This is the twelfth in this years' job market series.
Family firms are the most prevalent type of firm in the world. This is especially true in emerging economies, where family firms account for over half of medium-sized firms in the manufacturing sector. In particular, dynastic family firms – that is, where the founding family owns a controlling share and have appointed a second-generation (or later) family member as the CEO – account for a quarter of these firms. Since supporting such firms as the “backbone of the economy” is very politically popular (as this skilfully edited video from Last Week Tonight with John Oliver shows), it is crucial to understand more about these firms. More specifically, we need to understand how they operate and what their impact is on the economy and labour markets. Although there is mixed evidence on whether family ownership is a good thing, the weight of the evidence is that dynastic family CEOs are usually bad news for productivity. But why is that the case?
This is the eleventh entry in this year's job market series. You can read the previous entries here.
"On March 5th, we went to sleep as poor colonos [laborers]. On March 6th, we woke up rich, as landholders." –Cooperative Member, La Maroma Cooperative, 2017
Cooperative Property Rights in Latin America
Latin America has high levels of land inequality. In fact, land inequality is frequently cited as a key driver of Latin America’s comparative underdevelopment. In response to these high levels of inequality, over half of Latin American countries have attempted land reform programs to transform haciendas, in which an owner contracts laborers to work on the land, into agricultural cooperatives, in which workers jointly own and manage production. The figure below illustrates the Latin American countries that have attempted a land reform since the 1920s.
This is the tenth entry in this year's job market series. You can read the previous entries here.
Street harassment, or sexual harassment in public spaces, is a serious problem around the world. In Delhi, 95 percent of women aged 16-49 report feeling unsafe in public spaces (UN Women and ICRW 2013). Women incur significant psychological costs from sexual harassment (Langton and Truman 2014) and actively take precautions to avoid such confrontations (Pain 1997). However, there is limited evidence on the economic costs of daily harassment. Moreover, there is no quantitative evidence of the effect harassment has on women’s human capital attainment.
One potential cost of an environment in which street harassment is prevalent is that women may avoid opportunities that would otherwise be available to them. In Delhi University (DU), for example, women tend to attend lower quality colleges than men, even though on average they do as well or better than men on the national high school exams. In my job market paper, I ask whether women choose to attend lower quality colleges in order to avoid sexual harassment while travelling to and from college. I answer this question in a context where 71 percent of the enrolled students live at home with their families and travel to college every day, mostly by public transport, and where over 89 percent of female students have faced some form of harassment while traveling in the city. Specifically, 63 percent of female students have experienced unwanted staring, 50 percent have received inappropriate comments, 40 percent have been touched, groped, or grabbed, and 26 percent have been followed. I find that women’s college choice can be explained in part by their concerns about exposure to street harassment.
- job market papers 2017
This is the ninth in this years' job market series
Despite large investments in piped water throughout the developing world, the share of urban households without piped water has remained stable at 5% for middle-income countries and at 20% for low-income countries over the past decade. Given health, time-savings, and other benefits from piped water, how can water utilities set prices in order to close gaps in access while still covering costs? Conventional wisdom is that subsidizing fixed connection fees with high marginal prices can improve access especially for the poor, but this policy can have the opposite effect when households share water connections, which is common in the developing world. I observe that over 23% of households in Manila access piped water through a neighbor's connection. In this context, high marginal prices weaken incentives for households to extend water access to their neighbors through sharing. Similarly, connection fee subsidies may have limited impacts on access because sharing households already split any fixed costs with their neighbors.
This is the eighth in this year’s series of posts by PhD students on the job market.
Condoms are the only well-established technology that protect against sexually transmitted infections (STIs). Yet in 2015 alone, an estimated 3.3 billion risky sex acts took place without condoms in Sub-Saharan Africa, leading to 910,000 new HIV infections (UNAIDS, 2016a). Women disproportionally bear the costs associated with risky sex: they are more vulnerable to HIV infection, and carry the burden of unwanted pregnancy (UNAIDS, 2016b). Yet despite women standing to benefit most from condom use, the decision to use a condom is joint, and both sexual partners must agree. Thus women with low bargaining power may struggle to convince their male partners to use condoms.
