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.
I collected and digitized historical tax records from the Spanish colonial regime in Ecuador to estimate the long-run effects of a forced labor institution called concertaje on today’s economic performance. This institution allowed landlords to retain indigenous workers due to unpaid debts, and forced them to work as peasants in rural estates known as haciendas. In order to identify the causal effects of concertaje, I exploit variation in its intensity caused by differences in labor requirements from the crops a region could grow. I first report that an increase in 10 percentage points in concertaje rates is associated with a 6 percentage points increase in contemporary poverty, and negatively associated to average night light intensity, a proxy for economic development. I then explore several channels of persistence that might explain those results. As hacienda workers inherit the status to their children, districts with higher concertaje rates have been historically associated with higher illiteracy rates, lower school enrollment, and populations with fewer years of education. I also report that concertaje is associated with a higher fraction of people working in the agricultural sector, reflecting its role as a barrier to labor mobility, while inequality and public goods provision do not appear to be channels of persistence. I conclude that historical forced labor has persistent effects by generating barriers to the allocation of labor and affecting the formation of human capital.
A slave to the past? Labor coercion and intergenerational mobility in the long-run
I study the intergenerational effects of labor coercion on income in the long-run. I start with a novel dataset from Ecuador that includes the names of people who were listed as property in historical tax records taken from around 1800. I link these to recent individual tax records using a two-sample two-stage least squares approach, which involves matching based on uniqueness of names. I report that being a descendant of a formerly coerced worker is associated with 15 to 20% lower taxable income today.
Research in progress:
Education and Public Sector Employment (with Todd Schoellman)
Estimates of Intergenerational Mobility in Ecuador through Surnames