NBER Publications by Eric Verhoogen

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Working Papers and Chapters

May 2014Export Destinations and Input Prices
with Paulo Bastos, Joana Silva: w20143
This paper examines the extent to which the destination of exports matters for the input prices paid by firms, using detailed customs and firm-product-level data from Portugal. We use exchange-rate movements as a source of variation in export destinations and find that exporting to richer countries leads firms to charge more for outputs and pay higher prices for inputs, other things equal. The results are supportive of the hypothesis that an exogenous increase in average destination income leads firms to raise the average quality of goods they produce and to purchase higher-quality inputs.
August 2013Enlisting Employees in Improving Payroll-Tax Compliance: Evidence from Mexico
with Todd Kumler, Judith A. Frías: w19385
Non-compliance of firms with tax regulations is a major constraint on state capacity in developing countries. We focus on an arguably under-appreciated dimension of non-compliance: under-reporting of wages by formal firms to evade payroll taxes. We develop a simple partial-equilibrium model of endogenous compliance by heterogeneous firms to guide the empirical investigation. We then compare two independent sources of individual-level wage information from Mexico -- firms' wage reports to the Mexican social security agency and workers' responses to a household labor-force survey -- to investigate the extent of wage under-reporting and how it responded to an important change in the social security system. We document that under-reporting by formal firms is extensive, and that compliance is b...
October 2008The Quality-Complementarity Hypothesis: Theory and Evidence from Colombia
with Maurice Kugler: w14418
This paper presents a tractable formalization and an empirical investigation of the quality-complementarity hypothesis, the hypothesis that input quality and plant productivity are complementary in generating output quality. We embed this complementarity in a general-equilibrium trade model with heterogeneous, monopolistically competitive firms, extending Melitz (2003), and show that it generates distinctive implications for two simple, observable within-sector correlations -- between output prices and plant size and between input prices and plant size -- and for how those correlations vary across sectors. Using uniquely rich and representative data on the unit values of outputs and inputs of Colombian manufacturing plants, we then document three facts: (1) output prices are positively cor...

Published: Maurice Kugler and Eric Verhoogen, “Prices, Plant Size, and Product Quality.” Review of Economic Studies, vol. 79 no. 1, pp. 307-339, Jan. 2012. citation courtesy of

August 2007Class Size and Sorting in Market Equilibrium: Theory and Evidence
with Miguel Urquiola: w13303
This paper examines how schools choose class size and how households sort in response to those choices. Focusing on the highly liberalized Chilean education market, we develop a model in which schools are heterogeneous in an underlying productivity parameter, class size is a component of school quality, households are heterogeneous in income and hence willingness to pay for school quality, and schools are subject to a class-size cap. The model offers an explanation for two distinct empirical patterns observed among private schools that accept government vouchers: (i) There is an inverted-U relationship between class size and household income in equilibrium, which will tend to bias cross-sectional estimates of the effect of class size on student performance. (ii) Some schools at the class s...

Published: Miguel Urquiola and Eric Verhoogen, “Class-Size Caps, Sorting, and the Regression Discontinuity Design.” American Economic Review, v. 99 no.1, pp. 179-215, March 2009 citation courtesy of

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers onlyInformation about this author at RePEc

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