CEDE

2016

Do institutional investors unbind firm financial constraints? Evidence from emerging markets

Lugar W-102
Conferencista Carlos Pombo, Universidad de los Andes
Coautores Roberto Álvarez (Universidad de Chile) y Mauricio Jara (Universidad de Chile)
Abstract Using firm-level information for 11 larger emerging economies for the period -2003-2014, this article analyze the impact of firm investment ratio by the presence of institutional ownership and the effects that institutional investor heterogeneity has on firm financial constraints. Results show that the presence of institutional ownership reduces firm cash flow sensitivity for restricted samples using size and Kaplan and Zingales index. Investor heterogeneity regressions show that independent and foreign institutional investors reduces firm financial constraints explained by direct investor activism, lower monitoring costs and better corporate governance specially across small and medium-size firms.
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Fecha 22/11/2016
Hora 12:30 a 1:45 pm.

Stereotypes, Crime and Justice

Lugar W-102
Conferencista Rajiv Sethi, Universidad de Columbia
Coautores Dan O'Flaherty
Abstract This talk will provide an overview of trends in crime and punishment in the United States over the past few decades, with particular attention to racial disparities in offending, victimization, arrest, and incarceration. A key theme is the role of stereotypes in conditioning interactions between victims and offenders, parties to disputes, officers and suspects, and witnesses and prosecutors. In particular, stereotypes are important in accounting for patterns in the data on robbery, homicide, and officer-involved shootings. Stereotypes can also facilitate the interpretation of incentive-based phenomena in essentialist terms, and thus affect attitudes towards mass incarceration within the general public. The relevance of these arguments for other societies with a history of hierarchical organization will be discussed.
Fecha 15/11/2016
Hora 12:30 a 1:45 pm.

Wandering Astray: Uncertainties, Schooling and Crime

Lugar W-102
Conferencista Nicolás Grau, Universidad de Chile
Coautores Chao Fu (University of Wisconsin)  y Jorge Rivera (Universidad de Chile)
Abstract We build and estimate a dynamic model of teenagers' decisions of schooling and crime. Our model incorporates four groups of forces into a coherent framework: heterogeneous endowments, unequal opportunities, uncertainties faced by teenagers about themselves, and contemporaneous shocks. We estimate the model using administrative data from Chile that link school records with criminal records in teenage years. We use the estimated model to examine the effectiveness of counterfactual policies that aim at keeping teenagers "on track" and reducing inequality.
Fecha 10/11/2016
Hora 12:30 a 1:45 pm.

Los Concursos Docentes y Desempeño Académico de los Estudiantes en Colombia

Lugar W-102
Conferencistas Zelda Brutti, Instituto de Economía de Barcelona y Fabio Sánchez, Universidad de los Andes
Abstract En 2002 la carrera de los maestros de las escuelas públicas de Colombia fue reformada en forma significativa a través de la introducción de un examen de ingreso y de incentivos de calidad adicionales –Decreto 1278 de 2002. Este artículo estima el impacto de esa reforma sobre el desempeño de los estudiantes que terminan la secundaria y toman la prueba SABER 11. Los resultados encontrados indican que una mayor proporción de maestros nuevos en un área particular (matemáticas, ciencias, lenguaje, etc.) está positivamente asociado con un mayor puntaje en la prueba SABER 11 en esa área particular, no obstante los efectos encontrados no son de gran magnitud. Se evidencia en adición que los maestros nuevos que obtuvieron las calificaciones más altas en su examen de ingreso tienden a abandonar rápidamente la carrera docente.  También documentamos que una porcentaje significativo –superior a 30%- de los maestros nuevos lo conforman maestros temporales y que no lograron el puntaje mínimo para pasar el examen de ingreso. Estos últimos están asociados con un menor puntaje en la prueba SABER 11.
Fecha 08/11/2016
Hora 12:30 a 1:45 pm.

Orientaciones de la política económica de transportes en Perú 2014-2016

Lugar W-102
Conferencista José Gallardo, Pontificia Universidad Católica del Perú - PUCP.
Abstract En este seminario se busca explicar el diagnóstico del equipo económico que asumió en 2014 el gobierno en Perú, respecto de la situación de la economía  y los énfasis de la política pública desde entonces. Se hará énfasis en cómo el análisis económico de las políticas públicas permitió establecer un diagnóstico y los ejes principales para solucionar los problemas fundamentales. En particular, se mostrará que los ejes de la política pública enfatizados fueron la diversificación productiva y el capital humano, para explicar el rol de la inversión en infraestructura en el contexto de esta visión. Se hará énfasis en cómo la implementación de la red de metros y sus desafíos se convierten en un caso de implementación económica de políticas públicas que deja enseñanzas para los países de América Latina.
Fecha 03/11/2016
Hora 12:30 a 1:45 pm.

Calidad estructural y calidad de proceso en centros de educación inicial en Colombia

Lugar W-102
Conferencista Raquel Bernal, Universidad de los Andes
Coautores Sonya Krutikova (Institute for Fiscal Studies), Orazio Attanasio (UCL) y Marta Rubio-Codina (BID)
Fecha 01/11/2016
Hora 12:30 a 1:45 pm.

Linking firm structure and skill premium

Lugar W-102
Conferencista David Perez-Reyna, Universidad de los Andes
Coautores Enoch Hill (Wheaton College) y Michael Maio
Abstract We propose an original model of firm hierarchy which suggests that firm structure is important for understanding the wage structure. In our model, more productive firms choose to employ more levels of management, which requires a higher average level of skill in workers and consequently a higher average skill premium. This is consistent with what we document in the Chilean data and also agrees with the firm size to skill premium relationship commonly documented in the literature. Additionally, our model predicts that skill premium is increasing in the ratio of workers to managers, a fact we also observe in the Chilean data.
Fecha 25/10/2016
Hora 12:30 a 1:45 pm.

Inputs, Incentives, and Complementarities in Primary Education: Experimental Evidence from Tanzania

Lugar W-102
Conferencista Mauricio Romero, University of California - San Diego
Coautores Isaac Mbiti (University of Virginia), Karthik Muralidharan (University of California - San Diego), Constantine Manda (Twaweza), Youdi Schipper (Twaweza), and Rakesh Rajani (Twaweza)
Abstract Recent learning assessments have documented the low skill levels attained by pupils in Tanzanian schools. These low levels of learning are driven in part by limited accountability in the education system, which is reflected in the frequent absence of teachers from classrooms. This is further compounded by the resource constraints that schools face. In this study we conduct a randomized experiment to examine the effectiveness of increasing resources to schools relative to increasing teacher incentives, and the complementarity between teacher incentives and school resources. Specifically, we compare the student learning outcomes between schools that were randomly assigned to one of four different interventions: one in which we provide schools with extra resources through capitation (or per pupil) grants paid directly to the school bank account, one in which we provide teachers with a bonus based on the performance of their students on an externally administered exam, one in which schools received both programs, and the control group which received no support. Overall, we find that solely providing resources to schools does not improve learning outcomes. We also find that the teacher incentives did not significantly improve learning outcomes. However, we find learning outomces did significantly improve when teacher incentives were coupled with extra school resources.
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Fecha 20/10/2016
Hora 12:30 a 1:45 pm.

