@TechReport{RePEc:fip:fedhwp:95159,
author={Gustavo de Souza},
title={{The Labor Market Consequences of Appropriate Technology}},
year=2022,
month=Sep,
institution={Federal Reserve Bank of Chicago},
type={Working Paper Series},
url={https://ideas.repec.org/p/fip/fedhwp/95159.html},
number={WP 2022-53},
abstract={Developing countries rely on technology created by developed countries. This paper demonstrates that such reliance increases wage inequality but leads to greater production in developing countries. I study a Brazilian innovation program that taxed the leasing of international technology to subsidize national innovation. I show that the program led firms to replace technology licensed from developed countries with in-house innovations, which led to a decline in both employment and the share of high-skilled workers. Using a model of directed technological change and technology transfer, I find that increasing the share of firms that patent in Brazil by 1 p.p. decreases the skilled wage premium by 0.02% and production by 0.2%},
keywords={appropriate technology; directed technological change; innovation},
doi={10.21033/wp-2022-53},
}Copy
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@TechReport{RePEc:fip:fedhwp:94914,
author={Gustavo de Souza},
title={{On Political and Economic Determinants of Redistribution: Economic Gains, Ideological Gains, or Institutions?}},
year=2022,
month=Oct,
institution={Federal Reserve Bank of Chicago},
type={Working Paper Series},
url={https://ideas.repec.org/p/fip/fedhwp/94914.html},
number={WP 2022-47},
abstract={I describe a structural method to quantify the contribution of different elements of social choice to the level of redistribution. Estimating a DSGE model with microdata on the support for redistribution, I find that if voters disregarded their ideological views on welfare policies, redistribution in the U.S. would increase 117\%. Because ideology is a more important determinant of voting behavior than income, increasing voter turnout or capping campaign contributions would have a small effect on redistribution. Among the drivers of ideology, I find that racial animosity and distrust of the government contributes to an 80\% and 44\% smaller redistribution, respectively.},
keywords={Redistribution; Prefereces for Redistribution; Dynamic Macro Models of Political-Economoy},
doi={10.21033/wp-2022-47},
}@TechReport{RePEc:fip:fedhwp:94915,
author={Gustavo de Souza and Haishi Li},
title={{The Employment Consequences of Anti-Dumping Tariffs: Lessons from Brazil}},
year=2022,
month=Oct,
institution={Federal Reserve Bank of Chicago},
type={Working Paper Series},
url={https://ideas.repec.org/p/fip/fedhwp/94915.html},
number={WP 2022-46},
abstract={Can anti-dumping tariffs increase employment? We compile data on all antidumping (AD) investigations in Brazil matching it to firm-level administrative employment information. Using difference-in-differences, we find that an AD tariff decreases imports and increases employment in the protected sector. Moreover, downstream firms decrease employment, while upstream ones are not affected. To quantify the aggregate effect of these tariffs, we build a model with international trade, input-output linkages, and labor force participation. We show that the Brazilian AD policy increased employment by 0.06\%, but decreased welfare by 2.4\%. Using tariffs, the government can increase employment by as much as 2.8\%.},
keywords={Employment; Tariffs; Anti-Dumping; International Trade},
doi={},
}@article{DESOUZA2024103572,
title = {(Trade) War and peace: How to impose international trade sanctions},
journal = {Journal of Monetary Economics},
pages = {103572},
year = {2024},
issn = {0304-3932},
doi = {https://doi.org/10.1016/j.jmoneco.2024.103572},
url = {https://www.sciencedirect.com/science/article/pii/S0304393224000254},
author = {Gustavo {de Souza} and Naiyuan Hu and Haishi Li and Yuan Mei},
keywords = {Trade sanctions, Tariffs, Tariff competition},
abstract = {What is the most cost-efficient way to impose trade sanctions against Russia? We build a quantitative model of international trade with input–output connections. Sanctioning countries choose import tariffs to simultaneously maximize their income and minimize Russia’s income, with different weights placed on these objectives. We find, first, that for countries with low willingness to pay for sanctions against Russia, the most cost-efficient sanction is an approximately 20% tariff on all Russian products. Second, if countries are willing to pay at least US$0.70 for each US$1 drop in Russian welfare, an embargo on Russia’s mining and energy products is the most cost-efficient policy.},
}@TechReport{RePEc:fip:fedcwq:94057,
author={Gustavo de Souza and Andre Luduvice},
title={{Optimal Unemployment Insurance Requirements}},
year=2022,
month=Apr,
institution={Federal Reserve Bank of Cleveland},
type={Working Papers},
url={https://ideas.repec.org/p/fip/fedcwq/94057.html},
number={22-10R},
abstract={In the US, workers must satisfy two requirements to receive unemployment insurance (UI): a tenure requirement of a minimum work spell and a monetary requirement of past minimum earnings. Using discontinuity of UI rules at state borders, we find that the monetary requirement decreases the number of employers and the share of part-time workers, while the tenure requirement has the opposite effect. In a quantitative model, the monetary requirement induces workers to stay longer in unemployment because low-paying jobs are not covered by UI. Since it mitigates moral hazard, the optimal UI design has a high monetary requirement.},
keywords={Unemployment Insurance; UI Eligibility; Optimal UI},