This is the seventh in this year’s job market series.
Developing countries regularly underperform in their capacity to collect taxes, with tax revenue to GDP ratios that are 20 to 30 percent less than those of high-income countries (Besley and Persson, 2014). This tax capacity gap represents lost revenue that could have provided much-needed public goods and services while reducing reliance on foreign aid. This issue is especially relevant in Africa, where “shadow economies” comprise up to 75% of national GDP (Schneider and Enste 2000), indicating that large swaths of these countries’ populations manage to evade taxation. What accounts for this failure to convince citizens to pay taxes?
Structural roadblocks to tax collections in developing countries include poor service quality, dysfunctional bureaucracies, and outdated equipment. In contrast, my job market paper provides a political explanation centered on clientelism, or politicians' exchange of targeted goods for votes from loyal supporters.
This is the sixth in this year’s job market series
Labor misallocation is believed to be a key driver of differences in income across countries (Hsieh and Klenow 2010). However, the causes of this misallocation are not always well understood and there is little evidence on what interventions can improve the allocation of workers in the economy. These issues are particularly important in Sub-Saharan Africa, where worker mobility from low to high productivity sectors is often limited (McMillan, Rodrick and Verduzco-Gallo 2014).
My job market paper provides new experimental evidence from Ethiopia showing that subsidizing job applications can reduce inefficiencies in the allocation of workers’ talent.
This is the fifth in this year’s job market series.
By 2050, 2.5 billion people will move into cities with the vast majority doing so in the developing world (United Nations 2014). This has the potential to lift millions out of poverty by increasing the productivity of firms and workers who benefit from agglomeration. However, rapid and unplanned growth can lead to sprawling, inefficient cities with hours wasted stuck in traffic. Governments will spend vast sums on mass transit systems to reduce commute times (McKinsey 2016), but measuring their benefits is challenging. While individuals save time on any particular commute, their decisions of where to live and work will change as new alternatives become attractive and land and labor markets adjust. The lack of detailed intra-city data in less developed countries coinciding with the construction of large transit systems makes evaluating their causal impact even more daunting.
In my job market paper, I ask the question: how large are the economic gains to improving public transit within cities and how are they distributed between low- and high-skilled workers? I construct detailed data across 2,800 census tracts from before and after the opening of the world’s largest Bus Rapid Transit (BRT) system–TransMilenio–in Bogotá, Colombia. I develop a new reduced form methodology derived from general equilibrium theory to empirically assess TransMilenio’s impact on city structure and use this framework to quantify its aggregate and distributional effects.
This is the fourth in this year’s series of job market posts.
As the quality of a country's public sector workforce is an essential factor in its effectiveness in providing services, governments should try to hire qualified individuals in the public sector (Finan et al. 2017). However, there may be an important obstacle to the quality of this recruitment process, especially in developing countries: politicians could engage in patronage - the use of public sector jobs to reward their political supporters.
Virtually all modern bureaucracies are characterized by a civil service system, where the introduction of meritocratic hiring criteria was meant to shield public sector jobs from patronage practices. However, politicians typically retain some discretion in the selection of public workers, for instance through the use of temporary contracts (Grindle 2012). As a consequence, patronage could still play an important role in public sector hiring. Despite the potentially significant impact of this phenomenon on the quality of the public workforce, no study has systematically documented its presence in a modern bureaucracy, limiting our understanding of its consequences for the public sector.
In my job market paper "Patronage in the Allocation of Public Sector Jobs" (joint work with Emanuele Colonnelli and Mounu Prem), I study patronage in the context of Brazilian local governments during the 1997-2014 period.