I am a Lead Economist at the School of Education and Social Policy at Northwestern University.

I received my PhD in Economics from the University of Tennessee, Knoxville. Previously, I was a Research Assistant at the Boyd Center for Business and Economic Research at the University of Tennessee. My experience includes nine years of teaching as an instructor/lecturer. I also serve as a Consultant to state and local governments in the U.S. and abroad, and the Inter-American Development Bank.

My research focuses on evaluating the impact of public policies and regulation on households, firms, and government. I study the effects of social programs and conditional cash transfers on labor market outcomes, intergenerational mobility, and human capital formation.

I love economics, and I advocate for using empirical evidence and innovative data to improve public policies, working with experimental and quasi-experimental designs, economic forecasts, data mining, and automation tools to inform policymakers.

Reach out at diego.a.guerrero@northwestern.edu!

🎓Education

PhD in Economics, 2024
The University of Tennessee, Knoxville

MA. in Economics, 2021
The University of Tennessee, Knoxville

MSc. in Applied Economics, 2019
St. Cloud State University

BA. in Liberal Studies, 2013
Universidad Metropolitana

🔋 Research Interests

Public Economics
Labor Economics
Applied Microeconomics
Development Economics
Political Economy

Working Papers

"The Intergenerational Effects of the Earned Income Tax Credit on the Adult Income of Children." (Link)

This paper revisits the evidence on the intergenerational effects of the Earned Income Tax Credit (EITC) on the adult income of individuals whose families received the tax credit during childhood. I build on Bastian and Michelmore (2018) and test new sources of variation and new multigenerational data. Identification exploits an instrument that draws variation from formulaic changes across states and years. The results show that tax credit transfers during childhood increase adult income between 1.5 and 3.4 percent. The effect is concentrated on transfers received between 0 and 5 years old and, contrary to previous studies, transfers during adolescence have no impact on income. The intergenerational impact of the tax credit is driven by children of mothers working the fewest hours in the distribution, suggesting that work conditions offset the benefits of intergenerational poverty alleviation. The paper concludes that intergenerational poverty alleviation requires carefully accounting for the link between work incentives and the development of children.

"Business as Usual? Firm responses to the Earned Income Tax Credit." (Link)

This paper presents novel evidence on the impact of the Earned Income Tax Credit (EITC) on wages, employment, and the number of establishments across industries and occupations using establishment survey data. Despite extensive research on the EITC's effects using household surveys, questions remain about how the program shapes firm-level labor market outcomes. I exploit variation from the staggered implementation of state EITC supplements and differences in exposure across industries/occupations. The analysis finds that wages decrease by 8\% in exposed industries and occupations after EITC enactment, but this effect is transitory. There is little evidence of changes in employment levels or number of establishments. The wage effects concentrate in service industries and occupations. While employment effects are inconclusive, the significant temporary wage reductions underscore the program's influence on labor markets. The paper provides new insights into heterogeneous labor market responses to the EITC across different industries and occupations using previously unexplored data sources.

"The economics of market coercion" (Forthcoming)

This paper examines the distinction between voluntary and coercive exchanges in market and non-market domains. While markets are viewed as voluntary, coercion often defines political and historical economic practices, as seen in modern forced labor. Using a principal-agent model, the study explores whether markets themselves can be coercive. Drawing on James Buchanan’s theories, it contrasts market agreements with the inherent coercion in political decisions. The analysis concludes that while economic constraints are inevitable, coercion arises when one party deliberately restricts another’s choices. The paper highlights the importance of context in assessing market exchanges within a liberal order.

Ongoing Research

"Police Militarization and Citizens Deaths: The role of adverse selection and moral hazard." with Eunsik Chang and Matthew Harris.

We study the relationship between police departments acquiring military hardware and the failure to disclose the killings of civilians in reports to the federal government. While military hardware may be an input to citizen deaths - there should not be a direct effect on the non-reporting of those deaths. We examine the timing of non-disclosed deaths and the acquisition of military hardware, and find evidence supporting both adverse selection and moral hazard. These results call into question the interpretation of previous results, and finds that the federal government has failed to monitor the local law enforcement agencies to whom it gave lethal capabilities.

Publications

Zanoni, W., Acevedo, P. and Guerrero, D. (2023) "Do slum upgrading programs impact school attendance?." Economics of Education Review 96.

Hernández, I. and Guerrero, D. (2016) "Desafíos petroleros para América Latina y África ante la expansión asiática." Revista CIDOB d'Afers Internacionals.

Policy Reports

"Language Models and Google Trends An Application to Tourism in the Andean Countries." (2024) by Christian Larrahondo, Emily Diaz, and Diego Guerrero. Inter-American Development Bank Technical Note IDB-TN-2882.

"Knox Promise and Nashville Grad: An Early Look at College Outcomes." (2023) by Celeste K. Carruthers, William F. Fox, Diego Guerrero, Emily Pratt. Boyd Center for Business and Economic Research.

"Regional Economic Outlook." (2021) by Lawrence M. Kessler, Vickie C. Cunningham, Diego A. Guerrero, and Timothy A. Kuhn. Boyd Center for Business and Economic Research.

"College Enrollment and the Access to Opportunity in St. Cloud, Minnesota." (2018) by Monica Garcia-Perez, Diego A. Guerrero, and Robert Johnson. Access to Opportunity Program

"Energy in Figures 2014. Oil and Gas Sector." by Igor Hernandez, Armando Romero, Diego A. Guerrero, Maria Alejandra De Francesco. Center for International Energy and Environment IESA.

Non peer-reviewed

Guerrero, D. and Romero, A. (2016) "The Case of Oil Income Management in Venezuela: Industry Investment versus Social Expenditure." Latin American Policy Journal 76.

Hernández, I. and Guerrero, D. (2016) "Petroleum challenges for Latin America and Africa in light of the Asian expansion." In Woertz, Eckart (Ed.) Reconfiguration of the Global South.

Hernández, I. and Guerrero, D. (2015) "El Petróleo y Venezuela: Algunas cifras relevantes." Debates IESA.

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