Abstract: This paper investigates the distributional consequences of trade in economies characterized by distortions. Using aggregate data from over 100 countries, I find that trade liberalizations increase income inequality, particularly in less-distorted countries. To explain these patterns, I develop a trade model incorporating heterogeneous firms, skill-biased productivity, distortion wedges, and sorting of workers. Calibrating the model to microdata from firms and workers and to the Chilean trade liberalization of the 2000s, I show that distortions reduce gains from trade and mitigate increases in wage inequality. These results are consistent with firm-level empirical evidence from the same liberalization episode in Chile. My findings highlight a potential trade-off between welfare and inequality in second-best environments, providing new insights into the role of distortions.

Presentations: Midwest International Trade Conference (Spring 2025, Virginia Tech, Blacksburg).

Abstract: We study the effect of temperature on students' performance and how changes in the incentives to study alter this impact in the context of high-school exit exams in Colombia. We show that temperature increases have a negative impact on exam scores, particularly among urban students. Conversely, rural students exhibit slightly positive effects. Leveraging time-use data, we find evidence of individuals in rural areas responding to increases in temperature by reallocating time towards off-farm activities, which are human capital intensive. Additionally, the announcement of a national scholarship program, which introduced exogenous variation in exam stakes, reveals that heightened student effort exacerbates the temperature's impact on scores. In particular, an interquartile change in the exposure to this program increases the impact of temperature on exam scores by 12.4%. This underscores the intricate relationship between incentive-based policies and the challenge of rising temperatures. As global temperatures continue to rise, understanding this dynamic is crucial for informing effective educational policy.

Presentations: AERE Summer Conference (Washington DC 2024), AAEA Annual Meeting* (New Orleans 2024), ICAE* (Delhi 2024), SAEA* (Irving TX 2025)

* Presented by coauthor

Abstract: Export participation provides incentives for investing in firm-provided training, thereby boosting human capital accumulation within firms. Using firm-level data for over 100 countries, I document that exporters are more likely to train their workers than non-exporters. Currency appreciations lead to more entry into exporting and an increase in the share of firms providing training, especially when they expose domestic producers to heightened import competition. These patterns are consistent with a heterogeneous-firm model in which exporting and training are complementary because of the higher revenues from exports and the productivity increase following training investments. By reallocating sales towards the most productive producers, import competition leads to more firms finding it profitable to export and provide training.

Presentations: LACEA-LAMES Annual Meeting (Lima 2022), Midwest Macro Meeting (Fall 2022, SMU).

Abstract: International trade increases aggregate welfare but also creates winners and losers, which makes free trade a contentious political issue. Recent research has established that individuals are more sensitive to anti-trade information about the prospect of employment loss than to pro-trade information regarding lower product prices and increased variety. This means that we know what works to \textit{decrease} support for trade, but it is still unclear what works to \textit{increase} it. In this paper, we fill this gap by studying how individual attitudes and beliefs change in response to information regarding employment losses (in import-competing sectors), to information regarding employment gains (in export-oriented sectors), and to information regarding the possibility of compensation to those displaced by trade. To this end, we conducted a large-scale survey experiment in eighteen Latin American countries using nationally representative samples. Results indicate that anti-trade information reduces support for trade even if compensation to losers is mentioned and that pro-trade messages increase support only if they are worded so that a job gain is perceived. Belief updating about the consequences of increased trade on employment seems to be a relevant mechanism. Our findings have important implications on what types of messaging work to increase support for trade.

Presentations: LACEA-LAMES Annual Meeting* (Uruguay 2024)

Previous versions: Jobs and Support for Trade

* Presented by coauthor

Abstract: In this paper, I show empirically and theoretically that, by encouraging quality upgrading, trade changes the incentives of firms to provide training to their workers. Using detailed firm-level data from Mexico spanning the period 1991-2004, I document that changes in the profitability of exporting lead to increases in the share of firms engaging in exporting, providing training to their workforce, and holding the ISO-9000 certification --my proxy for quality. Notably, these effects are stronger among larger firms. To establish causality, I employ two distinct empirical strategies: exploiting the heterogeneity in the impact of the 1994 Mexican Peso crisis on firms of varying sizes and utilizing variation in bilateral exchange rates interacted with predetermined industry-level trade shares. To provide a theoretical explanation for these findings, I develop a heterogeneous-firms model of trade that incorporates non-homothetic preferences, quality upgrading, and firm-provided training.

Presentations: LACEA-LAMES Annual Meeting (Bogota 2023), SEA Annual Meeting (New Orleans 2023), RIEF Annual Conference (Online 2023), Midwest International Trade Conference (Fall 2024, Indiana University-Purdue University, Indianapolis).

Abstract: This paper studies the relationship between workforce age composition and aggregate productivity across firms in 19 European countries. Using firm-level data from the Structure of Earnings Survey and a Bartik shift-share instrumental variable approach, we identify a causal effect of workforce age composition on wages, which we use as a proxy for labor productivity. Our analysis reveals an inverted U-shaped relationship between age dispersion and productivity, suggesting that an optimal mix of experienced and inexperienced workers maximizes economic output. We find similar patterns using firm-level productivity data from Mexico, reinforcing the robustness of our results to different productivity measures. To explain these findings, we develop a model in which knowledge transfer within firms is driven by interactions between younger and more experienced employees. The model successfully replicates historical trends in workforce composition and GDP per capita, particularly in Sweden, over the period 1860–2020. Our results highlight the critical role of demographic dynamics in shaping economic performance and underscore the importance of policies that enhance knowledge transfer, skill development, and intergenerational collaboration in the labor market.

Presentations: SED Meeting (Copenhagen 2025, Scheduled)