Social Media and Collective Action: A Cross-Country Approach

Lugar W-102
Conferencista Leopoldo Fergusson, Universidad de los Andes
Coautor Carlos Molina, Universidad de los Andes
Abstract Internet and social media have been considered main drivers of recent political turmoil and protests, most notably allegedly playing an important role during the Arab Spring. While rigorous evidence on the political implications of new media is not altogether absent, existing research has focused on a number of specific episodes and much of this perception is mainly the result of journalistic analyses based on anecdotes rather than methodical research. In a large panel of countries, we examine whether Facebook increases various forms of collective action and political activity. To estimate the causal impact of Facebook on political outcomes, we exploit Facebook's release in a given language as an exogenous source of variation in access to social media where those languages are spoken. Our estimates imply a cumulative effect of 15% additional protests over the span of three years.
Fecha 18/10/2016
Hora 12:30 a 1:45 pm.

Primer concurso de Datos Abiertos DNP-3ie

Lugar W-102
Conferencista Norma Gómez y Nadia Puerta, DNP
Abstract El DNP sistematiza información de sus evaluaciones de Políticas Públicas que se dispone para el público en general en el Catálogo ANDA del DNP (https://anda.dnp.gov.co/index.php/catalog). Para promover el uso de esta información hemos unido esfuerzos con la Iniciativa Internacional para Evaluación de Impacto 3ie, y hemos organizado el Primer Concurso de Open Data.
El objetivo de esta presentación es dar a conocer las bases de datos del Catálogo Anda, y las reglas del concurso, para que estudiantes e investigadores puedan acceder y explorar bases de datos de más de 40 evaluaciones independientes financiadas por ambas entidades, les den un nuevo uso y presenten un policy brief.
Fecha 13/10/2016
Hora 12:30 a 1:45 pm.

Competition, Training Spillovers and Under-provision of a Profitable Technology: Theory and Evidence from a Randomized Experiment on Savings in Mozambique

Lugar W-102
Conferencista Rachid Laajaj, Universidad de los Andes
Coautores Michael R. Carter and Dean Yang
Abstract We provide a model that combines competition among firms that provide a technology (e.g. savings), with learning from the consumers of the technology who initially under-estimate its benefits. The firms can provide trainings that increase the expected benefits and take up of the technology. However, under-provision of trainings occurs because the benefit from take up simulated by a firm’s training is shared with the competitors. We test the prediction of the model using data from an experiment in rural Mozambique where we partnered with a formal bank and randomly assigned treatments that include financial education and monetary encouragements to save. We find that the savings interventions raised savings, investments and consumption during the two years following the beginning of the programs. Also, as predicted by the model, the savings program implemented by our partner bank increased the number of accounts and savings at competitor banks; and this effect becomes stronger when the competitor banks were closer to the users than our partner bank. This spillover effect provides a novel explanation for the slow diffusion of profitable technologies, and a rationale for public subsidy or collaboration in information provision among providers of a technology.
Fecha 11/10/2016
Hora 12:30 a 1:45 pm.

Intrahousehold Violence and Economic Development: Evidence for Urban and Rural Colombia

Lugar W-102
Conferencista Nicolas Eduardo Santos, Universidad de los Andes
Coautores Rachel Heath (Washington University); Rafael J. Santos (Universidad de los Andes)
Abstract We use country-wide labor demand shocks to estimate the impact of economic development on intrahoushold violence in Colombia. We estimate shocks at the municipality level using variation in wages in the rest of the country at the month-industry-gender level. Our analysis separates between urban and rural areas.  Using DHS data we corroborate that in both urban an rural areas our shocks predict the probability women work. We then show that in urban areas female labor demand shocks decrease violence against women while in rural areas these shocks increase violence. In both urban and rural areas,  male labor demand shock decrease violence against women.
Fecha 04/10/2016
Hora 12:30 a 1:45 pm.

Sobre la comisión de reforma tributaria en Colombia

Lugar W-102
Conferencista Guillermo Perry y Miguel Urrutia, profesores de la Facultad de Economía de la Universidad de los Andes y miembros de la comisión asesora para una reforma tributaria en Colombia
Abstract En esta sesión del seminario CEDE sobre políticas económicas se discutirá la metodología, las conclusiones y principales recomendaciones de la comisión para la reforma tributaria en Colombia.
Fecha 22/09/2016
Hora 12:30 a 1:45 pm.

A General Equilibrium Fiscal Model for Colombia

Lugar W-102
Conferencista Diego Zamora, Ministerio de Hacienda y Crédito Público
Abstract Between 50’s and 60’s more than 14 million people were born in Colombia. At its middle age, this population supported more than 51% of the Colombian GDP and became on its climax, around 45% of the labor force. After half a century of hard work, that was never free from war, informality and low schooling supply, this population is leaving the labor force at a rate of 300.000 people per year, which is expected to increase by more than 15.000 people starting in 2016. In year 2021 a population as big as Santiago de Cali’s will leave the labor force. How much resources will be necessary to provide all of it with a peaceful aging, given that the required capital was never accrued for this stage? In order to answer this important question, I run an OLG calibrated model that takes into account the aging process and its impact on the capital and labor markets as well as considers the flow of constrains imposed by the law and the economy structure.
Fecha 20/09/2016
Hora 12:30 a 1:45 pm.

Propuesta de reforma al esquema de Protección a la Vejez en Colombia: cobertura universal y principales desafíos del sistema pensional en Colombia

Lugar W-102
Conferencista Jaime Cardona, Ministerio de Hacienda y Crédito Público
Abstract La pobreza y la desigualdad en Colombia se acentúan fuertemente al llegar a la tercera edad. En atención a esta problemática, se estudia la oferta de coberturas para la vejez y se encuentran al menos tres desafíos. Primero, en el régimen público de pensiones, los elevados costos fiscales que paga la sociedad colombiana terminan en pocos beneficiados con altos subsidios asignados de forma muy regresiva.  Segundo, para el régimen privado la baja cobertura se explica por la restricción constitucional que obliga a tarifar rentas vitalicias que no pueden ser inferiores al salario mínimo.  Tercero, el diseño y focalización actual de los BEPs, deja por fuera a una gran parte de la población que podría ser beneficiada. Atendiendo a esta problemática social que distingue a Colombia de sus pares en la región, se propone un nuevo esquema de protección en la vejez que utiliza una combinación eficiente de recursos privados y públicos y permite plantear a un costo sostenible un esquema de cobertura que llega al 100% de la población.
Fecha 15/09/2016
Hora 12:30 a 1:45 pm.

Adverse Selection vs Discrimination Risk with Genetic Testing. An Experimental Approach

Lugar W-102
Conferencista David Bardey, Universidad de Los Andes-CEDE y visting fellow de TSE
Coautores Philippe De Donder (TSE) and Cesar Mantilla (Universidad del Rosario)
Abstract We develop a theoretical model to study the risk discrimination/adverse selection trade-off that occurs in health insurance markets. We focus on our analysis of two widely used regulations of genetic tests, disclosure duty and consent law, and we run an experiment in order to shed light on both the take-up rate of genetic testing and on the comparison of policyholders’ welfare under the two regulations. Disclosure duty forces individuals to reveal their test results to their insurers, exposing them to the risk of having to pay a large premium in case they are discovered to have a high probability of developing a disease (a discrimination risk). Differently, consent law allows them to hide this detrimental information, creating asymmetric information and adverse selection. The experimental results match the main theoretical predictions. Consent law is more likely to be preferred, with respect to disclosure duty, the lower the cost of the genetic test. Within consent law, take-up rates increase with the adverse selection intensity. We compute what would have been the adverse selection intensity at the steady state within consent law. We contrast these computations with the experimental results, and find that it is likely that individuals who initially prefer a consent law regulation would have been better off under a disclosure duty regulation in the long-run.
Fecha 13/09/2016
Hora 12:30 a 1:45 pm.

