Essays on environmental, labor, and development economics

This thesis is composed of three essays on environmental, labor, and development economics. The first chapter investigates whether traffic congestion affects time allocation. I use highly granular smartphone data from Mexico City to empirically study how traffic congestion affects work-time allocation. I find that traffic increases hours worked. The effect is driven by workers leaving work later, rather than by changes in arrival time. I show modest evidence that labor income does not increase despite the increase in total hours worked. These results highlight an avoidance mechanism (consistent with bottleneck models) that has been previously overlooked when estimating the costs of congestion. The second chapter is co-authored with Jerico Fiestas-Flores and Javier Montoya-Zumaeta. It investigates how pandemics affect nature. We explore the effect of COVID-19 on deforestation in the Amazon rainforest in Peru. Using an event study design and a difference-in-differences approach, we find that COVID-19 increased deforestation by 35%. This increased CO2 emissions by more than 17 million tons, representing a social cost equivalent to 3 times the national budget for forest management. The main mechanisms behind these findings are the reduction in monitoring efforts combined with an increase in illegal activities related to coca production and mining. The third chapter studies whether raising temperatures due to climate change affects labor markets. This paper studies the effect of temperature on hours worked using panel data for Peru from 2007-2015. I combine hours worked from household surveys with reanalysis and satellite weather data. I find evidence that hours worked are negatively affected by hot temperatures. This effect is driven by informal jobs instead of jobs in industries highly exposed to the weather. These results suggest that labor market segmentation may play a role in the impacts of climate change on labor market outcomes in developing countries.