2022 How to Introduce Behavioral Science Into Organizations and Not Perish While Trying. In A. Samson (Ed.), The Behavioral Economics Guide 2022 (pp. 81-89) (Available here). Behavioral science is at the core of the fast-growing success of your competitors. Perhaps you have seen it at a conference or on social media, and now you are interested in introducing it into your organization. How do you begin? Based on our experience at BeWay, we have designed a roadmap to implement behavioral science in an organization, beginning with internal sales, professional development, and ultimately how to lead a behavioral organization.
2020 AhorroPrevisionalVoluntario: ExperienciadelLaboratoriodeAhorro para elRetiro en América Latina y elCaribe.Gestión y Tendencias, 5(1), 7-10. With Mariano Bosch, Fabián Cofré, Stephanie González, Anne Hand, Lukas Keller, Maria Teresa Silva-Porto, and Catalina Rodríguez. (Available here). Este artículo presenta un resumen de la experiencia que el Laboratorio de Ahorro para el Retiro (LAR) del Banco Interamericano de Desarrollo (BID) ha desarrollado en sus cuatro años de existencia para promover el ahorro previsional voluntario en países como Chile, Colombia, México y Perú
2017Responsibility or autonomy: children and the probability of self-employment in the USA. Small Business Economics: an Entrepreneurship Journal, 49(2), 493-512 (Available here). This paper studies the effect of children on the likelihood of self-employment. Having children can change preferences that are central to the decision whether to be self-employed. On the one hand, individuals’ preference for autonomy and flexibility increases when having children, which increases the willingness to be self-employed. On the other hand, having children entails a responsibility over someone else, which increases individual risk aversion and decreases the willingness to be self-employed. Using a pooled cross section of 26 years from the General Social Survey, instrumental variable estimates indicate that, in the U.S., having children under the age of 18 in the household decreases the likelihood of being self-employed by 11% (i.e. the responsibility effect dominates). This effect is considerable as a child decreases the probability of self-employment more than the increase associated with being raised by a self-employed father—one of the main determinants of self-employment.
2008 El mercado venezolano en las exportaciones colombianas: Dependencia de los exportadores en 2006. Coyuntura Económica, 38(1), 77–107. With Enrique Montes, Aaron Garavito, Carolina Pulido, and Mónica Hernández. Available at: RePEc:col000438:012786 This document analyzes the recent behavior of firms exporting to Venezuela and the dependence of their revenues on sales to this destination. We use the database of foreign trade at the transaction level held by the Colombian Bureau of Statistics (Departamento Nacional de Estadística dane) and the financial balances of firms held by the Office for Supervision of Firms (Superintendencia de Sociedades). The analysis reveals that exports to Venezuela grew substantially last year, with a high share on total Colombian exports. Results at the level firm show that most of the firms exporting to Venezuela concentrate their foreign sales to this destination, but these sales do not constitute their principal source of revenues. However, a small number of firms with a high share on total exports to this country, report incomes highly dependant on sales to Venezuela. Exporters to Venezuela use to specialize themselves in serving a few number of markets, instead of diversifying destinations. This behavior deepened during the exporting boom of last years. A high proportion of firms exporting to this destination left the other markets they were attending in order to export only to Venezuela.
Policy Reports and Books
2021. Ahorro sin barreras: lecciones de las intervenciones del Laboratorio de Ahorro para el Retiro. With Mariano Bosch, Oliver Azuara, Maria Teresa Silva-Porto, Anne Hand, Lukas Keller, Fabian Cofre, Stephanie Gonzalez and Catalina Rodriguez. Available at http://dx.doi.org/10.18235/0003177 This document presents the Retirement Savings Laboratorys (Laboratory) main findings, lessons, and challenges from several pilot interventions aimed at promoting voluntary pension savings among independent and low-income workers in Chile, Colombia, Mexico and Peru. The interventions were implemented over four years using various tools based on behavioral economics and new technologies. The four main lessons that were obtained are: (1) Solutions linked to a source of income have a significant impact on generating voluntary savings. However, scaling them for the low-income and self-employed population is challenging; (2) Reminders are easy to scale and cost-effective, but they have little impact on saving for retirement and they don't always work; (3) Making saving easy must be accompanied by better financial and social security education; (4) Betting on voluntary retirement savings requires institutional leadership to overcome regulatory and technological barriers, as well market failures that make it difficult to implement scalable and effective savings solutions. Finally, the document offers a perspective on how to move towards a voluntary savings pillar for the entire adult population by creating a favorable regulatory environment, designing inclusive financial products, and leveraging technology to expand outreach to more people and offer simple and accessible savings channels.