La paz es mucho más que palomas: Beneficios económicos del acuerdo de paz en Colombia a partir del turismo de observación de aves

Lugar W-102
Conferencista Jorge H. Maldonado, Universidad de los Andes
Coautores Rocío Moreno-Sánchez (Conservation Strategy Fund.), Sophia Espinoza (Conservation Strategy Fund.), Aaron Bruner2, Natalia Garzón (Universidad de los Andes) y John Myers (Audubon Society)
Abstract

Colombia es el país con la mayor diversidad de aves en el mundo, con un registro aproximado de 1.900 especies, equivalentes a un 20% de las existentes en todo el planeta. Esta característica resalta el gran potencial que este país tiene en torno a la oferta turística especializada en la observación de aves (o aviturismo). Los esfuerzos llevados a cabo por el gobierno colombiano para brindar mayor seguridad dentro del país –poniendo fin al largo conflicto armado– y para promocionar el ecoturismo pueden ayudar a posicionar a Colombia como uno de los destinos más importantes para los observadores de aves de todo el mundo.

El presente estudio hace un análisis las preferencias de observadores de aves norteamericanos respecto a la oferta turística colombiana que integra la participación de comunidades locales (algunas víctimas del conflicto armado) y visitas a zonas de importancia (por su biodiversidad) para la observación de aves, que exhibirían, de firmarse el Acuerdo de Paz, mejores condiciones de accesibilidad y seguridad para los visitantes. A través de la aplicación del método de valoración contingente se estima el valor económico que la paz traería al sector de ecoturismo orientado a la observación de aves, a través del valor que los miembros de Audubon le asignan a estas características particulares dentro de un tour en el Caribe Norte de Colombia. A partir de estos cálculos, se hace una aproximación a la demanda para el sector del aviturismo en dicho país.

Los resultados muestran que los observadores de aves estarían dispuestos a pagar, en promedio, $US 60 adicionales por día y por persona por un tour en Colombia, en un escenario de posconflicto, que se caracteriza por mayor avistamiento de aves, mayor seguridad y por la participación de comunidades locales, antes afectadas por el conflicto armado, en la prestación de servicios turísticos, comparado con  un tour de características similares, en cuanto a duración y servicios, ofrecido por Costa Rica, uno de los principales destinos turísticos de los observadores de aves.

La demanda proyectada para el sector de aviturismo en Colombia estima que un total de 278.850 observadores estarían interesados en visitar este país. A un precio de $US 310 por persona por día, el número esperado de observadores sería de casi 150.000 en total. Si cada una de las personas de este grupo visita Colombia una vez durante los próximos 10 años, el aviturismo generaría $US 9 millones de ganancias anuales y más de 7.500 nuevos puestos de trabajo.

Las recomendaciones del estudio destacan los siguientes aspectos: i) Colombia debe desarrollar un sector de aviturismo diverso, con el fin de lograr competitividad en términos de calidad y precio; ii) se requiere inversión en infraestructura y un ambiente político y legal amigable para fomentar este mercado y maximizar el beneficio de los pobladores locales que fueron afectados por el conflicto armado; iii) se debe asegurar que las inversiones estén orientadas a las áreas prioritarias para la conservación de las aves; iv) es fundamental aumentar los esfuerzos en difusión e información en cuanto al potencial turístico de Colombia para el avistamiento de aves; y  iv) mejorar permanentemente la prestación de los servicios en el sector del aviturismo.

Fecha 06/09/2016
Hora 12:30 a 1:45 pm.

La Unión Europea y Colombia: Actualidad de las relaciones comerciales

Lugar W-102
Conferencista Sr. Christoph Saurenbach, Jefe de la Sección de Comercio de la Delegación de la UE en Colombia
Abstract La Unión Europea con sus 28 Estados Miembros y una población de 508 millones de habitantes es el principal bloque comercial en el mundo. La UE y Colombia son socios privilegiados a nivel comercial gracias al Acuerdo Comercial Multipartes (MPTA), en vigor desde agosto de 2013. Para la UE, Colombia es su primer socio comercial a nivel de la Comunidad Andina y quinto socio en Latinoamérica, mientras que la UE es el segundo socio comercial de Colombia y una de las principales fuentes de la Inversión Extranjera Directa. En 2015, el comercio bilateral de bienes alcanzó una cifra de € 13,13 mil millones. En la presentación de la Sección de Comercio de la Delegación de la UE en Colombia van a aprender más sobre los principios y funcionamiento práctico del Acuerdo Comercial y las perspectivas actuales del comercio con la Unión Europea.
Fecha 01/09/2016
Hora 12:30 a 1:45 pm.

Learning, Career Paths, and the Distribution of Wages

Lugar W-102
Conferencista Santiago Caicedo Soler, University of Chicago
Coautores Robert E. Lucas, Jr. (University of Chicago)  y Esteban Rossi-Hansberg (Princeton University)
Abstract We develop a theory of career paths and earnings in an economy in which agents organize in production hierarchies. Agents climb these organizational hierarchies as they learn stochastically from other individuals. Earnings grow over time as agents acquire knowledge and occupy positions with larger numbers of subordinates. We contrast these and other implications of the theory with U.S. census data for the period 1990 to 2010. The model matches well the Lorenz curve of earnings as well as the observed mean experience-earnings profiles. We show that the increase in wage inequality over this period can be rationalized with a shift in the distribution of the complexity and profitability of technologies relative to the distribution of knowledge in the population.
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Fecha 30/08/2016
Hora 12:30 a 1:45 pm.

"Latinoamérica: entre la convergencia a una “nueva” normal, la aceptación de lo que somos y las reformas necesarias para llevarlo a cabo"

Lugar W-102
Conferencista Munir Jalil, Citibank
Fecha 25/08/2016
Hora 12:30 a 1:45 pm.

The Mission: Human Capital Transmission, Economic Persistence and Culture in South America

Lugar W-102
Conferencista Felipe Valencia Caicedo, Bonn University
Abstract This article examines the long-term consequences of a historical human capital intervention. The Jesuit order founded religious missions amongst the Guarani, in modern-day Argentina, Brazil, and Paraguay. Missionaries instructed indigenous inhabitants in reading, writing and various crafts, before their expulsion in 1767. Using archival records and municipal census data, I demonstrate that educational attainment was and remains higher after 250 years in areas of former Jesuit presence. These dierences also translate into 10% higher incomes. The eect of Jesuit missions emerges clearly after comparing them with abandoned Jesuit missions, Franciscan Guarani Missions and using an Instrumental Variables strategy. In addition, I collect survey data and conduct behavioral experiments,  nding that respondents in missionary areas exhibit higher non-cognitive abilities and collaborative behavior. Such enduring dierences are consistent with transmission mechanisms of occupational persistence, inter-generational knowledge transmission and indigenous assimilation. Robustness checks suggest that the results are not driven by migration, urbanization and tourism.
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Fecha 23/08/2016
Hora 12:30 a 1:45 pm.

Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in Pakistan

Lugar W-102
Conferencista Eric Verhoogen, Columbia University
Coautores David Atkin (MIT), Azam Chaudhry (Lahore School of Economics), Shamyla Chaudry (Lahore School of Economics) y Amit K. Khandelwal (Columbia University)
Abstract This paper studies technology adoption in a cluster of soccer-ball producers in Sialkot, Pakistan. We invented a new cutting technology that reduces waste of the primary raw material and gave the technology to a random subset of producers. Despite the clear net benefits for nearly all firms, after 15 months take-up remained puzzlingly low. We hypothesize that an important reason for the lack of adoption is a misalignment of incentives within firms: the key employees (cutters and printers) are typically paid piece rates, with no incentive to reduce waste, and the new technology slows them down, at least initially. Fearing reductions in their effective wage, employees resist adoption in various ways, including by misinforming owners about the value of the technology. To investigate this hypothesis, we implemented a second experiment among the firms that originally received the technology: we offered one cutter and one printer perform a lump-sum payment, approximately a month's earnings, conditional on demonstrating competence in using the technology in the presence of the owner. This incentive payment, small from the point of view of the firm, had a significant positive effect on adoption. The results suggest that misalignment of incentives within firms is an important barrier to technology adoption in our setting.
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Fecha 16/08/2016
Hora 12:30 a 1:45 pm.

The Liquidity Trap: What to Do about It?

Lugar W-102
Conferencista Laurence Ball, Johns Hopkins University
Coautores Joseph Gagnon (Peterson Institute for International Economics); Patrick Honohan (Trinity College Dublin, Centre for Economic Policy Research, and Peterson Institute for International Economics);  Signe Krogstrup (Peterson Institute for International Economics) y Torsten Slok (Deutsche Bank)
Fecha 09/08/2016
Hora 12:30 a 1:45 pm.

“Beliefs and Parental Investment”

Lugar W-102
Conferencista Orazio Attanasio (UCL)
Coautor Flavio Cunha (Rice University)
Fecha 04/08/2016
Hora 12:30 a 1:45 pm.

Sharing a Ride on the Commodities Roller Coaster: Common Factors in Business Cycles of Emerging  Economies

Lugar W-102
Conferencista Andrés Fernandez (BID)
Coautores Andres Gonzalez (IMF), Diego Rodriguez (Banco de la República)
Abstract Fluctuations in commodity prices are an important driver of business cycles in small emerging market economies (EMEs). We document how these fluctuations correlate strongly with the business cycle in
EMEs. We then embed a commodity sector into a multi-country EMEs’ business cycle model where exogenous fluctuations in commodity prices follow a common dynamic factor structure and coexist
with other driving forces. The estimated model assigns to commodity shocks 42 percent of the variance in income, of which a considerable part is linked to the common factor. A further amplification mechanism is a ”spillover” effect from commodity prices to risk premia.
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Fecha 02/08/2016
Hora 12:30 a 1:45 pm.

 Big data in economics and statistical offices

Lugar W-101
Conferencista Roberto Rigobon, Massachusetts Institute of Technology
Abstract Nuestro invitado abordará la diferencia de los problemas de: diseño de encuesta, estimación de parámetros, predicción, y medición de la economía. Se abordarán los requerimientos de datos para cada uno de los objetivos de las técnicas apropiadas.
Fecha 27/05/2016
Hora 12:30 a 1:45 pm.

Endogenous Persistent Shocks and Households' Welfare

Lugar W-102
Conferencista Andrés Zambrano, Universidad de los Andes
Coautores Mateo Arbelaez y Leopoldo Fergusson, Universidad de los Andes
Abstract This paper estimates the persistence of adverse shocks and how it depends on household consumption decisions. We document how households respond to adverse shocks and present a model that builds on these estimates and rationalizes the observed behavior. Using Colombian data for urban households, we find that shocks are quite persistent: having an adverse shock increases future vulnerability by about 9 to 11 percentage points. Also, we show households in the middle of the wealth distribution significantly decrease consumption when hit by an adverse shock. Finally, our estimates indicate that this consumption reduction increases persistence of adverse shocks by 9 percentage points. When introduced in a calibrated version of our theoretical model, these numbers suggest there exists a poverty trap for households in the first two quartiles, and implies very large welfare losses for the first quartile when hit by an adverse shock.
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Fecha 05/05/2016
Hora 12:30 a 1:45 pm.

From Indigenous Electoral Success to Indigenous Participation: The Case of Mapuches in Chile

Lugar W-102
Conferencista Alejandro Corvalan, Universidad Diego Portales
Coautor Pedro Cayul (Universidad de Chile)
Abstract In many countries, indigenous populations are not only economically deprived but also politically underrepresented. This paper studies the local electoral success of the indigenous Mapuches in Chile, a group that is ten percent of the population but have no representation at the national level, either in Government or Congress. In particular, we study whether the election of Mapuche mayors encourages Mapuche participation in the next local elections. Using a national data set on registration, and a surname strategy to recognize Mapuches, we show that Mapuche majors increase the number of Mapuche registrations for the next election but the effect is not enough to change significantly the percentage of indigenous people in the entire set of voters. As for candidates, we show that Mapuche majors increase the future number and percentage of Mapuche candidates, and that the effect is not given by incumbency advantage. Finally, we observe that the effect does not depend on the political orientation, in the sense that both right and left-wing Mapuche majors encourage future participation.
Fecha 26/04/2016
Hora 12:30 a 1:45 pm.

Efecto de la cuota moderadora sobre la mortalidad en el Sistema General de Seguridad Social de Salud en Colombia

Lugar W-102
Conferencista Giancarlo Buitrago, Universidad de los Andes
Coautores Grant Miller, Marco Vera-Hernández
Abstract Se han descrito diferentes fallas del mercado asociadas con el aseguramiento en salud. En particular la presencia de riesgo moral atenta contra la eficiencia al aumentar el consumo de servicios de salud. Los costos compartidos óptimos son la solución privada de segundo rango que disminuye las consecuencias sobre la eficiencia del riesgo moral. Sin embargo, a pesar de que las consecuencias del efecto de la inclusión de estos costos compartidos han sido motivo de preocupación en la literatura académica, en la práctica el nivel de las coberturas y de los costos compartidos no parece ser diseñado de forma óptima. Este artículo pretende determinar el efecto de la cuota moderadora sobre la mortalidad en el Sistema General de Seguridad Social en Salud en Colombia (SGSSS). Para tal objetivo, se aprovecha el diseño de los costos compartidos en Colombia, en donde el Ingreso Base de Cotización al SGSSS es el que define el nivel de cuota moderadora a pagar. Se utiliza un diseño de regresión discontinua mediante estimación no paramétrica que permite evaluar el efecto de la cuota moderadora sobre la mortalidad en una base de datos que corresponde al 65% de la población colombiana del régimen contributivo. Se encuentra que la cuota moderadora afecta la probabilidad de morir, aproximadamente con un aumento de 1%. Dentro del estudio de posibles canales se observa que la cuota moderadora disminuye la frecuencia de asistencia a consulta externa médica y que, de forma cruzada, se relaciona con un aumento de la utilización de servicios hospitalarios.
Fecha 21/04/2016
Hora 12:30 a 1:45 pm.

