Eugenio Rojas

Eugenio Rojas
Job Market Paper

Firm Heterogeneity & the Transmission of Financial Shocks During the European Debt Crisis

This paper studies the role of firm heterogeneity in the transmission of financial shocks to the real economy. The recent European debt crisis provides a natural experiment with abundant firm-level data on an episode of heterogeneous firm responses to a severe tightening of credit conditions. The data show evidence indicating that smaller firms adjusted more their balance sheets than large firms, and performed better in economies with a more skewed firm size distribution. There is also some evidence suggesting that smaller firms faced larger increases in borrowing costs. This paper proposes a model of heterogeneous firms, in terms of productivity, capital and debt that face financial frictions (defaultable debt and costly equity issuance), a financial intermediation sector, and a sovereign. Financial frictions generate financing structures that depend on firm size, where small firms rely more on equity than debt, which is relatively more costly. Sufficiently large increases in public debt trigger a binding lending constraint for the intermediaries that cause a crowding out of private lending and leads smaller firms to adjust more than large firms. Moreover, firm heterogeneity has aggregate effects that result in larger output declines. Quantitative results show that the model, calibrated to match Spanish firm-level data, is consistent with the empirical facts and explains roughly 50% of Spain's output drop during the crisis.

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Other Research

“Loans for Higher Education, Does the Dream Come True?” (with Tomás Rau and Sergio Urzúa), NBER Working Paper No. 19138

 This paper analyzes the impact of student loans for higher education on enrollment, dropout decisions, and earnings. We investigate the massive State Guaranteed Loan (SGL) program implemented in Chile in 2006. Our empirical analysis is based on the estimation of a sequential schooling decision model with unobserved heterogeneity. We supplement this model with labor market outcomes. The model is estimated using rich longitudinal data generated from administrative records. Our findings show that the SGL program increased the probability of enrollment and reduced the probability of dropping out from tertiary education: SGL reduced the first year dropout rate by 6.8% for students enrolled in five-year colleges and by 64.3% for those enrolled in institutions offering two- or four-year degrees. Moreover, we document that the SGL program has been more effective in reducing the probability of dropping out for low-skilled individuals from low-income families. When analyzing labor market outcomes, we find that SGL beneficiaries have lower wages (up to 6.4% less) than those who did not "benefit'' from the program. We attribute this negative result to the design of the SGL program, which has incentivized higher education institutions to retain students at the expense of not securing the quality of education.

Teaching Experience

Lecturer for Introduction to Microeconomics (Undergraduate), University of Pennsylvania (Summer 2018, Summer 2017)

Instructor for Lab Sessions, PIER Workshop on Quantitative Tools for Macroeconomics, University of Pennsylvania (Fall 2018, Fall 2017)

Macroeconomics I (Ph.D.), University of Pennsylvania, Teaching Assistant for Professors Jesús Fernández-Villaverde and Dirk Krueger (Spring 2015)

Macroeconomic Modelling (Undergraduate), Recitation Instructor for Professor Guillermo Ordoñez (Fall 2014)


Other Information


Positive and Normative Implications of Liability Dollarization for Sudden Stops Models of Macroprudential Policy”, IMF Economic Review, forthcoming (with Enrique G. Mendoza)

Credit Constraints in Higher Education in a Context of Unobserved Heterogeneity, Economics of Education Review, 2016, 52, pp. 225-250 (with Rafael Sánchez and Mauricio Villena)

The Unintended Consequences of Childcare Regulation: Evidence from a Regression Discontinuity Design, Journal of Applied Economics, 2016, 19(1), pp. 1-39, lead article (with Rafael Sánchez and Mauricio Villena)


International Economics, Heterogeneous Agents, Quantitative Macroeconomics




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Enrique G. Mendoza


Professor Enrique G. Mendoza

133 South 36th Street, Room 538

Philadelphia, PA 19104



Professor Jesús Fernández-Villaverde

133 South 36th Street, Room 521

Philadelphia, PA 19104



Professor Alessandro Dovis

133 South 36th Street, Room 537

Philadelphia, PA 19104


Job Market Candidate Status
I am a job market candidate and I will be available for interviews at the ASSA Annual Meeting in Atlanta in January 2019.