In Chapter 1, I study the employment effects of a 2008 policy reform of the Chilean pension system. The reform increased pension benefits, changed the accrual rates, and relaxed the eligibility criteria for low-savings retirees. Using a difference-in-differences approach, I find that, on average, the reform increased labor force participation and hours worked for men aged 60–64 years by 15% and 4%, respectively. I find that a lack of pension knowledge is crucial in explaining the results. People with similar levels of pension wealth and monthly contributions behave differently depending on what they believe their pension assets and contributions are. I then develop a three-period model where workers supply labor. I conclude that the net impacts of the reform on labor decisions depend on pension wealth and workers’ knowledge about the pension system. In Chapter 2, the paper studies the relationship between intergenerational economic persistence and preferences for the provision of public goods. We develop a simple theoretical model in which a public good is financed through proportional taxation, and that predicts a lower provision of public goods given an increase in the intergenerational earnings elasticity (IGE), which is a measure of the degree of economic persistence. We test this model using the results of the 2020 Chilean national plebiscite, which asked about the replacement of the standing constitution by a new one that would potentially expand the role of the state in the provision of public goods. Our estimates suggest the existence of a positive association between the IGE and the share of the vote against a new constitution, even after controlling for median income and income inequality. These findings are consistent with our model and suggest that sectors of society that exhibit higher degrees of economic persistence also show greater reluctance towards redistributive policies that increase public goods provision. Chapter 3 revisits the Two-Sample Two-Stage Least Squares (TSTSLS) method, which is commonly used to estimate intergenerational mobility in the absence of parental earnings data. First, we decompose the TSTSLS intergenerational earnings elasticity (IGE) into the linked administrative data estimate, a projection bias, and a variance bias. We propose a parsimonious imputation proce- dure to eliminate the variance bias in the IGE and show that, under plausible conditions, the corrected TSTSLS IGE estimate provides a lower bound for the linked administrative IGE. Furthermore, we demonstrate that the uncorrected rank-rank correlation estimated through TSTSLS only exhibits projection bias, thus providing a lower bound to the linked administrative rank-rank correla- tion. Second, we use administrative data from a developing country to test our lower bound methodology through an Empirical Monte Carlo approach, confirming its validity.
