Jorge Alonso Ortiz

Abstract:
The informal sector accounts for a substantial fraction of employed population in Mexico and other Latin American countries. In this paper we study the interaction between the tax and transfers system and the size and composition of informal sector. To do that we build a search model that can be calibrated to the Mexican data. Our model features two employment statuses: employed and unemployed; and two sectors: formal and informal. We estimate our model to data from Encuesta Nacional de Ocupacion y empleo (ENOE) by simulated GMM. Then we perform three different policy analyses: changes in the distribution of the transfers between formal and informal sector workers, changes in the size of the transfer system, and changes in the progressivity of taxes and transfers (pending). Our model is able to capture key features of Mexican labor markets, such as the distribution of the labor force across sectors and the distribution of accepted wage offers. Dividing transfers equally between formal and informal sector workers increases the size of the informal sector by 5 percentage points, it also increases average wages in the formal sector by 6% whereas wages in the informal sector fall by 4%. When we double the size of transfers, the size of informal sector falls by 5 percentage points. However, it has a big effect on the distribution of accepted wage offers: average wages increase by 10% in the formal sector and they raise by 16% in the informal sector.

Abstract:
Employment to population ratios differ markedly across OECD countries relative to rates in the U.S., especially for persons aged 55-69. Social security features also differ across the OECD, particularly with respect to replacement rates, entitlement ages and earnings tests. I conjecture that differences in social security features explain many differences in employment to population ratios at older ages. I assess my conjecture quantitatively with a life cycle general equilibrium model of retirement. At ages 60-64 the correlation between my model's simulations and observed data is about two thirds. The replacement rate and the earnings test explain 90\% of observed variability, implying that differences in entitlement ages do not explain differences in employment to population rates at older ages.

Abstract:
We assess the consequences of increases in the scale of tax and transfer programs in the context of a model with idiosyncratic productivity shocks and incomplete markets. We contrast the outcomes for both hours worked and welfare relative to the results obtained in a stand-in household model, featuring no idiosyncratic shocks and complete markets. Our main finding is that the impact on hours remains very large, but the welfare consequences are very different. The analysis also suggests that tax and transfer policies may have large effects on average labor productivity via selection effects on employment.

Abstract:
We develop a general equilibrium model that links entry barriers, firm dy- namics and borrowing constraints. In the model, firms borrow to finance entry cost and extra investment above net profits. To borrow, firms post collateral that depends on their future capital stock. Firms also face idiosyn- cratic productivity shocks every period. The borrowing constraint and entry barrier have an effect on firm dynamics. This has aggregate implications for productivity and income differences across countries. A country with lower financial development faces tighter borrowing constraint that leads to lower aggregate productivity and income.

Abstract:
In this project I quantitatively assess if differences in the social security rules conditional on family structure are able to account for the employment to population ratio at older ages for single and married males and females. I use aggregate data from the OECD and microdata from the Health and Retirement Study in the US (HRS) and the Survey of Health, Aging and Retirment in Europe (SHARE).

Abstract:
A standard version of the canonical model for the evaluation of policy reforms, the life cycle general equilibrium heterogenous agent model, misclasifies who retires and when. This may have potential implications for the evaluation of reforms to the social security system. I explore the role of preference heterogeneity and human capital formation to account for the discrepancy between the data and the model, and the implications for policy reforms.

Abstract:
The variability of the employment to population across the OECD is accounted for by differences in employment to population of the older ages (55 and above) and the younger ages (25 and below). Social security stands out as a prominent factor to explain the employment behavior of the old. This project explore the quantitative role of the differences in educational systems into accounting for the employment behavior of the young.