Essays on the Economics of Skills

In this dissertation, I examine the importance of specific components of the skill vector in affecting outcomes across various settings. In particular, I first consider the importance of non-cognitive skills in higher education in the United States, both in explaining academic undermatch, but also showing their importance towards successful degree completion. In the Chilean context, I consider how early-life math skills affect the likelihood of reaching the top of the income distribution, partly through leading to employment in higher-quality firms. The last chapter of my dissertation presents a discrete choice model of college majors, in which I consider how non-cognitive skills contribute to the gender gap in STEM majors in the United States. In particular, I document the importance of mathematical self-efficacy as an important driver of the gender gap in STEM. In Chapter 2, I analyze the importance of non-cognitive skills in the context of higher education. Using longitudinal data for the United States, I first find that students with higher non-cognitive skills are more likely to enroll in higher-quality four-year colleges. Furthermore, students who have been previously characterized as "under-matched" in higher education have significantly lower non-cognitive skills than students with equivalent test scores. While enrollment is the first step towards higher education completion, a burgeoning literature has documented falling completion rates among enrollees. In this context, I find that for both two-year enrollees as well as those in four-year colleges of varying qualities, non-cognitive skills are strong predictors of subsequent college completion. Chapter 3, written in collaboration with Sergio Urzua, estimates the returns to skills in the labor market by taking advantage of three administrative data sources. We first test for non-linearities in these returns and find that the returns to mathematical skills are highly non-linear, with math skill 'superstars' far outearning other high math scorers. High math-skilled workers not only complete more years of education, but graduate from higher quality universities and earn higher-paying degrees. We further examine the role of firms as a mediator of the returns to skills, a dimension not previously explored in the literature. We find that high-skilled workers match to high-paying firms immediately upon labor market entry. We conduct a decomposition to examine the separate contribution of education and firms in mediating the returns to skills, and find that worker-firm matching explains almost half of the estimated returns. Chapter 4 studies the relationship between pre-college skills and the gender gap in STEM majors. I expand upon the analysis in the first two chapters, by introducing structure to students' human capital investment decisions using a discrete choice model of college major choices. I implement the model using longitudinal data for the United States and consider students' initial and final major choices in a context where college students sort into majors based on observed characteristics and unobserved ability. More specifically, I distinguish observed test scores from latent ability. I find that math test scores significantly overstate gender gaps in math problem solving ability. Math problem solving ability strongly predicts STEM enrollment and completion for men and women. I further explore the importance of math self-efficacy, which captures students' beliefs about their ability to perform math-related tasks. Math self-efficacy raises both men's and women's probability of enrolling in a STEM major. Math self-efficacy also plays a critical role in explaining decisions to drop out of STEM majors for women, but not for men. The correlation between the two math ability components is higher for men than for women, indicating a relative shortfall of high-achieving women who are confident in their math ability. Lastly, I estimate the returns to STEM enrollment and completion and find large returns for high math ability women. These findings suggest that well-focused math self-efficacy interventions could boost women's STEM participation and graduation rates. Further, given the high returns to a STEM major for high math ability women, such interventions also could improve women's labor market outcomes

Differences in On-the-Job Learning Across Firms

We examine whether experience accumulated in firms offering different learning opportunities affects early career wage growth. We take advantage of matched employee-employer data sets from Brazil and Italy. We discretize firm “classes” using a clustering methodology which groups together firms with similar distributions of unexplained wage growth. We introduce a conceptual framework which posits that different firm classes encompass firms offering heterogeneous learning opportunities. Preliminary results indicate that the Mincerian returns to experience vary substantially across experience acquired in different firm classes, and the magnitude of this type of heterogeneity is associated with significant shifts across the distribution of early-career wage growth. Second, past experience at firms with better on-the-job learning is associated with subsequent jobs featuring greater non-routine task content. Our findings hold among involuntarily displaced workers who have no seniority at their new jobs, reinforcing a human capital interpretation as opposed to seniority-based pay schemes. We lastly train a machine learning algorithm to examine the characteristics of firms with strong learning opportunities

Fast-Tracked to Success: Evidence on the Returns to Vocational Education in Switzerland

I estimate the returns to vocational education in Switzerland, which has the highest share of secondary students in firm-based vocational education across developed countries. I present a discrete choice model of secondary tracking decisions and tertiary education. I rely on longitudinal data encompassing students’ age fifteen test scores, non-cognitives kills, educational progression and age-30 labor market outcomes. The model considers specific upper-secondary tracking choices along with tertiary degree completion. Students sort into academic tracks based on their cognitive and non-cognitive ability. There are negative returns to academic studies rela tive to vocational tracks, yet these vary by the specific vocational track under consideration. There are positive returns to higher education for students in all upper-secondary tracks, with larger returns for those who pursued vocational tracks. I find a negative continuation value of academic studies relative to vocational education along with evidence of dynamic substitutability,with varying significance across specific vocational tracks. The strong linkage between vocational tracks and tertiary schooling drives positive outcomes for students in these tracks

