# Research

Current papers:

A Sharing Model of the Household: Explaining the Deaton-Paxson Paradox and Computing Household Indifference Scales. (pdf) (An older version in 2016 circulated as “A Sharing Model of the Household: Explaining the Deaton-Paxson Paradox and Contesting the Collective Model”)

This paper presents a new model of the household that is able to explain a variety of consumption patterns that existing models cannot describe, most notably, those associated with the \cite{deaton98} paradox. The most distinctive feature of this model is the presence of common-pool goods (rival and non-excludable) previously ignored in the literature. Under regularity conditions, the model can be interpreted as a hybrid between non-cooperative and a collective models of the household. Empirically, the paper revisits the Deaton-Paxson paradox exploiting household splits in longitudinal data and computes the elusive indifference scales coefficients.

The Inter-generational Fertility Effect of an Abortion Ban  (pdf) (An older version circulated as “Do fertility preferences pass from parents to children? Evidence from the 1966 Romanian abortion ban”)

This paper analyzes to what extend fertility preferences correlates across generations, dealing with a largely understudied dimension of the demand for children. The paper exploits the abrupt implementation of the 1966 Romanian anti-abortion decree that discontinuously changed the composition of mothers in relation to their taste’ for children. Using multiple Censuses, second-generation men and women born around the policy implementation are followed over their lives to study how the socio-economic status and fertility preferences of their parents affect their own reproductive behavior. Methodologically, the paper combines elements of the regression discontinuity design and the Heckman’s selection model. Results indicate that the intergenerational fertility correlation ranges from 0.15 to 0.25. One-third of this correlation is explained by inherited socio-economic status and two-thirds by inherited’ preferences.

Difference-in-Differences when Treatment Status is Observed in Only One Period (with Irene Botosaru, forthcoming Journal of Applied Econometrics) pdf   —  data_and_codes

Abstract: This paper considers the difference-in-differences (DID) method when the data comes from repeated cross-sections and the treatment status is observed either before or after the implementation of a program. We propose a new method which point-identifies the average treatment effect on the treated (ATT) via a DID method when there is at least one proxy variable for the latent treatment. Key assumptions are the stationarity of the propensity score conditional on the proxy and an exclusion restriction that the proxy
must satisfy with respect to the change in average outcomes over time conditional on the true treatment status. We propose a GMM estimator for the ATT and we show that the associated overidentification test can be used to test our key assumptions. The method is used to evaluate JUNTOS, a Peruvian conditional cash transfer program. We find that the program significantly increased the demand for health inputs among children and women of reproductive age.

Infant Health during the 1980s Peruvian Crisis and Long-term Economic Outcomes (World Development Vol. 89, pp. 71–87, 2017) pdf

Abstract: In 1988, Peru entered a severe economic crisis as a corollary of unfavorable external economic conditions, high levels of debt, and heterodox policies (the so-called debt crisis of 1980s). This paper investigates the short-term health shock experienced by infants during the crisis and its long-term impact on human capital accumulation. Because no longitudinal data are available, the estimation of causal effects is performed using multiple cross-section surveys that are representative of the same population over time. The short-term and the long-term effects are estimated exploiting the heterogeneous impact of the crisis across and within birth cohorts. Results indicate that the Peruvian crisis significantly affected the health of infants, particularly that of children born to low-educated mothers. From 1988 to 1990 vaccination declined 12 percentage points and infant mortality increased 2.3 percentage points among children born to low-educated mothers. In the long run, the children who suffered the most severe health shocks during the economic downturn of the 1980s performed worse in school. They had 0.12 fewer years of formal education and their probability of completing primary education
by age 15 was three percentage points lower in relation to similar children born after the crisis. The results have strong policy implications. Children in developing countries should be safeguarded against health shocks during economic crises to avoid a decline
in the accumulation of human capital in the long-run.

Acute Morbidity and Labor Outcomes in Mexico: Testing the Role of Labor Contracts as an Income Smoothing Mechanism (Journal of Development Economics, Vol. 110, Pages 1-12, Sep. 2014 )

Abstract: Economic development is associated with an increase in the share of workers in salaried jobs. This process may be accompanied by a reduction in wage fluctuations if labor contracts are used as income smoothing mechanisms. This paper tests to what extent salaried jobs help reduce the volatility of wages by insuring workers against productivity
shocks. Analysis of MxFLS data indicates that the average contractual arrangement in Mexico insures the worker against idiosyncratic productivity fluctuations associated with episodes of illness. The evidence is stronger for workers in formal jobs. To validate the methodology, the test is also implemented on a sample of self-employed workers. In this case, it correctly rejects the presence of insurance against productivity shocks.

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