Interacciones de choques en edad temprana e inversiones en capital humano: Evidencia para Colombia

Lugar W-102
Conferencista Valentina Duque, Universidad de Michigan
Coautores María Fernanda Rosales, Universidad de California – Irvine y Fabio Sánchez, Universidad de los Andes
Abstract Este estudio investiga cómo las condiciones en edad temprana interactúan con inversiones posteriores en capital humano que influyen en futuros resultados educativos. Utilizando datos administrativos para el caso colombiano, el estudio explota la variación exógena provenientes de dos fuentes; i) la variación en los entornos en edad temprana que resultan de la exposición de los niños a choques extremos de precipitación en la primera infancia; y ii), la variación en las inversiones posteriores resultantes de la disponibilidad de transferencias monetarias condicionadas (TCR) que promueven inversiones en salud y educación de los niños. El estudio combina un experimento natural con un diseño de regresión discontinua utilizando la regla de asignación de la TCR. Los resultados preliminares muestran que, aunque la TCR tiene un impacto positivo en los resultados educativos de los niños, no existe un efecto diferencial del programa en los niños expuestos a los choques en edad temprana. Sin embargo, el efecto general del programa es lo suficientemente grande como para mitigar el impacto negativo del choque climático. Estos resultados tienen importantes implicaciones políticas.
Fecha 19/04/2016
Hora 12:30 a 1:45 pm.

The Real Winner’s Curse

Lugar W-102
Conferencista Leopoldo Fergusson, Universidad de los Andes
Coautores Pablo Querubin (NYU) Nelson A. Ruiz-Guarin (LSE) Juan F. Vargas (Rosario)
Abstract We study the effect on violence of the arrival of previously excluded groups (in particular, left-leaning parties) to local executive office in Colombian municipalities. Using a regression discontinuity approach, we show that while violence from left-wing guerrillas and the government is unaffected when the left wins mayoral elections, attacks by right-wing paramilitaries increase by about four per each 100.000 citizens, almost a tripling relative to the sample mean and close to 80% of a standard deviation. We interpret this increase in violence as a de facto reaction of traditional political and economic elites trying to counteract the increase in de jure power of outsiders after they win office. Consistent with this interpretation, we find that the surge in violence is concentrated in the year of the subsequent elections and as a result left wing incumbents enjoy an incumbency disadvantage. We also find that the left implements land policies that are threatening to the most notorious allies of paramilitaries: large landowners. These effects highlight the unintended risks of political inclusion in societies with weak institutions, an uneven presence of the state across its territory, and features of subnational authoritarianism.
Fecha 12/04/2016
Hora 12:30 a 1:45 pm.

Information Policies and Higher Education Choices: Experimental Evidence from Colombia

Lugar W-102
Conferencista Andrés Ham, University of Illinois
Coautores Leonardo Bonilla, University of Illinois y Nicolas L. Bottan, University of Illinois
Abstract This paper studies whether providing information on funding opportunities and college premiums by degree-college pairs affects higher education decisions in a developing country. We conducted a randomized controlled trial in Bogotá, Colombia, on a representative sample of 120 urban public high schools, 60 of which received a 35-minute informational talk delivered by local college graduates. Using survey data linked to administrative records, we analyze student beliefs and evaluate the intervention. Findings show that most students overestimate true college premiums and are generally unaware of funding options. The talk does not affect earning beliefs but improves knowledge of financing programs, especially among the poor. There is no evidence that information disclosure affects post-secondary enrollment. However, students in treated schools who do enroll choose more selective colleges. These positive effects are mostly driven by students from better socioeconomic backgrounds. We conclude that information policies are ineffective to raise college enrollment in contexts with significant academic and financial barriers to entry, but may potentially affect certain students’ choice of college.
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Fecha 07/04/2016
Hora 12:30 a 1:45 pm.

Assessing social experiments using Apps: the case of Car-free days in Bogotá

Lugar W-102
Conferencista Jorge A. Bonilla, Universidad de los Andes
Coautor Fernando Carriazo, Universidad de los Andes
Abstract In the absence of monitoring data, Apps provide very useful information in time and space for policy analysis. Most Apps record real time data from social networks to enrich the users’ decision making. We argue that these data may also be used to better inform policy makers. This is the case of Waze, which is designed to facilitate access to information for car driving decisions. We collected Waze data to assess the impact of Car-free days, a social experiment in Bogotá, aimed to address congestion and local air pollution. Our results suggest that Car-free days improve traffic speed in 20% and local air quality, measured by particulate matter, in a 2% compared to business as usual. These results are useful to conduct cost-benefit analysis of Car-free days.
Fecha 05/04/2016
Hora 12:30 a 1:45 pm.

 Percepciones y evidencia sobre la contratación pública en Colombia

Lugar W-102
Conferencista Marcela Meléndez, ECON ESTUDIO
Abstract Durante el segundo semestre de 2015 la Cámara Colombiana de Infraestructura comisionó un trabajo con un objetivo ambicioso: tratar de entender a fondo cómo funciona la contratación pública en Colombia y, a partir de ese aprendizaje, identificar las direcciones de ajuste necesarias para asegurar que los recursos públicos se empleen de la manera más efectiva en la provisión de bienes y servicios. La idea de que muchos de los recursos públicos se filtran en direcciones indeseables por cuenta de la corrupción es compartida por muchos colombianos. Qué tanto hay de realidad en eso es aún una pregunta sin respuesta, pero dos cosas son ciertas: la percepción sobre la transparencia en la contratación es en general muy mala y la evidencia disponible no es suficiente para contradecir esa mala percepción. El ejercicio realizado se concentró en la contratación pública en el sector de la infraestructura de transporte y comprende dos ejercicios independientes hermanos. El primero es un modulo sobre transparencia en la contratación en una encuesta de percepción respondida por 248 constructores, 112 consultores y 30 concesionarios del sector. El segundo es un análisis de los procesos de contratación realizados por los gobiernos sub-nacionales -departamentales y municipales- en 2014, que fue posible gracias a la información pública del Sistema Electrónico de Contratación Pública (SECOP) a partir de la cual se construyó una base de datos invaluable. Durante el seminario se discutirán los hallazgos principales de este trabajo.
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Fecha 31/03/2016
Hora 12:30 a 1:45 pm.

An Analysis Of Country Medal Shares In Individual Sports At The Olympics

Lugar W-102
Conferencista Juan De Dios Tena H., Universidad de Liverpool
Abstract Research question: Several studies report modelling relating countries’ medal shares at the Olympics to population and per capita income (host status and political system are typically included as controls). This paper uses a similar model but disaggregates to the level of the individual sport to ask questions such as whether some sports have a less steep relationship with income levels than others and whether hosting effects are more pronounced in some sports than others. Research methods: Data on medal shares are modelled across fifteen sports at twelve editions of the Games (1960-2012). A tobit model accounts for the large number of observations with zero medal share. Marginal effects, calculated for the case of athletics, illustrate how far many poor countries are from reasonable expectation of achieving medals. Results and findings: Income is influential on outcomes in all sports, its effects most pronounced in sports with substantial requirements for specific capital equipment; the distribution of medals is less unequal in sports practiced in multi-sports venues. Gains from hosting vary in magnitude, performance tending to be elevated most in sports with outcomes strongly influenced by judges. Implications: For poorer countries, the paper identifies a small group of sports on which it would be most realistic to focus resources. For Games organisers, who must decide which sports to include, it provides information relevant to the goal of spreading success more evenly across countries. For example, proposals to exclude wrestling are shown to have been potentially harmful to medal prospects of poorer countries.
Fecha 29/03/2016
Hora 12:30 a 1:45 pm.

