Research

Working Papers:

Entrepreneurial Human Capital and Firm Informality  with Luis Franjo, Francesco Turino   Slides   Paper   (Submitted)

Abstract

This paper studies how entrepreneurial human capital affects firm informality in developing economies. We develop a life-cycle general equilibrium model with endogenous education and occupational choice under limited tax enforcement and credit frictions. Entrepreneurial ability is enhanced by college education. Calibrated to Brazil, the model shows that expanding college attainment reduces informality by reallocating talent toward larger, more productive formal firms. This raises GDP and aggregate productivity, with the magnitude of effects depending on the degree of credit frictions. We validate the mechanism using microdata, leveraging Brazil’s 1996 education reform. The findings underscore the role of education in promoting formalization.

Informality, children and female occupational choice   (Job Market Paper)

Abstract

This paper examines the relationship between fertility and female occupational choice in Brazil, with a particular focus on informality. I document that women with children are more likely to work in the informal sector compared to women without children. To explain these patterns, I develop an OLG occupational choice model with endogenous fertility and heterogeneity in working and managerial ability. The model’s rich heterogeneity allows for a detailed analysis of the characteristics driving self-selection into different employment types. The findings highlight the role of labor market rigidities and the absence of part-time employment options, showing that women often turn to informal entrepreneurship to gain the flexibility needed when raising young children.