Thesis advisor: Arthur Lewbel / In my dissertation I studied the political economy of economic development as well as the the urban wage premium, all using data from Brazil. In the first chapter, which is joint work with Carlos Varjao, we analyze the effect that increased political opposition in the city council has on corruption and public service provision at the local level. In the second chapter I study the sources of the high wage premium observed in cities, including firm sorting, firm and occupational matching, and compensating wage differentials. Finally, in the third chapter I study what happens to the provision of public education when a school teacher is elected to the city council (which actually occurs quite frequently). More detailed summaries of each chapter follow below. Chapter 1: In 'Political Opposition, Legislative Oversight, and the Performance of the Executive Branch', we study the effect that increased political opposition has on corruption and other measures of the mayor's performance in Brazil. The separation of powers between the executive and legislative branches is a cornerstone of democracy. This system of checks and balances, however, can be circumvented by partisan loyalties if legislators strategically avoid exerting oversight when their own party controls the executive branch. It is thus an empirical question whether the separation of powers prevents the abuse of power in practice. We answer this question by measuring the extent to which members of political opposition parties in a city council effectively check the mayor's performance in Brazil. We employ a regression discontinuity design to estimate the causal effect of an additional politically opposed legislator, and we find that political opposition increases oversight action and decreases corruption, with the effect fully concentrated on mayors facing reelection pressure. We trace the impact of oversight, via a reduction in healthcare spending irregularities, all the way to impacts on healthcare service delivery and health outcomes. Chapter 2: In 'Decomposing the Urban Wage Premium in Brazil: Firms, Matching, and Compensating Wage Differentials' I study the sources of the high wage premium observed in cities. In this chapter I used detailed employer-employee matched data from Brazil to understand 3 important elements of the urban wage premium: (1) the role of firms sorting into cities, (2) the role of firm and occupational matching in creating agglomeration economies, and (3) the role of compensating wage differentials. I first exploit identification from multi-city firms to show that positive selection of high-wage firms into larger cities accounts for 44% of what is often considered `agglomeration economies'. Then I show that improved firm and occupational matching together account for 87% of agglomeration effects. I then turn my attention to compensating wage differentials--- a possible explanation for the high-wage firms in cities. I estimate revealed-preference valuation of jobs, and show that jobs in cities in fact have better non-wage characteristics, and so high urban wages cannot be due to compensating wage differentials. This evidence together suggests that in Brazil, cities exist because they provide thick labor markets where high-wage firms and high-wage workers can go to find productive matches. Chapter 3: In 'Teachers in Politics: Teacher-Politicians, Gender, and the Representation of Public Education' I study what happens to public education in a city when a school teacher is elected to the city council, and I find that it depends on the gender of the teacher. Using a regression discontinuity design that exploits close elections, I find that when a female teacher is elected to the city council, the city hires both more teachers and more qualified teachers, and pays them more. Having a female teacher on the city council also increases the likelihood that the city's schools have necessary teaching resources, books, and financing, and possibly increases student test scores. No significant effect is found for male teachers elected to the city council. This difference may be due to different political career concerns for men versus women, a simple amplification of existing gender policy preference differences, or some mixture of the two. / Thesis (PhD) — Boston College, 2021. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

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As economias de aglomeração apresentam externalidades que impactam sobre os vetores de preços da economia. As interações que ocorrem nas aglomerações são relevantes para a compreensão dos benefícios gerados pela proximidade. Tais benefícios impactam diretamente o salário do trabalho e os preços dos imóveis, entre outros. Muitos trabalhos focaram em estudar economias de aglomeração no contexto espacial agregado, mas poucos estiveram focados no espaço intra-urbano. Em face dessa lacuna na literatura de Economia de Aglomeração, a análise nesta tese debruça-se sobre a Região Metropolitana de São Paulo (RMSP), que foi dividida em áreas homogêneas de 1 km2. Dois são os objetivos centrais desse trabalho. Primeiro, buscou-se identificar as áreas mais relevantes quanto à aglomeração de trabalhadores na RMSP, ou