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Seminario CEDE

Tuesday 22 October 2019, 12:30 - 13:45
by Hits : 1994


Coautores: Diego Escobar (Harris School of Public Policy) y Jose Tessada (Pontificia Universidad Católica de Chile)

This paper uses a policy implemented in Chile that obliges firms to fully fund childcare costs for their female employees, but only if they hire more than 19 women. Using plant level from manufacturing firms, we first show that this policy has had a substantially detrimental impact on the hiring of women above that threshold, in particular since the policy has become more binding, in industrial sectors that hire fewer women and in larger firms. We then use the response of firms to study whether women workers are more or less complementary to capital than men. We find that firms that avoid the legislation by having just below 20 female workers are significantly more capital intensive than firms just above the threshold.
This suggests that firms that want to avoid being subject to the regulation replace women with capital but in such a way that the capital to men ratio increases. A theoretical framework suggests that this implies that women are less complementary with capital than men in this emerging economy’s manufacturing sector. This does not seem to be driven by a change inskill composition of the workforce. We also find some evidence of other changes: average wages and total workforce are lower for firms who hire 20 women than those who hire just below that threshold but labor productivity is unaltered.

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Coautores: Kevin Donovan (Yale) y Terence Johnson (Notre Dame)

"An increasingly utilized class of general equilibrium models includes inter-firm knowledge spillovers through diffusion. Standard methods to calibrate critical diffusion parameters require making assumptions about the economic environment, then using the resulting structure to map these parameters onto more easily observed empirical moments. Within this class of models, we prove that randomly varying interactions uniquely identifies a small set of parameters characterizing the diffusion process independent of the remaining economic environment. We provide an application of our results in Kenya, where we conduct a randomized controlled trial matching firms from the left tail of the profit distribution to those from the right. Despite matching the quick fade out of the small-scale experimental treatment effect, the model simultaneously implies a large general equilibrium diffusion externality. Key is that critical parameters push the partial and general equilibrium magnitudes in different directions. This matters: if a policy-maker selected economies in which to implement optimal policy based solely on the magnitude of their experimental impact, she would in fact minimize the possible welfare gains. Thus, the ability to properly estimate such parameters is critical not only for measuring the equilibrium importance of diffusion but alsofor the interpretation and extrapolation of smaller-scale empirical studies."

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