I am an Economist at the Central Bank of Chile. I received my PhD in Economics from the University of Pennsylvania.
My research focuses on consumption insurance, fertility dynamics, and labor market behavior. I study how households respond to economic shocks and policy changes, with particular attention to the role of cognitive skills, financial constraints, and intergenerational transfers.
Working Papers
In the NLSY79, 69% of women in the lowest cognitive ability quartile have a first birth before age 22, compared with 22% in the highest. This gradient persists within education groups and within contraceptive method, suggesting that neither education sorting nor method selection fully accounts for it. I estimate a life-cycle model in which cognitive ability shifts the effectiveness of fertility control, beyond standard opportunity-cost channels. Restricting effectiveness to be equal across ability groups causes the model to underpredict the ability–fertility gradient by a factor of five. Equalizing effectiveness to high-ability levels reduces births before age 22 by 50% and raises college attendance by 15%. A cost-reduction policy generates welfare gains of 10% of lifetime consumption for the lowest ability quartile but near-zero gains for the highest, suggesting that improving effectiveness matters more than reducing cost for disadvantaged women.
Why do parents invest so much in their children’s college education? I propose that college serves as a commitment device for altruistic parents facing a Samaritan’s dilemma. In a dynastic model where parents and adult children interact non-cooperatively, children who anticipate parental support under-save and over-consume. College mitigates this problem from the parent’s perspective: by permanently raising the child’s income and making shocks less persistent, it shrinks the set of states where parents optimally transfer, reducing the lifetime costs of moral hazard. However, the net effect on college attendance is theoretically ambiguous: anticipated transfers subsidize enrollment, raising attendance, but also cushion non-college children against income risk, reducing their incentive to invest in human capital. I document four facts from matched parent-child data (PSID and HRS) consistent with this mechanism: parents whose children attend college consume 8% more, accumulate wealth differently, face a substantially weaker precautionary saving motive, yet transfer only modestly less—suggesting that the option value of forgone transfers, rather than realized transfer flows, drives parental behavior. The structural model, estimated by the simulated method of moments, quantifies these opposing forces and shows that the sign of the moral hazard effect on college varies across the ability–wealth distribution.
We use the Penn Wharton Budget Model’s microsimulation of U.S. demographics projections to construct estimates of the U.S. federal fiscal and generational imbalances. The federal government’s fiscal imbalance (FI) calculated under current fiscal laws and purchases policies over the next 75 years equals $93.8 trillion, which is 7.0 percent of the present value of projected GDP (PVGDP) over that time horizon. Calculated in perpetuity, FI equals $202.9 trillion, which is 8.2 percent of PVGDP, also calculated in perpetuity. The FI/PVGDP ratio in perpetuity would be 9.4 percent under extension of provisions that are scheduled to expire under the Tax Cuts and Jobs Act of 2017.
Work in Progress
We analyze the general equilibrium effects of human capital misallocation in Chile. First, we utilize tax and educational records to estimate the proportion of educationally mismatched individuals (high-ability individuals with low educational attainment). Second, we estimate the labor market returns on ability, education, and human capital investment. Finally, we construct and calibrate a dynastic overlapping generations model with both private and public human capital investment to decompose the causes of educational mismatch and the general equilibrium effects of changes in sorting.