This paper studies the impact of supply shocks in rural credit for investments on economic and land use outcomes in Brazil, focusing on agricultural productivity and deforestation. We use administrative data from the Brazilian National Development Bank (BNDES), the main provider of investment credit for agriculture in the country. The empirical strategy leverages as-good-as-random variation in aggregate lending supply shocks by a pool of financial institutions, employing novel developments in the Shift-Share Instrumental Variable (SSIV) literature and addressing the potential endogeneity that may arise from financial providers targeting farmers or regions with greater agricultural potential. The findings indicate that increased availability of rural credit for machinery acquisition is associated with growth in crop production and productivity, with suggestive evidence of a conversion of pastureland into cropland and zero effects on forest area. Therefore, these results suggest that credit for investment can foster productivity gains and enhance land use, without exerting pressure for deforestation. We find that the impact of rural credit for investment is more pronounced in more labor-intensive areas and when credit is directed towards the purchase of labor-saving equipment. This indicates that increases in labor productivity are the main driver of agricultural productivity gains.
There is evidence that particular types of immigration induce electoral shifts to the right-wing. With that in mind, we ask: is this purely a short run effect or is there persistence or attenuation through time? Also, to what extent is the effect mediated by changes in the living conditions of natives? This paper aims to unpack the underlying economic mechanisms through which low-skilled immigration shifted votes towards republicans in the United States between 1992 and 2016. Building upon a dynamic shift-share strategy for identification, we are able to disentangle between short and longer-term adjustment dynamics. We show that unemployment among low-skilled natives and local welfare expenditure per capita increase in the short run as a result of low-skilled immigration, but those effects fade through time, while voting is shifted towards republicans in the short run, but does not attenuate. We then use causal mediation analysis to measure the joint contribution of these channels to explain changes in voting. We estimate this explanation potential to be 60% in the short run. In the medium run, if only economic channels were at play, we would expect attenuation in voting shifts to be higher, suggesting that there are possibly other non-economic factors generating persistence in the right-wing shift.
How increased labor supply of immigrants affect firm performance and native labor market outcomes? While most of the migration literature focuses on native individual outcomes aggregated at some geographical level, hiring an immigrant is a firm-level decision that might change firm’s dynamics and might affect natives within firms or across firms operating in the same labor market. In this paper, we use a matched employer-employee dataset from 2000 to 2017 to analyse firm and native worker outcomes aggregated at the regional level. Our empirical strategy combines past settlements of immigrants and push factors (e.g. environmental disasters and political instability) at the country of origin, which are plausibly uncorrelated with local labor market outcomes in Brazil. We find evidence that immigration had a negative effect on the number of firms hiring formally in a region and also on native labor market outcomes (decrease in wages and increase in layoffs). We shed light on the mechanisms by analyzing establishment-level and worker-level outcomes within and across firms. We find evidence contrary to within-establishment adjustment hypotheses.
Expatriados, imigrantes e refugiados no Brasil: trajetórias e estratégias de integração econômica e social. [link] Mosaico, v. 8, n.13 (Imigração e Identidades), p. 161-179, 2017 (joint with Marco Ruediger, Margareth da Luz, Maria Isabel Couto, Janaina Fernandes, Bárbara Barbosa and Marcelo Rotenberg).