Publications in Journals

"Routinization and Employment: Evidence for Latin America", with Gasparini, L., Brambilla, I., Falcone, G., and Lombardo, C., Desarrollo y Sociedad, Volume 95, 2023.

Abstract:  We study changes in employment across occupations characterized by different degrees of exposure to routinization in the six largest Latin American economies over the past two decades. We combine our own indicators of routine task content (RTC), based on information from the Programme for the International Assessment of Adult Competencies (PIAAC), with labor market microdata from harmonized national household surveys. We find that growth in employment was inversely related to the automatability of tasks typically performed in each occupation, and positively correlated with the initial wage. Consequently, the share of high RTC occupations in total employment decreased in all countries and periods. This decline is linked to shifts in the economic structure towards sectors more intensive in low RTC occupations, as well as changes in the intensity of use of different occupations within sectors.Note on this article: globaldev

"The impact of robots in Latin America: Evidence from local labor markets", with Brambilla, I., Falcone, G., and Gasparini, L., World Development, Volume 170, 2023.

Abstract: We study the effect of robots on labor markets in Argentina, Brazil, and Mexico, the major robot users in Latin America, during the period 2004--2016. We exploit spatial and time variations in exposure to robots arising from initial differences in industry specialization across geographic locations and the evolution of robot adoption across industries, to estimate a causal effect of robots on local labor market outcomes. We find that district's exposure to robots causes a relative deterioration in labor market indicators such us unemployment and labor informality. We document that robots mainly replace formal salaried jobs, affecting young and semi-skilled workers to a greater extent, and that informal employment acts as a buffer that prevents a larger increase in unemployment.

"Exploring gender differences in labor markets from the perspective of the task based approach", with Gasparini, L., Brambilla, I., and Falcone, G. Estudios de Economía, forthcoming, 2023.

Abstract: Using households survey microdata from Argentina, Brazil, Chile, Colombia, Mexico and Peru, we characterize changes in employment and wages between the mid-2000s and the late-2010s emphasizing the gender dimension from the viewpoint of the task-based approach. We employ surveys from PIAAC-OECD to study the task content of jobs and create an index of routine task content (RTC) of occupations. We document five facts. (i) The proportion of routine tasks is currently higher for women than for men. (ii) The employment structure is considerably more biased towards high-RTC jobs in Latin America than in OECD countries, for both genders. (iii) There was an increase in the employment participation of low-RTC jobs during the period under study, mainly driven by movements in the occupational structure of women, especially the young and middle-aged. (iv) Wage gains were relatively higher in high-RTC occupations, with this pattern more pronounced for men than for women. (v) While there was a modest reduction in the gender wage gap, the decline was stronger in computer-intensive occupations.   

"Una caracterización de los cambios en la distribución del ingreso en Argentina en el período 1992-2014 mediante un análisis de microdescomposiciones", Estudios Económicos, forthcoming, 2024.

Abstract: Este trabajo caracteriza la evolución de la distribución personal del ingreso de la población urbana argentina durante el período 1992-2014 utilizando un análisis de microdescomposiciones econométricas. Se realizan microsimulaciones en equilibrio parcial que no permiten estimar efectos causales sino cuantificar la importancia relativa de posibles determinantes de los ingresos en un escenario determinado. Los resultados sugieren que el cambio en la dispersión del ingreso laboral de los hombres es el determinante principal de los cambios observados en la distribución del ingreso per cápita familiar durante todo el período analizado. El incremento de los retornos a la educación explica alrededor de un 45 por ciento del aumento de la desigualdad de ingresos laborales entre 1992 y 1999, mientras la disminución de dichos retornos da cuenta de un 60 por ciento de la reducción de la desigualdad de ingresos laborales del período 2006-2014. El aumento en la participación laboral de las mujeres de menor nivel educativo y la reducción en la dispersión de sus ingresos laborales amortiguan una parte no menor (15 por ciento) del deterioro de la distribución del ingreso ocurrido durante la crisis socioeconómica de 1999-2002. El aumento de los ingresos no laborales, derivado principalmente de la ampliación de la cobertura de la red de seguridad social, explica cerca de un 30 por ciento de la reducción en la desigualdad de ingresos ocurrida durante el período 2006-2014.

