Research

A Simple Solution to the Problem of Independence of Irrelevant Alternatives in Choo and Siow Marriage Market Model (pdf) (a shorter version is published at Economics Letters, volume 186, January 2020)

This paper proposes a simple solution to the independence of irrelevant alternatives (IIA) problem in Choo and Siow (2006) model, overcoming what is probably the main limitation of this approach. The solution consists of assuming match-specific rather than choice-specific random preferences. The original marriage matching function gets modified by an adjustment factor that improves its empirical properties. Using the American Community Survey, I show that the new approach yields significantly different results affecting the qualitative conclusions of the analysis. The proposed solution to the IIA problem applies to other settings in which the relative ``supply'' of choices is observable.

Will You Marry Me … if Our Children Are Healthy? The Impact of Maternal Age and the Associated Risk of Having a Child with Health Problems on Family Structure (pdf)

Family structure is usually believed to affect children’s human capital. Is it possible that causality goes in the opposite direction? This paper shows that the behavior of family structure variables over the life cycle dramatically changes when women have babies in their forties. These data regularities align with a significant increase in the risk of having a child with health problems when women enter the last decade of their reproductive life. I present a simple theoretical model that provides a common underlying explanation for the data patterns and generates additional testable implications. I estimate the model predictions using ACS data.

Commuting Patterns, the Spatial Distribution of Jobs and the Gender Pay Gap in the U.S. (pdf)

This paper studies to what extent gender differences in commuting patterns explain the observed disparities between husband and wife in relation to earnings and wages. It is argued that the cost of commuting is higher for women because they bear a disproportionate share of housework and child-rearing responsibilities. Therefore, female workers tend to work relatively close to home. A \emph{`job location wage gap’} emerges because jobs located away from the central business district offer lower wages. Using pooled data from the American Community Survey, the results indicate that 10% of the gender pay gap among childless workers and more than 23% of the wage decline attributed to being a mother (“child pay penalty”) are explained by sex differences in commuting patterns. A conditional Oaxaca-Blinder decomposition indicates that short commutes are strongly associated with working in low-paying occupations and industries.

Reaching the Top or Falling Behind? The Role of Occupational Segregation in Women’s Chances of Finding a High-Paying Job Over the Life-Cycle (pdf) (R&R)

Using a two-stage decomposition technique, this paper analyzes the role of occupational segregation in explaining the probability of women vis-\`{a}-vis men of finding high-paying jobs over the life-cycle. Jobs are classified as highly-remunerated if their compensation exceeds a threshold, which is set at different values to span the entire wage distribution. Results obtained from pooled CPS surveys indicate that the importance of occupational segregation remains virtually unchanged over the life-cycle for low- and middle-wage workers. However, women’s access to high-paying occupations becomes significantly more restricted as workers age, suggesting a previously undocumented type of `glass ceiling’ in the U.S.

The Intra-Household Allocation of Resources in the Presence of Common-pool Goods (pdf)

(An older version circulated as “A Sharing Model of the Household: Explaining the Deaton-Paxson Paradox and Contesting the Collective Model”)

This paper presents a model of the household, which most distinctive feature is the presence of common-pool goods (rival and non-excludable) previously ignored in the literature. Under regularity conditions, the model can be interpreted as a hybrid between non-cooperative and collective models of the household. The derived household demand system is capable of explaining consumption regularities that existing models cannot describe. Empirically, the paper proposes and implements a new method to compute the elusive indifference scales coefficients.

The Inter-generational Fertility Effect of an Abortion Ban (pdf) (R&R)

(An older version circulated as “Do fertility preferences pass from parents to children? Evidence from the 1966 Romanian abortion ban”)

This paper analyzes to what extend fertility preferences correlates across generations, dealing with a largely understudied dimension of the demand for children. The paper exploits the abrupt implementation of the 1966 Romanian anti-abortion decree that discontinuously changed the composition of mothers in relation to their `taste’ for children. Using multiple Censuses, second-generation men and women born around the policy implementation are followed over their lives to study how the socio-economic status and fertility preferences of their parents affect their own reproductive behavior. Methodologically, the paper combines elements of the regression discontinuity design and the Heckman’s selection model. Results indicate that the intergenerational fertility correlation ranges from 0.15 to 0.25. One-third of this correlation is explained by inherited socio-economic status and two-thirds by `inherited’ preferences.

