The Role of Trade in Structural Transformation

Low agriculture productivity is considered a key obstacle to economic development for many countries. International trade in agricultural goods can help overcome this barrier and facilitate structural transformation because it allows countries to import part of their food needs. This article quantifies the role of trade in this context through the examples of South Korea during the last 50 years and Great Britain in the 19th century. To do the analysis, I calibrate and simulate a two-sector, neoclassical growth model to match the data and perform the policy experiments. I find that agricultural imports played a crucial role in the early transformation of Great Britain, while, in South Korea, trade also had a positive impact on its structural transformation but it could have played a much larger role if the country had not introduced agricultural protection policies

Macroeconomic costs of gender gaps in a model with household production and entrepreneurship

This paper examines the quantitative effects of gender gaps in entrepreneurship and workforce participation in an occupational choice model with a household sector. Gender gaps in entrepreneurship affect negatively both income and aggregate productivity, since they reduce the entrepreneurs’ average talent and female labor force participation. We estimate the gender gaps for 37 European countries and we find that gender gaps cause an average market output loss of 11.5% when they are considered constant across talent levels. The loss in total output, which also includes household production, varies between 6.4% and 8.7%, depending on the household productivity parameter

The determinants of entrepreneurship gender gaps: A cross‐country analysis

This paper uses aggregate data from the International Labor Organization and microeconomic data from the European Values Study to quantify gender gaps in entrepreneurship, distinguishing between gender gaps in employership and in self‐employment, and study their main empirical determinants. Our sample consists of 40 European countries and varies broadly in terms of institutional background since it includes several ex‐Communist countries. In the aggregate data we observe a gender gap in employers of 59% and a gender gap in self‐employment of 36%. These gaps have remained roughly constant in the 2000-2017 period, although there are wide differences in both their levels and evolution over time and across countries. Using microeconomic data, we find that the incidence of entrepreneurship, employership, and self‐employment among men is much larger than among women, consistent with the gaps estimated using aggregate data. Our regressions show that these gaps are still sizable even after controlling for a large set of control variables that include marital status, age, education, number of children, wealth, the participation of parents and spouse in entrepreneurship, values toward women, social capital, and prior unemployment. We identify important differences between the determinants of these gaps in ex‐Communist countries and in high‐income ones

Size-Dependent Gender Gaps in Entrepreneurship: The Case of Chile

This paper documents differences in firm size depending on whether their manager is a man or a woman and studies the aggregate implications of these gender gaps in Chile. We document that in 2007 less than a quarter of firms are managed by women and that this gap takes its largest value for managers with tertiary education or more. In terms of their number of workers, female-run firms are on average about three times smaller than those run by men. Moreover, the ratio of men to women managers is always above one, but it is much higher for large and medium firms than for small or micro ones. These differences remain significant after controlling for several manager and firm characteristics. We then use an extended version of the theoretical framework developed in Cuberes and Teignier (2016) to incorporate these facts and obtain quantitative predictions about their effects on aggregate productivity and income in Chile. We find that the observed gender gaps in entrepreneurship in Chile generate a fall in aggregate productivity and aggregate income of 7.5%

Gender gaps in STEM occupations in Costa Rica, El Salvador and Mexico

This paper documents the existence of significant gender gaps in STEM occupations in Costa Rica, El Salvador, and Mexico and estimates the aggregate costs associated with these gaps in Mexico. For Mexico we calibrate and simulate a version of the general equilibrium occupational choice model of Hsieh et al. (2019) to estimate the output losses associated with these differences since 1992. We find that if barriers in STEM occupations were eliminated aggregate output would have been between 1% and 10% larger, depending on the year. If female-specific social norms were also eliminated, the rise in aggregate output would be between 1.4% and 14%. For comparison purposes, we also compute the gains of eliminating all the distortions in high-skilled occupations as well as in all occupations. We find that aggregate output would rise between 16.5% and 3.6% in the former group of occupations and between 36.7% and 12% in the latter

How Costly Are Labor Gender Gaps? Estimates by Age Group for the Balkans and Turkey

