SEMINARIOS Y WORKSHOPS

This paper uses a dynamic Roy model and data from the National Longitudinal Survey of Youth 1997 to analyze the decision to pursue two-year or four-year college choices and estimate their associated net value. In this model, the net value varies across three dimensions of abilities: cognitive, socio-emotional, and mechanical, which are estimated using a measurement system. I focus on characterizing the average individual who would conclude that there was a schooling path different from the one she chose, that would have led to higher net value. This classification is derived from comparing simulated net values, which consider potential earnings and costs, associated with each schooling path. The results provide valuable insights into the implications of credit constraints and regional characteristics on achieving the highest net value. In particular, short- and long-term credit constraints are important factors preventing people from achieving the highest net value as four-year graduates. Moreover, four-year and high school graduates finding higher net value in a two-year degree are more likely to come from and live in rural areas. Finally, there is evidence of a strong sorting for the cognitive and mechanical abilities but only weak sorting for the socioemotional ability.

Our study provides a comprehensive analysis of the effects of a debt moratorium policy that suspends payments during stress episodes. We offer theoretical predictions based on demand and supply elasticities, which suggest that non-stressed firms will experience a rise in loan rates while stressed firms will see a rise in loan amounts. To empirically test these predictions, we use administrative data from Colombia and conduct a regression discontinuity design that compares loans that barely met the treatment criteria with loans that barely missed it. Our analysis also examines how real variables such as investment and labor are affected by the policy. Finally, we use a quantitative default model to provide insights into  short- and long-term gains and losses of debt moratorium policies. In particular, we show large welfare gains if the policy is designed to include the foregoing of interest accumulation during stress episodes.

Millions of people are internally displaced by wars and conflicts with wide-ranging adverse social and economic consequences. Yet, we still know very little about how they fare upon return to their homes. Colombia’s 50-year internal armed conflict resulted in the world’s highest number of internally displaced people. In this paper, we study the effects of a recently implemented law allowing displaced Colombians to apply to receive land restitution. Although everyone could apply for restitution immediately, the implementation of claims happened in a phased manner. Using agricultural census data coupled with geospatial location of formal land restitution, and individual level information on applications, we shed light on the effect of land restitution on three sets of outcomes: social integration, labour investments and market integration. Our results suggest restituted households are integrating into the community - they are more likely to be a member of an association, more likely to partake in reciprocal farm work and sell their produce. We also find evidence that in the short run, unlike the findings in the literature relating to land formalisation, restituted households are not more likely to hire permanent workers but instead increase the use of day workers and household members on their land.

Despite being generally inefficient, price controls are often imposed by policy makers and tend to be popular in opinion polls. We conducted a laboratory experiment to study consumers’ support for a price cap in a competitive commodity market. We focused on two potential determinants of such support: (1) information about the impact of a price cap on market outcomes, and (2) consumers’ lack of direct responsibility for policy decisions, which provides them with little incentive to oppose price controls. In the experiment, we manipulated whether consumers were personally exposed to the price cap or received factual information about its effect on quantities, as well as consumers’ agency in the decision to implement the policy. We report three main findings. First, while personal exposure to the price cap significantly reduced support for it, a sizeable fraction of consumers still endorsed the policy. Second, simply providing consumers with factual information about market outcomes was less effective than personal exposure. Third, consumers who were directly responsible for the decision to impose the price cap were more responsive to both types of information and hence less willing to implement the policy. Overall, our results suggest that endorsement of price caps may be partially resistant to experience and factual information, and that consumers’ lack of agency in policy decisions may help to explain the popularity of price controls.

A growing literature estimates gene-by-environment (G × E) interactions and asks how policy can address inequality related to genetic factors. Economic models – typically absent from this literature – are needed to analyze how counterfactual reforms might interact with genetic factors to shape behavior, outcomes and welfare. We estimate a life-cycle model to better interpret existing associations between genetic factors, education, and household wealth. Counterfactual exercises predict how social security reforms would modify these associations. Strikingly, some policies may simultaneously flatten gene-wealth gradients but increase gene-welfare inequality. This illustrates a valuable role for economic theory in properly interpreting findings from the burgeoning G × E literature.

Purpose: Are gender-diverse boards and TMT more likely to reduce undesirable ESG behavior? Is it necessary to have a critical mass of women controlling and managing the firm to decrease irresponsible behavior? Do influence institutional factors on the above relationships?

Design/methodology/approach: We use a dataset of European firms from 2015 to 2020.

Findings: Our findings report that gender diversity is effective in preventing ESG misconduct only occurs when women have visibility and legitimacy in the company; women CEOs are more likely to reduce negative ESG attitudes in firms with gender equality. The findings also show that women directors and executives only reduce ESG misconduct in countries where national policies are more effective in fighting against gender inequality.

Originality: This paper contributes by studying the direct effects of gender diversity at each level of a firm’s hierarchy (C-suite, board, TMT) and the interactive effects among female leaders. It also contributes (i) to the critical mass literature by showing that female directors and executives are influential when women on boards or in TMTs has sufficient strength and visibility; and, (ii) to the queen bee phenomenon by noting that female leaders in organizations with gender inequality tend to adjust their leadership style to fit the masculine culture.

This paper studies the effects of business school education on manager career outcomes and firm performance, using evidence from the Engineering, Science, and Management War Training (ESMWT), that offered MBA-style education to middle managers and production supervisors working at US war industrial facilities during WWII. Using a regression discontinuity design (RD), I show that managers who scored right above the ESWMT entry-exam threshold had a substantially higher probability of being promoted to both middle and top management positions during their career, and engaged systematically more in self-employment and innovative entrepreneurial activities than similar managers who scored right below. Participation in the ESMWT had larger effects on the career outcomes of under-represented groups in firm management, such as nonwhite and female managers, and boosted performance and managerial practices implementation of admitted managers war facilities. Exposure to a network of class-mates from better-performing firms resulted in higher chances of moving into peer companies and founding a business with them.

We estimate the evolution of competition in the ready-to-eat cereal industry. To separately identify detailed patterns of industry conduct from unobserved marginal cost shocks, we construct novel instruments that interact data on rival firms’ promotions with measures of products’ relative isolation in the characteristics space. We find strong evidence for partial price coordination among cereal manufacturers in the beginning of our sample. After a merger in 1993 conduct becomes more competitive and on average consistent with multiproduct Nash pricing. The last part of our sample is characterized by even more aggressive pricing, implying median wholesale margins of less than 5%.