Contracts, Incentives, and Peer Effects in the Workplace. [pdf] BSE Working Paper Series (with Pau Milán)

Risk-averse workers in a team exert effort to produce joint output. Workers' incentives are connected via chains of productivity spillovers, represented by a network of peer-effects. We study the problem of a principal offering wage contracts that simultaneously incentivize and insure agents. We solve for the optimal linear contract for any network and show that optimal incentives are loaded more heavily on workers that are more central in a specific way. We conveniently link firm profits to network structure via the networks spectral properties.   When firms can't personalize contracts, better connected workers extract rents. In this case, a group composition result follows: large within-group differences in centrality can decrease firm's profits. Finally, we find that modular production has important implications for how peer structures distribute incentives. 

Public transport and productive inclusion linking accessibility and informal employment. Submitted (with Daniel Oviedo-Hernandez and Luis Ángel Guzman)

Our study in Bogotá examines accessibility to formal and informal employment using geocoded travel and household data. We find that public transport contributes to social and spatial inequalities, affecting different groups. By linking public transport accessibility to formal employment safety nets, we analyze how the city's current configuration influences job opportunities. Our study reveals varying levels of social and productive inclusion, highlighting the impact of informal job dependency. Investments in public transport may reinforce economic activity concentration, and we propose policy implications for low-skilled, low-income workers in the informal economy. 

A Contract Theory Approach to Blended Finance. [pdf]

We present a theoretical model that examines the advantages and limitations of blended finance. Blended finance refers to the strategic use of concessional capital to attract private investment towards projects with positive social impact. Without concessional support, these projects may remain unrealized, resulting in missed welfare opportunities. We use mechanism design to establish the conditions for commercial project financing under symmetric information and moral hazard. We then introduce a welfare-maximizing concessional lender capable of internalizing positive project externalities, and we study the optimal financing of projects that require concessional intervention. Our results show that a blended finance approach outperforms standalone financing by delivering greater welfare at a lower grant equivalent cost. 

Does proximity to massive transport systems reduce the probability of being informally employed? Evidence from Bogotá. [pdf] Biblioteca Virtual, Banco de la República de Colombia Bogotá, Colombia

I explore the impact of public transport expansion on social inclusion in Bogotá, using the framework of the Spatial Mismatch Hypothesis (SMH). Specifically, I investigate how proximity to Transmilenio BRT stations relates to the likelihood of informal employment. The findings indicate that residents living near these stations have a decreased probability of being informally employed, with varying effects on individuals with high and low skill levels. My research contributes empirical evidence to the SMH literature in the context of informality in the developing world, emphasizing the need for nuanced public policy development to address the intricate interplay between transport and informality. 

Efficiency analysis of the electricity generation sector in Colombia [pdf] (In Spanish)

I analyze data from 47 power generation plants in Colombia (20 hydroelectric and 27 thermoelectric) between October 2011 and October 2012, using Data Envelopment Analysis (DEA) and Statistical Data Envelopment Analysis (SDEA) to measure electrical energy production efficiency. The study constructs a production frontier considering various physical and technical variables to explain the input-output relationship. Results categorize plants based on relative efficiency, with hydroelectric plants showing higher efficiency on average. The analysis reveals no efficiency differences based on plant size. The findings establish a hierarchy of plants based on calculated efficiency, considering factors such as generation type, size, and operating company. Quarterly efficiency evolution is also examined, providing insights into performance fluctuations during the study period.