Leonardo Esteban Salazar Vergara
Ph.d.-forsvar:Leonardo Esteban Salazar Vergara: "Essays on Labor and Exchange Markets in Chile"
This thesis consists of four self-contained articles presented in four separate chapters dealing with persistence in Chilean macroeconomic data. Generally, the results provide empirical support for the predictions of the structural slumps theory in a world of imperfect knowledge.
The first chapter studies real exchange rate persistence. The results show that long and persistent swings in the real exchange rate are compensated by similar movements in the interest rate spread, which restores the equilibrium in the product market when the real exchange rate moves away from its long-run benchmark value. Fluctuations in the copper price are also associated with real exchange rate swings.
The second chapter analyzes the Phillips curve and the effect of monetary policy on unemployment. The results show that the natural rate of unemployment is positively associated with the interest rate, suggesting that monetary policy might not be completely neutral over the business cycle. Additionally, trend-adjusted productivity is positively co-moving with the unemployment rate and negatively co-moving with the real exchange rate. This suggests that in periods of real appreciation, firms improve productivity by laying off the least-productive workers.
The third chapter studies the effect of the minimum wage on the employment of household workers. The results show that there is a negative and inelastic long-run relationship between hours worked and the minimum wage, but no relationship between the minimum wage and the number of workers employed. This suggests that employers in the household service sector have reduced the number of hours worked per employee instead of the overall number of employees when there has been a minimum wage increase.
The fourth chapter analyzes the effect of the monetary policy on the labor market when workers' heterogeneity is explicitly considered (age, income quintile, and economic sector). The results indicate that monetary policy does not evenly affect all workers. The primary sector is the least sensitive and the secondary sector the most sensitive to contractionary monetary shocks.