Difference-in-Differences when Treatment Status is Observed in Only One Period (with Irene Botosaru, Journal of Applied Econometrics) (pdf)

This paper considers the difference-in-differences (DID) method when the data comes from repeated cross-sections and the treatment status is observed either before or after the implementation of a program. We propose a new method which point-identifies the average treatment effect on the treated (ATT) via a DID method when there is at least one proxy variable for the latent treatment. Key assumptions are the stationarity of the propensity score conditional on the proxy and an exclusion restriction that the proxy must satisfy with respect to the change in average outcomes over time conditional on the true treatment status. We propose a GMM estimator for the ATT and we show that the associated overidentification test can be used to test our key assumptions. The method is used to evaluate JUNTOS, a Peruvian conditional cash transfer program. We find that the program significantly increased the demand for health inputs among children and women of reproductive age.

Infant Health during the 1980s Peruvian Crisis and Long-term Economic Outcomes (World Development Vol. 89, pp. 71–87, 2017) (pdf)

In 1988, Peru entered a severe economic crisis as a corollary of unfavorable external economic conditions, high levels of debt, and heterodox policies (the so-called debt crisis of 1980s). This paper investigates the short-term health shock experienced by infants during the crisis and its long-term impact on human capital accumulation. Because no longitudinal data are available, the estimation of causal effects is performed using multiple cross-section surveys that are representative of the same population over time. The short-term and the long-term effects are estimated exploiting the heterogeneous impact of the crisis across and within birth cohorts. Results indicate that the Peruvian crisis significantly affected the health of infants, particularly that of children born to low-educated mothers. From 1988 to 1990 vaccination declined 12 percentage points and infant mortality increased 2.3 percentage points among children born to low-educated mothers. In the long run, the children who suffered the most severe health shocks during the economic downturn of the 1980s performed worse in school. They had 0.12 fewer years of formal education and their probability of completing primary education by age 15 was three percentage points lower in relation to similar children born after the crisis. The results have strong policy implications. Children in developing countries should be safeguarded against health shocks during economic crises to avoid a decline in the accumulation of human capital in the long-run.

Acute Morbidity and Labor Outcomes in Mexico: Testing the Role of Labor Contracts as an Income Smoothing Mechanism (Journal of Development Economics, Vol. 110, Pages 1-12, Sep. 2014 ) (pdf)

Economic development is associated with an increase in the share of workers in salaried jobs. This process may be accompanied by a reduction in wage fluctuations if labor contracts are used as income smoothing mechanisms. This paper tests to what extent salaried jobs help reduce the volatility of wages by insuring workers against productivity shocks. Analysis of MxFLS data indicates that the average contractual arrangement in Mexico insures the worker against idiosyncratic productivity fluctuations associated with episodes of illness. The evidence is stronger for workers in formal jobs. To validate the methodology, the test is also implemented on a sample of self-employed workers. In this case, it correctly rejects the presence of insurance against productivity shocks.

Growth and Income Poverty in Latin America and The Caribbean: Evidence from Household Surveys (with Leonardo Gasparini and Leopoldo Tornarolli, Review of Income and Wealth, Series 53, Number 2, June 2007) (pdf)

This paper provides evidence on growth and income poverty in Latin America and the Caribbean (LAC). Results are obtained by processing microdata from household surveys of 18 LAC countries covering the 1990s and early 2000s. Over this period the LAC economies experienced heterogeneous patterns of growth and poverty changes. Most countries in the region had a rather meager performance in terms of poverty reduction. Episodes of positive, significant and unambiguously pro-poor income growth have been rare in Latin America.

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