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The Effects of Exposure to Hyperinflation on Occupational Choice

Listed author(s):
  • Caio Waisman

    (Department of Economics PUC-Rio)

  • João Manoel Pinho de Mello

    ()

    (Department of Economics PUC-Rio)

  • Eduardo Zilberman

    ()

    (Department of Economics PUC-Rio)

We use data on immigrants who live in the United States to study the effects of exposure to hyperinflation on occupational choice. To do so, we calculate the number of years an individual had lived under hyperinflation before arriving to the US. We find that its marginal effect on the probability of being self-employed instead of wage-earner is 0.87 percentage point. This effect depends on the age individuals had when exposed to hyperinflation. In particular, it is stronger for individuals who experienced hyperinflation at an early age, but it vanishes for those over the age of 40. These results suggest that the macroeconomic environment an individual grows up in permanently affects his economic behavior.

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Paper provided by Department of Economics PUC-Rio (Brazil) in its series Textos para discussão with number 614.

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Length: 35p
Date of creation: Jun 2013
Handle: RePEc:rio:texdis:614
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