explores several economy-wide factors and their influence on the growth–crime relationship for small and medium enterprises. The results are robust to various sensitivity checks.

Imports of Intermediate Inputs and Country Size. 2014 (Applied Economics Letters, 21(11): 738-741 ; co-authored with Mohammad Amin).

The article analyses the relationship between country size and the use of imported intermediate inputs by firms in 76 developing countries. Recent evidence indicates that the use of imported inputs can have a large positive effect on productivity and growth, thus motivating a better understanding of the determinants of foreign inputs. Our results confirm that as is the case with exports, use of imported intermediate inputs is much higher at the extensive and intensive margin in small relative to large countries. Our results for imported inputs are comparable in magnitude with that for exports.

Is There a Gender Bias in Crime Against Firms for Developing Economies? 2013 (Women's Studies International Forum 37: 1–15)

This study explores the relationship between firms with a presence of female ownership and losses due to crime experienced by firms using data for about 12,000 firms in 27 developing countries. The results suggest that there may be a positive association between the losses experienced by firms due to crime and the presence of female ownership, a result consistent with findings in the literature on crime and female headed households. The results are retained for firms with a female owner and a top female manager. These results provide some support for gender based policies given the potential inefficiencies if crime targeting female owned and managed firms discouraged female labor participation. Several macro-economic factors weaken or strengthen this relationship, implying that gender based policies in tandem with certain macro factors may be more effective.

Fiscal Spending and the Environment: Theory and Empirics. 2011 (Journal of Environmental Economics and Management, 62: 180-198; co-authored with Ramón López and Gregmar Galinato).

During economic crises, governments often increase fiscal spending to stimulate the economy. While the fiscal spending surge may be temporary, spending composition is often altered in favor of expenditures on social programs and other public goods which may persist over time. We model and measure the impact of fiscal spending patterns on the environment. The model predicts that a reallocation of government spending composition towards social and public goods reduces pollution. However, increasing total government spending without altering its composition does not reduce pollution. We empirically test these predictions for air and water pollutants showing that they are fully supported.

Chapters in Books:

Trade and the Environment. 2009 In: Reinert, K. A., Rajan, R.S., Glass, A. J., L. S. Davis (Eds.), The Princeton Encyclopedia of the World Economy. Princeton, NJ: Princeton University Press (with Ramón López).