Practice Job Talk: Camila Paleo, University of California, Santa Barbara

Speaker

Camila Paleo, University of California, Santa Barbara

Biography

I am a PhD candidate in Economics at the University of California, Santa Barbara, where I am affiliated with the Broom Center for Demography and the Center for Latin American and Iberian Research (CLAIR).

My research is in the fields of labor, public, and health economics, with an interest in developing countries. I study how people, households, and firms respond to incentives and public policies, with a focus on vulnerable populations and the unintended consequences of welfare policies.

In my job market paper, I study how a public works program that provides temporary employment affects financial well-being. Using lottery-based assignment and linked administrative data, I show that the program increases formal credit use but also raises repayment risk after participants exit the program. These effects persist for 31 months after program exit, showing that public works programs can affect welfare through financial markets, but credit expansion without sustained earnings may expose vulnerable borrowers to repayment difficulties.
 

Title

"Temporary Jobs, Lasting Credit? Evidence from Uruguay's Public Works Program"

Abstract

Public works programs are common in developing countries, but evidence on their long-run effects remains limited. We estimate the effects of Uruguay's Oportunidad Laboral, a temporary public employment program, on participants' financial well-being. Leveraging lottery-based assignment and linked administrative records from the Central Bank of Uruguay, we show that participation sharply increases formal employment and earnings during the program, with no persistent formal-sector labor market effects after exit. In contrast, formal credit use rises persistently: by 8 percentage points during participation and by 8.4 percentage points in the 15-month post-program period, consistent with temporary formal employment relaxing barriers to financial inclusion. However, credit expansion also increases repayment risk. Delinquency rises by 2.4 percentage points during the program and by 10.7 percentage points afterward, with effects persisting 31 months after exit. Effects are larger for transgender applicants, smaller in high-unemployment municipalities, and delinquency effects are concentrated among new borrowers. The results show that public works programs can affect welfare through financial markets, but credit expansion without sustained earnings may increase financial vulnerability.

JEL Classification Codes: G51, I38, J68