Agglomeration Economies in the Presence of an Informal Sector. The Colombian Case

Lugar W-102
Conferencista Gustavo A. García, Universidad de los Andes
Abstract This paper analyzes the relationship between agglomeration economies and wages in the context of a developing country, taking into account the marked presence of an informal sector. Using data from Colombia, we investigate the effect of agglomeration economies on formal and informal productivity, inquiring whether the informal sector achieves benefits from agglomeration economies and whether there are differences between the formal sector and the informal sector in agglomeration returns. We estimate an elasticity of wages with respect to employment density of around -4% for the formal sector and around 3% for the informal sector; thus there is a significantly positive effect of agglomeration on the productivity of the informal sector. The results show that informal workers in a city twice as dense have around 2% greater productivity, that imply 14% higher wages in denser areas than in less dense areas. In contrast, in the formal sector the results show that formal workers in a city twice as dense have around 3% less productivity, leading this kind of workers to earn 17% less in denser areas. Factors associated with the constraints in the creation of formal jobs and a greater labor supply of formal workers and des-amenities very common in big cities in developing countries could explain this lower agglomeration return in the formal sector.
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Fecha 17/03/2016
Hora 12:30 a 1:45 pm.

"Debt: Deleveraging or Default"

Lugar W-102
Conferencista David Pérez-Reyna, Universidad de los Andes
Coautores Guillermo Ordoñez, University of Pennsylvania y Motohiro Yogo, Princeton University
Abstract Private information in credit markets may be resolved through deleveraging or default, depending on the volatility and the evolution of collateral value. We develop a dynamic model in which all borrowers have collateral subject to systematic uncertainty, but only good borrowers have additional income that is unobservable. When the volatility of collateral is low, good borrowers are able to fully separate by deleveraging, that is, raising debt and subsequently paying it down with unobservable income. For higher volatility, the amount of debt that is necessary for full separation may force bad borrowers to default, so that good borrowers must trade off the benefit of separation against an adverse selection cost of higher debt. For sufficiently high volatility, only partial separation is achieved because the cost of higher debt outweighs the benefit of separation.
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Fecha 15/03/2016
Hora 12:30 a 1:45 pm.

Business Accelerators and New-Venture Performance: Evidence from Start-Up Chile

Lugar W-102
Conferencista Juanita González-Uribe (London School of Economics)
Coautor Michael Leatherbee (Pontificia Universidad Católica de Chile)
Abstract Do business accelerators add value? If so, how? We investigate these questions by focusing on Start-Up Chile, an accelerator sponsored by the Chilean government. Using a regression discontinuity design, we show the mentoring services of accelerators can significantly increase new-venture performance by improving the managerial capital of participants. We speculate about the existence of two performance-enhancing mechanisms: the increase in the start-up’s social capital by enabling access to mentor networks, and the provision of an accountability structure in the form of board oversight. We find no support for the causal effect of basic services of cash and co-working space.
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Fecha 10/03/2016
Hora 12:30 a 1:45 pm.

A Structural Model to Evaluate the Transition from Self‐Commitment to Centralized Unit Commitment

Lugar W-102
Conferencista Álvaro Riascos, Universidad de los Andes
Coautores Sergio Camelo (Stanford University, USA and Quantil, Colombia); Luciano de Castro (University of Iowa, USA); y Anthony Papavasiliou (Catholic University of Louvain, Belgium)
Abstract We introduce a dispatch model of Colombia's independent system operator (XM) in order to study the relative merits of self‐commitment vs. centralized unit comment. We capitalize on the transition that took place in 2009 from self‐unit commitment to centralize unit commitment and use data from Colombia for the period 2006‐2012. In our analysis we simulate a competitive benchmark based on estimated marginal costs, startup costs and opportunity costs of thermal and hydro. We compare the differences between the competitive benchmark and self‐commitment for the period 2006‐2009 to the differences between the bid‐based centralized unit commitment and the competitive benchmark after the transition. Based on these comparisons we estimate changes in deadweight losses due to misrepresentation of cost by bidders and dispatch inefficiency. The results suggest that centralized unit commitment has improved economic efficiency, reducing the relative deadweight loss by at least 3.32%. This result could in part be explained b  the observation that, before 2009, there was an underproduction of thermal energy relative to the competitive benchmark and it support the claim that dispatch efficiency has improved after the transition.
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Fecha 08/03/2016
Hora 12:30 a 1:45 pm.

“Size-dependent distortions and labor substitution: Labor outsourcing and missing gaps”

Lugar W-102
Conferencista Carlos Ospino, Universidad de los Andes
Abstract I study, theoretically and empirically, the effects of substitution between direct and outsourced labor on firms’ total labor demand as a response to an implicit tax on direct labor which only applies to firms above a given size, a size-dependent distortion. A key result from the model is that it predicts positive mass of firms in the total employment distribution at the threshold of compliance with regulation, which is consistent with the empirical evidence but contradicts the predictions of standard models with homogeneous labor. The model also provides useful insights about the effects of size-dependent distortions on the increased use of outsourced labor observed in developing countries. I test the model’s predictions using Colombian manufacturing data and an exogenous change in the apprenticeship contract regulation in 2002 which implicitly taxed direct labor for firms hiring at least 15 workers. Intent to treat estimators suggest that firms affected by the change demanded less direct and total labor, compared to firms not subject to the regulation, while increasing their share of outsourced labor.
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Fecha 03/03/2016
Hora 12:30 a 1:45 pm.

"Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality"

Lugar W-102
Conferencista Richard Akresh, University of Illinois at Urbana-Champaign
Coautores Damien de Walque, The World Bank and Harounan Kazianga, Oklahoma State University
Abstract We conduct a randomized experiment in rural Burkina Faso to estimate the impact of alternative cash transfer delivery mechanisms on education. The two-year pilot program randomly distributed cash transfers that were either conditional or unconditional. Families under the conditional schemes were required to have their children ages 7-15 enrolled in school and attending classes regularly. There were no requirements under the unconditional programs. Results indicate that conditional and unconditional cash transfers have similar impacts increasing enrollment for children traditionally favored by parents for school participation, including boys, older children, and higher ability children. However, conditional transfers are significantly more effective than unconditional transfers in improving the enrollment of “marginalized children”, those less likely to go to school, such as girls, younger children, and lower ability children. Thus, conditionality plays a critical role in benefiting children who are less likely to receive human capital investments from their parents.
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Fecha 01/03/2016
Hora 12:30 a 1:45 pm.

Public Development Banks and Credit Market Imperfections

Lugar W-102
Conferencistas Marcela Eslava, Universidad de los Andes y Xavier Freixas, Universitat Pompeu Fabra
Abstract This paper is devoted to understanding the role of public development banks in alleviating financial market imperfections. We explore two issues: 1) which types of firms should be optimally targeted by public financial support; and 2) what type of mechanism should be implemented in order to efficiently support the targeted firms' access to credit. We model firms that face moral hazard and banks that have a costly screening technology, which results in a limited access to credit for some firms. We show that a public development bank may alleviate the inefficiencies by lending to commercial banks at subsidized rates, targeting the firms that generate high added value. This may be implemented through subsidized ear-marked lending to the banks or through credit guarantees which we show to be equivalent in "normal times". Still, when banks are facing a liquidity shortage, lending is preferred, while when banks are undercapitalized, a credit guarantees program is best suited. This will imply that 1) there is no "one size fits all" intervention program and 2) that any intervention program should be fine-tuned to accommodate the characteristics of competition, collateral, liquidity and banks capitalization of each industry.
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Fecha 23/02/2016
Hora 12:30 a 1:45 pm.

