Facultad de Economía

This paper explores the relation between agricultural shocks in illegal crops and schooling decisions. I focus on the case of Colombia where coca leaf fields were increasing at an average annual rate of 25 percent. Coca leaves are the main input to produce cocaine and Colombia is its main producer. The country's main strategy to eradicate coca crops was aerial spraying of herbicide until 2015, when the policy was suspended. I exploit the removal of the policy and use it as an instrument for the presence of coca fields. This temporal variation along with the cross-sectional variation of the spraying campaigns lead to an instrumental variable difference-in-differences. I use data on coca presence, eradication missions, and school outcomes at the municipal level from 2012 to 2018 to test whether a change in the presence of coca crops has an effect on schooling decisions. I show that my setting does not meet all the assumptions of the traditional difference-in-differences strategy but it fits those of Fuzzy Difference-in-Differences. My findings suggest that a one percent increase in the area cultivated with coca crops increases the high-school dropout rate by 0.3 standard deviations. This effect is equivalent to an increase of 0.9 percentage points, which represents an increase of almost 30% relative to the 3.15% mean high-school dropout rate. On the other hand, I do not find a significant effect on the primary- or middle-school dropout rate. Moreover, among the high-school students that decide to stay in school, there is a decrease in the share of students that fulfill the requirement for their grade in areas with coca presence. I also find some evidence that mathematics test scores in primary-school improve in such areas. Finally, I rule out the possibility that coca presence affects the area cultivated or harvested of any other crop in the municipality. Taken together, I interpret these results as suggestive evidence that high school-age individuals are leaving school to work on coca related activities.

Can the way students navigate admissions processes contribute to gender gaps in college major choices? We study the major choices of applicants to Colombia's largest public university who marginally miss the cutoff for their intended major. We find that women scoring just below the cutoff submit additional less-preferred majors and enroll sooner compared to similar men who intend the same major. Men instead reapply later for admission. As a result, a gender gap in potential salaries of 6.8-9.5% emerges among marginal applicants. Our findings show that differential approaches to admissions processes generate gender gaps in enrolled majors and earnings’ potential.

How important are liability dollarization in the transmission of commodity shocks on business cycles? To address this question, we developed a small open economy DSGE model with a banking sector and financial friction. The banks collect funds in the international capital markets in the form of foreign debt, which is denominated in dollars. Faced with a commodity shock, the results suggest that the presence of liability dollarization generates a greater response output, compared to the model that ignores this financial mechanism. In fact, after simulating a series of shocks in each period, bank balance sheets amplify expansions and deepen economic recessions. Thus, the volatility of business cycles is strongly affected by the presence of liability dollarization. However, the application of countercyclical macroprudential policies, based on Basel III capital requirements, absorbs the impacts of commodity shocks. In addition, this type of policy allows greater gains in social welfare. In summary, it can be pointed out that the bank balance sheets are quantitatively important because they provide information to understand macroeconomic fluctuations.

Much of the recent work on gender economics explains gender gaps pointing to differences in preferences, societal gender norms and prescriptive stereotypes about what women and men should be good or bad at and what they should like or dislike. But what happens to the individuals that do not behave/choose like the gender-typical person? We address this question using longitudinal data that allows us to measure gender conformity during childhood—using a seemingly irrelevant questionnaire—and tracks individuals through their life. We find that female nonconformers have substantially better school careers, labor market outcomes and are more likely to end up in male dominated occupations as compared to their gender conforming counterparts. We find the opposite pattern among male gender nonconformers; they perform substantially worse at school, earn less as adults and are more likely to be unemployed relative to their gender conforming male peers. We also see a positive correlation between gender nonconforming boys and mental health and addiction issues later in life. Furthermore, we find that gender nonconforming girls tend to delay childbearing in adulthood and face higher incidence of divorce.

A novel method for the joint estimation and identification of conventional and anticipated monetary policy shocks is introduced. The presence of an anticipated shock, such as forward guidance, renders the model dynamics noninvertible and invalidates the traditional SVAR based methods. To address this issue, invertibility-robust identification methods have gained popularity recently. Contrary to the current standard practice, we highlight that the proposed identification strategy based on noninvertible structural VARMA models does not require external information, such as instruments for the monetary policy shock. To distinguish between invertible and noninvertible model structures, non-Gaussianity of the error process is necessary, with this assumption solving also the standard structural identification problem. The main findings are: First, when purged from the anticipation component, the effects of a conventional monetary policy shock are less pronounced. Second, the anticipated monetary policy shock is shown to have large effects on the real activity in line with the current literature. These results lend support to the conclusion that the unconventional monetary policies are effective in stimulating the economy. Robustness to alternative data specifications and sample spans is checked with the main conclusions remaining unchanged.

This paper studies the labor effects of the enactment of a disability labor quota in Chile. This mandates firms with more than 200 (100) workers starting in April 2018 (2019) to have at least 1% of their employees in the situation of disability. To evaluate the effects of the quota, we use anonymized administrative data on monthly employer-employee linkages between 2017 and 2019, and individual-level disability certification records. Using a regression discontinuity and a difference in difference design, we find small and mixed effects of the enactment of the quota, both on worker and firm level labor outcomes. We also study if firms can be nudged to include PwD with different information letters.

We design an experiment to study the effect of asymmetry in the context of group lending with joint liability. The performance of group loan contracts crucially hinges on borrowers engaging in peer monitoring and the common practice is to offer participants of a group loan symmetric contract terms. Our experiment shows that asymmetric contracts, in which monitoring is a dominant strategy for one borrower, increase the monitoring rate, and thus the repayment rate. In addition, asymmetric contracting also raises expected profits of the lending institution. Overall, our experiment reveals that asymmetric group loan contracts are worth considering as part of a policy to maintain both financial stability and higher lender profits.