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UID:20250928T083124EDT-5792fIpWR6@132.216.98.100
DTSTAMP:20250928T123124Z
DESCRIPTION:Roman Zarate (Berkeley)\n	Date: January 21\, 2020\n	Time and Loca
 tion: 10:00 a.m.\, Leacock 429\n\nAbstract:\n	The presence of the informal 
 sector in the developing world creates wedges across firms that lower Tota
 l Factor Productivity (TFP). This paper examines the impact of transit imp
 rovements on aggregate efficiency by studying the relationship between com
 muting\, trade\, and informality. To do so\, I combine a rich collection o
 f administrative microdata and exploit the construction of new sub-way lin
 es in Mexico City. I find that transit improvements lead to a reduction in
  informality rates by four percentage points in nearby areas to the new st
 ations. This result indicates that workers reallocate to firms with higher
  total factor revenue productivity (formal firms). I develop a spatial gen
 eral equilibrium model considering both the direct effects under perfectly
  efficient economies and the allocative efficiency margin. From a first-or
 der approximation\, I provide a formula that decomposes the welfare impact
  of commuting/trade shocks into a “direct” effect and an allocative effici
 ency term. I quantify and decompose the welfare gains of the new infrastru
 cture after estimating the key elasticities of the model. Changes in alloc
 ative efficiency driven by the reallocation of workers to the formal secto
 r explain approximately 13-23% of the total gains\, and average real incom
 e per every dollar spent on infrastructure increases by 15% relative to a 
 perfectly efficient economy\n
DTSTART:20200121T150000Z
DTEND:20200121T163000Z
LOCATION:Leacock 429\, Leacock Building\, CA\, QC\, Montreal\, H3A 2T7\, 85
 5 rue Sherbrooke Ouest
SUMMARY:Roman Zarate (Berkeley)\, “Factor Allocation\, Informality and Tran
 sit Improvements: Evidence from Mexico City”  
URL:/economics/channels/event/roman-zarate-berkeley-fa
 ctor-allocation-informality-and-transit-improvements-evidence-mexico-city-
 305560
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