The Power of Weak Incentives

Lugar W-102
Conferencista Hector Lopez C., University of Maryland
Abstract A social planner would like a socially optimal outcome to be chosen in an environment with externalities. The standard approach to solving the social planner's problem is to design mechanisms with desirable incentive properties such as strategy-proofness or equilibrium uniqueness. These mechanisms make the desired outcome a Nash equilibrium and rely on agents' rationality to coordinate on it. I introduce mechanisms with weak incentives to offer a different approach. These mechanisms make the desired outcome a Nash equilibrium, but rely on agents' behavioral traits - instead of rationality - to coordinate on the desired outcome. A mechanism with weak incentives is an indirect mechanism in which the payoff of agent i does not depend on his report. These mechanisms shed light on the relative importance between making the desired outcome a Nash equilibrium and offering incentives to coordinate on it. As an application, I show that in large economies, if players' reports are true on average, mechanisms with weak incentives solve the social planner's problem. I demonstrate this result using an experimental congestion game. In the lab, a mechanism with weak incentives realized 95% of the efficiency achieved by a social planner with full information. This suggest that lie-aversion, a well-established behavioral trait, can be used to design effective mechanisms.
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Fecha 18/02/2016
Hora 12:30 a 1:45 pm.

 

Estimating the social cost of carbon: an alternative approach

Lugar W-102
Conferencista Robert S. Pindyck, Massachusetts  Institute of Technology
Abstract An estimate of the social cost of carbon (SCC) is key to the design of climate policy. But how should we estimate the SCC? A common approach is to use an integrated assessment model (IAM), which simulates time paths for the atmospheric CO2 concentration, its impact on global mean temperature, and the resulting reductions in GDP and consumption. I have argued elsewhere that IAMs have serious deficiencies that make them poorly suited for this job, but what is the alternative? I discuss a simple and more transparent approach to estimating the SCC. It relies on the elicitation of expert opinions regarding (1) the probabilities of alternative economic outcomes of climate change, especially catastrophic outcomes, but not the particular causes of those outcomes; and (2) the reduction in emissions required to avoid or limit those potential outcomes. For example, a possible outcome might be a 20% or greater reduction in GDP. The ratio of the present value of the damages from a catastrophic outcome to the total emission reduction needed to avert the outcome is an estimate of the average SCC.
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Fecha 16/02/2016
Hora 12:30 a 1:45 pm.

 

Cities Drifting Apart: Heterogeneous Outcomes of Decentralizing Public Education

Lugar W-102
Conferencista Zelda Brutti, European University Institute
Abstract I focus on the decentralized provision of public education in a middle income country, and provide original empirical evidence on heterogeneous impacts of autonomy, depending on the levels of development characterizing local authorities. Colombian municipalities were assigned to administer their public education service autonomously solely on the basis of whether they exceeded the 100 thousand inhabitants threshold. Exploiting this discontinuity, I look at the heterogeneous impact that autonomy has had on student test scores across municipalities using a regression discontinuity design and fixed-effects regression on a discontinuity sample. I find a test score gap arising between autonomous municipalities in the top quartile and those in the bottom quartile of the development range, in a trend that reinforces over time. From analysis of detailed municipal balance sheet data, I show that top-quartile municipalities are wealthier and invest in education more than the ad hoc transfers they receive, supplementing  these with own financial resources. Significant differences that help explaining outcome patterns are also found in indicators of municipal administration quality.
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Fecha 11/02/2016
Hora 12:30 a 1:45 pm.


Bidding When Cost Is Uncertain: Evidence From Fresh Produce Procurement Auctions

Lugar Hemiciclo 002
Conferencista Cinthia Konichi-Paulo, University Of Pennsylvania
Abstract This paper empirically analyzes procurement auctions in which suppliers must decide their bid based on expectations about how future market conditions will affect their costs. While previous literature has focused on the uncertainty about winning or losing the auction, I examine the risk that is intrinsic to the contract. I use data from government procurement auctions in the State of Sao Paulo in Brazil for fresh produce to study the e_ect of contract risk on auction outcomes. I find that suppliers are risk averse and therefore include a risk premium in the prices they bid, which can reach 38% of the price for some goods. In addition, I show that a simple change in the payment scheme, in which the government pays a fixed amount plus 40% of the reference index of wholesale prices, could reduce the risk premium to less than 1% of the bid price for all goods analyzed.
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Fecha 05/02/2016
Hora 3:00 a 4:30 pm.

Paternalism vs Redistribution: Designing Retirement Savings Policies with Behavioral Agents

Lugar Hemiciclo 002
Conferencista Pedro Olea de Souza, Princeton University
Abstract This paper develops a theory of optimal savings and redistributive policies when individuals under-save for retirement because of a behavioral bias. The two central features of our model are labor income inequality, arising from unobservable earnings ability differences, and heterogeneity in savings rates, due to unobservable degrees of present bias. The interaction between government’s redistributive preferences and its paternalistic motive to correct savings leads to a novel insight: the optimal policy offers low income individuals a one-size-fits-all savings instrument, resembling social security, whereas it offers high income individuals a set of policies tailored to their heterogeneous preferences, similar to 401(k) and IRA accounts in the United States. The rationale for this policy is that the government uses flexibility at high earnings as a reward for generating income that can be taxed and used for redistribution. In a quantitative exercise, we use our normative model to evaluate the current U.S. social security and tax-transfer system. We find the current system to be inefficient, independent of redistributive preferences. Relative to the utilitarian benchmark, current social security benefits are consistent with more progressive social preferences, while the tax-transfer system suggests lower progressivity. We explore the implications of our theory for other behavioral contexts as well as for non-behavioral Pigouvian tax policies.
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Fecha 05/02/2016
Hora 1:00 a 2:30 pm.

Is the Rent Too High? Aggregate Implications of Local Land-Use Regulation

Lugar W-102
Conferencista Devin Bunten, UCLA
Abstract Highly productive U.S. cities are characterized by high housing prices, low housing stock growth, and restrictive land-use regulations (e.g., San Francisco). While new residents would bene_t from housing stock growth due to higher incomes or shorter commutes, existing residents justify strict local land-use regulations on the grounds of congestion and other costs of further development. This paper assesses the welfare implications of these local regulations for income, congestion, and urban sprawl within a general equilibrium model with endogenous regulation. In the model, households choose from locations that vary exogenously by productivity and endogenously according to local externalities of congestion and sharing. Existing residents address these externalities by voting for regulations that limit local housing density. In equilibrium, these regulations bind and house prices compensate for differences across locations. Relative to the planner's optimum, the decentralized model  generates spatial misallocation whereby high-productivity locations are settled at too-low densities. The model admits a straightforward calibration based on observed population density, expenditure shares on consumption and local services, and local incomes. Welfare  and GDP would be 1.4% and 2.1% higher, respectively, under the planner's allocation. Abolishing zoning regulations entirely would increase GDP by 6%, but lower welfare by 5.9% due to greater congestion.
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Fecha 04/02/2016
Hora 12:30 a 1:45 pm.

Product Switching, Adaptation and Firm Survival in the Brewing Industry during Prohibition

Lugar W-102
Conferencista Carlos Eduardo Hernández, UCLA
Abstract This paper studies the adaptation of firms to reductions in demand, and how this process can make firms more resilient to future demand shocks. I focus on the American brewing industry during the early twentieth century. Many states and counties chose to prohibit the sale and production of alcohol in the years leading up to the 1919 federal prohibition. Because of high transportation costs, local prohibition in nearby markets reduced the demand for beer production for some breweries more than others. Using novel micro-data at the brewery level, I show that breweries adapted to this first shock by acquiring machinery such as carbonators to produce alternative products like soft drinks. This initial investment strategy allowed them to endure federal prohibition (1919-1933), when no brewery was allowed to produce or sell beer. Breweries that faced the average reduction in demand due to local prohibitions were 12 percent more likely to survive the entire prohibition period (local + federal) than breweries not affected by local prohibitions. Higher survival rates are consistent with a model in which firms adapt to reductions in demand by making irreversible investments in other products, thereby endogenously increasing their ability to respond to future shocks, rather than with models in which firm survival depends exclusively on exogenous productivity.
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Fecha 02/02/2016
Hora 12:30 a 1:45 pm.

