Working Papers
This paper examines the impact of an increase in the cost of social insurance for workers on labor market decisions, and quantifies the value workers place on social insurance benefits when choosing between formal and informal jobs. I leverage a unique policy change in Costa Rica that increased social insurance contributions by 4% of workers' wages. Using continuous difference-in-differences based on industry-level variations in the share of informality, I find that workers in more informal industries are 2.85 percentage points more likely to exit the formal sector following the cost increase. The effect is particularly pronounced among younger workers, who have longer until retirement, and two-person households that benefit from spousal insurance. I develop and estimate a static discrete choice model that accounts for worker heterogeneity, industry-specific parameters, and uncertainty in medical expenses to further understand the choice of formality. The model estimates suggest that the value formality equates to about 60% of the worker's average earnings, with the value of insurance accounting for 45% of the perceived benefit of formal work. Counterfactual simulations indicate that health insurance is a key driver of formalization, as removing it from the formal sector would increase informality by 22%.
The Challenges to Modernize G2P Payments: Reaching the Last-Mile in Financial Inclusion, with Bridget Hoffmann, Camilo Pecha and Diego Vera-Cossío.
IDB Working Paper (Previous version: The Promises of Digital Bank Accounts for Low-Income Individuals)
We experimentally study an intervention in Colombia to encourage the reception of cash transfers through direct deposit into digital bank accounts. The probability of receiving transfers via direct deposit increased by 7.3 percentage points, generating savings for the government and increasing the timely reception transfers. The impacts were larger for beneficiaries without a financial history, although they were less responsive to the intervention. For this subgroup, the intervention improved access to formal credit markets. These findings highlight the potential and challenges of reaching the last mile of financial inclusion.
Work in Progress
Maternity Leave Benefits and Informality, with Elizabeth Jaramillo.
Reforming Social Security Systems: Implications for Labor Market Outcomes
Publications
Climate change’s impact on real estate prices in Chile, with Facundo Luna and Carlos Madeira.
PLOS Sustainability and Transformation, 2022.
Climate change should deteriorate the value of real estate, but studies are lacking for developing economies which may suffer the worst weather changes. We match an administrative register of all the real estate properties’ transactions in Chile between 2002 and 2020 with a high spatial resolution dataset of local temperatures and precipitation. Even after controlling for a wide set of home characteristics or fixed-effects for each property, we find that fluctuations in temperatures had an impact on the prices of residential homes and agricultural properties.
The impact of climate change on economic output across industries in Chile, with Carlos Madeira.
PLOS ONE, 2022.
Using region-industry panel data for Chile over the period 1985 to 2017, we find no effect of precipitation changes on GDP and a negative impact of higher summer temperatures on Agriculture-Silviculture and Fishing. An increase of one Celsius degree in the month of January implies a 3% and 12% GDP reduction in Agriculture and Fishing, respectively. There is also a negative effect of higher temperatures in January on Construction and Electricity, Gas, and Water. Our analysis suggests that climate change did not have a big impact on the Chilean economy during this period. Stress test exercises that select only the negative and statistically significant coefficients imply that the Chilean GDP would fall between -14.8% and -9% in 2050 and between -29.6% and -16.8% in 2100, according to our model.
Association Between Assistance With Medicaid Enrollment and Use of Health Care After Incarceration Among Adults With a History of Substance Use, with Marguerite E. Burns, Steven Cook, Lars M. Brown, Laura Dague, Steve Tyska, Cici McNamara, Ryan P. Westergaard.
JAMA Network Open, 2022.
Other publications
The Cost-Effectiveness of Air Pollution Information Provision Programs, with Bridget Hoffmann, Cristobal Ruiz-Tagle, and Alejandra Schueftan.
Inter-American Development Bank, 2021.
This paper examines the cost-effectiveness of two different air quality information programs that were implemented as part of randomized control trials. In the case of the SMS air quality alerts in Mexico City, we find that the program was not cost-effective in the experimental sample, but it would likely be cost-effective if the program were extended to all of Mexico City. In the case of real-time feedback on wood stove emissions in Valdivia, we find that the program was cost-effective in both the experimental sample and at scale.
Evidencias del Impacto de la Factura Electrónica de Impuestos en America Latina, with Juan Robalino. In Electronic Invoicing in Latin America, edited by Alberto Barreix and Raul Zambrano.
Inter-American Development Bank, 2017.
Inter-American Development Bank, 2016.
The Avancemos conditional cash transfer (CCT) program, which has operated since 2006 in Costa Rica, focuses on families living in extreme poverty and social vulnerability with adolescents and youth between the ages of 12 and 25. In August 2015, nearly 157,000 students received the cash transfer upon meeting certain co-responsibilities associated with school attendance and completing the school year in secondary school. Beneficiaries are eligible based on their score in the Target Population Information System (Sistema de Población Objetivo - SIPO), calculated through the Social Information Record (Ficha de Información Social - FIS). To receive the benefit, the mother or guardian of the student needs to sign a contract with the Joint Institute for Social Welfare (Instituto Mixto de Ayuda Social - IMAS) in which they commit to meeting the above mentioned co-responsibilities. Verification of the co-responsibilities is carried out by the IMAS in conjunction with the education centers. The payments are made monthly through a prepaid card issued by the National Bank of Costa Rica (Banco Nacional de Costa Rica - BNCR). This document is part of a series of studies carried out in several countries of Latin America and the Caribbean with the objective of systematizing understanding of the operations of CCTs. The other case studies are available on the IDB´s Conditional Cash Transfers website.
Conditional Cash Transfer Impact Evaluation: An Evaluation of the Costa Rican Secondary Education Program Avancemos with Catherine Mata.
Revista de Ciencias Económicas, 2015.
This paper evaluates the impact of Avancemos, a conditional cash transfer program in Costa Rica. Specifically, this paper measures the impact on student desertion for the first year of the program using a panel created with the Household Surveys for Multiple Purposes for the years 2006 and 2007, elaborated by the National Institute of Statistics and Census. Using econometric tools and quasi-experimental methodologies such as Propensity Score Matching and difference-in-differences, we find a positive impact associated with the program for desertion and reinsertion. Specifically, for between 10 and 16 percent of the students who did not leave high school, it was only due to Avancemos, meaning that without the program they would have abandoned their studies. This is why we can conclude that Avancemos had a positive impact according to its planned objectives of preventing dropouts and ensuring their reinsertion.