Trabajar desde casa: implicaciones para los países en desarrollo

En este articulo nos proponemos examinar la viabilidad e implicaciones del trabajo a distancia en los países en vías de desarrollo. Dado que un número importante de países ha implementado políticas de distanciamiento interpersonal, la cantidad de trabajo que puede realizarse desde casa va a ser un determinante crucial de los resultados económicos durante la pandemia. En primer lugar mostramos que la proporción de trabajo que puede realizarse a distancia varía significativamente según la renta de los países: en las áreas urbanas de los países pobres, esta proporción alcanza solo a aproximadamente el 20%, comparado con cerca del 40% en los países ricos. Este resultado se debe en gran medida al predominio de los trabajadores autónomos (autoempleo) en países de bajos ingresos. Posteriormente mostramos que el nivel de educación, el estatus de empleo formal, y la riqueza de los hogares guardan una relación positiva con la posibilidad de trabajar desde casa, hecho que refleja la vulnerabilidad de varios grupos de trabajadores. Destacamos la importancia de identificar rápidamente a los trabajadores vulnerables en cada país con el fin de diseñar las políticas más adecuadas para combatir las repercusiones negativas sobre el empleo de la pandemia del Covid-19.In this article, we examine the feasibility and implications of working from home in developing countries. As a large number of countries have implemented social distancing policies, the share of employment which can be done at home will play a critical role in determining economic outcomes during the pandemic. We first show that the share of employment that can be done from home varies significantly with countries’ incomes: in urban areas, this share is only about 20% in poor countries, compared to close to 40% in rich ones. This result is largely driven by the prevalence of self-employed workers in low-income countries. We further show that educational attainment, formal employment status and household wealth are positively associated with the possibility of working from home, reflecting the vulnerability of various groups of workers. We remark on the importance of rapidly identifying vulnerable workers across countries to design adequate policies to combat the negative employment impacts of Covid-19

Le travail à domicile : Quelles implications pour les pays en développement ?

Cette contribution propose une analyse de la faisabilité et des implications du travail à domicile (TAD) dans les pays en développement. En raison de la pandémie de COVID-19, de nombreux États ont mis en place des mesures de distanciation sociale. De fait, la part du travail qui pourra se faire au domicile jouera un rôle majeur dans la détermination des résultats économiques constatés pendant la période. Dans cet article, nous montrerons dans un premier temps que la part de l’emploi qui peut être réalisée à distance varie énormément en fonction des revenus des pays : dans les zones urbaines des États pauvres, cette part représente 20 % du total, tandis qu’elle monte à 40 % dans les pays riches. Ce taux résulte largement de la prévalence des travailleurs indépendants dans les pays à faible revenu. Nous montrerons également que le niveau d’instruction, un statut formel d’emploi et le niveau de revenus du foyer sont corrélés positivement à la possibilité de télétravailler et que cela reflète la vulnérabilité de certains groupes sociaux. Nous notons l’importance de l’identification rapide des actifs occupés vulnérables dans les différents pays afin que des politiques adaptées puissent être pensées pour combattre les effets négatifs de la COVID-19 sur l’emploi.In this article, we examine the feasibility and implications of working from home in developing countries. As a large number of countries have implemented social distancing policies, the share of employment which can be done at home will play a critical role in determining economic outcomes during the pandemic. We first show that the share of employment that can be done from home varies significantly with countries’ incomes: in urban areas, this share is only about 20% in poor countries, compared to close to 40% in rich ones. This result is largely driven by the prevalence of self-employed workers in low-income countries. We further show that educational attainment, formal employment status and household wealth are positively associated with the possibility of working from home, reflecting the vulnerability of various groups of workers. We remark on the importance of rapidly identifying vulnerable workers across countries to design adequate policies to combat the negative employment impacts of Covid-19

COVID-19 in Developing Economies

La Revue internationale de politique de développement et le Centre for Economic Policy Research (CEPR) ont publié un livre COVID-19 in Developing Economies, co-édité par Simeon Djankov et Ugo Panizza. Les auteurs y analysent notamment les effets de la pandémie sur la pauvreté, les inégalités et l’économie informelle. Ils interrogent les réponses politiques contre le COVID-19 et leurs consequences macro-économiques et financières. Les 28 chapitres sont disponibles en accès libre sur https://voxeu.org/content/covid-19-developing-economies. Ce numéro de la Revue réunit une sélection de sept articles traduits en français et en espagnol. The International Development Policy journal and the Centre for Economic Policy Research (CEPR) published an e-book titled COVID-19 in Developing Economies, co-edited by Simeon Djankov and Ugo Panizza. This volume discusses how the pandemic affects poverty, inequality and informality, addresses policy responses, and highlights the macro-financial effects of the crisis, including the role of the international financial institutions. The 28 original chapters are available in open access in English on https://voxeu.org/content/covid-19-developing-economies. This online issue gathers a selection of seven of the chapters translated into Spanish and French. La revista International Development Policy y el Centre for Economic Policy Research (CEPR) publicaron recientemente el libro electrónico COVID-19 in Developing Economies [La COVID-19 en las economías en desarrollo], editado conjuntamente por Simeon Djankov y Ugo Panizza. En este volumen se analiza la manera en que dicha pandemia afecta la pobreza, la desigualdad y la economía informal. Se abordan además las medidas políticas y se destacan las consecuencias macro-financieras de la crisis, incluyéndose el papel que desempeñan los organismos financieros internacionales. Los 28 capítulos originales que componen este libro se encuentran en acceso libre en ingles en: https://voxeu.org/content/covid-19-developing-economies. La presente edición en línea reúne una selección de siete capítulos traducidos al español y al francés