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The Effects of Exposure to Hyperinflation on Occupational Choice

Author

Listed:
  • Caio Waisman

    (Department of Economics PUC-Rio)

  • João Manoel Pinho de Mello

    (Department of Economics PUC-Rio)

  • Eduardo Zilberman

    (Department of Economics PUC-Rio)

Abstract

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.

Suggested Citation

  • Caio Waisman & João Manoel Pinho de Mello & Eduardo Zilberman, 2013. "The Effects of Exposure to Hyperinflation on Occupational Choice," Textos para discussão 614, Department of Economics PUC-Rio (Brazil).
    • Handle: RePEc:rio:texdis:614
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    References listed on IDEAS

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    2. Fajardo, José & Dantas, Manuela, 2018. "Understanding the impact of severe hyperinflation experience on current household investment behavior," Journal of Behavioral and Experimental Finance, Elsevier, vol. 17(C), pages 60-67.
    3. Franziska Hampf & Marc Piopiunik & Simon Wiederhold, 2020. "The Effects of Graduating from High School in a Recession: College Investments, Skill Formation, and Labor-Market Outcomes," CESifo Working Paper Series 8252, CESifo.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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