Essays on Applied Microeconomics in Latin America
Open AccessThis dissertation consists of three separate studies focusing on applied microeconomics in Latin America. In the three chapters, I use administrative data to explore each research question and to contribute to the literature about three relevant topics in the region: emigration, crime, and water stress. This dissertation highlights the need in developing countries to explore new ways to collect administrative data and make it accessible to researchers. The first chapter “Following your Lead: Migration Networks and Immigrants' Education Decisions” estimates the effect of immigrant networks on education of school-age Salvadoran immigrants in the United States. I construct an instrument for the network size in the United States using existing settlement patterns and municipality-level push factors in El Salvador such as crime, agricultural land use, and economic development. I find that almost half a year of education is lost by Salvadoran immigrants with an exogenous increase of the network size by one standard deviation (4.6 percent decrease). In addition, a larger concentration of former Salvadoran immigrants working in agriculture or construction enlarges the network effect on years of schooling leading to an 11.4 percent reduction. Causal links between the education decisions of immigrants and their network may partly explain the low level of education attained by new young immigrants. Immigrants with more education may assimilate better into their host countries and contribute to their economies.The second chapter is titled “Turn Off the Faucet: Moral Hazard and Water Consumption”. Consumption of water and other utilities is often measured collectively for all residents of a building or neighborhood, and payment of such services is equally shared among members of the group. When this is the case individuals may use more services than what is socially optimal. In this paper we evaluate how the installation of individual meters affects water consumption. Using rich administrative data from the public water utility company in Quito, Ecuador, and a regression discontinuity approach, it is estimated that water consumption decreases by about 8\% as a result of individual metering. The effect is large and economically significant, because a) similar reduction in water consumption can be obtained when prices increase by 100%, and b) alternative interventions that provide households with gifts to motivate water saving practices are not nearly as effective. Individual water metering could be a useful tool to curve down consumption both in developing and developed countries.The third chapter is titled “Fleeing from Violence: The Impact of a Gangs' Truce on Salvadoran Emigration”. It estimates the effect of the gangs' truce on emigration from El Salvador to the United States. It takes advantage of a truce between gangs and the Salvadoran government that led to an unanticipated reduction of 53 percent of homicides during 2012 and 2013. The analysis relies on exploiting time variation during the truce years, and on geographical variation of gangs' exposure within the country. We create a variable that captures the share of Salvadoran foreign-born population in Los Angeles, California, a place where the main Salvadoran gangs were born. We find that when the household's exposure to gangs increases by one standard deviation, this change leads to a reduction on emigration probability of 9.4 percent during the truce years.
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ContrerasGonzalez_gwu_0075A_15862.pdf | 2022-10-04 | Open Access |
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