seja, os subcentros de emprego (SBD). Para tanto, utilizaram-se os microdados geocodificados do Ministério do Trabalho (RAIS- MTE) para os anos de 2002, 2008 e 2014. Uma nova abordagem empírica foi desenvolvida, utilizando Regressões Ponderadas Geograficamente e uma regra objetiva de valor de corte. Os resultados apontam para três SBD nos anos de 2002 e 2008. No ano de 2014, a abordagem metodológica desenvolvida nessa tese com valor de corte mais restrito identifica apenas dois SBD. Nos dois períodos iniciais, os SBD se localizam em Barueri, São Paulo e São Caetano do Sul. No último ano avalidado, localizam-se em Barueri e São Paulo. O padrão observado é que o emprego localizado nas áreas centrais de São Paulo apresenta nível de crescimento relativamente maior do que nas demais áreas. Os demais SBD perdem não apenas em termos de emprego, mas também em termos de área, isto é, as áreas dos SBD nesses municípios se reduzem. Em 2002, os SBD de Barueri e São Caetano do Sul ocupavam áreas de 5 e 7 km2, respectivamente. Em 2014, o primeiro ocupava 1 km2 e o segundo deixou de existir. Em São Paulo, a área se elevou de 79 km2 para 90 km2. Os resultados sugerem elevada concentração espacial do emprego na RMSP. No segundo ensaio, objetiva-se identificar o impacto da aglomeração sobre os salários dos trabalhadores e, adicionalmente, testa-se a hipótese de atenuação espacial da aglomeração. Para tanto, construiu-se uma base de dados longitudinal e considerou-se uma especificação com múltiplos efeitos fixos e defasagem espacial da aglomeração de emprego. Mesmo em face de uma especificação mais restritiva, os resultados sugerem efeito positivo da aglomeração, o qual é atenuado com o distanciamento espacial. Em outras palavras, a aglomeração impacta positivamente o salário. Em estimações que desconsideram a questão da endogeneidade, estima-se um efeito direto (na própria área) de 0,039%, efeito indireto de primeira ordem (em áreas contíguas) de -0,11% e efeito indireto de segunda ordem (anel externo às áreas contíguas) de -0,23%, normalizado por 100,000. Ao tratar o problema da endogeneidade, através do uso de variáveis instrumentais, obtém-se efeito direto de 1,78%, indireto de primeira ordem de -2,12% e o efeito de segunda ordem não é estatisticamente significante. / Agglomeration economies are externalities that impact on prices in the economy. The interactions that occur in agglomerations are relevant for the understanding of the benefits generated by proximity. These benefits directly affect workers\' wage, real estate prices, etc. Many papers have focused on non-market interaction in aggregated labor markets, but intra-urban labor markets have received less attention. Seeking to fulfill such lack, 1 km2 areas of the Metropolitan Area of São Paulo (MASP) are taken as the scope of analysis of this study. The central objectives of this dissertation are twofold. First, in chapter 3, I identified and characterized the most relevant areas in terms of job agglomeration in the MASP, named subcentral business districts (SBD). For this purpose, the geocoded matched employer-employee database of the Ministry of Labor (RAIS- TEM) was used. I developed a new empirical approach to identify the SBD, using Geographicaly Weight Regression and cut-off rules of identification. The results identified three SBD in the years of 2002 and 2008, and only two in 2014. Considering the two initial periods, the SBD are located in the municipalities of Barueri (SBD-BAR), São Paulo (SBD-SAO) and São Caetano do Sul (SBD-SCS). In the last year, the SBD are located in Barueri and São Paulo municipality only. The employment located in the central areas of São Paulo shows a relatively higher amount of employee than in the other SBD areas. SBD-BAR and SBD-SCS lost not only in terms of employment, but also in terms of area. In 2002, these last two SBD occupied areas of 5 and 7 km2 respectively. In 2014, the SBD-BAR occupied 1 km2, while the SBD-SCS is not ranked at all. In São Paulo, the area ranges from 79 km2 to 90 km2. The results stemmed from the first paper suggest a high spatial concentration of employment in the MASP. In the second paper (chapter 4), the objectives are to identify the impact of agglomeration on workers\' wages and test the agglomeration spatial attenuation hypothesis (SAH). For that, I use employer-employee RAIS database and consider a specification with multiple fixed effects and spatial lags of the employment agglomeration as a strategy to SAH identification. Even in the face of a more restrictive specification, the results suggest a positive effect of agglomeration, which is attenuated as the spatial distance increases. In other words, agglomeration affects positively workers\' wage in the workplace area. Estimates without solving for endogeneity between wage and agglomeration indicate a direct effect of 0.039% (in the area itself), a first-order indirect effect of -0.11% (in the contiguous areas), and a second-order effect of -0.23% (in the ring around the contiguous areas), normalized by 100,000. When considering instrumental variables, the estimated direct effect on wages becomes 1.78%, the first-order effect changes to -2.12%, and the second order effect is not statistically significant.

