Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

June/2024

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Outline

• Introduction.
• Institutional background and data.
• Empirical strategy.
• Results.
• Conclusion.

03/06/2024

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Introduction

• Motivation: Competition in the workplace has long been touted to be an important driver of wages and career trajectories.
• Workers compete for better wages, promotion prospects, job amenities, training, etc.
• It is difficult to define, measure, and estimate its effects on labour market outcomes.
• Research question: How does competition in the workplace affect wages and career trajectories?
• Competition induced by job absenteeism (workplace visibility).
• How does a shock that reduces competition at the workplace affect the different workers in the firm?

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33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Framework of the paper

• Setup: Policy in Brazil that allowed firms to offer extended maternity leave (EML) to their workers (from four to six months).
• The government funds the maternity payments.
• Intuition: If a worker has many co-workers using extended maternity leave, she faces less competition.
• This raises her wages and makes her more likely to be promoted.
• Empirical strategy: IV framework that uses the eligibility of co-workers as an instrument for their take-up decisions.
• Causal effects of competition on labour market outcomes.
• Overall effects of the policy on other workers in the workplace.

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Preview of results

• I find significant effects of competition on wages and promotions.
• A one standard deviation increase in the level of competition decreases average annual wages by 1.9% and her probability of promotion by 1.82 percentage points.
• The effects of competition are stronger in settings where the spread of wages is higher and where the availability of jobs is lower.
• The overall effect of competition across the workplace is assymetric between men and women.
• Men benefit more when the decrease in competition is more intense.
• Women are harmed when the decrease in competition is small.

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Contributions

• Competition at the workplace: The absence of a worker can affect other co-workers in the firm (Johansson et al., 2009; Hesselius et al., 2019; Jager and Heining, 2022; Bianchi, Bovini, Li, and Powell, 2022; Johnsen, Ku, and Salvanes, 2023; Cornelissen, Dustmann, and Schonberg, 2023.
• This paper: Evidence of competition effects induced by extended maternity leave. Support for the predictions of the tournament theory (Lazear and Rosen, 1981). The first in a developing country.
• Career trajectories: Differential movement along the job ladder helps to explain the gender gap (Lazear and Rosen, 1991; Thomas, 2021).
• This paper: Evidence of how targeted amenities can affect career trajectories and wages over time.
• Leave policies: Mandatory extensions at the national level. No effects on wages (Lalive and Zweimuller, 2009; Dahl et al., 2016; Blair and Posmanick, 2023).
• This paper: Voluntary extension with free entry.
• Job amenities: Different workers face heterogeneous exposure to job amenities in the workplace (Hersch, 1998).
• This paper: Evidence of heterogeneity in the take-up of extended maternity leave within and between firms.

​

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33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Outline

• Introduction.
• Institutional background and data.
• Empirical strategy.
• Results.
• Conclusion.

03/06/2024

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Institutional background (1): Mandatory leave

• Maternity leave in Brazil has been a constitutional right since 1988.
• Eligibility: be employed at the time of pregnancy.
• Entitlements: 100% of wage replacement (for four months) if the salary is below 6,433.57 BRL (95% of female workers in the country).
• Maternity payments are funded by the Brazilian Social Security System (INSS).
• Empirical fact: virtually all workers use four months of ML.

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Take-up

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Institutional background (2): Voluntary leave

• In 2010, Programa Empresa Cidadã (PEC, or Citizen Company Program) was introduced.
• It allows workers to request two additional months of ML, increasing the benefit from four to six months.
• To participate, firms need to opt in (no cost).
• The firm pays the additional leave and is refunded with a tax rebate by the end of the fiscal year.
• Only firms taxed on their real profits are eligible for this rebate.

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Take-up

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Data

• RAIS: a matched employer-employee dataset that covers the universe of formal employment in Brazil. Records from 2003 to 2019.
• Information on maternity leave spells 2007-2019. Sample selection: private-sector workers in eligible firms.
• PEC’s adoption at the firm level.
• Receita Federal (Brazilian tax authority) data on the firm’s tax scheme to determine eligibility.

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RAIS 2015

Staggered adoption

Matching

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Outline

• Introduction.
• Institutional background and data.
• Empirical strategy.
• Results.
• Conclusion.

