Ph.D. Candidate in Economics
University of Chicago
I am an applied microeconomist specializing in Political Economy and Labor Economics. Using administrative data and formal theory, I study firms to understand how power distribution between groups —e.g. management and unions— affects their productive efficiency and welfare. My research aims to understand institutional constraints that hinder optimal allocations and provides insights into crafting more efficient institutions and organizations.
I will be on the 2023/2024 job market.
Reach me at email@example.com.
Job Market Paper
Power Distribution and Efficiency: Theory and Evidence from Unionized Firms
Abstract: Institutions shape the distribution of power within societies and organizations, affecting resource distribution among their members. This paper explores whether reallocating power to disadvantaged groups can enhance equality and efficiency. By introducing the "burden of power" mechanism, I show that powerful groups can benefit by transferring power, thereby mitigating coercive actions on the part of the powerless that would otherwise reduce total surplus. I investigate this dynamic in the context of labor unions by examining how an increase in unions' bargaining power influences firms' profits. Utilizing data from a Chilean labor code reform, I run an event study based on a quasi-random treatment assignment. It reveals that while profits were unaffected, remuneration of nonmanagerial workers increased, the number of hours worked did not fall, and unionization rates declined. The heterogeneity in the effects by prepolicy bargaining power indicates that firms' profits are concave in unions' bargaining power while remunerations and unionization rates are convex in the same variable. I present a Nash bargaining model rationalizing these findings, formalizing the "burden of power" and characterizing Pareto-efficient bargaining power distributions. A model calibration for an average firm indicates that the union’s surplus share increases from 0.39 (prereform) to 0.48 (postreform) without harming profits.
Partisan Colleges and Political Donations
Submitted. SSRN WP #4611160 (with Franco Calle)
Abstract: This paper provides evidence that educational institutions shape political ideologies and activism. Using population data from Chilean college applications and political donations from 2004 to 2021, we explore the causal impact of attendance of universities with different ideological leanings on political donations. Leveraging score-based discontinuities in Chile's centralized college application system as an instrumental variable, we find that attending left-leaning universities significantly impacts political donation behaviors. Specifically, our fuzzy RDD outcomes indicate that enrollment at left-leaning institutions bolsters political activism, elevating the likelihood of donating to any political party by 0.69 pp (a magnitude equivalent to 60% of the share of donations in the population) and 0.92 pp for compliers. This uptick predominantly stems from a surge of 0.48 pp in donations favoring left-wing campaigns (equivalent to 52% of all donations caused by attendance at a left-leaning college going to leftist campaigns, 18% going to the right, and 30% to the center). Eighty percent of the donations to leftist campaigns from alumni of left-leaning colleges are attributable to the causal effect of attending a left-leaning college. No significant effects are found for graduates of right-oriented colleges.
Work in Progress
(Un)Ethical Allocations in Democratic Competition: A Dynamic Probabilistic Voting Model
Abstract: Ethical preferences significantly influence individuals' judgments on political actions and policies, and deviations from perceived ethical standards lead to political dissatisfaction. This paper explores the conditions under which democratic competition fails to implement ethical allocations, using a dynamic probabilistic voting model to understand how candidates learn about citizens’ ethical preferences. This study characterizes a set of ethically consistent redistribution policies (allocations), defined as equilibrium outcomes implementable by a social welfare function —ranging from Rawlsian to utilitarian— derived from normative axioms consistent with a particular ethical framework. Through a communication game, continuous learning by politicians leads to a steady-state convergence, identifying society’s true preference profile and implementing a utilitarian optimum (as in classic probabilistic voting models). However, a sequence of uninformative election outcomes, termed as 'uninformative traps', can obstruct this learning process, leading to potentially unethical allocations. The paper investigates the role of communication frictions, like voluntary voting and authoritarian regimes, in impeding the learning process, while highlighting how high-quality institutions can facilitate accurate learning and ethically consistent allocations. The findings underline the importance of informed electoral processes and institutional quality in promoting ethically consistent policies, contributing to satisfaction with democratic outcomes.
Bargaining Power and Redistribution at the Firm
(with José Miguel Pascual)
[Draft coming soon]
Abstract: This paper studies the impact of increasing the size of collective bargaining units on wage distribution and firm outcomes, exploiting a reform in Chile as a quasi-natural experiment. Previously, firms circumvented larger bargaining units by creating smaller entities with different tax-identifying numbers (TINs), limiting collective bargaining to smaller units. The reform shifted bargaining to the employer level, preventing this subdivision. Using a difference-in-differences approach, we compare firms and workers within the same economic sector, contrasting those that engaged in subdivision with those that did not, based on administrative data from the Chilean IRS. Our initial findings suggest that the reform led to increased wages. Further analyses will investigate its effects on profits, wage distribution, and firm survival, providing insights into the consequences of regulatory changes in labor practices.
Presented: Harris School of Public Policy, University of Chicago.
Power Shifting Dynamics and Development Paths: Evidence from Unionized Firms
Long-term Effects of Partisan Colleges on Political Donations
(with Franco Calle)
Publications (Pre - Ph.D.)
Abstract: This article presents the earned income tax credit (EITC), an instrument that consists of topping up lower-paid workers’ earnings with cash transfers. As a social policy, it has the advantage of being an effective mechanism for tackling inequality that does not greatly interfere with the trade-off between leisure and work but encourages labor market participation and formalization, cuts poverty, and reduces the stigma attached to being a social program beneficiary. This instrument is offered for two purposes: (i) as an actual policy option and (ii) as a benchmark for contrasting the potential cost-effectiveness of any other public policy intended to reduce inequality. The paper applies a genetic algorithm for numerical optimization to evaluate the parameters that optimally minimize income inequality and shows that, for example, spending 5,000 million dollars a year would reduce the Gini by between 4.7 and 6.1 points, which is more than the entire reduction recorded in Chile between 1990 and 2015.
Abstract: This paper looks at the effects of assortative mating on education for variables such as inequality, income, and the level of education in society. For Chile, it simulates a scenario where the parents of this generation would have mated randomly, without regard to their mate’s level of education. It demonstrates that in that hypothetical scenario, the inequality of household income, measured using the Gini coefficient, would fall from 0.48 to 0.43, a drop equivalent to the reduction in inequality between 1990 and 2013 (for this same variable). On average, income would simultaneously fall 15 percent, the uneducated would decrease by 5 percent, and the college graduates would also drop 5 percent.