Essays on beliefs, democracy and local labor markets: an empirical examination for Peru

摘要

This thesis presents three empirical chapters on local labour markets, mineral booms, beliefs, conflictudand uncertainty. All the analysis was conducted using Peruvian data and context.ududThe first chapter finds that Peruvian individuals exposed to violent events during their impressionableudyears trust less government institutions, and feel less identified with their neighbours, while moreudidentified with religious groups. The estimated effect is small and heterogeneous depending on theudidentity of the perpetrator. The effect on identification with groups of population is also heterogeneousudby the indigenous origin of the individuals. Owners of an agricultural plot embedded in a cooperativeudsetting at the local level exhibit even smaller levels of identification with their locals while higher levelsudof identification with their ethnic group. In line with recent literature, these findings suggest that conflictudhas a small but persistent effect on the formation of trust and identity, which is a central feature toudunderstand the interaction between culture and institutions, and ultimately to understand the persistentudconsequences of wars.ududThe second chapter studies the relationship between democratic beliefs and economic uncertainty. Iudexplored whether uncertainty experienced during the impressionable years of the individuals is a keyudfactor behind the formation of the democratic beliefs. Results showed that this type of uncertainty hadudno effect on the determination of democratic beliefs. Combining uncertainty with the exposure toudauthoritarian regimes did not change the result. This result is robust to different definition of ruraludindividuals, the interaction of uncertainty and degree of experienced authoritarianism, and differentudformative periods. Current uncertainty, on the other hand, was unable to fully explain the formation ofuddemocratic beliefs.ududThe final chapter investigated the local labour effects of mining booms. Using two rounds of populationudcensus for 1043 districts in Peru I documented that large-scale mining activity had a positive effect onudlocal employment over 14 years. The effect was differentiated by industry, skill and migration status.udEmployment grew by 4% faster by one standard deviation increase in the mineral prices. Both high andudlow skilled workers enjoyed similar employment increase, however only low skilled workersudexperienced a decline in unemployment. Using data from 10 annual household surveys I found that,udconsistent with a model of heterogeneous firms and labour, wages for low skilled workers in districtsudclose to the mining activity was 5% higher by every standard deviation increase in the index of mineraludprices. Additional evidence with the census data suggested that to a large extent locals working in theudmining or the agricultural sector filled the new employment opportunities. Together these findingsudsuggest that large-scale mining activity increases the demand for mining and agricultural localudemployment, and the wages in the local economy.