Work in Progress
Spatial Equilibrium and the Regional Effects of Trade Liberalization (JMP)
This paper uses the 1994 North American Free Trade Agreement (NAFTA) and granular data on Mexican municipalities to study the local effects of trade liberalization on college wage premia, housing costs, and urban amenities between 1990 and 2010. I measure local exposure to international trade by constructing a market access database of each municipality's lowest-cost route to the closest US truck port. I find that municipalities facing larger trade exposure experienced: (1) declines in local wage differences between college and noncollege graduates, both in nominal and real terms; (2) smaller increases in local urban amenities. I interpret these results under the notion of spatial equilibrium in which non-monetary urban amenities compensate for gaps in real wages across cities.
Working paper
Inward Foreign Direct Investment, Superstar Firms and Wage Inequality between Firms: Evidence from European Regions
Theoretical models and international evidence have established that foreign direct investment is associated with new technologies, productivity gains, higher wages, and wage inequality in the host countries. While most existing studies on foreign direct investment and wage inequality have examined relative wages across skills, occupations and sectors, recent contributions to the theoretical and empirical literature highlight the role of wage dispersion between firms as an important driver of overall income inequality. Against this background, this paper examines wage dispersion between firms across European regions and the role played by multinational firms with dominant market shares, the so-called “superstar firms”. Firstly, we document the evolution of wage dispersion between firms and the regional presence of foreign affiliates across European regions. Second, we empirically investigate the role of inward foreign direct investment as a driver of wage dispersion between firms across European regions. The analysis uses firm-level data from the ORBIS Europe data set over 2012-2021 combined with a range of data for European regions. Using a shift-share instrumental variables approach, we find that foreign direct investment, particularly international superstar firms, contributed to increased wage inequality between firms across European regions.
Do We Know What Hit Us? Bartik Shocks, Labor Demand, and Local Productivity in Europe
Despite the increasing popularity of the Bartik-style labor demand shocks, little isknown about the exact interpretation of their source of variation. This paper studies theempirical link between local productivity changes and Bartik shocks in Europe between2012 and 2020 by constructing regional productivity measures based on firm-level revenuetotal factor productivity (TFP) for ten European countries. I find there is a weakempirical relationship between the Bartik shocks and changes in regional productivity.By contrast, I find that changes in regional productivity are more strongly related tothe competitive effect of the shift-share model that gains relevance where regional employmentgrows faster than employment growth in the same industry at the nationallevel.
Gender Gaps in the Labor Market Effects of COVID-19: Evidence from Mexico
This paper analyzes the effects of the COVID-19 pandemic on labor market outcomes for men and women in Mexico. Using a large longitudinal dataset and an event-study design, I find that the labor effects of the pandemic differed by gender and changed considerably over time. While men temporarily suffered from a higher probability of unemployment, women experienced greater and more persistent declines in labor force participation. By exploring the heterogeneity of the effects across sub-samples, I show that these disparities in the recovery of labor participation are mainly driven by increased childcare needs and are linked to women being over-represented in the informal and part-time workforce.
Working paper
Regional Industry Transformation, Labor Demand, and Local Gender Gaps
This paper investigates how gender gaps vary across space and time using census microdata for Mexico during 1990-2010. I document that female-to-male gaps in working hours increased on average for all municipality sizes, but this increase was disproportionately greater in smaller compared to larger municipalities. This novel empirical pattern also coincides with a more rapid increase in the share of services in smaller locations that initially specialized in producing goods (primary activities and manufacturing). Motivated by these stylized facts, I quantify the impact of industry-specific labor demand shocks on local gender gaps in working hours and explore the heterogeneity of the effects across municipality sizes. I find that labor demand shocks in the goods industry only affect female relative work hours in small municipalities. My results suggest that the interaction between industry specialization across locations, industry differences in female labor intensities, and the rise of the service economy boosted female employment in smaller cities.
