Papers

This paper provides new evidence on why men and women leaders make different choices. Exploiting Brazilian close elections, we show that female mayors responded differently to the COVID-19 crisis over the year 2020. Female mayors were less likely to close non-essential businesses early in the pandemic and female-led municipalities experienced higher mortality, while the reverse was true later on. We show that these findings can be rationalized by a simple political agency model in which politicians seek re-election and voters are gender biased. Consistent with this interpretation, the gender differences we find are driven exclusively by mayors facing re-election.

This paper explores the effects of weather-induced rural–urban migration on labor and housing market outcomes of urban residents in Brazil. In order to identify causal effects, it uses weather shocks to the rural municipalities of origin of migrants. We show that larger migration shocks led to an increase in employment growth and a reduction in wage growth of 4 and 5 percent, respectively. The increased migration flows also affected the housing market in destination cities. On average, it led to 4 percent faster growth of the housing stock, accompanied by 6 percent faster growth in housing rents. These effects vary sharply by housing quality. We find a substantial positive effect on the growth rates of the most penurious housing units (with no effect on rents) and a negative effect on the growth of housing units in the next quality tier (with a positive effect on rents). This suggests that rural immigration growth slowed down housing-quality upgrading in destination cities.

This paper examines the local impact of COVID-19 in 2,500 cities in Brazil, contrasting findings with existing international estimates. It shows that pre-pandemic city characteristics have time-varying correlations with COVID-19 deaths per capita in Brazil and that the evolution of these correlations can differ significantly from other countries. Some patterns, such as the association between population density and mortality, are consistent across international experiences. However, in contrast to the U.S. but consistent with studies in China, Italy, and other European countries, the pandemic in Brazil took a greater toll on cities with higher income levels. This is consistent with the fact that higher incomes correlate with greater mobility in Brazil. Other city characteristics, such as the presence of slums and high residential crowding, also correlate with higher death rates per capita in Brazil. Nonetheless, these vulnerabilities do not appear to be driven by mobility differences, as people in cities with these characteristics had a greater propensity to stay home.

This study assesses the empirical relevance of the Harris-Todaro model at high levels of urbanization – a feature that characterizes an increasing number of developing countries, which were largely rural when the model was created 50 years ago. Using data from Brazil, the paper compares observed and model-based predictions of the equilibrium urban employment rate of 449 cities and the rural regions that are the historic sources of their migrant populations. Little support is found in the data for the most basic version of the model. However, extensions that incorporate labor informality and housing markets have much better empirical traction. Harris-Todaro equilibrium relationships are relatively stronger among workers with primary but no high school education, and those relationships are more frequently found under certain conditions: when cities are relatively larger; and when the associated rural areas are closer to the magnet city and populated to a greater degree by young adults, who are most likely to migrate.

Are the well-known facts about urbanization in the United States also true for the developing world? We compare American metropolitan areas with analogous geographic units in Brazil, China and India. Both Gibrat’s Law and Zipf’s Law seem to hold as well in Brazil as in the U.S., but China and India look quite different. In Brazil and China, the implications of the spatial equilibrium hypothesis, the central organizing idea of urban economics, are not rejected. The India data, however, repeatedly rejects tests inspired by the spatial equilibrium assumption. One hypothesis is that spatial equilibrium only emerges with economic development, as markets replace social relationships and as human capital spreads more widely. In all four countries there is strong evidence of agglomeration economies and human capital externalities. The correlation between density and earnings is stronger in both China and India than in the U.S., strongest in China. In India the gap between urban and rural wages is huge, but the correlation between city size and earnings is more modest. The cross-sectional relationship between area-level skills and both earnings and area-level growth are also stronger in the developing world than in the U.S. The forces that drive urban success seem similar in the rich and poor world, even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop.

Births to child mothers — girls aged 10 to 14 — are undercounted. Using birth registries from 37 countries and census data from 73 countries, we show that contemporaneous census-based estimates of births to child mothers are significantly lower than registry counts, consistent with censuses counting only co-resident children. In contrast, censuses conducted a decade later for the same birth cohorts report more such births than earlier censuses and, in over 65% of country-censuses, more than the registries. We develop a model in which social stigma discourages disclosure among young mothers but fades over time, explaining why retrospective sources uncover births missed by contemporaneous ones.

We study the causal effect of reducing distance-related frictions with headquarters on branch outcomes in multi-unit firms in Brazil. Exploiting the introduction of new airline routes, we compare branches that gain a direct flight to their headquarters with otherwise similar branches in the same location that do not. In contrast to prior findings from high-income country settings, improved connectivity with headquarters lowers 12-month survival and, conditional on survival, reduces service and production employment. To interpret these results, we develop a model with three distance-dependent frictions: (i) internal coordination costs of delivering headquarters inputs to branches; (ii) client-service costs when serving markets without a local branch; and (iii) a moral-hazard friction whereby distance amplifies local managers’ incentives to over-hire. Consistent with the model’s predictions, survival declines are larger at closer branches, while employment reductions are concentrated at more distant branches and in firms with lower headquarters bandwidth. The model clarifies how the impact of reduced frictions with headquarters depends on pre-existing distortions and reconciles heterogeneous connectivity effects observed across developing- and high-income contexts.

Gender segmentation in the labor market is widespread. However, most existing studies of the effects of labor demand shocks on local economies ignore gender differences. In this paper, I show that local labor demand shocks can lead to different outcomes depending on whether they favor male or female employment. I develop a spatial equilibrium model featuring gender-segmented labor markets and joint mobility frictions, which predicts that couples are more likely to migrate in response to male employment opportunities. As a result, positive shocks to local labor demand for men lead to population growth, increases in female labor supply, and housing demand growth. Meanwhile, equivalent shocks to labor demand for women lead to smaller inflows of migrant workers, with labor force participation being a relatively more important margin of adjustment. I find strong empirical support for the model’s predictions in Brazil during 1991-2010. Comparing the effects of gender-specific labor demand shocks, I show that male-oriented shocks produce a higher migratory response and make localities more populated and expensive. These results imply that place-based policies creating jobs for women are more likely to benefit existing residents, while those creating male jobs are more likely to benefit immigrants and landlords.

This paper examines the effects of public education budgets on schooling, migration, and local labor markets, using late 1990s FUNDEF program’s redistribution of education funds across Brazilian municipalities for identification. Using a cohort-exposure design, I find that doubling the education budget raised primary school completion by 1.4 percentage points and decreased the likelihood of individuals staying in their education locality by 0.5 percentage points among exposed cohorts. At the local labor market level, difference-in-differences estimates indicate that larger education budgets led to lower employment and wages, suggesting a “brain drain” effect that depressed local labor demand in the long run.

This paper examines why a larger share of COVID-19 deaths occurs among young and middle-aged adults in developing countries than in high-income countries. Using novel data at the country, city, and patient levels, we investigate the drivers of this gap in terms of the key components of the standard Susceptible-Infected-Recovered framework. We obtain three main results. First, we show that the COVID-19 mortality age gap is not explained by younger susceptible populations in developing countries. Second, we provide indirect evidence that higher infection rates play a role, showing that variables linked to faster COVID-19 spread, such as residential crowding and labor informality, are correlated with younger mortality age profiles across cities. Third, we show that lower recovery rates in developing countries account for nearly all of the higher death shares among young adults, and for almost half of the higher death shares among middle-aged adults. Our evidence suggests that lower recovery rates in developing countries are driven by a higher prevalence of preexisting conditions that have been linked to more severe COVID-19 complications, and by more limited access to hospitals and intensive care units in some countries.