Table A4: City Characteristics and the Instrumental Variable

||N. Obs|Distance to the<br>nearest labor<br>office (hours) *<br>Inspectors per<br>firm in the state<br>Metho|Distance to the<br>nearest labor<br>office (hours) *<br>Managerial<br>capacity in the<br>state<br>d: OLS|Distance to the<br>nearest labor<br>office (hours) *<br>Access to Justice<br>in the state|Distance to the<br>nearest labor<br>office (hours) *<br>GDP pc in the<br>state|Distance to the<br>nearest labor<br>office (hours) *<br>Political<br>Concentration in<br>the state|
|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|
|Train Stations City (dummy)|5,242|-0.025|0.068|0.01|-0.10|-0.53|
|||[0.020]|[0.032]**|[0.021]|[0.032]***|[0.164]***|
|Access to Justice City|5,244|-0.037|-0.085|(0.01)|0.07|0.03|
|||[0.041]|[0.063]|[0.047]|[0.061]|[0.317]|
|Managerial Capacity City|5,243|-0.035|-0.063|0.08|-0.01|0.35|
|||[0.041]|[0.068]|[0.054]|[0.062]|[0.348]|
|Political Concentration City|5,243|-0.002|0.002|(0.01)|0.00|-0.02|
|||[0.004]|[0.007]|[0.006]**|[0.007]|[0.045]|
|Households Piped Water pc City|5,242|-0.014|0.005|(0.15)|0.10|-0.01|
|||[0.041]|[0.078]|[0.050]***|[0.070]|[0.522]|
|Households Sanitation pc City|5,242|-0.001|-0.121|0.21|0.18|2.01|
|||[0.078]|[0.135]|[0.116]*|[0.129]|[0.786]**|
|Households Electricity pc City|5,242|-0.02|-0.034|0.05|0.03|0.10|
|||[0.011]*|[0.017]*|[0.014]***|[0.016]*|[0.081]|
|Current Transfers from State to City|4,518|0.044<br>[0.063]|0.165<br>[0.084]**|(0.15)<br>[0.061]**|-0.19<br>[0.070]***|-1.21<br>[0.375]***|
|Homicide Rate City|5,242|-0.067|-0.056|0.22|-0.09|0.22|
|||[0.074]|[0.121]|[0.088]**|[0.127]|[0.611]|
|Log Population City|5,242|-0.039|-0.116|(0.04)|0.04|0.52|
|||[0.032]|[0.055]**|[0.036]|[0.059]|[0.306]*|
|Log GDP pc City|5,242|0.022|0.094|(0.02)|-0.12|-0.46|
|||[0.025]|[0.047]**|[0.033]|[0.044]***|[0.243]*|
|Share Agriculture in GDP City|5,228|0.002|0.057|(0.01)|-0.05|-0.15|
|||[0.007]|[0.011]***|[0.009]|[0.011]***|[0.058]***|
|Share Manufactiring in GDP City|5,242|-0.007|-0.017|0.01|-0.01|-0.05|
|||[0.008]|[0.013]|[0.009]|[0.013]|[0.072]|
|Share Services in GDP City|5,242|0.006|-0.041|0.00|0.05|0.20|
|||[0.007]|[0.013]***|[0.009]|[0.011]***|[0.067]***|
|Share Informal Workers City (1980)|5,242|-0.004|0|(0.02)|0.01|0.07|
|||[0.005]|[0.009]|[0.006]**|[0.009]|[0.052]|
|Unemployment Rate City (1980)|5,242|0.002|0.002|(0.00)|0.00|-0.01|
|||[0.001]*|[0.002]|[0.002]|[0.002]|[0.009]|
|Theil Index City (1980)|5,242|0.008|-0.031|0.01|0.06|0.17|
|||[0.006]|[0.010]***|[0.008]|[0.010]***|[0.052]***|
|Poverty Rate City (1980)|5,242|0.002|-0.012|0.01|0.01|-0.04|
|||[0.004]|[0.006]**|[0.005]*|[0.006]**|[0.028]|

Robust standard errors in brackets, * significant at 10%; ** significant at 5%; *** significant at 1%. The table reports the least squares estimates of the regression of each of the variables reported in each row on the distance to the nearest labor office (hours) interacted with the number of labor after controlling for all the variables as in column (3) of table 4. Households with piped water, sanitation and electricity are measured with the logarithm of number of households with these amenities normalized by the total number of individuals in the city. When not reported city characteristics refer to either year 2000 or 2002 depending on the data availability. More details on the construction of the variables are provided in the Data section.