"The asymmetric risks of automation in Latin America", with Gasparini, L., Brambilla, I., Falcone, G., and Lombardo, C., Desarrollo Económico, Volumen 62 (N° 235), 2022.

Abstract:  In this paper we characterize workers’ risks from automation in the near future in the six largest Latin American economies as a function of the exposure to routinization of the tasks that they perform and the potential automation of their occupation. We combine (i) indicators of potential automatability by occupation and (ii) worker’s information on occupation and other labor and demographic variables. We find that the ongoing process of automation is likely to significantly affect the structure of employment. In particular, unskilled and semi-skilled workers are more at risk of bearing a disproportionate share of the adjustment costs. Automation will probably be a more dangerous threat for equality than for overall employment.
Note on this article (spanish): LA NACION

"Automation and the jobs of young workers", with Brambilla, I., Falcone, G., and Gasparini, L., Latin American Economic Review, Volume 31, 2022.

Abstract: New automation technologies affect workers in a heterogeneous manner according to their demographic characteristics, skills, and the tasks they perform. In this paper we study the effects of automation on labor market outcomes in a developing country, Chile. We focus our analysis on the heterogeneous impacts of automation across cohorts. Does automation affect young workers differently than older workers? Do young workers tend to perform routine tasks? Are young workers in routine occupations more exposed to negative effects of technology? Our empirical strategy is based on exploiting differences in the routinization of tasks across districts and occupations and a change in the trend of automation technology adoption in Chile. We find that young workers are more easily displaced by automation than older workers of similar characteristics. At the same time, cohorts of young workers are more skilled and more mobile than older workers, which implies that they have good prospects of working in complement with automation technology in the near future. The young and unskilled are the most vulnerable group of workers.

"Costs and benefits of trade shocks: Evidence from Chilean local labor markets", with Falcone, G., and Gasparini, L., Labour Economics, Volume 73, 2021.

Abstract: We study Chile’s labor market responses to trade shocks during 1996–2006, exploiting spatial and time variations in trade exposure arising from initial differences in industry specialization across local labor markets and the evolution of shocks across industries. We take advantage of China’s supply and demand’s worldwide shocks to instrument for Chinese import competition and demand for Chilean exports. Our main finding is that increasing manufacturing import competition implied a significant rise in labor informality in more exposed local markets, especially among young and unskilled workers. These groups also suffered significant relative wage losses. Meanwhile, locations that benefited most from the increased demand for primary products experienced a relative increase in employment, particularly among young individuals, and reallocation from self-employment towards salaried jobs in the formal sector, along with relative wage gains among old-age workers. Interestingly, these areas experienced a smaller increase in tertiary education enrollment rates than less exposed areas. Notes on this article (spanish): CEDLAS; La Tercera

"Heterogeneous effects of Chinese import competition on Chilean manufacturing plants", with Falcone, G., Economía, Volume 20, 2020. 

Abstract:  We  study the effect of a trade-induced competitive shock, defined as rising import competition from China, on Chilean manufacturing plants. For identification, we exploit the fact that in 1995-2006, Chinese import penetration increased sharply in Chile, but this expansion varied widely across manufacturing industries. We use Chinese export growth in high-income industry-country pairs as instrument for Chinese import penetration. Our results suggest that plants in more exposed industries exhibit relative declines in revenue, employment, and physical capital and face a higher probability of exiting the panel than comparable plants in less exposed industries. All these effects are concentrated among establishments with low initial levels of productivity.  Notes on this article (spanish): CEDLAS; Foco Económico

"Efectos heterogéneos del comercio internacional: ¿Qué nos enseña la literatura?", Ensayos de Política Económica, Volume 3, 2019.

