Wiring Equality. The Impact of Internet on Wage Dispersion in Costa Rica 

Joint work with Sabrina Genz and Maarten Goos. Download SSRN Working Paper 

Abstract: This paper shows that investment in internet infrastructure compresses lower-tail wage inequality. We present a monopsony model with heterogeneous firms in which better job search by workers, due to increased internet access, forces wages to converge to the competitive wage. This results in larger wage increases for low-wage workers and a reallocation of workers from low-wage to high-wage firms, such that lower-tail wage inequality decreases. We then leverage the liberalization of the telecommunications market in Costa Rica as a natural experiment in a continuous treatment DiD design to show evidence in support of our model. We also show that lower-tail inequality in non-wage job characteristics decreases, and that minimum wages and collective bargaining are unlikely to be alternative explanations for our empirical results.

Who Works Where? Commuting Flows and Selection. Evidence from Costa Rica

Solo-authored

Abstract: This paper studies commuting flows and selection into commuting using novel survey data from Costa Rica that identifies individuals' county of residence and county of work. To understand commuting patterns in developing countries, I develop and test two complementary theoretical frameworks. First, a gravity model that incorporates heterogeneous commuting costs and county-specific relative returns to skill. Second, a Roy-type selection model with commuting costs that decrease strongly with skill. Taking these models to the data, I find that distance reduces commuting flows and that this negative effect is larger for flows of unskilled workers than of skilled workers. Additionally, I find that skilled workers are more likely to commute than unskilled workers, revealing positive selection into commuting. These findings provide support for the empirical predictions derived from both frameworks. I also document that counties exhibit marked differences in their ability to attract and to retain workers, revealing patterns of geographic labor market concentration. These findings suggest that inadequate transportation infrastructure creates differential spatial barriers, with unskilled workers being particularly disadvantaged.

Are They Connected? Internet and the Labor Market: Evidence from Costa Rica

Joint work with Wolter Hassink

Abstract: We study how gaining access to internet at home affects individual labor market outcomes in Costa Rica. To do so, we combine novel data on internet availability with rich household survey data. Exploiting the gradual expansion of broadband infrastructure between 2011 and 2020 to address endogeneity concerns, we confirm that internet access increases the probability of employment and the number of hours worked. We contribute with two novel results: internet at home increases the probability of access to social security and reduces the probability of underemployment. In terms of policy implications, our findings show that the positive impact of internet access goes beyond finding employment: it also improves job quality and it allows individuals to find additional hours of work.