Author: Guillermo Falcone / Political Geography: Chile

Author:: Andrés César and Guillermo Falcone
Publication Date:: 04-2024
Content Type:: Working Paper
Institution:: Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:: We study the causal impact of export growth on Chilean local economic development during 2000–2006 by exploiting spatial and temporal variations in local exposure stemming from the interaction of past differences in industry specialization across local labor markets and the evolution of tariffs cuts and exports across industries. We find that growing exports implied a significant reduction in labor informality and labor income gains in more exposed local markets, driven by job creation and wage growth in the formal sector. These effects concentrate on senior skilled workers. Exposed locations also exhibit a greater relative decline in the poverty rate.
Topic:: Poverty, Employment, Economic Growth, Tariffs, Exports, Economic Development, Labor Market, Wages, and Informality
Political Geography:: South America and Chile

Author:: Irene Brambilla, Andres Cesar, Guillermo Falcone, and Guido Porto
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:: This paper proposes a new link relating export destinations and the organization of the firm. We claim that the production of higher-quality varieties exported to rich destinations induces firms to re-structure their production processes, becoming organizationally more complex. We introduce a theoretical model with these features and we explore the mechanisms using a panel of Chilean manufacturing plants. Our identification strategy relies on falling tariffs on Chilean products across destinations caused by the signature of Free Trade Agreements with high-income countries (the European Union, the United States, and South Korea). We find that Chilean plants that were induced by these tariff reductions to start exporting to high-income destinations increased the number of hierarchical layers and upgraded the quality of their products. This involved the addition of qualified supervisors that facilitated the provision of higher product quality. These effects took place at new high-income exporting firms.
Topic:: Economy, Free Trade, Exports, Hierarchy, and Quality
Political Geography:: Latin America and Chile

Author:: Andres Cesar, Guillermo Falcone, and Leonardo Gasparini
Publication Date:: 07-2022
Content Type:: Working Paper
Institution:: Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:: We study Chile’s labor market responses to trade shocks during 1996-2006, exploiting spatial and time variations in trade exposure arising from initial differences in industry specialization across local labor markets and the evolution of shocks across industries. We take advantage of China’s supply and demand’s worldwide shocks to instrument for Chinese import competition and demand for Chilean exports. Our main finding is that increasing manufacturing import competition implied a significant rise in labor informality in more exposed local markets, especially among young and unskilled workers. These groups also suffered significant relative wage losses. Meanwhile, locations that benefited most from the increased demand for primary products experienced a relative increase in employment, particularly among young individuals, and reallocation from self-employment towards salaried jobs in the formal sector, along with relative wage gains among old-age workers. Interestingly, these areas experienced a smaller increase in tertiary education enrollment rates than less exposed areas.
Topic:: Employment, Trade, Labor Market, and Informal Economy
Political Geography:: South America and Chile

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