Reproducibility package for Can Temporary Wage Incentives Increase Formal Employment? Experimental Evidence From Mexico
Overview
Formal sector entry-level jobs in Mexico offer low starting salaries but substantial wage growth. This paper experimentally tests whether a six-month wage incentive can increase formal employment among secondary school graduates. Combining survey and high-frequency social security data, the paper shows that the incentive increases formal employment among vocational school graduates by 4.2 percentage points (14.5%) over the first two years, driven by a 5 percentage point (25%) increase in permanent formal jobs. These employment gains are due to both extensive and intensive margin effects. We identify a reduction in reservation wages as the key mechanism behind the treatment effects.
Reproducibility Package
| Repository name | URI |
|---|---|
| Reproducible Research Repository (World Bank) | https://reproducibility.worldbank.org |
Reproducibility
Paper exhibits were reproduced on a computer with the following specifications:
• OS: Windows 11 Enterprise
• Processor: INTEL(R) XEON(R) PLATINUM 8562Y+ 2.80 GHz (2 processors)
• Memory available: 32.0 GB
Run time: ~ 20 minutes
To reproduce the findings from the intermediate data, Update the working directory in wagesubsidy_analysis_AEJ.do, and run it.
To reproduce the findings from the raw data, a replicator must:
- Secure Access to Data: Access the datasets not included in the package. See the Datasets section for more details.
- Secure Access to un-redacted code: Access the code not included in the package. See the README for more details.
- Run the Package: Update the working directory in line 24 of the do-file
master_dofile_AEJ.do., and run it.
Since not all the data is included, the package includes the results produced by replicators. These files can be used to review the results presented in the paper.
Data
The reproducibility package relies on 3 types of data: open, limited-access (Forthcoming to World Bank Microdata Library as licensed dataset), and restricted data (available only from the data owners). For the source, access type, file location, and citation of each dataset, refer to the Datasets section and the README file.
Description
| Author | Affiliation | |
|---|---|---|
| Martin Abel | Bowdoin College | m.abel@bowdoin.edu |
| Eliana Carranza | World Bank | ecarranza@worldbank.org |
| Kimberly Geronimo | Labor Mobility Partnerships | kgeronimo@lampforum.org |
| Maria Elena Ortega | World Bank | mortegahesles@worldbank.org |
2026-10-16
Scope and coverage
| Location | Code |
|---|---|
| Mexico | MEX |
Disclaimer
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
Access and rights
| Name | URI |
|---|---|
| MIT License | https://opensource.org/license/mit |
| World Bank IGO Rider | https://github.com/worldbank/metadata-editor/blob/main/WB-IGO-RIDER.md |
Contacts
| Name | Affiliation | |
|---|---|---|
| Martin Abel | Bowdoin College | m.abel@bowdoin.edu |
| Reproducibility WBG | World Bank | reproducibility@worldbank.org |
Information on metadata
| Name | Abbreviation | Affiliation | Role |
|---|---|---|---|
| Reproducibility WBG | DECDI | World Bank - Development Impact Department | Verification and preparation of metadata |
2026-10-16
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