Resumen: Este trabajo revisa gran parte de la literatura dedicada a estudiar los efectos del comercio internacional sobre el crecimiento económico, el mercado laboral, la distribución del ingreso y el bienestar. De esta revisión se desprende que la integración comercial promueve el crecimiento, principalmente a través de mejoras en la productividad agregada de la economía, a la vez que genera una transformación de la estructura productiva que acarrea ganadores y perdedores. Además, los mercados están sujetos a fricciones que ralentizan las transiciones y acentúan los efectos heterogéneos del comercio sobre firmas, industrias, regiones y, en definitiva, sobre el bienestar de distintos individuos. Estos efectos se agudizan en presencia de restricciones financieras, baja movilidad laboral y debilidad institucional. En este contexto, es fundamental comprender los mecanismos por los cuales el comercio internacional genera dichos efectos para mejorar el diseño de políticas costo-efectivas, que permitan suavizar el proceso de ajuste para trabajadores y regiones desplazadas en pos de compartir los beneficios del comercio entre todos los miembros de la sociedad. 

"Globalización y composición tributaria: Evidencia para América Latina", con Porto, N., y Garbero, N., Revista de Economía Pública Urbana, Volumen 22, 2019.

Resumen: El objetivo de este trabajo es evaluar los efectos de la apertura comercial y la globalización sobre los ingresos fiscales en América Latina para el período 1990-2012. Los modelos estimados por MGM en Diferencias predicen que una mayor apertura comercial genera un aumento en la presión tributaria total, por impuestos domésticos y por impuestos al comercio exterior, mientras que la globalización incrementa la presión solo por impuestos al comercio exterior. Considerando la tasa efectiva de imposición al comercio, se documenta un efecto Laffer entre la apertura comercial/globalización y los ingresos al comercio exterior, indicando que los países están en la parte creciente de la Curva de Laffer.

Chapters in Books

New technologies and the future of jobs in Latin America, with Brambilla, I., Falcone, G., and Gasparini, L. In Albrieu, R. (Ed.): Cracking the future of work. Automation and labor platforms in the Global South, 2021. 

Policy Brief on this research: FOWIGSA report based on this project: FOWIGS22

Working Papers 

"Local Economic Development Through Export-Led Growth: The Chilean Case", with Falcone, G.

Abstract: We study the causal impact of export growth on Chilean local economic development during 2000--2006 by exploiting spatial and temporal variations in local exposure stemming from the interaction of past differences in industry specialization across local labor markets and the evolution of tariffs cuts and exports across industries. We find that growing exports implied a significant reduction in labor informality and labor income gains in more exposed local markets, driven by job creation and wage growth in the formal sector. These effects concentrate on senior skilled workers. Exposed locations also exhibit a greater relative decline in the poverty rate. 

"Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil", with Ciaschi, M., Falcone, G., and Neidhöfer, G., CEDLAS Working Paper N° 316, 2023.

Abstract: This paper investigates whether the impact of trade shocks on employment and wages persists across generations. Using survey data with retrospective information on parental employment and instrumental variables, we study the effect of increased Chinese import competition in Brazilian industries on individuals with differently exposed fathers. Results show that several years after the shock, children of more exposed fathers have lower education and earnings, lower chances of formal jobs, and are more likely to rely on social assistance. These effects are substantially stronger for children from disadvantaged background, indicating that the shock had a negative impact on intergenerational mobility.

"Robots, Exports and Top Income Inequality: Evidence for the U.S.", with Falcone, G., and Garriga, P., CEDLAS Working Paper N° 307, 2022.

