Working Papers

“The Effects of Institutional Gaps between Cohabitation and Marriage” (November 2021), Job Market Paper

Abstract
This paper examines the effects of institutional differences between marriage and non-marital cohabitation―in dimensions such as child custody laws and property division rules upon separation―on household formation, individual's welfare and child human capital. I first show that, conditional on observable characteristics, cohabiting women have higher labor supply and higher separation rates than married women. They also raise children with lower cognitive outcomes. To rationalize these facts, I model the individuals' life-cycle problem within an equilibrium marriage market framework that features the choice between marriage and cohabitation. I estimate the model on U.S. household data. The results indicate that low-educated cohabiting women receive a lower share of the household's resources than low-educated married women. Moreover, their children accumulate less human capital compared to those born to low-educated married women, explained by lower maternal time investments and higher separation rates between cohabiting couples. In counterfactual simulations, I equalize child custody for married and unmarried parents upon separation. This policy improves the welfare of low-educated cohabiting women. The equilibrium effects are critical for this result: While this policy reduces the welfare of low-educated cohabiting women under the baseline marriage market equilibrium (by reducing their access to children at separation), in the new equilibrium they are compensated with a higher share of the household's resources. This policy also contributes to closing the human capital gap between children born to low-educated cohabiting and married women.

“Marriage Market and Labor Market Sorting” (July 2021). Revise and resubmit, Review of Economic Studies  
with Ilse Lindenlaub and Ana Reynoso

Abstract

We develop a new equilibrium model in which households’ labor supply choices form the link between sorting in the marriage market and sorting in the labor market. We first show that, in theory, the properties of the home production function—namely, whether partners’ hours are complements or substitutes in producing a public good—shape equilibrium labor supply as well as marriage and labor market sorting. We then estimate our model using German data to assess the nature of home production. We find that spouses’ home production hours are complements, and this complementarity has increased over time from1990 to 2016. By increasing partners’ incentives to spend similar hours in home production, this trend strengthens positive marriage sorting and reduces the gender gap in worked hours and in labor market sorting. This puts significant downward pressure on the gender wage gap and within-household income inequality, but fuels between-household inequality.



“Intra Household Decision Making: New Evidence from the Innovation Sample of the German Socioeconomic Panel” (June 2021)  
with Ilse Lindenlaub and Lindsey Uniat

Abstract

Using data from a new survey we designed for the Innovation Sample of the German Socioeconomic Panel (GSOEP), we document the relationship between marital sorting and intra-household decision-making, with a focus on consumption allocations and employment changes due to having children. Our first main finding is that most households in our sample (72%) split private consumption equally between partners, but a household is more likely to allocate more private consumption to the female partner when she is at least as educated as the male partner. Second, our data indi cates there is a substantial gender discrepancy in career disruption due to childbearing: more than 50% of women experience a career disruption around the time of childbirth, compared to only 5% of men. However, women are significantly less likely to experience a disruption when they are more educated than their male partners. We establish a link between both facts, suggesting that women with a higher labor market attachment after having children are also more likely to benefit from a higher share of household resources later on. Our results suggest that marriage market sorting shapes intra-household decision-making in important ways.

Work in Progress

“Parental Mental Health and Children Outcomes”  
with Marianne Bernatzky and Zhengren Zhu

Abstract
In this project we explore the role that parental mental health has on children’s human capital development. Using data from NLSY79, linking mothers and their children, we document that 1) there is a positive relation between poor maternal mental health and her child’s mental health problems, 2) poor maternal mental health is negatively associated with her child’s cognitive outcomes and 3) inputs such as emotional support and material investments are negatively associated with problems in maternal mental health. With this empirical evidence as motivation, we develop a model of child human capital development where maternal mental health enters as an additional input in the production function of a child’s human capital. By looking at the impact of child’s human capital on long-term outcomes, we aim to understand how mental health contributes to the intergenerational transmission of poverty and inequality.