03/06/2024

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical framework: target mothers and competitors

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Formal definition

Ideal experiment

Identification hypothesis:

The position of each competitor in this timeline is orthogonal to the target mother.

Competitors: a co-worker with similar education (college) and age group (4 years) who gives birth in the 18-month window around PEC’s adoption.

Distance between the date of birth and PEC’s adoption (in days)

Target mother: a worker giving birth in the 18-month window around the adoption of PEC.

Sample restriction: be at the firm for at least two years.

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33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical specification: OLS (1)

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Total number of competitors

Number of competitors not using extended ML

Dynamic speficification

33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical specification: OLS (2)

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33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical specification: IV

15 /

Balance

Pre-trends

Relevance

Exclusion

Variation

Total number of competitors

Number of competitors eligible to PEC

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical specification: LATE effects

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33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Outline

• Introduction.
• Institutional background and data.
• Empirical strategy.
• Results.
• Causal effects of competition.
• Effects of competition on other workers.
• Conclusion.

03/06/2024

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

R1: Negative effects of competition on wages

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1 SD

The reduction in the post-birth wages of a target mother facing a 1 SD increase in competition.

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The total effect is driven by competition

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Spillover analysis

33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Robustness checks

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33

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Heterogeneity

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Placebo adoption

• I assume that each firm in the sample adopted PEC one year before the actual adoption. Redefine the set of target mothers and competitors estimate the target mother’s regression again.

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Mechanism: Promotions

• Differential movements across the job ladder could explain part of the effects of competition on wages (Lazear and Rosen, 1990; Thomas, 2021).
• Promotions are defined as:
• (a) Climbing the firm wage ladder: a worker in the top decile of the firm wage growth distribution.
• (b) Climbing the labour market wage ladder: a worker in the top decile of the wage growth distribution of her market.
• A market is defined using five dimensions: sex, tenure group (3 years), region, industry (2-digit), and occupation (3-digit)

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Mechanisms: Promotions

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1 SD

The reduction in the probability of promotion of a target mother facing a 1 SD increase in competition.

Definition

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Outline

• Introduction.
• Institutional background and data.
• Empirical strategy.
• Results.
• Causal effects of competition.
• Effects of competition on other workers.
• Conclusion.

03/06/2024

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Effects of reduced competition on other workers (1)

• The introduction of PEC at the workplace reduces competition in the intensive margin.
• Question: What are the effects of reduced competition on the career trajectories of workers hired just before PEC was implemented in their workplace?
• Male workers.
• Female workers (non-mothers).
• Female workers (40+).

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Take-up

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Effects of reduced competition on other workers (2)

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Treated: exposed to lower competition

Comparison

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Effects of reduced competition on other workers (3)

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Reduced competition in the workplace benefits men but not women

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CF

CF

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The effects of competition are stronger for workers facing a higher share of co-workers taking extended leave.

• High reduction in competition: workers who faced a high proportion of competitors (mothers with the same occupation) using extended maternity leave.

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6 months of leave

4 months of leave

Placebo

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Additional results

• Exposure effects: being hired before/after the adoption of the program.
• Effects of own-take up on wages and turnover.
• Causal effects of competition on other workers.
• Workplace over time.

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Outline

• Introduction.
• Institutional background and data.
• Empirical strategy.
• Results.
• Conclusion.

03/06/2024

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Conclusion

• Competition in the workplace has the potential to affect workers’ labour market outcomes.
• In this paper, I analyse how introducing a job amenity that reduces competition in the workplace can affect labour market outcomes.
• I find evidence of competition effects induced by the introduction of extended maternity leave at the firm level.
• These can harm workers if no enforcement mechanism is placed (excessive work hours or presenteeism, low maternity leave uptake).
• Policy implications:
• Coordination, maternity (paternity) leave expansions, gender or group-specific policies, 4-day work week (intensive and extensive margins of competition), alternative work arrangements (external validity).

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

34 /

Thank you!

@brunoss42

bruno.souza@warwick.ac.uk

linkedin.com/in/brunoss42

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Appendix

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Index

• ML length.
• RAIS 2015.
• Adoption over time.
• Definition of a target mother.
• Ideal experiment.
• Dynamic specification.
• EML take-up.
• Turnover before-after.
• Turnover short and long ML.