Abstract: The last decades have witnessed a revolution in manufacturing production characterized by increasing technology adoption and a strong expansion of international trade. Simultaneously, the income distribution has exhibited both polarization and concentration among the richest. Combining datasets from the U.S. Census Bureau, the U.S. Internal Revenue Service, the International Federation of Robotics, EU KLEMS, and COMTRADE, we study the causal effect of industrial automation on income inequality in the U.S. during 2010--2015. We exploit spatial and time variations in exposure to robots arising from past differences in industry specialization across U.S. metropolitan areas and the evolution of robot adoption across industries. We document a robust positive impact of robotics on income for only the top 1 percent of taxpayers, which is largest for top income fractiles. Therefore, industrial automation fuels income inequality and, particularly, top income inequality. According to our estimates, one more robot per thousand workers results in relative increments of the total taxable income accruing to fractiles P99 to P99.9, P99.9 to P99.99 and P99.99 to P100, of 2.1 percent, 3.5 percent and 5.9 percent, respectively. We also find that robotization leads to increased exports to high-income and upper-middle-income economies, and that this is one of the key mechanisms behind the surge in top income inequality. 

"Automation trends and labor markets in Latin America", with Brambilla, I., Falcone, G., and Gasparini, L.  (new version coming soon) 

Abstract:  This paper studies the effects of automation of production on labor market outcomes, and whether there is an effect of automation on functional and personal inequality in Latin America. The paper combines several data sources and empirical strategies in order to approach the issues from different perspectives and to cover different dimensions of labor markets. The main issues that we focus on are: (i) the hypothesis that industries with a higher share of workers performing routine tasks are more likely to be affected by automation, using indexes of task routinization by occupation; (ii) the effects of automation on industry and local labor share, employment, wages, personal inequality and poverty. We focus on seven Latin American countries: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru, during the period 1992-2015.

"Organizational hierarchies and export destinations", with Brambilla, I., Falcone, G., and Porto, G. (submitted) 

Abstract:  This paper proposes a new link relating export destinations and the organization of the firm. We claim that the production of higher-quality varieties exported to rich destinations induces firms to restructure their production processes, becoming organizationally more complex. We introduce a theoretical model with these features and we explore the mechanisms using a panel of Chilean manufacturing plants. Our identification strategy relies on falling tariffs on Chilean products across destinations caused by the signature of Free Trade Agreements with high-income countries (the European Union, the United States, and South Korea). We find that Chilean plants that were induced by these tariff reductions to start exporting to high-income destinations increased the number of hierarchical layers and upgraded the quality of their products. This involved the addition of qualified supervisors that facilitated the provision of higher product quality. These effects took place at new high-income exporting firms.

"Import price and quality adjustment after exchange rate shocks", with Brambilla, I.

Abstract: We characterize price and quality adjustment on manufacturing imports in the event of a large devaluation, and we present a simple model with the arguments. We document empirical findings using import data for Argentina during 1999-2004. On January 2002, Argentina faced a large banking and currency crisis, and ended a ten-year currency board to adopt a floating exchange rate system. During 2002, the U.S. dollar appreciated more than 200% relative to the AR peso. We show that border prices (measured in U.S. dollars) and estimated qualities of imported manufacturing products both decreased significantly, and that there was substitution towards lower price and lower quality product varieties. We document that price reduction and substitution across varieties also take place in many other devaluation episodes. Motivated by these facts, we rely on structural modeling to quantify the contribution of three channels towards the decrease in border prices. We develop a theoretical framework where firms sell one differentiated variety in a market characterized by monopolistic competition, and consumers choose the variety that provides them with the highest indirect utility. When there is a depreciation, real income falls, and consumers become less willing to pay for quality. Firms may find it profitable to reduce both, the mark-up and the quality of a given variety, while there is also an increase in the market share of lower quality product varieties. We simulate product-level price changes that closely match observed price changes. The counterfactual analysis suggests that within variety quality adjustment accounts for 50-57% of product-level price reductions, substitution across varieties accounts for 31-41%, and mark-up adjustment explains 10-17%.Notes on this article (spanish): CEDLAS; Nada es Gratis