Gianmarco León

Civil Conflict and Human Capital Accumulation: The Long-term Effects of Political Violence in Perú

This paper provides empirical evidence of the persistent effect of exposure to political violence on human capital accumulation. I exploit the variation in conflict location and birth cohorts to identify the long- and short-term effects of the civil war on educational attainment. Conditional on being exposed to violence, the average person accumulates 0.31 less years of education as an adult. In the short term, the effects are stronger than in the long run; these results hold when comparing children within the same household. Further, exposure to violence during early childhood leads to permanent losses. I also explore the potential causal mechanisms.

International Remittances and Income Inequality: An Empirical Investigation

The aim of this paper is to provide comprehensive empirical evidence on the relationship between international remittances and income inequality. In simple cross-country regressions we find a non-monotonic link between these two variables when using ordinary least squares, instrumental variables; we also test our hypothesis using dynamic panel data methods. We provide evidence in support of existing theoretical work that accounts for network effects that describe how, in the first stages of migration history, there is an inequality-increasing effect of remittances on income inequality. Then, as the opportunity cost of migrating is lowered due to these effects, remittances sent to those households have a negative impact on inequality. We also show how education and the development of the financial sector can help countries to reach the inequality-decreasing section of the curve more quickly. Our results are robust to several empirical specifications, as well as for a wide variety of inequality measures.

Turnout, Political Preferences and Information: Experimental Evidence from Perú

I combine a field experiment with a change in voting laws reducing the fine for abstention to assess the effects of monetary incentives to encourage voter participation. In a real world election, using experimental variation in the perceived reduction of the fine for abstention I estimate that receiving information about a reduction in the fine by 50 (75) percent causes a decrease in turnout of 2.6 (5.3) percentage points. These estimates imply a cost elasticity of voting of -0.22. The reduction in turnout is driven by voters who are in the center of the political spectrum, hold less political information and have lower subjective value of voting. The increase in abstention does not change aggregate preferences for specific policies. Further, involvement in politics, as measured by the decision to acquire political information, is independent of the level of the fine. Additional results indicate that the reduction in the fine reduces the incidence of vote buying and increases the price paid for a vote.

Institutional Enforcement, Labor Market Rigidities, and Economic Performance

This paperstudy the issue of institutional enforcement of regulations by focusing on labor-market policies and their potential link to economic performance. It test the different impacts of enforceable and non-enforceable labor regulations by proxying non-enforceable labor rigidity measures using data on conventions from the International Labor Organization (ILO). It has been argued that non-enforceable conventions -that is, those that exist on paper and are simply de jure regulations -appear to be more distortionary and tend to be the least enforced in practice (Squire and Suthiwart-Narueput, 1997). According to Freeman (1993), these conventions reflect the ideal regulatory framework from an institutionalist perspective and cover a variety of labor market issues, from child labor to placement agencies. Whereas in theory, a country`s ratification of ILO conventions gives the country legal status and thus supersedes domestic regulations relating to those issues, in practice the degree of labor-market rigidity depends on how the conventions are enforced. It is the outcome of the regulations that matters, rather than their number.

Barriers to Exit

Unlike previous empirical studies that focus on barriers to entry in international trade, we focus on barriers to exit as measured by passport costs for a cross-section of countries. We test four common theories on the determinants of such exit barriers and find that macroeconomic and brain-drain explanations do explain high barriers to exit. However, institutional and cultural hypotheses do not appear to be empirically robust explanations of such high barriers. Our findings hold when applying instrumental variables, changes in specification, and changes in cross-country periods.

Privatized Firms, Rule of Law and Labor Outcomes in Emerging Markets

This paper takes advantage of a recent large firm-level dataset to compare labor indicators of privatized, private, and public firms around the world, particularly wages, benefits, labor composition, education and training, unionization, and quality of management. While labor productivity increases after privatization, the ratio of permanent workers to temporary workers also increases. Convergence depends to some degree on the quality of the institutions, namely, the rule of law. Not only is this true for the ratio of permanent workers to temporary workers, but also for education of the workforce, and for the manager’s years of experience. On the other hand, the rule of law appears to be less important in the case of labor productivity and training.