March 3, 2026

Essays in Industrial Organization and Labor Economics

Key Points

The introduction of a state-owned enterprise significantly reduces equilibrium fees in the market, enhancing worker returns.
A dynamic equilibrium model estimates the impact of Uruguay's capitalization pension system in the presence of SOEs and private firms.
Elimination of SOEs leads to a more than 100% increase in private firm fees, demonstrating their competitive advantage.
Direct price regulation is shown to be a more effective mechanism than SOEs for managing competition.

Abstract

We study the equilibrium welfare effects of using state-owned enterprises (SOEs) to regulate market power. We estimate a dynamic equilibrium model of Uruguay’s individual capitalization pension system, where a high-quality SOE competes with private firms. We find that the presence of an SOE reduces equilibrium fees and increases investment returns. Eliminating the SOE and replacing it with a private firm would more than double its fee and increase the fees of private firms by 8\%. Reducing workers' inertia cannot fully offset privatization. Finally, direct price regulation outperforms SOE as a competitive force in the market

Essays in Industrial Organization and Labor Economics

Key Points

Abstract

Cite This Study