Research

Publications

• Immigration, Wages, and Employment under Informal Labor Markets
  Listed in UC3M working paper series, SocArxiv and RieC
  Journal of Population Economics (2024) Vol 37, Art 55.
  Abstract

  This paper studies the labor market impacts of the Venezuelan immigration in Colombia. Exploiting spatial variation in exposure, I find a negative effect on native wages driven by the informal sector (where immigrants are concentrated) and a reduction in native employment in the formal sector (where the minimum wage binds for many workers). To explain this, I build a model in which a firm substitutes formal for informal labor in response to lower informal wages. Consistent with the model's predictions, I document that the decrease in formal employment is driven by small firms that use both labor types in production and by workers earning the minimum wage.

Working papers

• Worker Responses to Immigration Across Firms: Evidence from Colombia
  Coverage: uc3nomics blog and PSE Migration policy briefs
  Winner of the Best Immigration Economics Paper at OECD Immigration Conference 2023
  Abstract

  Millions of migrants have recently relocated to developing countries where the informal sector is large and small firms are prevalent in the labor market. The interaction between workers, firms, and immigration shocks in these contexts remains largely unexplored. In this paper, I study the mass arrival of migrants from Venezuela in Colombia using comprehensive administrative records that cover the universe of formal workers and firms. As immigrants concentrate in the informal sector, formal employment for natives earning the minimum wage declines, reflecting their high substitutability with informal workers who become less costly. Across firms, the negative formal employment and wage effects are concentrated in small firms. To rationalize this, I construct a model of heterogeneous firms that employ both formal and informal labor to show that small firms' responses are more pronounced as they rely more on informal labor for production. Finally, I develop causal forests to find that the heterogeneity in employment and wage effects is explained more by firm characteristics rather than worker characteristics. These results indicate that the firm dimension is key for a complete understanding of the impact of immigration on native workers and the labor market overall.

• Monopsony Power and Firm Organization (with Álvaro Jáñez)
  Alvaro’s JMP
  Abstract

  Labor market competition drastically differs for production workers and managers. For instance, in Portugal, there are half as many firms competing for managers as for production workers in the typical local labor market. Using administrative data from Portugal together with a general equilibrium model of oligopsony that incorporates minimum wages and management delegation, we show that monopsony power by firms leads to a welfare loss of 5.7% for production workers and 23.1% for managers relative to an efficient economy. Production workers bear smaller losses because they often work in markets with more competitor firms, view firms as closer substitutes, and are more affected by the minimum wage. The weak monopsony power of low-wage firms over production workers implies that raising the statutory minimum wage reduces overall welfare and affects managers through worker reallocation and delegation adjustments. Moving from the benchmark to an occupation-based minimum wage that optimally addresses monopsony power increases welfare by about 0.2% for both occupations.

• The Impact of Hard Discount Stores on Local Labor Markets: Evidence from Colombia (with Andrés Calderón & Andrea Otero-Cortés)
  Listed in Banco de la República-DTSERU
  Abstract

  Hard discount stores have reshaped the retail sector by selling low-cost products. While this business model has gained market shares in many countries, how it affects the labor market is unclear. To fill this gap, we study the impact of discount stores on local labor markets in Colombia, where these stores had a rapid, staggered geographic expansion. Our results show that discount stores boost local formal employment, especially in retail, manufacturing, and agriculture, suggesting significant spillover effects from retail to other sectors. Consistent with this finding, we also document increases in local tax revenues from manufacturing and commerce activities.

Work in progress

• Firms, Regularization, and the Labor Market Integration of Migrants
• Immigration Shocks and Housing Dynamics: Evidence from Bogota (with Daniel M. Angel & Juan M. Jiménez)
  Daniel’s JMP

Policy reports

• World Bank Report of the EU.
  Part 1: Energizing Europe–Inclusive Growth: Inflation Chipping Away the Gains from Inclusion (2023).
  Part 2: Energizing Europe–Rising to the Challenge (2023).