2020 La libertaddeelección en lossistemasdepensionesdeahorro individual: Leccionesde Perú.Inter-American Development Bank. With: Mariano Bosch and Lukas Keller. Available at http://dx.doi.org/10.18235/0002328 En 2016, en Perú se aprobó la ley 30425 que permite, entre otros, el retiro de hasta el 95,5% de los fondos de las cuentas individuales de ahorro para el retiro al cumplir una determinada edad. En esta nota presentamos los 10 principales resultados de una encuesta realizada dos años después de la entrada en vigor de la ley a una muestra de afiliados que decidieron sobre sus fondos. La mayoría retiró los fondos y, en promedio, los están gastando más rápido que el ingreso equivalente de una renta vitalicia. Además, encontramos diferencias importantes dependiendo del saldo que tenían al retirarse. Por ejemplo, los afiliados de saldos bajos reportan más la necesidad de liquidez como razón para retirar los fondos y están usando más rápidamente los fondos, mientras los de saltos altos consideran que pueden obtener mejores retornos y están usando los fondos a una velocidad similar a lo que hubieran recibido de una renta vitalicia
2019 How to Promote Retirement Savings for Low-Income and Independent Workers: The Cases of Chile, Colombia, Mexico and Peru. Inter-American Development Bank. With: Mariano Bosch, Fabián Cofré, Stephanie González, Anne Hand, Lukas Keller, María Teresa Silva-Porto. Available at http://dx.doi.org/10.18235/0002016. The objective of this document is to understand the potential that voluntary savings has to increase pension coverage for low-income and independent workers in Chile, Colombia, Mexico, and Peru. It comprehensively reviews supply, demand, and institutional barriers to retirement savings, and presents possible cost-effective solutions to overcome these barriers. The framework of solutions proposed consists of behavioral tools, in addition to financial and technological innovations, with high potential for impact on the long-term savings of independent and low-income workers.
2019 Diagnóstico del sistema de pensiones peruano y avenidas de reforma (in spanish). With Álvaro Altamirano Montoya, Solange Berstein, Mariano Bosch, Manuel García-Huitrón, Lukas Keller, María Teresa Silva-Porto. Available at http://dx.doi.org/10.18235/0002051. Este documento contiene un análisis detallado del estado actual del sistema de pensiones peruano. El documento enumera y describe los retos principales que el sistema de pensiones enfrentará en los siguientes años así como distintos elementos de análisis para avanzar en una nueva generación de ajustes que: (i) considere el sistema pensional en su conjunto; (ii) incremente cobertura; (iii) mantenga un equilibrio entre contribuciones y beneficios; (iv) reduzca la inequidad; (v) proporcione subsidios apropiados, progresivos y sostenibles; y (vi) proporcione cobertura efectiva de riesgos (muerte, longevidad, volatilidad en tasas).
Edited Encyclopedia Entries
2015 "James Duesenberry" and "Relative Income Effects". In (M. Altman, Ed.) Real-World Decision Making An Encyclopedia of Behavioral Economics. Greenwood. With Robert Oxoby.
Working Papers
2018 Educación Financiera y Previsional a través del Taller Ahorra desde Ahora: Evidencia de una Evaluación de Impacto en Chile. (in spanish)With Mariano Bosch, Fabián Cofré, Stephanie González, Lukas Keller, and María Teresa Silva-Porto Los sistemas de pensiones de contribución definida como el chileno trasladan gran parte de los riesgos asociados al sistema pensional al trabajador. Por lo tanto, para su buen funcionamiento estos sistemas requieren de una comprensión profunda de la población sobre conceptos financieros y previsionales. En la literatura hay consenso de que el nivel de educación financiera previsional es bajo (Lusardi y Mitchell, 2014). Este estudio mide el impacto de uno de los principales esfuerzos en materia de educación previsional en Chile: “Ahorra desde Ahora”, taller de educación financiera y previsional desarrollado por la Asociación de AFPs. Evaluamos el impacto del taller en el conocimiento, conciencia y percepción del sistema de pensiones en alumnos de último año de educación secundaria de colegios técnico-profesionales, a través del método de prueba controlada aleatorizada (RCT, por sus siglas en inglés). La intervención consistió en dos visitas a 196 colegios técnico-profesionales, los cuales fueron aleatoriamente asignados a dos grupos: tratamiento (alumnos asistieron al taller) y control. Los resultados de la evaluación muestran que el taller “Ahorra desde Ahora” tiene un efecto significativo en incrementar el conocimiento financiero y previsional de los alumnos de cuarto medio. La magnitud del efecto es similar a lo encontrado en la literatura (i.e. Frisancho, 2017) con una intervención mucho más limitada. Además, la confianza de los alumnos en las AFP y sistema de pensiones se incrementó de manera significativa.
