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About

Jorge Pérez Pérez - Research Economist - Banco de México

Posts

Disentangling the Effects of Large Minimum Wage and VAT Changes on Prices: Evidence from Mexico

5 minute read

Published:

In January 2019, in an effort to boost activity on the northern Mexican border, the authorities increased the minimum wage by 100 percent and decreased the value-added tax (VAT) by half. Disentangling both effects, we find increments in prices due to the minimum wage hike that were more than offset by the decreases associated with the VAT. In the absence of both policy changes, average prices would have been higher. The share of informal labor in the production of different goods seems to be playing a role in the impact of the minimum wage on prices.

The Efficacy of Hiring Credits in Distressed Areas

4 minute read

Published:

We analyze the efficacy of hiring tax credits, particularly in distressed labor markets. These types of programs have provenhard to assess as their introduction tends to be endogenous. We find sizable and robust impacts on employment and unemployment: a $9,000 credit leads to a nearly 0.5 percentage points reduction in the unemployment rate and a 3% increase in employment in the counties where the credit was made available.

La eficacia de las deducciones fiscales por contratación de trabajadores en áreas deprimidas

5 minute read

Published:

Analizamos la eficacia de las deducciones fiscales por contratación de trabajadores, particularmente en mercados laborales deprimidos. Este tipo de programas ha sido difícil de evaluar por su asignación endógena. Encontramos impactos robustos en el desempleo y en el empleo: una deducción de 9000 dólares por contratación reduce la tasa de desempleo en 0.5 pp e incrementa el empleo en 3% en los condados donde la deducción estuvo disponible.

Los efectos de un incremento en el salario mínimo real en los sectores formal e informal

6 minute read

Published:

Estimo el efecto de un incremento en el salario mínimo real en los salarios formales e informales, y en el empleo en Colombia. Encuentro evidencia de respuestas positivas de los salarios cercanos al mínimo. Los resultados muestran que los salarios alrededor del mínimo aumentan más en el sector formal que en el informal. No encuentro que los salarios informales reaccionen al salario mínimo de manera indirecta, a través de vínculos entre el mercado formal y el informal.

The Effects of a Real Minimum Wage Increase in the Formal and Informal Sectors

5 minute read

Published:

I estimate the effect of a real minimum wage increase on formal and informal wages, and on employment in Colombia. I find evidence of positive wage responses for wages close to the minimum wage. The results show that wages increase more in the formal than in the informal sector. I do not find that informal wages react to the minimum wage indirectly, through the linkages between the formal and the informal market.

Descomponiendo la incidencia de la pobreza multidimensional

6 minute read

Published:

Las medidas de pobreza multidimensional se han vuelto estándar como indicadores complementarios de la pobreza en varios países. Proponemos una aplicación de metodologías existentes que descomponen agregados de bienestar, basadas en simulaciones contrafactuales, para dividir los cambios en la pobreza multidimensional en la variación atribuida a cada una de las dimensiones.

Decomposing multidimensional poverty headcounts

5 minute read

Published:

Multidimensional measures of poverty have become standard as complementary indicators of poverty in many countries. We propose an application of existing methodologies that decompose welfare aggregates -based on counterfactual simulations- to break up the changes of the multidimensional poverty headcount into the variation attributed to each of its dimensions.

research

Grading Fiscal Policy in Latin America in the Last Decade

Published in IDB Policy Briefs, 2014

Fiscal policy in Latin America has been historically imprudent and continues to be viewed with skepticism. At the same time, most countries have remained out of trouble for several years and were able to successfully conduct proactive countercyclical fiscal policy to fight the Great Recession, a historical first. This paper examines the last decade to assess progress, highlight weaknesses, and chart the way forward.

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Unpacking the MPI : A Decomposition Approach of Changes in Multidimensional Poverty Headcounts

Listed in World Bank Policy Research Working Paper Series

Coverage: Vox Lacea

Blog post

Multidimensional measures of poverty have become standard as complementary indicators of poverty in many countries. This paper proposes an application of existing methodologies that decompose welfare aggregates -based on counterfactual simulations- to break up the changes of the multidimensional poverty headcount into the variation attributed to each of its dimensions.

Download --- Download from World Bank Policy Research Working Paper Series

The Minimum Wage in Formal and Informal Sectors: Evidence from an Inflation Shock

Published in World Development, 2020

Coverage: HKUST-IEMS , La Silla Vacia

I estimate the effect of the minimum wage on formal and informal wages and employment in Colombia. I exploit an unexpected increase in the real minimum wage during the 1999 Colombian economic crisis to estimate short-term effects of the minimum wage along the wage distribution in both sectors. I find evidence of wage responses, with a stronger incidence in the formal sector.

