Nicolás de Roux

IEA – Could you walk us through the key moments that shaped your path, from your earliest exposure to economic thinking to what sparked your interest in the field, and ultimately what drew you to academic research?

Nicolás – I think our paths are shaped less by the decisions we make and more by the people we happen to cross along the way. In my case, there haven’t been key moments as much as key people. I grew up in Bogotá, Colombia, in a house full of books. When I was a teenager, we would often visit a family friend, Pablo, who was an economist. He had done his PhD at the University of Chicago under the supervision of Milton Friedman and invested in the stock market. One day I told him I was unsure about what to study. He looked at me and said, with complete conviction: “If you want to understand how the world works, study economics.” I wasn’t sure what he meant at the time, but I liked math, and I had grown up with strong social concerns. That, plus his advice, pushed me to study economics at the Universidad de los Andes in Bogotá. Much later I came to understand what he meant, and I love telling this story to my students. Economics doesn’t just teach you facts, it gives you a method to understand and address social problems.

While I was still a student, I began teaching as a TA for the History of Economic Thought, and I fell in love with teaching. Additionally, I started working as a research assistant for Marc Hofstetter, one of Colombia’s leading macroeconomists. He asked me to digitize old newspaper prices, and then used them to build inflation series for historical periods where none existed. I remember Marc saying to me: “This is the best job in the world, getting paid to write about the things you’re curious about.” Around the same time, Juan Camilo Cárdenas, another mentor, showed me what it means to be intellectually curious, he truly lives to learn, and radiates joy when he talks about knowledge. These two mentors, Marc and Juan Camilo, were key in helping me realize that I wanted to become a researcher.

I worked several years as a research assistant at Universidad de los Andes before starting my PhD at Columbia University. I began with the intention of studying macroeconomics – Marc’s influence – but I eventually shifted toward applied microeconomics and development, which turned out to be a difficult transition. In my second year, while exploring what to specialize in, I took courses in applied micro, public finance with Wojciech Kopczuk, health with Doug Almond, political economy with Suresh Naidu, and industrial development with Eric Verhoogen. These courses sparked my enthusiasm for applied econometrics and causal inference.

Eric’s class, in particular, played a significant role in shaping my path. He later became my advisor. He taught me that job creation is the most effective tool we have against poverty, and that to create those jobs, we need to help producers in developing countries overcome the barriers they face. That means identifying those barriers and proposing solutions. His course also taught me the value of rigorous empirical work guided by theory. When he asked me to work as his RA, I learned what careful empirical research really entails – attention to detail, to data, to code, to structure. That’s when I truly fell in love with the empirical side of economics.

IEA – Your paper on Farm Size Distribution, Weather Shocks, and Agricultural Productivity shows how weather risk affects small farms differently and can lead to lower overall productivity. Could you walk us through the main takeaways, and how better risk management might help improve both equity and efficiency in agriculture?”

Nicolás – In this paper, we look at how bad weather affects farmers, especially small ones, and what that means for the overall productivity of agriculture. Using detailed administrative data from Colombia, we find that when there’s a weather shock, like extreme temperatures, small farmers are more likely to sell land and even stop farming altogether. At the same time, new farmers, often landless households, enter the market by buying small plots. The end result is more fragmented landholding, with more small farms and lower productivity. It is striking how long these effects last. Even when the weather returns to normal, the changes in who owns land persist for years.

To understand why this happens, we build a model where households decide whether to keep farming or switch to other work, and whether to buy or sell land. The key is that in many rural areas, there’s no crop insurance and land can’t easily be rented. So, land ends up playing two roles, it’s both a productive asset and a way to cope with bad times. When small farmers face a shock and don’t have a safety net, selling land is one of the few options they have. But this coping strategy, while understandable, leads to more fragmentation and lower average productivity in the sector.

What can be done? The big takeaway is that better risk management tools, like crop insurance or well-designed safety nets, can make a big difference. If small farmers don’t have to sell land every time there’s a bad harvest, they’re more likely to stay in the game and keep investing in their farms.

IEA – In your research on Measuring Labor Market Power in Developing Countries: Evidence from Colombian Plants, what did you uncover about the extent of market power among employers, and how does this affect wage-setting and worker conditions in developing economies?

Nicolás – In this paper, we study how much power employers have in setting wages in a typical developing country context. We focus on Colombia and use detailed census data on manufacturing plants. We find that large employers pay wages that are, on average, about 71% percent of what workers would earn in a perfectly competitive labor market. In other words, firms are able to set wages well below workers’ marginal productivity, which is a sign of significant labor market power. We also find that this power varies a lot across firms. Those in less competitive local labor markets tend to pay lower wages.

This kind of employer power changes how we think about labor markets in developing countries. It’s not just about informality or regulation—firms also have room to push wages down because workers can’t easily move or bargain. From a policy perspective, this opens up a space to think about interventions that improve job mobility, reduce frictions, and give workers more options. That could mean better enforcement of labor laws, more transparent hiring practices, or even support for small and medium-sized firms that create alternatives to dominant employers in local markets.