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Pugatch Research

My research areas are labor markets, education and migration in developing countries. My current work focuses on youth unemployment in South Africa, and the effect of Mexican immigration on labor markets in the U.S. Click here for my research statement.

"Bumpy Rides: School to Work Transitions in South Africa"
Re-enrollment in school following a period of dropout is a common feature of the South African school to work transition that has been largely ignored in both the literature on South Africa and the wider literature on sequential schooling choice. In this paper, I quantify the importance of the option to re-enroll in the school to work transition of South African youth. I estimate a structural model of schooling choice in South Africa using a panel dataset that contains the entire schooling and labor market histories of sampled youth. Estimates of the model’s structural parameters confirm the hypothesis that enrollment choices reflect dynamic updating of the relative returns to schooling versus labor market participation. In a policy simulation under which re-enrollment prior to high school completion is completely restricted, the proportion completing at least 12 years of schooling rises 6 percentage points, as youth who would have dropped out under unrestricted re-enrollment reconsider the long-term consequences of doing so. The results suggest that the option to re-enroll is an important component of the incentives South African youth face when making schooling decisions. (Web appendix)

Prospective Analysis of a Wage Subsidy for Cape Town Youth” (with James Levinsohn)
NBER Working Paper Series No. 17248

Persistently high youth unemployment is one of the most pressing problems in South Africa. The South African government has proposed an employer wage subsidy to address the issue. We prospectively analyze such a policy. Recognizing that a credible estimate of the policy's impact requires a model of the labor market that itself generates high unemployment in equilibrium, we estimate a structural search model that incorporates both observed heterogeneity and measurement error in wages. Using the model to examine the impact of a wage subsidy, we find that a R1000/month wage subsidy paid to employers leads to an increase of R660 in mean accepted wages and a decrease of 15 percentage points in the share of youth experiencing long-term unemployment.

"The Economics and Health Effects of Hurricanes in Mexico" (with Dean Yang)

"Border Enforcement and Migration Location: Evidence from the U.S.-Mexico Border"

“Safety Valve or Sinkhole? Vocational Schooling in South Africa”

“The Impact of Mexican Immigration on U.S. Natives: Evidence from Migrant Flows Driven by Rainfall Shocks” (with Dean Yang)