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on Microeconomic European Issues |
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Issue of 2023‒05‒29
23 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Matteo Picchio (Department of Economics and Social Sciences, Marche Polytechnic University); Michele Ubaldi (Department of Economics and Social Sciences, Marche Polytechnic University) |
| Abstract: | This paper studies whether individuals that experienced parental unemployment during their childhood/early adolescence have poorer health once they reach the adulthood. We used data from the German Socio-Economic Panel from 2002 until 2018. Our identification strategy of the causal effect of parental unemployment relied on plant closures as exogenous variation of the individual labor market condition. We combined matching methods and parametric estimation to strengthen the causal interpretation of the estimates. On the one hand, we found a nil effect for parental unemployment on mental health. On the other hand, we detected a negative effect on physical health. The latter is stronger if parental unemployment occurred in early periods of the childhood, and it is heterogeneous across gender. The negative effect of parental unemployment on physical health may be explained by a higher alcohol and tobacco consumption later in life. |
| Keywords: | Parental unemployment; plant closure; mental health; physical health; health behaviors |
| JEL: | I14 J13 J62 J65 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:478&r=eur |
| By: | Steffen Künn; Juan Palacios |
| Abstract: | What is the impact of housing upgrades on occupant health? Although economists and policymakers are certain about the health implications of housing upgrades, empirical evidence is largely missing or else only based on small-scale experiments in developing countries. This study provides the first population-representative quasi-experimental estimates based on a large-scale refurbishment program that renovated half of the East German housing portfolio in the aftermath of German reunification. During the 1990s, the German government devoted significant financial resources to upgrading the insulation and heating systems of over 3.6 million dwellings in East Germany. We link the renovations to individual demand for the healthcare of occupants using the German Socio-Economic Panel (SOEP) as well as administrative records of universal hospital admissions in Germany. Exploiting the staggered roll-out of the renovation program, our results show that an improvement in housing quality enhances the health of vulnerable age groups. Evidence from hospital records suggests that reductions in hospitalization were due to a lower risk of cardiovascular problems for older individuals (45 years or older) which were mainly driven by days with extremely hot and cold ambient temperatures. Our findings have strong policy implications and can enrich the cost-benefit analysis of public investments in weatherization programs. |
| Keywords: | Housing quality, renovation program, health |
| JEL: | H54 I38 R21 R23 R38 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1186&r=eur |
| By: | Hamed Markazi Moghadam; Patrick A. Puhani; Joanna Tyrowicz |
| Abstract: | To determine how wives’ and husbands’ retirement options affect their spouses’ (and their own) labour supply decisions, we exploit (early) retirement cutoffs by way of a regression discontinuity design. Several German pension reforms since the early 1990s have gradually raised women’s retirement age from 60 to 65, but also increased ages for several early retirement pathways affecting both sexes. We use German Socio-Economic Panel data for a sample of couples aged 50 to 69 whose retirement eligibility occurred (i) prior to the reforms, (ii) during the transition years, and (iii) after the major set of reforms. We find that, prior to the reforms, when several retirement options were available to both husbands and wives, both react almost symmetrically to their spouse reaching an early retirement age, that is both husband and wife decrease their labour supply by about 5 percentage points when the spouse reaches age 60). This speaks in favour of leisure complementarities. However, after the set of reforms, when retiring early was much more difficult, we find no more significant labour supply reaction to the spouse reaching a retirement age, whereas reaching one’s own retirement age still triggers a significant reaction in labour supply. Our results may explain some of the diverse findings in the literature on asymmetric reactions between husbands and wives to their spouse reaching a retirement age: such reactions may in large parts depend on how flexibly workers are able to retire. |
| Keywords: | retirement coordination; labour market participation; household decisions; regression discontinuity design |
| JEL: | J22 J26 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1187&r=eur |
| By: | Giovanis, Eleftherios; Akdede, Sacit Hadi |
