Estefan Davila, Manuel Alejandro; (2019) Essays in Development Economics. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

This dissertation consists of three essays on three topics in Development Economics: gender equality, state capacity, and human capital. The first essay studies the effect of female labour force participation on gender violence. Using Mexican administrative records for a 10-year period, the study examines the impact of local variation in female employment resulting from changes in US demand for Mexican manufacturing in light industries and finds that increases in the population share of employed women lead to reductions in the male-female earnings gap while increasing the female-instigated divorce rate on the grounds of domestic violence, consistent with an “empowerment” effect. However, the study also finds an increase in homicide of married women, consistent with a “backlash” effect. The second essay examines the effects of property tax rate changes on taxpayer behaviour in the context of weak enforcement capacity. Specifically, the study uses individual-level property tax records in Mexico City over five years and leverages variation from unexpected yearly tax rate hikes affecting only certain property value bands. The main finding of the study is that tax rate hikes lead to higher tax revenues but also provoke unambiguous reductions in tax compliance, worsening inequality in tax compliance. The third essay proposes a structural approach to study the general equilibrium effects of public investments in schooling on the labour market. Schooling decisions are modelled as individual choices subsidised by the government in an overlapping-generations model. Social returns of human capital depend on the productivity of different schooling levels as production inputs. Estimation of the model using Mexican data on schooling and earnings reveals that public subsidies to college increase average wages and reduce earnings inequality. The reason is that individuals experience significant productivity gains after completing this schooling level, while college graduates are relatively scarce in the Mexican economy.

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