doi={10.26509/frbc-wp-202210r},
}@TechReport{RePEc:fip:fedhwp:95159,
author={Gustavo de Souza},
title={{The Labor Market Consequences of Appropriate Technology}},
year=2022,
month=Sep,
institution={Federal Reserve Bank of Chicago},
type={Working Paper Series},
url={https://ideas.repec.org/p/fip/fedhwp/95159.html},
number={WP 2022-53},
abstract={Developing countries rely on technology created by developed countries. This paper demonstrates that such reliance increases wage inequality but leads to greater production in developing countries. I study a Brazilian innovation program that taxed the leasing of international technology to subsidize national innovation. I show that the program led firms to replace technology licensed from developed countries with in-house innovations, which led to a decline in both employment and the share of high-skilled workers. Using a model of directed technological change and technology transfer, I find that increasing the share of firms that patent in Brazil by 1 p.p. decreases the skilled wage premium by 0.02\% and production by 0.2\%},
keywords={appropriate technology; directed technological change; innovation},
doi={10.21033/wp-2022-53},
}@TechReport{RePEc:fip:fedhwp:97522,
author={Gustavo de Souza and Haishi Li},
title={{Robots, Tools, and Jobs: Evidence from Brazilian Labor Markets}},
year=2023,
month=Nov,
institution={Federal Reserve Bank of Chicago},
type={Working Paper Series},
url={https://ideas.repec.org/p/fip/fedhwp/97522.html},
number={WP 2023-42},
abstract={What is the effect of robots and tools on employment and inequality? Using natural language processing and an instrumental variable approach, we discover that robots have led to a sizable decrease in the employment and wages of low-skill workers in operational occupations. However, tools — machines that complement labor — have led to an equally large reinstatement of these workers, increasing their employment and wages. Using a quantitative model, we find that the lower prices of robots and tools over the last 20 years have reduced inequality and increased welfare without a significant effect on employment.},
keywords={robots; Automation; tools; Labor-augmenting},
doi={10.21033/wp-2023-42},
}@TechReport{repec:fip:fedhwp:95078,
type={Working Paper Series},
institution={Federal Reserve Bank of Chicago},
author={Gustavo de Souza},
title={It's Good Weather for More Government: The Effect of Weather on Fiscal Policy},
year={2022},
month={Oct},
number={WP 2022-48},
abstract={I show that weather conditions on election day affect future fiscal policy. When it rains during state elections, there is an increase in the relative income of voters, which is followed by an increase in expenditure and debt. The increase in expenditure is directed towards a larger police and safety budget. This result is compatible with a model of complementarity between consumption and public goods. In the model, high-income voters support an increase in safety budget because they benefit more from it than low-income voters.},
keywords={public goods; Government size; fiscal policy; weather},
doi={10.21033/wp-2022-48},
url={https://ideas.repec.org/p/fip/fedhwp/95078.html},
}
@TechReport{repec:fip:fedhwp:97212,
type={Working Paper Series},
institution={Federal Reserve Bank of Chicago},
author={Gustavo de Souza},
title={R\&D Subsidy and Import Substitution: Growing in the Shadow of Protection},
year={2023},
month={Oct},
number={WP 2023-37},
abstract={I study the effect of an innovation subsidy on the growth of firms in a developing country. Using administrative microdata for Brazil and difference-in-differences, I find that innovation subsidies drive firm growth by facilitating firm entry into high-tariff markets with domestically produced versions of foreign goods. After receiving an innovation subsidy, firms issue more patents, expand their workforce, and diversify their product line. However, these patents receive minimal citations, while also heavily citing foreign patents. Firms increase imports of foreign inputs and expand their product line towards products with high import tariff. Despite that, in the most conservative estimate, every $1 of innovation subsidy generated $10 in present value wages.},
keywords={R\&D; Industrial policy; Industrial development},
doi={10.21033/wp-2023-37},
url={https://ideas.repec.org/p/fip/fedhwp/97212.html},
}
@TechReport{repec:fip:fedhwp:99305,
type={Working Paper Series},
institution={Federal Reserve Bank of Chicago},
author={Gustavo de Souza and Ruben Gaetani and Martà Mestieri},
title={More Trade, Less Diffusion: Technology Transfers and the Dynamic Effects of Import Liberalization},
year={2024},
month={Sep},
number={WP 2024-20},
abstract={How does international trade affect technology diffusion? We show that tariff increases in Brazil lead to more international technology transfers to Brazilian firms and more citations to foreign patents. The highest increase in citations occurs among firms located near those receiving technology transfers, and it is driven largely by citations to firms transferring technology to Brazil. These findings suggest that import tariffs can facilitate the diffusion of foreign technology by promoting technology transfers. We quantify this effect in a growth model that incorporates trade, technology transfers, and their effect on diffusion. When tariffs in Brazil rise, foreign firms transfer their technology rather than export their products, boosting the diffusion of foreign knowledge. An optimal subsidy to technology transfers significantly amplifies the welfare gains from trade liberalization.},
keywords={Technology diffusion; Growth; technology transfer; International trade},