As economias de aglomeração apresentam externalidades que impactam sobre os vetores de preços da economia. As interações que ocorrem nas aglomerações são relevantes para a compreensão dos benefícios gerados pela proximidade. Tais benefícios impactam diretamente o salário do trabalho e os preços dos imóveis, entre outros. Muitos trabalhos focaram em estudar economias de aglomeração no contexto espacial agregado, mas poucos estiveram focados no espaço intra-urbano. Em face dessa lacuna na literatura de Economia de Aglomeração, a análise nesta tese debruça-se sobre a Região Metropolitana de São Paulo (RMSP), que foi dividida em áreas homogêneas de 1 km2. Dois são os objetivos centrais desse trabalho. Primeiro, buscou-se identificar as áreas mais relevantes quanto à aglomeração de trabalhadores na RMSP, ou seja, os subcentros de emprego (SBD). Para tanto, utilizaram-se os microdados geocodificados do Ministério do Trabalho (RAIS- MTE) para os anos de 2002, 2008 e 2014. Uma nova abordagem empírica foi desenvolvida, utilizando Regressões Ponderadas Geograficamente e uma regra objetiva de valor de corte. Os resultados apontam para três SBD nos anos de 2002 e 2008. No ano de 2014, a abordagem metodológica desenvolvida nessa tese com valor de corte mais restrito identifica apenas dois SBD. Nos dois períodos iniciais, os SBD se localizam em Barueri, São Paulo e São Caetano do Sul. No último ano avalidado, localizam-se em Barueri e São Paulo. O padrão observado é que o emprego localizado nas áreas centrais de São Paulo apresenta nível de crescimento relativamente maior do que nas demais áreas. Os demais SBD perdem não apenas em termos de emprego, mas também em termos de área, isto é, as áreas dos SBD nesses municípios se reduzem. Em 2002, os SBD de Barueri e São Caetano do Sul ocupavam áreas de 5 e 7 km2, respectivamente. Em 2014, o primeiro ocupava 1 km2 e o segundo deixou de existir. Em São Paulo, a área se elevou de 79 km2 para 90 km2. Os resultados sugerem elevada concentração espacial do emprego na RMSP. No segundo ensaio, objetiva-se identificar o impacto da aglomeração sobre os salários dos trabalhadores e, adicionalmente, testa-se a hipótese de atenuação espacial da aglomeração. Para tanto, construiu-se uma base de dados longitudinal e considerou-se uma especificação com múltiplos efeitos fixos e defasagem espacial da aglomeração de emprego. Mesmo em face de uma especificação mais restritiva, os resultados sugerem efeito positivo da aglomeração, o qual é atenuado com o distanciamento espacial. Em outras palavras, a aglomeração impacta positivamente o salário. Em estimações que desconsideram a questão da endogeneidade, estima-se um efeito direto (na própria área) de 0,039%, efeito indireto de primeira ordem (em áreas contíguas) de -0,11% e efeito indireto de segunda ordem (anel externo às áreas contíguas) de -0,23%, normalizado por 100,000. Ao tratar o problema da endogeneidade, através do uso de variáveis instrumentais, obtém-se efeito direto de 1,78%, indireto de primeira ordem de -2,12% e o efeito de segunda ordem não é estatisticamente significante. / Agglomeration economies are externalities that impact on prices in the economy. The interactions that occur in agglomerations are relevant for the understanding of the benefits generated by proximity. These benefits directly affect workers\' wage, real estate prices, etc. Many papers have focused on non-market interaction in aggregated labor markets, but intra-urban labor markets have received less attention. Seeking to fulfill such lack, 1 km2 areas of the Metropolitan Area of São Paulo (MASP) are taken as the scope of analysis of this study. The central objectives of this dissertation are twofold. First, in chapter 3, I identified and characterized the most relevant areas in terms of job agglomeration in the MASP, named subcentral business districts (SBD). For this purpose, the geocoded matched employer-employee database of the Ministry of Labor (RAIS- TEM) was used. I developed a new empirical approach to identify the SBD, using Geographicaly Weight Regression and cut-off rules of identification. The results identified three SBD in the years of 2002 and 2008, and only two in 2014. Considering the two initial periods, the SBD are located in the municipalities of Barueri (SBD-BAR), São Paulo (SBD-SAO) and São Caetano do Sul (SBD-SCS). In the last year, the SBD are located in Barueri and São Paulo municipality only. The employment located in the central areas of São Paulo shows a relatively higher amount of employee than in the other SBD areas. SBD-BAR and SBD-SCS lost not only in terms of employment, but also in terms of