| Abstract: | In this study, we aim to explore and compare the frequency of attendance and the reasons for non-attendance to cultural activities between natives and first-generation immigrants in thirteen European countries. The empirical analysis relies on data from the special module on cultural participation in the European Union-Income and Living Conditions Survey (EU-SILC) in 2015. We apply the Probit and multinomial Probit models. This study contributes to the literature by exploring the determinants of cultural participation and comparing the frequency of participation in cultural activities between natives and first-generation immigrants. Furthermore, the study explores the reasons for non-participation in cultural activities, highlighting potential differences between countries and between the European Union (EU) and non-EU migrants. The results highlight that social interactions depend on several factors related mainly to the country of destination and employment opportunities and individual factors related to the migrant, including demographic and economic characteristics and the length of residence in the host country. The findings show that the length of residence of immigrants in the host countries is positively correlated with a higher frequency of attendance, indicating that cultural participation can be, by its nature, a long-term process or “experienced” activity. The findings also show that in most cases, migrants do not attend the cultural activities we explore because of financial constraints and not due to lack of interest. Thus, this highlights that the economic integration of migrants could be the primary driver of cultural participation and integration. |
| Keywords: | Cultural Integration; Discrete Choice Models; First-Generation Immigrants; International Migration; Integration; Multiculturalism |
| JEL: | Z10 Z13 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117259&r=eur |
| By: | Risto Conte Keivabu (Max Planck Institute for Demographic Research, Rostock, Germany); Marco Cozzani; Joshua Wilde (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | In this paper, we combine administrative data for continental Spain from 2010 to 2018 with meteorological data to identify the effect of temperature on fertility. We demonstrate that warm (25-30°C) and hot days (>30°C) decrease total fertility rate (TFR) in Spain, and that the estimated decrease is higher than the effects estimated in previous literature for other countries. Moreover, we show that locations with a colder climate are more vulnerable to the impact of heat. Our results suggest that the global impact of climate change on population dynamics may be understated, especially without adaptation and mitigation measures, and that temperature increases may exacerbate the socio-economic consequences of low fertility such as population ageing. |
| JEL: | J1 Z0 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2023-021&r=eur |
| By: | Eric A. Hanushek; Babs Jacobs; Guido Schwerdt; Rolf van der Velden; Stan Vermeulen; Simon Wiederhold |
| Abstract: | The standard economic model of occupational choice following a basic Roy model emphasizes individual selection and comparative advantage, but the sources of comparative advantage are not well understood. We employ a unique combination of Dutch survey and registry data that links math and language skills across generations and permits analysis of the intergenerational transmission of comparative skill advantages. Exploiting within-family between-subject variation in skills, we show that comparative advantages in math of parents are significantly linked to those of their children. A causal interpretation follows from a novel IV estimation that isolates variation in parent skill advantages due to their teacher and classroom peer quality. Finally, we show the strong influence of family skill transmission on children’s choices of STEM fields. |
| JEL: | I24 I26 J12 J62 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31186&r=eur |
| By: | Mari, Gabriele |
| Abstract: | Families with two or more children often receive extra income support from the tax-benefit system to contrast poverty risks and help with the costs of raising children. Starting in the 1990s, however, cutbacks have been implemented across European countries. The long-run consequences for children’s human capital might have been substantial, unequal across households, and depended on how families adjusted to less generous support. I examine a Dutch reform that curtailed child-benefit payments for families with second or higher-order children born from 1 January 1995 onwards. The reform imparted a small yearly cutback, but large benefit income losses accumulated until children reached age 18. Based on high-quality administrative data and a regression discontinuity design, I find little evidence of average reform effects on children’s long-run educational and health outcomes. However, children in less well-off households appear less likely to enrol in the academic track of secondary school and more likely to graduate from college as opposed to university. Rather than compensatory labour supply responses or a decrease in total fertility, I find larger earnings losses for mothers affected by the reform and no evidence of changes in the number of children. Survey evidence suggests that cohorts exposed to the reform were more likely to experience income poverty and invested less in child-related goods, including daycare, both in absolute terms and using money from child benefits. |
| Date: | 2023–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:e3n82&r=eur |
| By: | Tisch, Daria (Humboldt-Universität zu Berlin); Schechtl, Manuel |
| Abstract: | This study examines how inheritance and gift tax systems in combination with gendered parental transfer behavior strengthen gender wealth inequalities. Gender differences in transfers can be reproduced if men benefit differently than women from tax exemptions. This might happen when men and women receive different types of assets where only some are tax-exempted. To investigate gendered parental transfer behavior and gender differences in tax rates, we draw on German administrative inheritance and gift tax data. Women were less likely than men to receive tax-relevant parental transfers, the value of the transfers were lower, and women and men differed in the asset types they received. Moreover, we identify a gender tax gap of 2% for inheritances and 22% for gifts. Our analyses suggest that men benefit more from tax exemptions on business assets. This study adds the tax system as yet another factor implicated in the reproduction of gender wealth inequalities. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2023–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:kfetw&r=eur |