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• Descriptives PEC firms.
• Predictors of adoption.
• Predictors of take-up.
• Density of births around adoption.
• Proportion of workers on ML.

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Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

All workers use four months of maternity leave

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Takers

Non-takers

In PEC, before adoption

Never in PEC

In PEC, after adoption

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Descriptives – RAIS 2015

39 /

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

48% of participant firms joined the program within one year after its implementation.

40 /

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Weighting firms by their importance in terms of ML spells matters.

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Index

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Descriptives – PEC adoption

42 /

Descriptives

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Definition: target mother and competitors

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Dynamic specification

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

ITT - Mothers with a higher share of competitors eligible to PEC observe higher wage trajectories up to 4 years post-birth.

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Ideal experiment: comparing mothers with mothers.

Firm A

Competitors

Target mother

• 4 months of ML:

• 6 months of ML:

Vs.

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Good variation in the instrument

Low share

High share

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Groups with low and high share of eligible competitors are similar in observables

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Wage trajectories diverge for target mothers facing low and high competition

Low competition

High competition

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Result 1: The eligibility of competitors predicts their own take-up

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Result 2: The eligibility of competitors is not related to the target’s mother own take-up

By own eligibility

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The result holds independent of own eligibility.

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical strategy – Target workers (1)

Target worker: a worker who is hired in the 12-month window preceeding the date of PEC’s adoption.

Distance between the date of hiring/birth and PEC’s adoption (in days)

Competitors: co-workers with similar characteristcs who give birth in the 18-month window around PEC’s adoption.

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical strategy – Target workers (2)

Occupation

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Negative effects of competition on promotions

1 SD

The reduction in the probability of promotion of a target mother facing a 1 SD increase in competition.

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Spillover effects

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Empirical strategy – Target workers (2)

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Effects are stronger for men

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Placebo exercise

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

No effects before the shift in competition.

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Occupation

• Brazilian Classification of Occupations (CBO2002): 6-digit
• 123110: Financial Director
• 141505: Hotel Manager
• 142105: HR Manager
• 142110: Marketing Manager
• 142115: Financial Manager
• 142116: Risk Manager

1-digit

2-digits

3-digits

4-digits

5-digits

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The policy has bite and reduces competition at the workplace.

Index

Share of ML spells using extended leave

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The turnover rate for mothers increases by 4.8%.

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Index

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Using extended ML is associated to a 12% increase in the probability of being laid off after the start of ML.

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In PEC, after adoption – Not used EML

In PEC, after adoption – Used EML

P(D|Not Used EML)

= 1.12

P(D|Used EML)

Index

Warwick PhD Forum 2023

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Online

Appendix

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

High variance in the design of ML policies around the world

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The literature – Expansions in ML

• Austria: Lalive and Zweimuller (2009); Germany: Dustmann and Schonberg (2012); Norway: Schönberg and Ludsteck (2014), and Dahl et al. (2016); Sweden: Ginja, Karimi, an Xiao (2023); US: Byker (2016) , Golightly and Meyerhofer (2022), Thomas (2021), and Blair and Posmanick (2023); UK: Fagan and Norman (2012).
• Schönberg and Ludsteck (2014) – Norway
• Aitken et al. (2015) – Indirect benefits of ML to mothers and children.
• Dahl et al. (2016) – Norway – Mothers spend more time at home with no reduction in family income.
• Golightly and Meyerhofer (2022) – California.

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Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

What predicts PEC adoption?

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Descriptive PEC firms before and after adoption

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Regional differences in PEC adoption.

Dependent variable: indicator for PEC adoption at the firm level

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Extended ML pre-adoption matters!

Dependent variable: indicator for PEC adoption at the firm level

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

What predicts PEC take-up?

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

White and college workers are more likely to use extended ML

Dependent variable: indicator for PEC take-up at the worker level

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

The position in the wage distribution is also important to explain take-up

Dependent variable: indicator for PEC take-up at the worker level

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)

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Index

Job Amenities, Competition, and Career Trajectories: Evidence from Brazil.

Bruno Souza (University of Warwick)