Research

Working Papers:

I use administrative data on the ownership, management, and taxes for the universe of all firms in Ecuador to study the implications of family-management for aggregate productivity. A novel finding I document is that family-managed firms grow half as quickly as externally-managed firms. This growth differential implies that family-managed firms account for only 40% of employment, despite being the 80% of firms. I construct a general equilibrium model of firm dynamics that is consistent with these facts. Entrepreneurs choose whether to utilize family members as managers or hire external managers. External managers allow firms to scale up production, but their efficiency is affected due to contractual frictions. Improving the efficiency of external managers could increase output on the order of 6%, as it leads more firms to abandon family-management and consequently enjoy rapid growth. [new version coming soon]

[Appendix]

This paper studies the long-run effects of concertaje, a forced-labor institution established during the Spanish colonial regime in Ecuador. This institution allowed landlords to retain indigenous workers due to unpaid debts and forced them to lifetime work in rural estates known as haciendas. I collected and digitized historical tax records for the universe of workers circa 1800, to assess both the effects of concertaje regionally, as well on their pseudo-descendants. Instrumental variable estimates show that an increase of 10 percentage points (pp) in a district’s concertaje rate increments contemporary poverty in 4.2 pp. At an individual level, I link historical tax records (1800) to current ones (2010s) via surnames to document for the first time the long-run intergenerational effects of coercion. Using a TS2SLS approach, I show that an increase of 10 pp in a surname’s concertaje rate reduces current formal labor income in 1.7%. I further provide evidence of the channels that explain these results. I show that concertaje has been historically associated with lower educational levels and a lower provision of public goods. Due to restricted mobility, concertaje also lead to higher employment in agriculture and less migration nowadays. However, I also find that the effect of descending from a concierto is less pronounced for individuals born outside the concertaje region, suggesting that migration could have mitigated some effects of historical institutions. [updated version]

We study the effects of credit on employment growth and on the probability of firm survival during the Covid-19 pandemic in Mexico. To this end, we merge administrative micro-level data on the universe of bank-firm matched loans and on formal employment at the firm level. Our identification strategy exploits the pandemic’s heterogeneous effects on bank balance sheets to obtain credit supply shocks. We find that credit growth for firms with pre-existing banking relationships with more exposed banks was lower. An increase of 10 percentage points (pp) in a firm’s credit growth rate increased employment growth by 0.75 pp and reduced the probability of exit by 0.5 pp. [draft coming soon]

In this paper, I document the existence of unconditional convergence in labor productivity across Mexican states in three-digit manufacturing industries. The rate of convergence for the period 1988-2018 is 1.18% per year. However, this result does not hold at the aggregate level: there is no unconditional convergence in manufacturing-wide labor productivity across states. Shift-sharing analysis reveals that the primary reason for this is the lack of labor reallocation towards more productive industries, and the un- derperformance of some of the largest ones. Unconditional convergence at all levels only occurred during 1988-1998. Afterwards, the convergence process broke down and was only observed at disaggregated levels. I provide evidence that one possible cause of this breakdown is the China shock. Additionally, I show that the convergence process has exhibited a catching-down feature, where past-leaders have seen their labor productivity decline.

Book Chapters:

  • The legacy of concertaje in Ecuador. Chapter prepared for Roots of Underdevelopment: A New Economic (and Political) History of Latin America and the Caribbean. Palgrave, Macmillan. Edited by Felipe Valencia Caicedo. 

Research in progress:

  • Revisiting Income Dynamics in Mexico (with Rodolfo Oviedo) [draft coming soon]
  • Estimates of Intergenerational Mobility in Ecuador through Surnames
  • Education and Public Sector Employment (with Todd Schoellman)
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