Fernando Rios-Avila

Unions, Wage Gaps, and Wage Dispersion: New Evidence from the Americas

Using a common methodology, the effects of unions on wage levels and wage dispersion are estimated for two neighboring countries, Bolivia and Chile, and for the U.S. The analysis shows that unions have broadly similar effects on the wage distribution within these three economies. The findings suggest that the political economy of unions, coupled with market constraints on labor costs, produce commonality in union wage effects that transcend other economic and institutional differences.

The Wage Impact of Undocumented Workers

Using administrative, individual-level, longitudinal data from the state of Georgia, this paper finds that a documented worker employed by a firm that hires undocumented workers can expect to earn 0.15 percent less than if employed by a firm that does not hire undocumented workers. However, in sectors where there are opportunities for task specialization and benefits from communication skills, documented workers can expect to earn a wage premium of less than 1 percent from being employed at a firm that also hires undocumented workers.

Reevaluation of the employment impact of the 1996 Summer Olympic Games.

Using empirical methods published more recently than our earlier analysis found in this journal, we continue to find a statistically significant and substantial employment impact of the 1996 Summer Olympic Games in Atlanta. Post-Olympics versus pre-Olympics employment gains in counties affected by the Olympics exceeded employment gains in the rest of the counties in Georgia by 11% by the end of 2000. In addition, Olympics-affected counties in the metro Atlanta area experienced employment gains relative to other major Southern metropolitan statistical areas of roughly 5%. These results stand up to robustness and falsification tests.

Revisiting the effects of innovation on growth: a threshold analysis

Since Schumpeter’s (1934) seminal work, the existing literature has examined the relationship between innovation and economic growth, arguing for a strictly positive relationship. The recent literature suggests that this relationship might be non-linear. Low levels of innovation will not affect economic growth; yet, when a certain threshold is reached, innovation significantly promotes economic growth. Using panel data information for 147 countries from 2006 to 2012, we employ threshold regressions à la Hansen (1999) to test the hypothesis of a non-linear relationship between innovation and growth. We find evidence that the relationship between innovation and growth is not linear and that only high levels of innovation increase economic growth. The results tend to be stronger when investment and public expenditure are present, suggesting that the quality of institutions is important.

A search for evidence of skill mismatch in the aftermath of the great recession

Using matched individual-level data from the Current Population Survey, this article identifies a significant trend shift upwards in schooling among prime-age labour force leavers following the 2008–2009 recession. However, further evidence discredits skill mismatch as an explanation for that trend shift.

The impact of psychological trauma on wages in post-conflict Bosnia and Herzegovina.

In the last three decades, armed conflict has increasingly been fought among civilian populations, resulting in greater physical and mental tolls. Soldiers returning from combat with psychological trauma are now receiving medical and policy attention for reintegration into the workforce. However, there is little attention on the impacts and options available to civilians who may face similar problems achieving labor force success after exposure to war-related trauma. Using the Bosnia and Herzegovina Living Standards Measurement Survey for years 2001-2004, we study wage attainment for 7659 respondents in relation to a series of psychological trauma measures which correspond to those used in PTSD diagnosis. In standard OLS regression, all subcomponents of PTSD have a negative impact; however, once unobserved individual heterogeneity is taken into account, some of the individual elements of psychological trauma have positive impacts on wage attainment. This is one of the first studies to find evidence of Posttraumatic Growth using information beyond psychometric instruments. The impact of the PTSD condition itself is insignificant in both models, and we do not find evidence of selection bias. We determine that the traditional means of predicting wages in labor economics are relevant in a post-conflict environment.

The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being

The Great Recession had a tremendous impact on low-income Americans, in particular black and Latino Americans. The losses in terms of employment and earnings are matched only by the losses in terms of real wealth. In many ways, however, these losses are merely a continuation of trends that have been unfolding for more than two decades. We examine the changes in overall economic well-being and inequality as well as changes in racial economic inequality over the Great Recession, using the period from 1989 to 2007 for historical context. We find that while racial inequality increased from 1989 to 2010, during the Great Recession racial inequality in terms of the Levy Institute Measure of Economic Well-Being (LIMEW) decreased. We find that changes in base income, taxes, and income from nonhome wealth during the Great Recession produced declines in overall inequality, while only taxes reduced between-group racial inequality.

A Tale of Two Decades: Relative Intra-family Earning Capacity and Changes in Family Welfare over Time

The female/male average wage ratio has steadily risen from 1983 to 2012. In earlier work, we found that the falling wage gap from 1983 to 1993 was materially detrimental to the average dual-earner family. The female/male wage ratio continued to rise over the following two decades, accompanied by a growing share of households in which the wife is the principal household income generator. This paper investigates how these two developments affected family welfare. Although family welfare rose during the 1990s, the story of the 2000s is quite different.

Will elders provide for their grandchildren ?: unconditional cash transfers and educational expenditures in Bolivia

This paper takes advantage of repeated cross-section household surveys and a sharp discontinuity created by the introduction of an unconditional cash transfer to elders. The paper evaluates the impact of these cash transfers on the educational expenditures for children within a household. The analysis finds positive and significant effects of the program at the aggregate level. It also finds that the program has stronger effects in indigenous populations and among female and rural populations. The results are robust with respect to a series of falsification tests, survey structures, model specifications, and estimation methods.

The effect of intimate partner violence on labor market decisions: Evidence from a multi-ethnic country

Purpose - The purpose of this paper is to investigate the heterogeneous labor market responses of indigenous and non-indigenous women to intimate partner violence (IPV) using information from the 2003 Demographic and Health Survey for Bolivia. Design/methodology/approach - This analysis employs an instrumental variable with a Heckman correction approach to account for possible endogeneity problems between IPV and job exit decisions, and the self-selection of women into the labor force. It also analyses the sample across different population characteristics to search for heterogeneity and potential explanations to the observed effects. Findings - The results show that the effect of IPV on women’s job exits is stronger among non-indigenous women compared to their indigenous counterparts. These differences could be tied to the cultural differences between these two segments of the population. These results are robust using different methodologies and specifications. Originality/value - To the best of the authors’ knowledge, this paper is the first one to compare the relationship between domestic violence and labor market outcomes in a multi-ethnic developing country, such as Bolivia.