| By: | Riudavets-Barcons, Marc (University of Helsinki); Uusitalo, Roope (University of Helsinki) |
| Abstract: | We study the effect of school closures and the transition from on-site to on-line teaching during the Covid-19 pandemic in the Finnish upper secondary schools. To identify the effects we exploit variation in the length of school closure periods across schools between autumn 2020 and spring 2021. Using a difference-in-difference design, we show that the students who studied on-line for longer periods performed equally well in the Matriculation exam at the end of upper-secondary education than the students who experienced shorter school closures. Moreover, we show that inequalities across Finnish students from different socioeconomic backgrounds did not exacerbate during this period. |
| Keywords: | school closures, online teaching, test scores, COVID-19 |
| JEL: | I21 I24 I28 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16074&r=eur |
| By: | Florian Fouquet (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - ONIRIS - École nationale vétérinaire, agroalimentaire et de l'alimentation Nantes-Atlantique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - École Centrale de Nantes - Nantes Univ - Nantes Université); Florent Sari (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - Université Gustave Eiffel) |
| Abstract: | This paper explores the influence of spatial mobility on the risk of overeducation of French young workers. We mobilise a survey that follows a cohort of young people who graduated in 2010 until 2013. The effect of residential migration on the probability of being overeducated is estimated through linear probability models. Our analysis deals with self-selection into employment and endogeneity of mobility decision by combining Heckman procedure and instrumental variables method. Estimated results reveal that regional migration decreases the risk of (statistical and subjective) overeducation. We also evidence differentiated effects for migration to Paris and/or according to the educational level. |
| Keywords: | Overeducation, Educational mismatches, Spatial mobility, Migration, Employment |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04086383&r=eur |
| By: | Carolin Linckh; Caroline Neuber-Pohl; Harald Pfeifer |
| Abstract: | This study examines the employment effects of raising the minimum wages for underage apprentices in Germany. To estimate our effects, we exploit age-, sector-, and state-level variations of negotiated minimum wage increases within a triple difference framework. Using a full sample of apprenticeship contracts, we find negative employment effects, as the number of training contracts for underage apprentices decreases significantly due to the minimum wage adjustments. Furthermore, we find that the negative employment effect increases with the size of the minimum wage adjustments. The effects are mainly driven by a reduction in contracts for low-qualified training applicants and for sectors where firms mainly follow a substitution- rather than an investment-oriented training strategy. |
| Keywords: | Minimum wage, Apprenticeship market, Collective bargaining |
| JEL: | J31 J23 J38 J51 J2 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0202&r=eur |
| By: | Hend Sallam |
| Abstract: | Return migration intentions are complex and are not necessarily followed by future return migration. Our study compares successful return or repeated migration with self-declared return intentions. We take advantage of the latest German Socio-Economic Panel survey dropout studies and fieldwork to observe a wider return migration window than reported in the literature to answer the question of whether return migration intentions eventually coincided with actual emigration behaviors. We also examine the validity of return migration estimates. This paper explores whether return intentions eventually materialize, whether they can eventually predict actual return behaviors, and if the determinants of actual and predicted return based on intentions are similar. Overall, our results support that migration intentions can predict actual return behavior. While our results show discrepancies in the predictors of return intentions and actual returns, they show emigration intentions as good predictors of actual future emigration. Moreover, we find that life satisfaction significantly impacts the individual intention to remigrate. |
| Keywords: | Return and repeat migration, emigration, self-selection, intentions and realizations, West Germany |
| JEL: | F22 J61 I31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1181&r=eur |
| By: | Pérez, A.F.; Pedrazas, A.M.; Gaggero, A. |
| Abstract: | We quantify the efect of the non-essential business closure policy in the Spanish region of Andalusia. Exploiting that municipalities were assigned a two-week closure of the non-essential business on the basis of the exact 14-day infection rate (per 100, 000 inhabitants) being above a cut-off value of 1, 000, we use a regression discontinuity design to estimate the causal impact of the policy on new COVID-19 cases and deaths. Using weekly administrative data, our estimates suggest that, on average, the policy reduced new COVID-19 cases and deaths by 63 and 1, respectively. Notably, our heterogeneity analysis highlights that while the policy was extremely effective in urban areas, its effect was not statistically different from zero in rural areas, namely, municipalities with population less than 5, 000. Our results imply that roughly 700 lives have been saved by this policy. Overall, this study provides compelling evidence that shutting down businesses has been an effective tool to counter the COVID-19 pandemics. |