In this article we use survey data from the Balkan countries and Turkey to document the presence of gender gaps in the labor market and examine its economic consequences in terms of aggregate income per capita. We first show that the age of women in the labor force, as well as in the categories of employers and self-employed, are clearly below the corresponding figures for men. These gender inequalities display a slightly negative time trend and are present in all age groups, with the middle-age group displaying the lowest inequality in terms of labor force participation but the largest inequality in terms of employers share. Using a theoretical framework we calculate that, on average, the loss associated with these gaps is about 20% of income per capita. Taking into account that the weight of each age group in the total population is different, we find that the aggregate costs associated with each age group are quite similar on average

Macroeconomic costs of gender gaps in a model with entrepreneurship and household production

This paper examines the quantitative effects of gender gaps in entrepreneurship and workforce participation in an occupational choice model with a household sector and endogenous female labor supply. Gender gaps in workforce participation have a direct negative effect on market, while gender gaps in entrepreneurship affect negatively market output not only by reducing wages and labor force participation but also by reducing the average talent of entrepreneurs and aggregate productivity. We estimate the effects of these gender gaps for 37 European countries, as well as the United States, and find that gender gaps cause an average loss of 17.5% in market output and 13.2% in total output, which also includes household output. Interestingly, the total output loss would be similar (12%) in a model without household sector, since the market output loss is larger when the female labor supply is endogenous. Eastern Europe is the region with lowest income fall due to gender gaps, while Southern Europe is the region with the largest fall. Northern Europe is the region with the largest productivity fall, which is due to the presence of high gender gaps in entrepreneurship

Aggregate Effects of Gender Gaps in the Labor Market: A Quantitative Estimate

This paper examines the quantitative effects of gender gaps in entrepreneurship and workforce participation. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability. Gender gaps in entrepreneurship affect negatively both income and aggregate productivity, since they reduce the entrepreneurs' average talent. Specifically, the expected income loss from excluding 5 percent of women is 2.5 percent, while the loss is 10 percent if they are all employers. We find that gender gaps cause an average income loss of 15 percent in the OECD, 40 percent of which is due to entrepreneurship gaps. Extending the model to developing countries, we obtain substantially higher losses, with significant variation across regions

Financial development, credit, and business cycles

How does financial development affect the magnitude of the business cycles fluctuations? We examine this question in a general equilibrium model with heterogeneous agents and endogenous credit constraints based on Kiyotaki (1998). We show that there is a hump‐shaped relationship between the degree of financial frictions and the amplification of unexpected productivity shocks. This nonmonotonic relation is due to the fall in financial frictions having two opposite effects on the response of output. One effect is the reallocation of productive inputs between agent types, which, while active, increases with the fall in financial frictions. The other effect is the change in the demand of inputs, which decreases with the fall in financial frictions. At low levels of financial development, the reallocation effect dominates and a fall in financial frictions increases the amplification of productivity shocks. In contrast, at higher levels of financial development, a fall in financial frictions decreases the shock amplification because the reallocation effect disappears while the effect on the demand of inputs is still present

The determinants of entrepreneurship gender gaps: A cross-country analysis

This paper uses aggregate data from the International Labor Organization and microeconomic data from the European Values Study to study the empirical determinants of gender gaps in entrepreneurship, distinguishing between gender gaps in employership and in self-employment. Our sample of 44 countries consists mostly of European countries but varies broadly in terms of income level and institutional background since it includes both Western European countries and former Communist countries. In the aggregate data we observe a gender gap in employers of 67% and a gender gap in self-employment of 48%. These gaps have slightly decreased in the 2000-2017 period although there are wide differences across countries. The two gaps are very highly correlated but their correlation with per capita GDP is weak. This is an important difference with respect to gender gaps in labor force participation, which tend to follow an inverse U-shape pattern when plotted against income per capita. Using the microeconomic data we find that the incidence of entrepreneurship among men is larger than among women, consistent with the gaps estimated using aggregate data. Our regressions show that these gaps are still sizeable even after controlling for a large set of control variables that include marital status, age, education, number of children, wealth, the participation of parents and spouse in entrepreneurship, values towards women, social capital, and the unemployment rate. Men benefit disproportionately from two of the key determinants in our model, the participation of parents and spouse in entrepreneurship, which have the largest magnitude of influence of selection into that occupation