I'll be starting my full-time RA gig pretty soon as well! As a general rule of thumb, profs told me that the largest marginal benefits are experienced by applicants who have everything in good shape except for what can be filled in by that full time RA job.
So basically, those who have:
1) good grades in advanced math/econ classes
2) two good letters of recommendation (assuming you'll be working for one professor?)
3) an undergrad thesis (not totally necessary, but I'm guessing that one letter of recommendation will come from your thesis advisor?)
but does not have
1) a strong third recommendation letter
2) demonstrated research experience
All else equal, I'd guess that you have a higher shot of getting into the school you work at, since your professor will likely be much more connected with faculty at his/her institution. However, if your other two letter writers were already well connected with top schools, maybe the marginal benefits of your full time RA prof's connections are not that large. (and if your other two letter writers weren't so well connected, then the marginal benefits will be much larger). If other areas of your application are weak (bad grades, mediocre letters, etc.), then you still may not get into the school you're working at.
This is only my opinion, however, so feel free to disagree with whatever I said!