Image of Paola Montero Ledezma


I am a Postdoctoral researcher at the University of Chile and at the Millennium Institute: Market Imperfections and Public Policy. I obtained my PhD in Economics at the Université catholique de Louvain (Belgium) in 2015, under the supervision of Prof. Bruno Van der Linden and Prof. Yves Zenou. My broad research interests include urban economics, labor economics, network economics, and industrial organization.


I am a Bolivian economist, currently working as a Postdoctoral researcher at the University of Chile and the Millennium Institute: Market Imperfections and Public Policy.

I worked as a research economist in the public and private sectors in La Paz, Bolivia and as a senior economist at the Swedish Competition Authority in Stockholm, Sweden. I have a Research Master in Economics and a PhD in Economics from the Université catholique de Louvain (Belgium).

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Publications “Workforce Location and Equilibrium Unemployment in a Duocentric Economy with Matching Frictions,” 2016. Journal of Urban Economics, 91(1), 26-44. With Etienne Lehmann and Bruno Van der Linden.

This article examines unemployment disparities and efficiency in a densely populated economy with two job centers and workers distributed between them. We introduce commuting costs and search-matching frictions to deal with the spatial mismatch between workers and firms. In a decentralized economy job-seekers do not internalize a composition externality they impose on all the unemployed. With symmetric job centers, a change in the distribution of the workforce can lead to asymmetric equilibrium outcomes. We calibrate the model for Los Angeles and Chicago Metropolitan Statistical Areas. Simulations suggest that changes in the workforce distribution have non-negligible effects on unemployment rates, wages, and net output, but cannot be the unique explanation of a substantial mismatch problem.

Work in Progress “Search, labor supply and unemployment of married women in cities,” 2014. Mimeo. With Wei Xiao and Yves Zenou.

This paper studies female labor supply in an urban search matching framework. In a monocentric city, we examine how the female labor market interacts with the housing market. In the model, female unemployed workers allocate their time between managing the household affairs, such as raising children or doing household chores, and searching for jobs (search intensity). Female employed workers spend their time on working, commuting and taking care of the household affairs. Different than unemployed women, who make their time allocation decisions by themselves, employed women bargain with firms over wages and hours of work. We show that there is a unique equilibrium. To study the properties of the equilibrium, we perform a comparative statics analysis. After introducing bargaining over hours of work, the equilibrium is inefficient even under the Hosios condition.

“A matching model with heterogeneity in commuting and relocation costs,” 2014. Mimeo. With Anne Bucher.

This article studies the effect of individuals’ residential and job-search decisions on labor market outcomes in a duocentric closed economy. We build a theoretical urban search-matching model putting forward workers’ ability to commute and relocate between job centers. Conditional on individuals’ abilities, in steady state we identify three different types of workforce in each job center: stayers, commuters and relocated workers. Relocation and commuting decisions affect the population density in each job center and hence, unemployment rates. We find that changes in commuting and relocation costs have ambiguous effects on unemployment rates and provide the conditions under which they can be reduced. In the welfare analysis, we show that under the Hosios condition search externalities are internalized. However, the Hosios condition is not sufficient to guarantee efficient relocation of workers and search decisions.

“Social networks, commuting, and (un)employment rates,” 2015. Mimeo.

This article proposes a partial equilibrium model of job search in a multicentric economy where job-seekers leave unemployment through their social network and the market. Workers and firms are heterogeneous in their geographical locations and hence workers commute to their work places. Workers learn about open vacancies through their strong and weak ties or from directly contacting firms. In this setup, job-search activities involve deciding how far to search, conditional on the worker’s social network. Job-seekers choose the range of markets in which they are willing to participate. Choosiness, as defined by the job-search area, varies across individuals depending on the employment status of their strong tie. Job-seekers whose strong tie is employed are choosier than are those whose strong tie is unemployed. However, when a strong tie is unemployed, employed weak ties become more valuable to the job search. Employment (unemployment) rates rise (fall) with a larger job-search area. The effect of weak ties on employment rates is ambiguous.

“Matching equilibrium with commuting and skill heterogeneity,” 2012. Mimeo. With Bruno Van der Linden.

In this paper we study the equilibrium of a spatial matching model with on-the-job search and heterogeneous agents. Firms have simple and complex jobs and enter freely to two different job centers. Workers are distributed between the job centers and can be low- or high-skilled. We model wages under credible Nash bargain. We provide some analytical results which can settle the framework to explain unemployment rate disparities across regions in the Belgian economy.

Contributions to Publications “Advantages of investment in Bolivia,” Fiscal Analysis Network - Ministry of Finance Bolivia, 2007.

“Strategy of Fiscal Decentralization of the Ministry of Finance,” Fiscal Analysis Network - Ministry of Finance Bolivia, 2006.

“Fiscal Report 2006,” Fiscal Analysis Network - Ministry of Finance Bolivia, 2006.

“Commission for the Revision of Public Expenditure,” Fiscal Analysis Network - Ministry of Finance Bolivia, 2004.

“Dossier of Social and Economic Statistics of UDAPE,” Analysis Unit of Economic and Social Policies (UDAPE), 2003.

“Design of a New Financial Strategy for Bolivia,” Debt Relief International (DRI), 2003.


Labour Economics and Wage-Setting Theory (Master level), Stockholm University.

Teaching Assistant for Professor Lars Calmfors.

Spring 2014 and 2015.

Empirical Methods in Economics II (undergraduate level), Stockholm University.

Teaching Assistant for Peter Fredriksson.

Spring 2015.

International Economics (undergraduate level), Stockholm University.

Teaching Assistant for Anders Akerman.

Autumn 2014.

Empirical Methods in Economics II (undergraduate level), Stockholm University.

Teaching Assistant for Björn Tyrefors Hinnerich.

Autumn 2014.


Swedish Competition Authority - Konkurrensverket, Sweden

Senior Economist - Chief Economist's Department. 2015

Ministry of Finance - Now Ministry of Economy and Public Finances, Bolivia

Junior professional - Fiscal Analysis Network. 2005-2007

The Fiscal Analysis Network (Red de Analisis Fiscal - RAF in Spanish) is a think-tank institution of the Ministry of Finance conducting analysis of fiscal policies at national and international level. In particular decentralization, public debt, tax policy, public investment and financial policies.

Ministry of Finance - Now Ministry of Economy and Public Finances, Bolivia

Junior Researcher. 2004

Direct collaboration with the Minister of Finance as technical adviser. Responsible for the Minister’s information data base and analysis of specific policies, i.e., budget and tax policies.

Analysis Unit of Economic and Social Policies (UDAPE in Spanish), Bolivia

Research Assistant. 2003-2004

Participation in the analysis of fiscal and monetary policies. Support to the national workshop for the Design of a New Financial Strategy for Bolivia, organized by Debt Relief International (DRI) 2003.

NGO Canadian Executive Service Organization (CESO-SACO Bolivia): Support for the Public Sector Reforms, Bolivia

Professional Internship. 2002

Study of the performance of the public sector after the implementation of public reforms, i.e., institutionalization and decentralization, among others.