Welcome to my website!
I am an Assistant Professor at PUC-Rio. My primary research interests are at the intersection of Public and Labor Economics. My research explores how government interventions shape and are shaped by labor market dynamics, with focus on the institutional challenges that developing countries face when designing effective tax and social insurance policies.
Email: crcarval@umich.edu
Unintended Consequences of Unemployment Insurance: Evidence from Stricter Eligibility Criteria in Brazil (joint with Raphael Corbi and Renata Narita)
Economics Letters (2018), Vol. 162, Pages 157-161. doi: https://doi.org/10.1016/j.econlet.2017.10.016
Abstract:
This paper investigates the impact of changes in the eligibility criteria of unemployment benefits (UI) on layoffs in Brazil. We exploit exogenous variation introduced by a reform in the UI system in 2015. Our difference-in-differences estimates show that UI accounts for 11–13% of the average dismissal rates of eligible workers. Our results are consistent with workers having the incentive to strategically induce their dismissals in order to collect UI benefits.
Abstract:
This paper provides evidence on the effects of size-based taxation in a context of low enforcement and a large informal sector. I examine the effect of a Brazilian tax reform that applied to micro-businesses below a revenue cutoff. For affected companies, the reform replaced all business taxes with a low, fixed monthly fee. Evidence indicates that the intervention increased the number of formal firms by 43%. Because so many informal firms transitioned to the formal sector, total tax revenues increased, despite the tax cut that the reform offered firms that were already in the formal sector. The paper’s model identifies sufficient statistics for welfare analysis of this type of reform, and its estimates suggest that the reform increased welfare, with compliance cost reduction—rather than tax reduction—being the primary driver of enrollment in the new regime.
Abstract:
This paper examines the impact on gender wage disparities of an often-overlooked source of pay transparency: the public disclosure of tax information. We leverage a 2001 policy in Norway that made individual tax returns publicly accessible online. Using matched employer-employee data, we show that this abrupt increase in transparency—originally aimed at improving tax compliance—significantly narrowed gender wage gaps within firms. A difference-in-difference design reveals a 2.17 percentage point (8.7%) decline in the within-firm gender wage gap, driven entirely by rising female wages. The reduction was strongest in private sector firms and industries with initially larger gaps, and was more pronounced in municipalities previously lacking access to printed tax lists. We explore the underlying mechanisms and find that wage growth was concentrated among women who changed jobs following the increase in transparency, pointing to heightened job search and mobility as key drivers. Our findings highlight the potential of broad-based transparency policies to reduce gender wage inequality through shifts in both information access and labor market behavior.
Abstract:
Labor inspection plays a crucial role in addressing the high prevalence of the informal sector and the low compliance with labor regulations in developing countries. However, while inspections can lead to an increase in labor costs, there is limited evidence regarding their effects on worker outcomes. In this study, we combine employer-employee matched data with establishment-level data on labor inspections in Brazil to estimate the impact of these inspections on worker earnings trajectories in the years following an inspection. Our findings indicate persistent, negative wage effects lasting up to four years after inspections. Workers in inspected establishments are also more likely to leave their jobs following an inspection. We find that these negative wage effects are driven both by firm stayers, consistent with within-firm adjustments, and firm-leavers, suggesting reallocation costs. The type of violations is important, with severance payment violations having a more significant negative impact than formalization violations. We examine potential channels to explain this difference and find that the firm’s cost pass-through, the amenities associated with the regulation, and the wage spillover effects resulting from the firm’s pay policies may play a role.
Labor Enforcement, Schooling, and Child Labor (joint with Ariza Gusti)
The Local Labor Market Effects of Right-to-Work Laws: Evidence from Brazil (joint with Andrew Joung)