Catching up with Stone Centre PhD Scholar Sebastian Espinoza Rojas

Sebastian Espinoza Rojas, a 2024/2025 Stone Centre PhD Scholar, is heading to Harvard Kennedy School's Growth Lab as a postdoctoral fellow.

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Ahead his career move, we spoke with Sebastian to hear about his research on transport, labour markets and inequality, and his job market paper on the effects of transport investment on inequality in Santiago.

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Tell us about your academic background

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I started in Chile, where I went to university to study economics because I was passionate about how to reduce poverty and inequality. I come from a background where my family struggled a lot, and that strongly motivated me. My first job was at the National Productivity Commission in Chile, working on how to make education more valuable in the labour market. I wanted exposure to different contexts, so I moved to the Inter-American Development Bank in Washington D.C., where I spent two years researching poverty and development. Then I decided to pursue a PhD, so I moved to London and joined UCL.

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What are your ongoing projects?

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I have a paper on intergenerational mobility, studying the geography of upward mobility in Chile. I also worked on a project on early childhood, looking at the medium-term effects of Chile Crece Contigo, a landmark, almost universal national programme. I’m also working on another project that revisits the old question of how parental investments respond to observed child characteristics, using unique data from the Millennium Cohort Study in the UK.

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In parallel, I've worked periodically with the World Bank, collaborating with its Poverty and Equity Global Practice. I used microsimulations to study how public policies affect poverty and inequality. I've always been passionate about translating research into practice.

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Another project studies how the housing market reacts to the introduction of a VAT on housing transactions. We find that real estate developers are able to pass a significant amount of the tax to the consumers and protect their margins by reducing the quality of the housing. That project is ongoing.

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What research did you work on with the Stone Centre at UCL?

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The project I presented at the Stone Centre is my job market paper. It tries to understand how investments in transport infrastructure affect labour markets and how those effects may be heterogeneous, in a context where high commuting costs generate local labour market power in the more peripheral parts of the city. I look at the different effects of commuting on the low-skilled and high-skilled labour markets, and how that impacts labour market power. These differences have important implications for inequality.

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Low-skilled workers gain the most, because the fall in commuting costs produces a larger reduction in market power in their labour markets. This happens because low-skilled workers are relatively less mobile and have fewer outside options than high-skilled workers, making them more "captive" to local firms.

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I studied this in Santiago, a city of eight million people where the best-paying jobs are concentrated in the centre and working people live mostly on the periphery, not by choice, but because that is where housing is affordable. They are also less likely to own a car, so they depend on public transport and are more exposed to its limitations. Santiago is not unusual in this: high spatial inequality is a feature of many cities in both developing and developed countries.

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What my research shows is that a transport infrastructure programme, such as extending a metro network, acts as a form of competition policy. By expanding the effective choice set of workers, it not only allows them to reach more productive firms but also forces local employers to raise wages to retain their staff. This creates gains in both productivity and equity, because low-skilled workers benefit the most.

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Were you inspired by your own personal experience?

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Yes, I lived very far away from the city centre. It took me around two hours to get to university back when I was a student, so my research is very grounded in what I observed.

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How has the support of the Stone Centre at UCL helped you?

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The Stone Centre's support allowed me to present my research at several conferences around the world, where I received comments that helped me significantly improve the quality of my work.

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The Stone Centre at UCL provides access to a very nice community. When I presented my research at the Stone Centre breakfast, I received substantive and valuable feedback, both there and in meetings with the team. Interacting with the community meant that I was exposed to different ways of studying inequality, which broadened my knowledge of the area of my research I care about most.

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What do you plan to do next?

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I'm preparing to move to Boston to start as a Postdoctoral Research Fellow at Harvard Kennedy School, in the Growth Lab, where I'll continue working on my research agenda.

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Thanks for your time Sebastian, and best of luck with your next move!