“Children's Formal Schooling and Maternal Labor Supply: Evidence from a Regression Discontinuity Design in Peru”

Abstract
This paper estimates the causal effect of pre-kindergarten enrollment of children in the labor market outcomes of their mothers. I exploit a quasi-experimental setting in Peru, in which children turning 3 years old before March 31st are eligible to be formally enrolled in pre-kindergarten, while those who were born after April 1st have to wait an additional year. This leads to a large discontinuity in the probability of enrollment to pre-kindergarten. Using the child's exact date of birth as an instrument for enrollment, I estimate that the complier mothers who enroll their children in pre-kindergarten at 3 years old are 44 percentage points more likely to work, than those whose children are not eligible for enrollment.

Publications

Facundo Albornoz, Antonio Cabrales, Paula Calvo, Esther Hauk (2018). “Immigrant Children’s School Performance and Immigration Costs: Evidence from Spain”. Economics Letters, 170, 27-30.

Abstract

This note provides evidence on how immigration costs affect school performance of immigrant children exploiting the information provided by the CDI; a standardized exam for all students enrolled in the last year of Primary education in the Madrid region. For a given socio-economic background and parent characteristics, school performance of immigrant children improves with parental immigration costs.


Paula Calvo (2014). “Welfare Impact of Wheat Export Restrictions in Argentina: Non-parametric Analysis on Urban Households”. Trade policies, household welfare and poverty alleviation. Case studies from the Virtual Institute academic network (Ed. Pavcnik, N.), Geneva: UNCTAD.

Abstract

The Argentine wheat value chain was subject to considerable policy interventions during the last decade. The measures adopted by the government included export duties from 2002 onward, quantitative wheat export restrictions since 2006, and domestic price ceilings and subsidies introduced in 2007. These policy instruments aimed to limit the increase in domestic prices of cereals during a period of high international prices and to keep an adequate provision of grains in the domestic market. Export restrictions implicitly intended to avoid an increase in the prices of basic consumption goods derived from wheat. However, these non-tariff measures could also distort farmers’ incentives to produce. Using non-parametric techniques, this study contributes to the policy discussion of the effects of non-tariff measures in the cereals market by evaluating the welfare impact of wheat export restrictions on Argentine urban households. Focusing on the effects of changes in prices of final consumption goods during 2006 - 2011, the study finds that prices of wheat derivatives would be only 1 per cent higher in the absence of quantitative restrictions, with negligible welfare effects on consumers. If both export restrictions and subsidies to millers were removed, prices would be 6.4 percent higher. This would imply modest welfare losses ranging from zero to 1.5 percent, mainly affecting the poorest households.


Policy Papers

Paula Calvo, Luis Felipe López-Calva, Josefina Posadas (2015). “A Decade of Declining Earning Inequality in the Russian Federation”. World Bank Policy Research, WP 7392.

Abstract

Wage inequality decreased significantly in the Russian Federation over the 2000s. The economic expansion experienced throughout the decade led to an improvement in social indicators, with a large reduction in poverty rates and an increase in higher education. In this context, wage inequality showed a sharp decline, with the Gini index on labor income decreasing by 18 percent between 2002 and 2012. Using data from the Russian Longitudinal Monitoring Survey, this paper documents the reduction in wage inequality and explores potential factors behind the trend. The analysis uses a decomposition technique proposed by Fortin, Lemieux, and Firpo (2011) to disentangle the main drivers behind changes in the wage distribution. The results suggest that wage structure effects are more important than composition effects for explaining changes in wage inequality. Institutional factors, such as minimum wage policies and changes in the returns to employment in different sectors and types of firms as well as the reduction of the skill premium, emerge as the most relevant factors for explaining changes in the wage structure.


Joao Pedro Azevedo, Paula Calvo, Minh Nguyen, Josefina Posadas (2015). “Kyrgyz Republic : Social Sectors at a Glance”. Social Protection and Labor Discussion Paper, No. 1505.

Abstract

Traditional benchmarks to assess performance rely on unconditional rankings or regional averages. This paper uses a recently developed methodology based on quantile regressions and initial conditions to propose alternative benchmarks for social sectors in Kyrgyz Republic. Covering a wide set of indicators, the analysis reveals mixed results for Kyrgyz Republic. The country has made important strides in many social areas, with outstanding results in reducing child mortality and undernourishment. However, other areas are still key challenges and demand further attention and resources, as evidenced by the underachievement in maternal mortality, educational performance, and increasing informality in labor markets.