Date of Award

December 2018

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Jeffrey D. Kubik

Keywords

Absenteeism, Neighborhood environment, Small firms, Taxation, Tax breaks programs, Wage subsidies

Subject Categories

Social and Behavioral Sciences

Abstract

This dissertation consists of three chapters in the area of applied microeconomics. Using a variety of quasi-experimental research designs, they study the labor market effects of a wage subsidy in a highly informal economy, the impact of a tax-breaks program on small formal firms' entrance decision and the probability of survival, and the impact of exposure to neighborhood crime on school absenteeism, respectively.

The first chapter studies the labor market effects of a wage subsidy introduced in Colombia's First Job Act. It exploits changes in the labor earnings distribution to measure how the policy change affected net employment, the relative sizes of the formal and informal labor markets, and the subsidy's excess burden. The results indicate the policy caused sizable shifts of workers across the formal and informal labor markets, but relatively little net employment growth. The policy's marginal excess burden ranges from 0.1% to 4% of corporate income tax revenues, which the paper argues represent a lower bound for what the benefits of moving workers across sectors should be, for the policy to be welfare enhancing.

The second chapter, coauthored with Julio Romero, studies how taxes affect small formal firms' entrance decision, the probability of survival, employment and average per-worker compensation. It exploits variation in tax treatment from a cohort-based, tax breaks program implemented in Colombia in 2010. Exploiting the fact that to qualify firms must have registered after December 31, 2010, it compares firms created soon before the cut-off date, to firms created soon after. It finds the availability of the tax breaks did not affect any of the outcomes considered.

The third chapter, coauthored with Amy Ellen Schwartz, studies whether exposure to neighborhood violence causes school absenteeism. Exploiting variation in the timing of violent crimes, it compares absenteeism days immediately after exposure, to days immediately before. It finds an increase in average absenteeism after exposure of 5% to 10%. The response is statistically significant for both genders, most race/ethnic groups, and grade levels, and varies by violent crime type, being stronger for cases of exposure to homicides. Students exposed multiple times respond strongly to a second event, regardless of the violent crime type, but not to the subsequent ones.

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