| Keywords: | COVID-19; non-essential business closure; Spain; 14-day infection rate; infection; mortality; regression discontinuity; |
| JEL: | I1 I18 H12 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:23/04&r=eur |
| By: | Jordahl, Henrik (Örebro University School of Business); Blix, Mårten (Ratio, Sweden); Moberg, Linda (Uppsala University); Persson, Lovisa (Kristianstad University, Sweden) |
| Abstract: | We examine the implementation of digital time tracking in home care services in Swedish municipalities. Our study combines original survey data with external measures of quality and costs, allowing us to examine both the perceived and estimated effects of time tracking. According to the responding managers, time tracking has led to improvements in quality and reductions in costs. However, the estimated effects suggest that these managerial perceptions may need to be revised. We found that quality is unaffected or reduced while costs have increased due to the implementation of time tracking. |
| Keywords: | Elderly care; Management accounting; Employee monitoring; Digitalization; Public sector productivity |
| JEL: | H42 H44 L33 |
| Date: | 2023–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2023_006&r=eur |
| By: | Kasy, Maximilian; Lehner, Lukas |
| Abstract: | We evaluate a guaranteed job program launched in 2020 in Austria. Our evaluation is based on three approaches, pairwise matched randomization, a pre-registered synthetic control at the municipality level, and a comparison to individuals in control municipalities. This allows us to estimate direct effects, anticipation effects, and spillover effects. We find positive impacts of program participation on economic and non-economic well-being, but not on physical health or preferences. At the municipality level, we find a large reduction of long-term unemployment, and no negative employment spillovers. There are positive anticipation effects on subjective well-being, status, and social inclusion for future participants. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2023–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:cd25u&r=eur |
| By: | Sarah Cattan (Institute for Fiscal Studies); Kjell G. Salvanes (Norwegian School of Economics); Emma Tominey (University of York) |
| Abstract: | High school students from non-elite backgrounds are less likely to have peers with elite educated parents than their elite counterparts in Norway. We show this difference in social capital is a key driver of the high intergenerational persistence in elite education. We identify a positive elite peer effect on enrolment in elite programmes and disentangle underlying mechanisms. Exploiting a lottery in the assessment system, a causal mediation analysis shows the overall positive peer effect reflects a positive effect on application behaviour (conditional on GPA), which dominates a negative effect on student GPA. We consider implications for income mobility finding that encouraging further mixing between elite and non-elite students in high school could improve mobility across the whole distribution. |
| Keywords: | Peers, Elite university, Subject choice, Social mobility, Teacher bias |
| JEL: | I24 J24 J62 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucl:cepeow:23-04&r=eur |
| By: | Robert Dur (Erasmus University Rotterdam); Arjan Non (Erasmus University Rotterdam); Paul Prottung; Benedetta Ricci |
| Abstract: | In many public policy areas, randomized policy experiments can greatly contribute to our knowledge of the effects of policies and can thus help to improve public policy. However, policy experiments are not very common. This paper studies whether a lack of appreciation of policy experiments among voters may be the reason for this. Using unique survey data representative of the Dutch electorate, we find clear evidence contradicting this view. Voters strongly support policy experimentation and, in line with theory, particularly so when they do not hold a strong opinion about the policy. In a subsequent survey experiment among Dutch politicians, we find that politicians conform their expressed opinion about policy experiments to what we tell them the actual opinion of voters is. We conclude that voters are not afraid of policy experiments and neither are politicians when we tell them that voters are not. |
| Keywords: | policy experiments, randomized controlled trials, voters, politicians, public policy, survey experiment, conformism. |
| JEL: | C93 D72 D78 |
| Date: | 2023–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20230027&r=eur |
| By: | LECHEVALIER, Sébastien; MOFAKHAMI, Malo |
| Abstract: | What is the impact of digitalization on job quality? While the literature has mainly focused on the effects on performance and volume of employment, it has relatively neglected the qualitative issues, including when the existence of a digital divide is discussed. This paper tries to fill the gap through a comparative analysis of the diverse impacts of digital use on work organization and job satisfaction in Japan and France, two comparable countries with distinctive features regarding both digital use and work. To do so, we propose a simplified mediation model that synthesizes the different relations at stake. Our results can be summarized as follows. First, we did not find overall substantial differences between the two countries regarding the impact of digital use on job quality. Second, we find no direct effect of digital use on job satisfaction. However, digital use is correlated to some work organization practices, through which it has positive mediated effects. Third, the most massive source of the digital divide is, in both countries, related to the absence of digital skills. We also find other sources of individual heterogeneity, for which the patterns are different between the two countries. |