Download --- Download from World Development --- Replication Files

Better or Worse Job Accessibility? Understanding Changes in Spatial Mismatch at the Intra-urban Level in Medellín

We analyze accessibility to jobs through different transportation modes and the extent of job spatial mismatch at the intra-urban level in a developing country city. We use data from Medellín, Colombia, from 2012 to 2017, to measure accessibility using employment weighted by travel times. We find that despite the continuous investment in public transportation and transport infrastructure, spatial mismatch in Medellín has increased.

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The Spending Responses to Adverse Health Shocks: Evidence from a Panel of Colombian Households

Listed in SocArXiv

We analyze the effect of adverse health shocks on different expenditure shares. We find that households engage in substitution between health expenditures and food expenditures. We also find important heterogeneity in this trade-off between present health and future health mediated by access to social protection, job contract type, and location (urban-rural).

Download --- Download from SocArXiv

City Minimum Wages and Spatial Equilibrium Effects

Listed in SocArXiv

Listed in Banco de Mexico working papers

Winner of the 2018 S4 Graduate Student Paper Prize

Coverage: Marginal Revolution

Local minimum wage laws are becoming common across U.S. cities, and their effects may be different from effects of state or nation-wide minimum wage policies. I study the effect of changes in local minimum wages on spatial equilibria in local labor markets.

Download --- Download from SocArXiv --- Download from Banco de Mexico working papers

The Changing Valuation of Airbnb Amenities in Mexico During the COVID-19 Pandemic

We study how the COVID-19 pandemic changed the valuation of amenities in the prices of Airbnb listings in Mexico, a country with few tourism and mobility restrictions. Using the universe of Airbnb listings in Mexico from 2018 to 2022, we estimate hedonic price models and analyze how hedonic coefficients changed for amenities associated with lower COVID-19 infection risk and reduced face-to-face contact. Our results show that the valuation of remote-work amenities –such as workspaces–, open-space amenities –such as beach fronts–, and reduced-contact amenities –such as private spaces– significantly increased during the pandemic.

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Close the Distance: The Effect of the Minimum Wage on the Gender Wage Gap in Mexico

This paper estimates the effect of a change in the minimum wage on the gender wage gap in Mexico. We exploit an increase in the minimum wage on the northern Mexican border of 100% in January 2019. We use a triple difference model to compare the wages of men and women, on the northern border and the rest of the country, before and after the policy change. We find that women’s daily wages increased between 0.9 and 1.7 log points more than men’s in the northern border because of the minimum wage increase, without overall differences in the evolution of formal sector employment across genders. These effects imply a 7 to 13% reduction in the gender wage gap. Most of the effect on wages appears in sectors with higher gender wage gaps and low-wage workers.

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Urban Transit Infrastructure: Spatial Mismatch and Labor Market Power

Coverage: CAF Transport Infrastructure for the Development of Latin America

Does transit infrastructure reduce labor market power? This paper estimates the effects of a large subway expansion on local labor market outcomes in Santiago, Chile. We find changes in work locations and wages consistent with a reduction in firms’ labor market power around areas that were connected to the subway network after the expansion. We then lay out a quantitative spatial equilibrium model where firms behave as oligopsonies in the labor market to calculate the welfare gains from the transit infrastructure expansion. We find that workers benefit as firm owners see reduced profits and that accounting for labor market power responses amplifies the welfare gains.

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The Contribution of Workers, Workplaces, and Sorting to Wage Inequality in Mexico

We estimate the contribution of average workplace-specific wage premia, worker-level characteristics, and assortative matching on Mexico’s wage inequality. We find that assortative matching explains between 16% and 19% of total wage variance, while worker- and workplace-specific factors contribute between 35% to 42% and 33% to 38%, correspondingly. The importance of workplace factors in determining wage inequality correlates negatively with regional economic development.

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Disentangling the Effects of Large Minimum Wage and VAT Changes on Prices: Evidence from Mexico

Published in Labour Economics (Forthcoming), 2022

Coverage: Banxico , El CEO , 24 Horas , El Financiero , IMCO , El Financiero (2)

In January 2019, in an effort to boost activity on the northern Mexican border, the authorities increased the minimum wage by 100 percent and decreased the value-added tax (VAT) by half. Disentangling both effects, we find increments in prices due to the minimum wage hike that were more than offset by the decreases associated with the VAT. In the absence of both policy changes, average prices would have been higher. The share of informal labor in the production of different goods seems to be playing a role in the impact of the minimum wage on prices.

Download --- Download from Labour Economics (Forthcoming)

teaching

Microeconomic Analysis

Undergraduate course, Universidad del Rosario, Department of Economics, 2010

Introductory microeconomics course for political science and international relations students.

Microeconomics I

Undergraduate course, Universidad del Rosario, Department of Economics, 2017

Introductory microeconomics course for economics and finance students.

Urban Economics

Graduate course, ITAM, 2019

Urban Economics for Graduate Students

Urban Economics

Graduate course, ITAM, 2021

Urban Economics for Graduate Students

Labor Economics

Graduate course, ITAM, 2022

Labor Economics for Graduate Students