From Wells to Wealth? Government Transfers and Human Capital  Journal of Development Economics (with Lenin Balza and Nicolas Gomez-Parra)

Abstract 

To study the causal impact of oil royalties on human capital, we exploit quasi-experimental variation arising from a law in Ecuador that prescribes an algorithm to assign oil royalties to municipalities regardless of their oil-producing status. We find that royalties increase the likelihood of students completing primary and secondary education. Students reaching high school are also more likely to pass and excel on the exit exam. Furthermore, schools are more likely to remain open, increase their size, and become more road-accessible. However, the likelihood of students pursuing higher education decreases as they face steeper opportunity costs when labor demand increases.

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Keywords: Natural Resources, Oil Royalties, Human Capital, Ecuador

JEL: I25, O13, O15, Q32, Q35

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The asymmetric impact of out-migration and return-migration on wages in the source country: Evidence from Mexico. Journal of Human Capital 17, no. 2 (2023): 000-000.

Abstract

This paper studies the impact of return migrants from the United States to Mexico on workers’ wages in Mexico and contrasts it with the effect of out-migration trends. The empirical estimation reveals that return migrants and nonmigrant workers are imperfect substitutes. The mechanism driving imperfect substitution is consistent with migrants’ foreign acquisition of human capital that is valued in the home-country labor market. The results suggest that occupation-specific experience in the United States drives imperfect substitution. Imperfect substitution generates distributional and sign asymmetries on the impact of wages for out-migrant- and return-migrant-induced labor supply shocks of the same magnitude.

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Keywords: Return migration, U.S.-Mexico migration, Impact of migration, Wages, Human Capital

JEL: O15, J61, J31, J11, F2

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Non-classical Measurement Error with False Positives and Negatives. Applied Economics Letter 28, no. 18 (2021): 1620-1625.

Abstract

Non-classical measurement error caused by false positives and false negatives produces biased and inconsistent estimates in a regression. This is the case whether the mismeasured variable is a dependent or an explanatory variable, and having an IV does not always work. To tackle these limitations, this paper shows that proper adjustment of the mismeasured variable of interest produces consistent estimates. The paper also discusses alternatives when the key inputs to adjust the mismeasured variable are not known.
Keywords: Non-classical measurement error, false positives, false negatives
JEL codes: C80, C01, C40, C49

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The effects of border enforcement and expected economic gains: Mexico-U.S. migration during and after the Great Recession

Abstract

Stricter border enforcement is expected to have a negative effect on undocumented migration, but quantifying its impact has been an eluding issue. This paper studies the effect of border enforcement on the decision to migrate from Mexico to the U.S. Using data that connect migration flows from states in Mexico with states in the U.S., this paper sheds light on 1) the mechanics of border enforcement as a deterrent to unauthorized migration, and 2) the linkages between labor markets of these countries. It derives an empirical specification from a random utility model to explain recent patterns in Mexico-U.S. migration and finds that instead of stricter border enforcement, lackluster expected economic gains are the major disincentive to migration. Point estimates imply an elasticity of migration with respect to economic gains of 1.5, and an elasticity with respect to border enforcement of -0.27.

JEL: O15, J61, J68, R23, F22

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Weapon Supply Shocks, Violence, and Migration  (R&R)    

Abstract

I use shocks to the world supply of weapons to identify the causal effect of violence as a driver of the U.S. migrant border crisis. The main finding is that weapon supply shocks increase violence, and violence increases migration. Migration is not monotonic after violence shocks, implying changes in migration timing that have neutral impacts over sixteen quarters. Critically, children and unaccompanied children react the least rapidly to violence.

JEL: H12, K42, O15, F22

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Distant Economic Shocks, Migrants' Networks, Jobs, and Violence

Abstract

This paper documents a strong negative effect of formal employment on homicide violence and sheds light on the impact of distant economic shocks on the surge of violence in Mexico. To explore the mechanism and guide the empirical strategy, this paper develops a stylized spatial equilibrium model with multiple sectors and regions that can sustain nominal wage differences across and within regions. Distant economic shocks are channeled through migrants’ networks to local labor markets. Positive shocks increase employment in the formal sector, decrease informality and the probability that a Drug Trade Organization (DTO)
initiates operations in a given municipality. In contrast, negative shocks decrease employment in the formal sector and expand the informal sector. The informal sector serves as a buffer during downturns, reducing the number of workers joining illicit labor markets. Results suggest that violence levels would be higher in the absence of migration.

Keywords: Violent crime, Formal and informal labor markets, Drug trade organizations

JEL: J40, R23, K42, O15, N36

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Immigration, Selection, and Human Capital: The Venezuelan Inflow and Educational Pathways in Ecuador   (Under Review)

Abstract 

Employing a shift-share design that leverages the unanticipated Venezuelan migration crisis, I examine the impact of immigration on educational attainment in Ecuador. Immigration has no significant impact on the overall quality of education, but it does have a positive effect on the standardized test scores of high school students and those seeking to enroll in college. The specific institutional setting leads to more college graduates and high school dropouts, widening education inequality while increasing educational attainment, on average.  A combination of positive selection and preparation intensity for college admission explains the results.

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Keywords: Impact of Immigration, Human Capital, Ecuador, Venezuela, Latin America

JEL: J24, J61, H75, O15

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The Ripple Effects of U.S. Monetary Policy on Social Unrest and Conflict (with Jorge Avila-Santamaria and Pedro  Romero)

Abstract

We estimate the dynamic causal effect of the U.S. monetary policy on social unrest and armed conflict in Africa and the Middle East by leveraging high-frequency monetary policy surprises. We find a consistent reduction in social unrest and armed conflict in response to contractionary policies. We determine that the policy sustains declines in commodity and consumer prices, which translates to less conflict despite the overall economic contraction. As anticipated, we discover that the same shocks have standard effects on foreign economies, such as contracting their GDP. This demonstrates the complex mapping between the economy and social unrest. The findings point to non-traditional channels of propagation of global shocks.

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JEL: D74,  E52 , E71 , F33, F42 , H56,  O1 

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From Finite Resources to Enduring Potential: Early Investments Through Government Transfers (with Bernard Moscoso)

Abstract

We find improvements in key metrics for newborns using variation in government transfers during gestation, originating from natural resources and spanning over three decades. These short-term impacts have lasting effects into adulthood, increasing the likelihood of holding high-skilled jobs and educational attainment. The short-run outcomes are consistent with increased family income, nutritional supplementation, and additional healthcare. Complementary evidence suggests that prenatal investments reinforce investments in childhood. These early investments more effectively translate to long-term human capital formation, but are less effective at enhancing employment outcomes relative to postnatal transfers.

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Key words: Oil royalties, human capital, Ecuador, health outcomes, labor outcomes

JEL Codes: I15, O15, Q33, O12.

Research in progress

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with  Joyce J. Chen (OSU). “Sequential Migration: Unaccompanied Children, Separated Families, and Crime in the Northern Triangle”

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