Working papers - Macroeconomics and Labor Economics

1. “The value of a formal job” (Job Market Paper)
   Abstract

   • Starting a labor career in a formal or informal job significantly impacts labor market outcomes due to differences in productivity, human capital accumulation, job destruction rates, and the presence of a minimum wage. To quantify this, I propose a frictional labor market model with two sectors and firm heterogeneity in productivity and destruction rates, where workers search off- and on-the-job and accumulate human capital, generating a three-dimensional job ladder. I calibrate the model using survey and administrative Chilean data. The model shows that, on average, the value of a formal job is equivalent to a lump sum payment of 13.5 minimum wages, with this value decreasing as human capital rises. Also, starting with a formal job leads to at least 6.5% higher total earnings after five years. Finally, productivity and offer arrival rates drive the difference between sectors, with job safety and human capital accumulation playing secondary roles.
   Presented at

   • Workshop on Gender and Labor Market Mismatch - LM2C2 & PUC Chile (2024) (Scheduled)
   • Conference- European Association of Labour Economists: Job Market Session (2024)
   • Macro Reading Group - University of Edinburgh (2023 & 2024)
2. “When education is not enough: Explaining labor informality inertia in Chile”
   Abstract

   • This paper studies the evolution of labor informality in Chile with a twofold contribution. First, I propose a measurement of informality between 1990 and 2020 that is consistent with administrative records and surprisingly stable. This is counter-intuitive since Chile experienced an increase in tertiary education in that period, often linked to a reduction of informality. Second, I adapt a search and matching model that explains the decrease in labor informality in Brazil to the Chilean case, and I estimate it using data from 2006-2017. The model is focused on the general equilibrium effects that affect informality when the skill composition of the workforce changes. I find that increases in the real minimum wages and decreasing TFP offset the impact of tertiary education, contributing to stable informality levels. This highlights differences between the Brazilian and Chilean economies, revealing potential diminishing returns to the effect of education on informality.
   Presented at

   • Workshop on Policy Evaluation* - MIPP & U. Chile (2023)
   • Workshop on Gender and Labor Market Mismatch- LM2C2 & PUC Chile (2024)
   • Conference - Chilean Public Policy Society (2023)
   • Conference for PhD Students - Royal Economic Society (2023)
   • Conference - Scottish Graduate Programme in Economics (2022)
   • Macro Reading Group and Ph.D. Seminar - University of Edinburgh (2021 & 2022)
3. “How substitutable are high-skilled workers? The case of expansion of tertiary education in Chile” with Roberto Cases
   Abstract

   • This paper explores the implications of tertiary education expansion in Chile from 2010 to 2019, mainly focusing on how large firms substitute workers with varying qualifications and experience. Despite a significant increase in the share of tertiary-educated workers, reaching 45 percent, there is no substantial decline in the wage premium associated with college-educated workers. Regarding occupations, we found a notable mismatch between educational attainment and job requirements, where most workers with higher vocational education find themselves overqualified, leading to a potential displacement of those workers by their college-educated counterparts. Then, we propose a novel model estimated through administrative data, and we found close-to-perfect substitutability between workers with higher vocational and college education. Finally, we emphasize the need to differentiate programs at each educational level to generate a more effective integration in the labor markets.
   Presented at

   • Conference* - Spanish Association of Labor Economists (2024)
   • Conference- Swiss Society of Economics and Statistics (2024)
   • Conference - Rimini Centre for Economic Analysis Conference (2024)
   • Conference - Scottish Economic Society (2024)
   • Conference - Rurh Graduate School of Economics Doctoral Conference (2024)
   • Conference - Chilean Public Policy Society (2023)
   • Ph.D. Seminar - University of Edinburgh (2023)
4. “Exploring the determinants of gig economy wages in a digitalized emerging market” with Ricardo González (R&R Socio-Economic Review)
   Abstract

   • This article explores the wage determinants of Chile's gig economy, a prominent sector in the developing world characterized by its algorithm-driven and flexible nature. Utilizing official survey data from 2020 to 2022, we analyze the wages of 67,570 workers, including 2.1% who are engaged in gig work. This approach offers a novel perspective compared to previous studies primarily focused on single-platform analysis. Contrary to common assumptions about the gig economy, our analysis reveals that gig workers do not experience a negative wage premium compared to traditional sector workers, particularly when adjusting for formality status. Furthermore, our study finds a more subdued correlation between education and income in the gig economy than in traditional employment. We also find similar gender wage gaps between both sectors, suggesting that technological advancements have not changed gender inequalities. These findings challenge existing narratives and offer valuable information for policymakers in developing economies.
5. “Transitions into and out of the gig economy” with Ricardo González (Submitted)
   Abstract

   • The gig economy has transformed global labor markets, yet its dynamics in emerging economies, where informal labor is prevalent, still need to be explored. Furthermore, there is limited knowledge of how gig work interacts with traditional employment sectors and unemployment. This article analyzes the transitions between gig work, traditional employment, and unemployment in Chile, an emerging economy with significant informal employment. Using longitudinal data from Chile's National Employment Survey from 2021q1 to 2024q1, we use probit models to analyze transition probabilities between these three states. We find gig jobs generally serve as transitional roles rather than long-term employment solutions, with substantial turnover and frequent shifts to traditional employment. Individuals in part-time roles or working for smaller companies are more likely to transition into gig employment, whereas those in more stable jobs are less inclined to shift. Additionally, those in informal jobs tend to enter and remain in the gig economy. The study also shows that individuals with higher education are more drawn to gig work, indicating a labor market segmentation that could deepen income inequalities. These insights highlight the dual role of the gig economy in providing temporary relief from unemployment and informality while presenting challenges of stability and long-term job security. Finally, we situate our findings within the existing literature and discuss the broader implications for labor regulation in Chile and similar contexts.

Working papers - Social Networks

1. “Breaking the populist spell: A comparative study of the association between interpersonal ties and populist preferences” with Ricardo González, Bernardo Mackenna and Esteban Muñoz [Alexis de Tocqueville Award]
   Presented at

   • Conference - World Association for Public Opinion Research (2023)

Publications

Peer-Reviewed articles

1. (2024) “Nonresponse in name generators across countries and survey modes” with Ricardo Gonzalez and Esteban Muñoz. Social Networks 79: 93-103.

2. (2021) “Personal income tax in Chile: Simulations with other OECD countries’ structure” (only abstract in English) with Rodrigo Vergara. Estudios Públicos 161: 69-111.

3. (2020) “On social capital and health: The moderating role of income inequality in comparative perspective” with Ricardo Gonzalez and Esteban Muñoz. International Journal of Sociology 50(1): 68-85.

4. (2019) “The value of personal connections: Resource generator and labor market in Chile”, Estudios Públicos 156: 69-105.

5. (2018) “The public wage premium and its evolution in the period 1990-2017” (only abstract in English) with Rodrigo Vergara, Estudios Públicos 152: 7-45.

Book Chapters

1. (2019) “The immigrants in the labor market” (in Spanish) with Rodrigo Vergara, in Isabel Aninat and Rodrigo Vergara (Eds.) Immigration in Chile. A multidimensional view, pp. 65-99. Santiago de Chile: Fondo de Cultura Económica

2. (2019) “Statistical characterization of immigration in Chile” (in Spanish) with Andrés Hernando, in Isabel Aninat and Rodrigo Vergara (Eds.) Immigration in Chile. A multidimensional view, pp. 379-407. Santiago de Chile: Fondo de Cultura Económica.