Pension Incentives and Formal-Sector Labor Supply: Evidence from Colombia

Lugar W-102
Conferencista Oscar Becerra, University of British Columbia
Abstract This paper describes how future pension benefits affect labor supply in economies that have an informal sector. From the perspective of the worker, a formal-sector job offers long-run gains, as it increases his likelihood of gaining pension benefits in the future. If workers take those gains into account when they search for formal-sector jobs, the pension system affects formal-sector labor supply. I estimate the causal link between pension incentives and formal-sector labor supply using a cohort-based reform undertaken in Colombia. I demonstrate that a change in future pension benefits generates a large shift between the formal-sector and informal-sector labor supply, and that this change does not affect labor force participation. The average effect of pension incentives on formal-sector labor supply is heterogeneous, and is consistent with the predictions of a theoretical model combining a pension system and informal job opportunities. The effect is concentrated among workers for whom the minimum qualifying onditions are binding, and among workers with higher expected pension wealth. The results presented here suggest that pension reforms have the potential to create large efficiency costs, an effect that should be taken into account when designing pension programs.
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Fecha 28/01/2016
Hora 12:30 a 1:45 pm.

Sources of Revenue and Government Performance: Evidence from Colombia

Lugar W-102
Conferencista Luis R. Martínez, London School of Economics
Abstract If government revenue is not coming out of their pockets, voters may be uninformed about it or uninterested in what happens to it, contributing to low accountability and poor governance. The present paper provides empirical evidence on the positive relationship between taxation and governance by comparing the effects of increases in internally-raised tax revenue and in royalties from the extraction of oil on local public good provision in a panel of Colombian municipalities. I find that an increase in property tax revenue, occurring as a result of an exogenous cadastral update, has a positive effect on several basic public services in the areas of education, health and water. These effects are at least ten times larger than the effects of an equivalent increase in oil royalties, obtained as a consequence of exogenous fluctuations in the world price of oil. I find no evidence that oil royalties contribute to improvements in public service provision, despite being earmarked for this purpose. Differences in the timing and in the sectoral allocation of spending across sources are unable to explain the results. I use novel data on disciplinary prosecutions to show that additional oil royalties increase the probability that the mayor and other local public officials are prosecuted, found guilty, and removed from office. I also provide suggestive evidence on the positive effect of taxation on citizen demands regarding public services. These results indicate that accountability is crucial for the responsible management of public funds and that taxation is an effective way of achieving the necessary citizen involvement in public affairs.
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Fecha 26/01/2016
Hora 12:30 a 1:45 pm.

 

Electoral rules and leader selection: experimental evidence from Ugandan community groups.

Lugar ML-513
Conferencista Miri Stryjan, Institute for International Economic Studies (IIES), Stockholm University.
Coautores Deserranno E., and M. Sulaiman
Abstract This paper studies leadership selection in community groups. Despite a large body of work documenting how electoral systems affect policy outcomes, less is know about their impact on leader selection. We compare two types of participatory decision-making in Ugandan community saving groups: vote by secret ballot and open discussion with consensus. Random assignment of electoral rules allows us to estimate the causal impact of the rules on leader types and on social service delivery. We find that vote groups elect leaders more similar to the average member while discussion group leaders are positively selected on socio-economic characteristics. Further, dropout rates are significantly higher in discussion groups, particularly for the poorer members. After 3.5 years, vote groups are larger in size and their members save less and get smaller loans. We conclude that the secret ballot vote creates more inclusive groups while open discussion groups are more exclusive and favor the economically successful. The appropriate method for leader selection thus ultimately depends on the objective and target group of the program. Our findings offer important contributions to the literature on leader selection and to the understanding of public service delivery in developing countries.
Fecha 22/01/2016
Hora 12:30 a 1:45 pm.

Reluctant donors and their reactions to social information

Lugar W-102
Conferencista David Klinowski, University of Pittsburgh
Abstract Recent work on charitable giving finds that some individuals donate when asked, but prefer to avoid the request. Drawing on this, I investigate how information about others’ contributions affects giving, and whether the response is sensitive to the timing of the information. Participants of a laboratory experiment are invited to donate to charity, and receive information about the size of a previous donation either before or after they accept the invitation. Results show that the timing affects behavior, because solicitees respond reluctantly to the information. For example, participants decline the invitation if they learn that others give large amounts, but donate relatively large amounts if they receive the same information only after accepting the invitation. Through a novel elicitation I show that this behavior is correlated with a preference for sharing money reluctantly in a dictator game. I characterize the findings with a model in which donors do not want to appear selfish and create excuses for declning to donate. Informing them of others’ donations affects their ability to create such excuses.
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Fecha 21/01/2016
Hora 12:30 a 1:45 pm.

The Cyclical Behavior of Unemployment and Wages under Information Frictions

Lugar W-102
Conferencista Camilo Morales-Jiménez, University of Maryland
Abstract I propose a new mechanism for sluggish wages based on workers' noisy information about the state of the economy. Wages do not respond immediately to a positive aggregate shock because workers do not (yet) have enough information to demand higher wages. Firms, who have perfect information, do not reveal their information and instead extract an informational rent. This increases firms' incentives to post more vacancies, which makes unemployment volatile and sensitive to aggregate shocks. The model is robust to two major criticisms of existing theories of sluggish wages and volatile unemployment:  flexibility of wages for new hires and procyclicality of the opportunity cost of employment. Calibrated to U.S. data, the model explains 60% of overall unemployment volatility. In line with empirical evidence, the response of unemployment to TFP shocks is large, hump-shaped, and peaks one year after the TFP shock, while the response of the aggregate wage is weak and delayed, peaking after two years. In line with empirical evidence, this model predicts a reallocation of employment from low to high-paying firms during expansions. I show that this reallocation is intensified by sluggish wages, and has significant effects on newly-hired workers as they find more and better paying jobs in booms.
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Fecha 19/01/2016
Hora 12:30 a 1:45 pm.

 

“Higher Pay, Worse Outcomes? The Impact of Mayoral Wages on Local Government Quality in Peru”

Lugar Hemiciclo 001
Conferencista Ricardo Pique, Northwestern University
Abstract In this paper, I study how wages earned by local politicians affect local government quality. I construct a novel data set on Peruvian municipalities which includes individual level data on the characteristics of local authorities, candidates and top bureaucrats, as well as detailed information on local government performance, bureaucratic structures and local politics.  To identify the effects, I use caps imposed by the Peruvian central government on the wages earned by local mayors as an excluded instrument.  The results indicate that mayoral wages do not improve local government quality.  I find evidence of a robust, negative impact on public investment performance.  Moreover, I find no evidence of a positive effect on politician and bureaucrat selection and on political effort.  I consider multiple explanations for the performance result and conclude that this can be attributed, in part, to greater political opposition and fragmentation.  Wages strongly affect the local political landscape, leading to more political opposition and fragmentation.  These latter factors are shown to be detrimental for local government performance.
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Fecha 14/01/2016
Hora 12:30 a 1:45 pm.

 

end faq