New Century, Old Disparities: Gender and Ethnic Wage Gaps in Latin America

This paper surveys gender and ethnic wage gaps in 18 Latin American countries, decomposing differences using matching comparisons as a non-parametric alternative to the Blinder-Oaxaca (BO) decomposition. It is found that men earn 9-27 percent more than women, with high cross-country heterogeneity. The unexplained pay gap is higher among older, informal and self-employed workers and those in small firms. Ethnic wage differences are greater than gender differences, and educational attainment differentials play an important role in explaining the gap. Higher ethnic wage gaps are found among males, single-income generators of households and full-time workers, and in rural areas. An important share of the ethnic wage gap is due to the scarcity of minorities in high-paid positions.gender, ethnicity, wage gaps, Latin America, matching

New Century, Old Disparities: Gender and Ethnic Wage Gaps in Latin America

This paper surveys gender and ethnic wage gaps in 18 Latin American countries, decomposing differences using matching comparisons as a non-parametric alternative to the Blinder-Oaxaca (BO) decomposition. It is found that men earn 9-27 percent more than women, with high cross-country heterogeneity. The unexplained pay gap is higher among older, informal and self-employed workers and those in small firms. Ethnic wage differences are greater than gender differences, and educational attainment differentials play an important role in explaining the gap. Higher ethnic wage gaps are found among males, singleincome generators of households and full-time workers, and in rural areas. An important share of the ethnic wage gap is due to the scarcity of minorities in highpaid positions.gender, ethnicity, wage gaps, Latin America, matching

Firms response to tax enforcement through audits

Understanding tax non-compliance and the effect of different enforcement strategies is relevant for improving the efficiency and efficacy of tax policy. Using administrative data provided by Chile’s tax authority we analyze the dynamic effects of real-world tax audits for the universe of firms. The results show that audits have significant impacts on the corporate income tax base and sales of audited firms. The effects are mostly concentrated among micro firms and last up to one year after the audit. We exploit the rich panel dataset to alleviate concerns about non-random audits

Quality Regulation and Competition: Evidence from Pharmaceutical Markets

We study the effects of quality regulation on market outcomes by exploiting the staggered phase-in of bioequivalence requirements for generic drugs in Chile. We estimate that the number of drugs in the market decreased by 25%, average paid prices increased by 10%, and total sales decreased by 20%. These adverse effects were concentrated among small markets. Our results suggest that the intended effects of quality regulation on price competition through increased (perceived) quality of generics—and therefore reduced vertical differentiation—were overturned by adverse competitive effects arising from the costs of complying with the regulation

Essays in Health Economics

These essays study how private incentives affect the functioning of three dimensions of health care markets: health insurance, prescription drugs, and the delivery of health care by physicians. In the first chapter, I study the workings of long term health insurance, a form of contracts with the potential to efficiently insure individuals against reclassification risk, but at the expense of other limitations like provider lock-in. I empirically investigate the workings of long-term guaranteed-renewable contracts, which are subject to this tradeoff. Individuals are shielded against premium increases and coverage denial as long as they stay with their initial contract, but those that become higher risk are subject to premium increases or coverage denials upon switching, potentially leaving them locked-in with their original network of providers. I provide the first empirical evidence on the importance of this phenomenon using administrative panel data from the universe of the private health insurance market in Chile, where competing insurers offer guaranteed-renewable plans. I fit a structural model to yearly plan choices, and am able to jointly estimate evolving preferences for different insurance companies and supply-side underwriting in the form of premium risk-rating and coverage denial. To quantify the welfare effects of lock-in, I compare simulated choices under the current rules to those in a counterfactual scenario with no underwriting. The results show that consumers would be willing to pay around 13 percent more in yearly premiums to avoid lock-in. Finally, I study a counterfactual scenario where guaranteed-renewable contracts are replaced with community-rated spot contracts, and I find only minor general-equilibrium effects on premiums and on the allocation of individuals across insurers. I argue that these small effects are the result of large levels of preference heterogeneity uncorrelated to risk. In the second chapter, David Silver and I study worker interactions among the medical staff in the emergency department. Using rich administrative case-level data from two hospital-based emergency departments, we start by documenting peer effects among physicians. We find that physicians are 1.5 percent faster when working with peers who are 10 percent faster. We devise a test for random patient-physician assignment and we provide a number of tests to discern the mechanisms underlying these spillovers. The evidence points to spillovers that are driven primarily by faster peers responding negatively to working with slower peers. Utilization of shared resources accounts for little of the spillover, and event-study evidence points to spillovers that come into effect as soon as slower peers begin their shifts. In the third chapter, José Ignacio Cuesta, Morten Sæthre and I study regulations to pharmaceutical laboratories in the form of bioequivalence (BE) requirements -- the most prevalent tool used in developed economies to ensure the effectiveness of generic drugs allowed in the market. The main goal is to empirically investigate how the market reacts to BE requirements, and the consequences in prices, market shares, and product availability for branded and generic drugs. In particular, this study is an early exploration of the experience of Chile, where BE requirements were adopted for 172 molecules, leading to the BE approval of 642 generic drugs between March 2009 and March 2015. We show that the introduction of the requirements lead to a significant increase in BE approvals and in the share of BE drugs in the market. However, prices and market shares of other competing drugs were not significantly affected during the period we analyze. Other outcomes, like number of products, and market concentration are also found to be unaffected