Awards

This research agenda examines how labor market institutions, labor demand shocks, and organizational change shape structural transformation, employment, and wages in Brazil, leveraging administrative micro data and original data collection. The four projects supported by this award from the Markets and Development initiative are:

• The origins of structural transformation (with Julieta Caunedo and Kristina Manysheva): The first project studies the relationship between non-agricultural labor demand shocks and structural transformation. Using municipality-level panel data and staggered large-firm entry events, preliminary results find that increases in non-agricultural employment raise local wages and formal employment while inducing labor reallocation out of agriculture. Preliminary findings show that the largest effects are driven by expansion in housing construction associated with Brazil’s federal low-income housing program. Current work seeks to deepen this analysis by collecting new data on housing rents, housing market dynamics, and the geographic expansion of construction activity.
• Trade and modern slavery (with Guilherme Bayma): The second project examines the relationship between commodity demand shocks and labor coercion in Brazil. Since 1995, more than 50,000 workers have been rescued from conditions classified as modern slavery, especially in cattle ranching and agricultural production. The project aims to provide new evidence on how labor market conditions, commodity prices, and enforcement capacity jointly shape the persistence of modern slavery. The next stage of the project will substantially expand the collection and analysis of novel administrative inspection records data to further estimate the preliminary results.
• Outsourcing, labor market frictions, and employment (with Michael Wong): The third project studies the effects of outsourcing on labor market organization in Brazil. This delves into current work that explores the variation in court permissiveness prior to the 1993 legalization of outsourcing and shows that legalization increased employment among security guards. Next steps will investigate whether outsourcing generates genuine productivity gains through economies of scale and specialization, or whether much of its expansion reflects tax optimization and regulatory arbitrage.
• Admins, Scale, and the Extensive Export Margin (Rodimiro Rodrigo): The fourth project studies the role of administrative workers within firms and the interaction between administrative labor, firm growth, and technological change. Preliminary evidence suggests that administrative employment is complementary to firm scale and export participation. An additional question is whether recent AI diffusion substitutes for this administrative labor. Planned work will seek expanded access to microdata and potentially develop surveys targeting firms’ adoption of administrative technologies and artificial intelligence tools.