2. Retail Expansion in Developing Countries: Evidence from Hard Discount Stores
with Andrés Calderón & Andrea Otero-Cortés
R&R · Journal of Development Economics
WP: Banco de la República
Abstract · Version: April 2026
The expansion of modern retail in developing countries has reshaped an industry historically dominated by traditional, informal retailers. Its consequences for labor markets, however, remain poorly understood. We study the staggered entry of hard discount stores into small Colombian municipalities between 2010 and 2019. Combining social security records with household survey and tax data, we find that following the entry of a discount chain, the formal employment-to-population ratio increases by approximately 10 percent over time. Formality rises in commerce, manufacturing, and construction, along with tax revenues in those sectors. We also find no significant effects on informal employment. Our results suggest that modern retail expansion in highly informal contexts can foster labor formalization.
3. Wage-Setting Constraints and Firm Responses to Demand Shocks
with Manudeep Bhuller, Santiago Hermo & Linnea Lorentzen
🏆 Best Paper · CUFE Forum 2025
Abstract · Version: May 2026
This paper investigates how institutional wage-setting constraints, such as a national minimum wage or collectively bargained wages, affect firm responses to demand shocks. We develop a framework to interpret heterogeneous shock responses that depend on the constraints firms face, and provide empirical evidence on the relevance of these constraints in shaping firm behavior across three countries with different institutional settings: Portugal, Norway, and Colombia. We discuss the implications of our findings for conventional estimates of rent-sharing and employer wage-setting power.
4. Worker Responses to Immigration Across Firms: Evidence from Colombia
🏆 Best Immigration Paper · OECD Conference 2023
WP: RFBerlin
Coverage: uc3nomics blog · PSE Migration policy briefs
Abstract · Version: April 2026
The labor market effects of immigration depend on how firms adjust, yet this aspect remains unexplored in developing countries. This paper studies the mass influx of Venezuelan migrants into Colombia using employer-employee data. As immigrants enter informal employment, formal employment for minimum-wage natives declines, reflecting their substitutability with lower-cost informal workers. The negative effects are stronger in small formal firms, which rely more on informality. A machine learning analysis shows that firm-level factors explain more of the heterogeneity in worker-level impacts. These findings highlight that informality amplifies the role of firms in shaping workers' adjustments to immigration.
5. Monopsony Power and Firm Organization
with Álvaro Jáñez
WP: RFBerlin
Abstract · Version: October 2025
Labor market competition differs drastically for production workers and managers. We extend a general equilibrium oligopsony model with minimum wages to include firm organization: firms trade off hiring managers to expand their number of production workers against higher costs. Using matched employer-employee and balance sheet data of Portuguese firms, we quantify the model and validate it against quasi-experimental evidence on oligopsony and minimum wage effects. Relative to the efficient economy, monopsony power reduces employment, wages, and employment concentration, particularly for managers. Hence, welfare losses are 3.4 and 2.4 percent for managers and production workers, respectively. Managers bear greater losses because they sort into larger firms, view firms' non-wage attributes as less substitutable, and are less likely to be bound by the minimum wage. Moreover, monopsony over managers alone reduces production workers' earnings by one-fifth through production complementarities.
6. Firms, Regularization, and Immigrant Integration
Abstract · Version: April 2026
This paper examines the labor market integration of millions of migrants in Colombia during a large-scale regularization program. Using labor force survey data on Venezuelan-born migrants in the informal sector and longitudinal data for the universe of regularized migrants in the formal sector, I uncover substantial disparities. The most pronounced gap is in formality: migrants are about 70% more likely to work informally than comparable natives. Despite the regularization program, only 10% of regularized migrants had formal jobs by 2021. Among those entering the formal sector, they typically work in minimum-wage jobs and in small, low-paying firms, earning around two-thirds as much as comparable natives. I find that close to 50% of the overall wage gap between them is due to migrant sorting into firms with lower pay policies. While there are improvements as migrants gain formal sector experience, a persistent gap remains. I discuss, using some evidence and theory, why formalization rates remain low despite migrants' similar language, culture, education, and access to work permits.