Santiago Saavedra
Job Market Candidate

Stanford University
Department of Economics
579 Serra Mall
Stanford, CA 94305

Curriculum Vitae

Development and Environmental

Expected Graduation Date:
June, 2017

Thesis Committee:
Pascaline Dupas (Primary):

Lawrence Goulder:

Arun Chandrasekhar:

Melanie Morten:


Local incentives and national tax evasion: The response of illegal mining to a tax reform in Colombia [Job Market Paper] (with Mauricio Romero)
National governments can only tax the economic activity they either directly observe or that is reported by municipal authorities. In this paper we investigate how illegal mining, a very common phenomenon in Colombia, changed with a tax reform that reduced the share of revenue transferred back to mining municipalities. To overcome the challenge of measuring illegal activity, we construct a novel dataset using machine learning predictions on satellite imagery features. Theoretically we expect illegal mining to increase because the amount required to bribe the local authority is smaller after the reform. Using a difference-in-differences strategy, with Peru as the control, we find that illegal mining increased by 1.41 percentage points as share of the mining area. In addition, we provide suggestive evidence that illegal mines have more harmful health effects on the surrounding population than legal mines. These results illustrate unintended effects of tax revenue redistribution.

The Daily Grind: Cash Needs, Labor Supply and Self-Control (with Pascaline Dupas and Jonathan Robinson)
We study the intertemporal labor supply decisions of Kenyan bicycle taxi drivers, using detailed observational data constructed from daily passenger-level logbooks and weekly surveys. To test between models of labor supply, we provide drivers with random cash payouts on unannounced days. We document three key facts: (1) drivers work more in response to both unexpected and expected cash needs; (2) drivers increase the probability of quitting discontinuously when their day’s earnings reaches their day’s cash need; but (3) randomized cash payouts have no effect on labor supply. We show that these results are consistent with models in which workers face high effort costs and have reference-dependent preferences over an earned income target, which is itself a function of both expectations and goals. A calibration exercise suggests that such preferences enable workers to earn 5% more income than if they had neoclassical preferences. We propose a model and interpretation of income targeting as morphine: it partially numbs the effort cost until the target is reached.

The Effect of Gold Mining on the Health of Newborns (with Mauricio Romero)
Mining can propel economic growth, but often results in heavy metal releases, that could negatively impact human health. Using a difference- in-differences strategy we estimate the impact of gold mining on the health of newborns in Colombia. We find heterogeneous effects depending on where mothers are located with respect to a mine. Mothers living in the vicinity of a mine are positively affected experiencing a reduction of 0.51 percentage points in the probability of having a child with low APGAR score at birth (from a basis of 4.5%). However, we find a negative effect on mothers living downstream from a mine, whose probability of having a child with a low APGAR score at birth increases by 0.45 percentage points. We provide suggestive evidence that contaminated fish consump- tion in the first weeks of gestation is the mechanism behind our results using an exogenous increase in fish consumption caused by a religious celebration.