area. In 2002, these last two SBD occupied areas of 5 and 7 km2 respectively. In 2014, the SBD-BAR occupied 1 km2, while the SBD-SCS is not ranked at all. In São Paulo, the area ranges from 79 km2 to 90 km2. The results stemmed from the first paper suggest a high spatial concentration of employment in the MASP. In the second paper (chapter 4), the objectives are to identify the impact of agglomeration on workers\' wages and test the agglomeration spatial attenuation hypothesis (SAH). For that, I use employer-employee RAIS database and consider a specification with multiple fixed effects and spatial lags of the employment agglomeration as a strategy to SAH identification. Even in the face of a more restrictive specification, the results suggest a positive effect of agglomeration, which is attenuated as the spatial distance increases. In other words, agglomeration affects positively workers\' wage in the workplace area. Estimates without solving for endogeneity between wage and agglomeration indicate a direct effect of 0.039% (in the area itself), a first-order indirect effect of -0.11% (in the contiguous areas), and a second-order effect of -0.23% (in the ring around the contiguous areas), normalized by 100,000. When considering instrumental variables, the estimated direct effect on wages becomes 1.78%, the first-order effect changes to -2.12%, and the second order effect is not statistically significant.

Cette thèse explore la dimension géographique des disparités entre les sexes dans le marché du travail. Les questions étudiées incluent la variation de la prime salariale urbaine entre les sexes (chapitre deux), l'exploration des différents mécanismes derrière les effets importants de la localisation géographique sur les gains du marché du travail des femmes (chapitre trois), et de l'écart entre les sexes sur les rendements d'expérience urbains (chapitre quatre). Le deuxième chapitre entreprend une analyse transversale à l'aide de données françaises pour estimer la prime salariale urbaine et sa variation entre les sexes. Les résultats confirment l'existence d'une prime salariale urbaine nettement supérieure pour les femmes. Un doublement de la densité de l'emploi dans une zone donnée entraîne une réduction de 2,4 pourcent de l'écart salarial entre les sexes, une valeur qui augmente de 4 pourcent lorsqu'on exclut la catégorie professionnelle des ouvriers. Contrairement au reste des professions, l'effet de la densité favorise les hommes dans la catégorie des ouvriers. Le troisième chapitre cherche à trouver les mécanismes à l'origine de l'effet importante de la localisation géographique sur les gains du marché du travail pour les femmes en employant l'approche par l'estimateur « within ». Les résultats suggèrent que la moitié de la prime salariale urbaine est attribuée sur la base d'un tri des travailleurs selon le type de compétences à travers des différentes zones. Cependant, en complément du tri de compétences, d'autres hétérogénéités individuelles contribuent également à l'excès de la prime salariale urbaine pour les femmes. / This dissertation explores the geographical dimension of the gender gaps in the labor market. The investigated issues include the variation of urban wage premium across genders (chapter two), exploration of different mechanisms behind stronger location effects for females' labor market gains (chapter three), and the gender gap in the urban returns to experience (chapter four). The second chapter undertakes a cross-sectional analysis by using French data to estimate the urban wage premium and its variation across genders. The findings confirm the existence of an urban wage premium that is significantly higher for women. A twofold increase in employment density of an area results in a 2.4 percent reduction in the gender wage gap, which increases to 4 percent when we exclude manual workers occupational category. Contrary to the rest of the occupations, the density effect favors men in the manual workers category. The third chapter seeks to find the mechanisms behind the stronger location effects on labor market gains for women by employing the within estimate approach. Results suggest that half of the urban wage premium is contributed by the sorting of workers according to skill type across different areas. However, in addition to skill sorting other individual heterogeneities also contribute to the excess urban wage premium for females. Firm level agglomeration effects attribute a minor part to the excess urban wage premium for females. The left over premium is a result of pure urban effects (lower discrimination, better matching, urban amenities).