2016 Luck and Effort: Learning about Income from Friends and Neighbors.Current Draft. Can social segregation explain differences in beliefs regarding the role of effort in determining high incomes? I develop a model of lineages of agents learning about the effect of effort on the probability of receiving a high income based on their own experience (effort chosen and income received) and the experiences of agents in their networks. Simulating economies of these agents, only two conditions are needed for the existence of long-run differences in beliefs: (i) agents assume their networks are representative of the whole economy, and (ii) they are more likely to meet others with similar life experiences—as under social segregation. For my analysis, I also consider (iii) imperfect intergenerational transmission of beliefs, in the form of partial confidence about parent’s beliefs, to account for sizable changes in beliefs due to single mobility experiences. I find a positive relationship between the degree of social segregation and the level of long-run differences in beliefs. Moreover, high levels of social segregation can lead agents to make inefficient effort choices while average beliefs drift away from real parameters. High levels of social segregation generate groups of agents who persistently choose to exert (no) effort coexisting with agents choosing depending on their cost of effort. And, mobility experiences resulting from luck decrease the belief about the role of effort. Formerly circulated under the name "Segregation and Beliefs regarding Income Determining Factors." Presented at: (2016) Canadian Economics Association (CEA) Annual Conference, Midwest Political Science Association Conference, (2015) University of Michigan School of Information BEE-ICD Lab Meetings, (2014) Behavioral Models of Politics Conference.
2016 Opportunities and Effort: ex-post redistribution in the lab.Current Draft. This paper presents evidence from a lab experiment examining the effect of information regarding effort and opportunities in ex-post redistribution behavior. In the experiment, individuals are randomly selected into one of two groups, each endowed with different probabilities of earning $20. By exerting effort individuals can increase their probability of earning the $20, but conditional on effort the difference in probabilities remain constant. That is, different groups bestows individuals with different opportunities. After initial earnings are determined, I examine redistribution decisions using a dictator game where the dictator has $20 and the receiver $0. Treatments vary (i) the level of inequality of opportunities and (ii) information regarding receivers’ effort and opportunities. I find dictators consistently revealing a lower concern for low effort receivers. However, dictators do not significantly consider opportunities—either the receivers’ or their own—when redistributing. - Previously circulated as (2014) Information Effect Regarding Inequality of Opportunities on Redistribution : A Lab Experiment (Working Paper No. 2014-75). University of Calgary. Presented at: (2014) North-American Economics Science Association Meetings, the Antigua Experimental Economics Conference, the Canadian Economics Association (CEA) Annual Conference, and Science of Philanthropy Initiative Annual Conference (Poster session) (2013) North-American ESA Meetings.
2010 Risk Preferences Under Extreme Poverty : A Field Experiment (Documento CEDE No. 2010-33). Bogotá, Colombia: Universidad de los Andes–Facultad de Economía–Cede. Available at : RePEc:col:000089:007717 This paper studies the effects of subsistence and survival constraints in risk behavior. It posits a theory of rational decision making that explains the seemingly contradictory empirical findings of the poor being extremely risk averse in some cases while being extremely risk loving in other cases. According to this theory, revealed risk preferences respond to the effect of subsistence constraints in life expectancy and the possibility (or not) of assuring one's subsistence with a low risk activity. As a way of testing this theory, 92 individuals from households living in poverty and extreme poverty were presented with a high-stakes risk choice involving only gains. This resulted in an economic quasi-experiment, inasmuch as the treatment, deciding around subsistence, was not randomly assigned but instead was determined based on households' per-capita incomes. I use a regression discontinuity design, and find evidence suggesting that, being presented with the opportunity of avoiding undernourishment significantly decreases a household's risk aversion.
Work in Progress
Redesign of pension contribution statements to promote understanding. With Mariano Bosch, Dean Karlan, Jake Kendall, Jonathan Zinman, María Teresa Silva-Porto, Kyle Holloway and Dayana Lorena TellezGaleano. Link to description of the study here.
Push messages to promote voluntary savings. With Mariano Bosch and Anne Hand.
Using social media to promote voluntary retirement savings in Mexico. With Mariano Bosch, Anne Hand, María Teresa Silva Porto and Lukas Keller. Presented at: (2019) Lacea Brain, (2018) Bogotá Experimental & Behavioral Economics Seminar (BEBES)
Workers stick together? Performance pay inequality, redistribution and the determinants of income in the lab. With Robert Oxoby (University of Calgary). Slides Presented at: (2019) Universidad Nacional de Colombia (2016) North American ESA.
Potenciales impactos del patrocinio de Beneficios Económicos Periódicos (BEPS) como complemento de Colombia Mayor: una indagación a través de grupos focales de una renta vitalicia suficiente para salir de la pobreza extrema. (in spanish) With Yanira Oviedo, Diana Mejía and Manuel Naranjo