Danilo Paula de Souza
Doctorate – Essays in applied economics
Advisor: Prof. Dr. Mauro Rodrigues Junior
Comission: Profs. Drs. Marcos Yamada Nakaguma, Breno Ramos Sampaio, Raphael Bottura Corbi and Vladimir Pinheiro Ponczek
This doctoral dissertation consists of 3 articles that address topics not related to each other, but directly linked to three major areas of economic research: economic growth, political economy, and labor economics. The first article tries to reconcile the theoretical predictions of economic growth literature on the relationship between increased human capital and GDP per capita with the empirical evidence of the last 40 years. The overlapping generations model suggests the existence of a trade-off between quantity and quality of education that arises through the occupational choice of individuals. Thus, the positive impact of an increase in a country's average years of schooling on its human capital stock would be compensated by a decrease in the average human capital of teachers in the long-run. The article contributes with a mostly empirical literature that finds in the education quality an important variable to explain the lack of correlation between increases in average years of schooling and economic growth. The second article analyzes how electoral campaign strategies regarding negative advertising are affected by the dispute and candidates’ characteristics, and by electoral institutions. In order to understand determinants and incentives, we build a stylized model of decision on the campaign type which predicts that a candidate is more likely to attack his opponent as the opponent's initial support rises and the electoral competition decreases. The model also predicts significant differences in the likelihood of attack among candidates running for the seat in municipalities with a single-ballot system and municipalities with a dual-ballot system. Model predictions are empirically tested using an unique dataset of lawsuits on the type of political advertising carried out by candidates in the 2012 and 2016 Brazilian municipal elections. Results confirm the model predictions and document aspects of the political candidates' decision to conduct negative advertising. The third and last article documents the structure, functioning, and the effects of the Brazilian labor justice on firms' behavior. Reduced form estimations using the universe of labor lawsuits filed in the country's largest labor court from 2008 to 2013 show that a greater labor cost leads to a decrease in the growth rate of firm's employment and in the growth rate of the average wage of new hires. There is also a negative effect on the likelihood of firms' survival. A search-matching model is built and calibrated with Brazilian data in order to assess how the level of employment and other variables reacted to the changes introduced by the 2017 Labor Reform by shifting lawsuit costs to the losing party. Similar to the reduced form evidence, the counterfactual analysis shows that by reducing labor regulations and the expected costs with labor lawsuits, the Labor Reform may have increased the employment level of the economy.
*Abstract provided by the author