Albert Bollard
Ph.D. Student in Economics
Stanford University
579 Serra Mall
Stanford, CA 94305
abollard@stanford.edu
The size wage premium in Indian manufacturing
Comprehensive plant-level data on Indian manufacturing show that large formal plants pay average wages more than four times greater than small informal plants. This wage premium is much greater than that observed in other countries, and is not explained by differences in observable worker skills. I present evidence that employment protection legislation in the formal sector can explain much of the wage differences. States with more restrictive employment protection laws have higher formal sector wage premiums, and when states pass more restrictive laws, formal sector wage premiums increase. States with more restrictive laws also have fewer small formal firms – a "missing middle" in the firm size distribution. Estimating a counterfactual model suggests that eliminating the formal sector wage premium could more than double the size of the formal sector, increase total output by between 5 and 10 percent, and substantially improve the welfare of workers in the informal sector.
Slides: The size wage premium in Indian manufacturing
Slides: The size distribution of Indian manufacturing
The reallocational effects of Indian de-licensing
with Peter J. Klenow and Gunjan Sharma
During the 1980s and early 1990s, the Indian government gradually removed restrictions on the activities of large manufacturing plants. This project investigates how resources were consequently re-allocated across both plants and industries.
Expanding the EU, re-integrating Austria-Hungary
I exploit variation in firms' locations within postal codes to show that Hungarian firms near the Austrian border experienced 6% higher revenue than firms at the other end of the country following the enlargement of the European Union in 2004. The effect was concentrated in the Wholesale and Retail sectors, and a symmetric pattern is observed for a selected sample of Austrian firms, which suggests that access to new customers might be responsible. This is concrete evidence of the economic integration which follows the lowering of borders.
Plants are larger where productivity is higher
with Peter J. Klenow
Average output per manufacturing plant increases one-for-one with average labor productivity in those plants. The pattern holds across disaggregated industries within the U.S., China, India, Indonesia, Colombia and Chile, and within and across countries. It does not appear to stem from measurement error. The variation in average labor productivity is substantial, accounting for half of the variation in average plant output. This empirical regularity suggests a strong relationship between aspects of market competition, such as entry costs and markups, and determinants of labor productivity, such as human and physical capital. Accounting decompositions attribute the major role to covariation in entry costs and human capital across industries, with a subsidiary role for covariation in entry costs and average markups.
Remittances and the brain drain revisited: The microdata show that more educated migrants remit more
with David McKenzie, Melanie Morten and Hillel Rapoport, August 2009
Recent literature based on cross-country regressions has claimed that more educated migrants remit less, leading to concerns that further increases in skilled migration will hamper remittance growth. We revisit the relationship between education and remitting behavior using microdata from surveys of immigrants in ten major destination countries. The data show a mixed pattern between education and the likelihood of remitting, and a strong positive relationship between education and the amount remitted conditional on remitting. Combining these intensive and extensive margins gives an overall positive effect of education on the amount remitted. We find the higher income earned by migrants, rather than characteristics of their family situations explains much of the higher remittances. Finally, we show that it does not appear to be the case that the rise in skilled migration is coming at the expense of less-skilled migrants – instead countries with a high number of skilled migrants also have a high number of less-skilled migrants in both the cross-section and over time. As a result the fear that a rise in skilled migration will lower remittances and reduce less-skilled migration is not supported by the evidence.
The Remitting Patterns of African Migrants in the OECD
with David McKenzie and Melanie Morten, August 2009
Recorded remittances to Africa have grown dramatically over the past decade. Yet data limitations still mean relatively little is known about which migrants remit, how much they remit, and how their remitting behavior varies with gender, education, income levels, and duration abroad. We construct the most comprehensive remittance database on immigrants in the OECD currently available, containing microdata on over 12,000 African immigrants. Using this microdata we establish several basic facts about remitting patterns of Africans, and then explore how key characteristics of policy interest relate to remittance behavior. Africans are found to remit twice as much on average as migrants from other developing countries, while those from poorer African countries are more likely to remit than those from richer African countries. We find male migrants remit more than female migrants, particularly among those with a spouse remaining in the home country; that more educated migrants remit more than less educated migrants; and that while the amount remitted increases with income earned, the gradient is quite flat over a large range of income. Finally, we find little evidence that the amount remitted decays with time spent abroad, with reductions in the likelihood in remitting offset by increases in the amount remitted conditional on remitting.