doi={10.21033/wp-2024-20},
url={https://ideas.repec.org/p/fip/fedhwp/99305.html},
}
@TechReport{repec:fip:fedhwp:95999,
type={Working Paper Series},
institution={Federal Reserve Bank of Chicago},
author={Gustavo de Souza},
title={Employment and Welfare Effects of the Quota for Disabled Workers in Brazil},
year={2020},
month={Oct},
number={WP 2023-11},
abstract={I study the effect of a quota for disabled workers on the labor market and on welfare. Using a task-based model, I show that the effect of a quota will depend on the productivity of disabled workers and their labor supply elasticity. I estimate the productivity of disabled workers using variation from inspections of the quota. I find that the quota increased the hiring of disabled workers, but it reduced wages and employment of non-disabled workers, suggesting that the quota reduced firms’ productivity. I estimate the labor supply elasticity of disabled workers using heterogeneous exposure across regions. Using the model calibrated to the empirical estimates, I find that the quota for disabled workers decreased welfare by 0.33\% and forced the government to increase marginal taxes. However, alternatively, a subsidy for disabled workers could increase welfare.},
keywords={quota for disabled workers; disability insurance; Fiscal Policy},
doi={None},
url={https://ideas.repec.org/p/fip/fedhwp/95999.html},
}
@TechReport{repec:fip:fedhwp:99304,
type={Working Paper Series},
institution={Federal Reserve Bank of Chicago},
author={Gustavo de Souza and Jacob S. Herbstman and Jack Mannion},
title={How Demand for New Skills Affects Wage Inequality: The Case of Software Programmers},
year={2024},
month={Sep},
number={WP 2024-19},
abstract={We study how the demand for programming skills has impacted inequality. We create a new dataset with information on wages, employment, and software of Brazilian programmers, covering the period from the birth of information technology (IT) to the rise of artificial intelligence (AI). High-ability, high-wage, and highly educated individuals in key technology hubs are more likely to become programmers. Creating software boosts both wages and career prospects of programmers, especially for those with specialized skills in AI and cybersecurity. These wage gains are concentrated among top programmers, increasing inequality within the profession. Therefore, increased demand for specialized skills in programming has contributed to wage inequality both within the programming field and between programmers and other occupations.},
keywords={technological progress; AI; software},
doi={10.21033/wp-2024-19},
url={https://ideas.repec.org/p/fip/fedhwp/99304.html},
}
@techreport{NBERw35517,
title = "The Effects of U.S. Public R&D on Global Growth",
author = "De Souza, Gustavo and Fieldhouse, Andrew J and Mertens, Karel and Nath, Ishan B and Ramey, Valerie A",
institution = "National Bureau of Economic Research",
type = "Working Paper",
series = "Working Paper Series",
number = "35517",
year = "2026",
month = "July",
doi = {10.3386/w35517},
URL = "http://www.nber.org/papers/w35517",
abstract = {This paper provides the first causal estimates of the global social returns to U.S. public R&D. We use a narrative identification strategy to quantify the effects of exogenous shocks to U.S. R&D appropriations on the dynamic TFP response of 69 foreign economies from 1980–2019. A U.S. R&D appropriations shock equal to 1 percent of the federal R&D capital stock raises foreign TFP by approximately 1 percent after 12 years. This response is driven primarily by nondefense rather than defense R&D and is concentrated in non-OECD economies. These patterns are most consistent with diffusion occurring through openly accessible scientific content, capital-embodied trade, and technological leapfrogging by economies further from the global frontier. A back-of-the-envelope calculation suggests that the global social returns to U.S. public nondefense R&D are roughly twice as large as the domestic returns, meaning the U.S. captures about half of these productivity benefits.},
}@techreport{deSouza2025Artificial,
abstract = {I use administrative data on artificial intelligence (AI) software created in Brazil to study its effects on the labor market. Owing to a unique copyright system, Brazilian firms have registered their software with the government since the 1980s, creating a detailed record of nearly all commercial AI applications developed in the country. Drawing on this registry, I show that AI is widely used not only in administrative tasks but also in production settings, where it primarily supports process optimization and quality control. Using an instrument based on variation in software development costs, I find that AI affects administrative and production workers differently. Among office workers, AI reduces employment and wages, particularly for middle-wage earners. Among production workers, it increases employment of low-skilled and young workers operating machinery. These results suggest that AI displaces routine office tasks while making machines more productive and easier to operate, leading to a net increase in employment.},
address = {Chicago, IL},
author = {Gustavo de Souza},
copyright = {https://www.econstor.eu/dspace/Nutzungsbedingungen},
doi = {10.21033/wp-2025-11},
keywords = {J23; J24; F63; 330; Artificial Intelligence; Automation; Deskilling; Software; Inequality},
language = {eng},
number = {WP 2025-11},
publisher = {Federal Reserve Bank of Chicago},
title = {Artificial intelligence in the office and the factory: Evidence from administrative software registry data},
type = {Working Paper},
url = {https://hdl.handle.net/10419/324842},
year = {2025}
}