We study the location and occupational composition of establishments within firms between 1981 and 2016. Using Danish administrative employer-employee matched data, we document four interesting results regarding the internal spatial organization of firms. First, we show that the average number of establishments per firm increased by 21%. Second, the average distance of establishments and workers to their headquarters increased by around 100%. Third, these changes are mainly driven by the decentralization of production and business service workers and higher use of the latter. Fourth, we show that the ratio of managers to production and clerical workers within firms increased by 45%, driven particularly by headquarters and establishments located in the largest cities. These facts imply that firms are not simply becoming more spatially dispersed; instead, some activities, such as managerial, are increasingly being concentrated near firms' central offices.
Spatial Wage Differentials, Geographic Frictions and the Organization of Labor within Firms. (with Ditte Håkonsson Lyngemark). 2020 [PDF]
This paper studies the spatial structure of firms, both theoretically and empirically. Two new facts in Danish register data motivate the analysis. First, firms have become more fragmented over time. Second, headquarters (HQ) establishments have become more manager intensive, despite a significant increase in managerial wages at HQ locations. We study the roles of exogenous changes in wages across locations and communication costs in explaining these two trends. Immigration shocks are the source of identifying variation for changes in relative labor supply. Estimates indicate that increases in the wage of managers at the HQ relative to non-HQ, explain 50% of the increase in HQ managerial intensity. This can be explained by associated increasing demand for headquarter services as establishments become larger. Simulations suggest that wider wage gaps across locations can also lead to more establishments per firm, and this effect strengthens as communication costs fall.
The Unintended Consequences on Crime of the Latin American Criminal Procedure Revolution: Evidence From the Colombian Case. (with Angela Zorro-Medina and Daniel Mejia). 2018. [PDF]
During the 1990s, Latin America experienced a criminal procedural revolution (LACPR) when approximately 70% of its countries abandoned their inquisitorial system and adopted the U.S. adversarial model. Following the LACPR, the region experienced a dramatic increase in crime, consolidating it as one of the most violent areas in the world. Despite previous empirical evidence indicating that procedural law affects criminal behavior, the effects of the LACPR continue highly unexplored. In this paper, we use the Latin American case to evaluate the impact of an adversarial reform on crime rates. Exploiting the quasi-experimental implementation of the reform in Colombia, we use an event study approach combined with differences-in-differences to estimate the reform’s effects on criminal activity. Despite the opposite incentives the reform created, we find an increase associated with the procedural transformation in overall crime rates (22%), violent crime (15%), and property crime (8%). We also observe a dramatic decrease in drug offenses associated with lower arrest rates. Our findings contribute to the literature on Latin American crime and the link between procedural law and criminal behavior.
Work in Progress
The Impact of Brexit on Immigrant Entrepreneurship. (with Astrid Marinoni). 2020.
Pobreza, Brechas y Ruralidad en Colombia. (with Parra-Peña, R.I., & Ordoñez, L.) Revista Coyuntura Económica de Fedesarrollo, 2013, 43 (1), 15-36.
Un Enfoque Económico de la Detención Preventiva. Crecimiento de la Población Reclusa y Hacinamiento Carcelario en el Tránsito del Sistema Penal Acusatorio Colombiano (2003-2008). (with Hernandez, N., & Zorro-Medina, A.) In E. Lozano -Rodríguez (Ed.), Teoría y Puesta en Práctica del Análisis Económico del Derecho Colombiano (pp. 251-282) Bogotá: Ediciones Uniandes, 2016.
Old Working Papers
Birth Rates, Factor Shares and Growth. (with Alvarez, A., Gomez, C., & Zuleta, H. ) Bogotá: Documento CEDE No. 20 - 2019. Universidad de los Andes.
Certainty vs. Severity Revisited: Evidence for Colombia. (with Mejia, D., & Zorro-Medina, A.) Bogotá: Documento CEDE No. 21 - 2016. Universidad de los Andes.