| Keywords: | Digital use, Job quality, Job satisfaction, Work organization, New technology adoption, Comparative analysis |
| JEL: | J28 O33 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:740&r=eur |
| By: | Sofia Amaral-Garcia (European Commission - Joint Research Center, i3health/Universite libre de Bruxelles); Mattia Nardotto (ECARES - Universite libre de Bruxelles, CEPR and CESifo); Carol Propper (Imperial College London, Monash University, CEPR and IFS); Tommaso Valletti (Imperial College London, CEPR and CESifo) |
| Abstract: | We study the effect of internet diffusion on the uptake of the measles, mumps and rubella (MMR) vaccine for children in England between 2000 and 2011. OLS estimates suggest that internet diffusion led to an increase in vaccinations but this result is reversed once we instrument for internet access. We find that the effect of internet diffusion on vaccination rates is sizable: a change of one standard deviation in internet take up determined an approximately 20% decrease in vaccination rate. We also find that areas with a higher proportion of high skilled individuals and lower deprivation levels are those with a higher response to internet diffusion in terms of the reduction in MMR vaccination rates. These findings are consistent with higher skilled and less deprived parents responding faster to false information circulated at the time that the vaccine could lead to autism. Even though this information has been proven to be wrong, these parents were those absorbing it more. |
| Keywords: | MMR vaccines, vaccine hesitancy, broadband internet, misinfromation |
| JEL: | I10 I12 L86 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:mhe:chemon:2023-04&r=eur |
| By: | Annalisa Loviglio |
| Abstract: | I study how schools impact student performance and educational attainment throughout secondary education, and show that school quality cannot be easily captured by any type of rankings because students with differing characteristics and abilities benefit from different school inputs. To do so, I estimate a dynamic structural model of cognitive skills accumulation and schooling decision using rich administrative data from middle schools in Barcelona. I then simulate the outcomes that each student would have achieved in every school in the sample. Notably, the school environment has a crucial impact on the educational attainment of students from less advantaged family background and low-ability students who are at greater risk of leaving school. Moreover, the schools that would yield the highest final test scores for these students – provided they do not drop out – are not the ones that would maximize their likelihood of graduating and enrolling in further education. The results suggest that evaluating and comparing schools using only standardized assessments is insufficient for serving the needs of disadvantaged students, who require schools that enhance educational attainment rather than just test scores. |
| JEL: | I20 J24 C35 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1184&r=eur |
| By: | Cantone, Giulio Giacomo; Tomaselli, Venera |
| Abstract: | This study checks the hypothesis that sustainable well-being is a determinant factor of fertility through the application of a multiversal method based on the assumptions of Vibration of Effects (VoE) model of multiversal sampling on the Italian Equitable and Sustain- able Well-being (BES) dataset. For 48 social indicators of well-being, adopting the Province as statistical unit, the estimate of linear effect has been systematically sampled 1, 024 times. This multiversal sampling allows to estimate the component of the hypothetical variability of the estimate of the effect size that depends on the theoretical choices of the analysis. This component is commonly underestimated, hidden, or ignored in regular multivariate analysis or classical bootstrapping. Results do not allow to claim that any of the 48 social indicators is a robust linear predictor of fertility. Indicators associated with high statistical significance are also at risk of misleading the causal relationship. Implications for policy-making and the future direction of the research on BES are discussed in the conclusive remarks. |
| Date: | 2023–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:metaar:z5msx&r=eur |
| By: | Klaus Friesenbichler; Agnes Kügler; Julia Schieber-Knöbl (Statistics Austria) |
| Abstract: | We examine the role of intangible capital as a production factor using Austrian firm-level register data. Descriptive statistics show that intangible investment has increased over time. The intensive and extensive margins of firms' investments are highly skewed. They differ across sectors. A series of sample splits show that the components of intangible capital play different roles as inputs in the production function. Software and especially licenses are important for SMEs and exporters. Research and development play an important role in production in all specifications. For firms that continuously invest in intangible capital, all components of intangible capital gain importance in the production functions. These patterns differ from those found in previous studies and have implications for the strategic orientation of industrial and innovation policy. |
| Keywords: | Intangible capital, R&D, Firm level productivity, Investment, Production function, Austria |
| Date: | 2023–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2023:i:660&r=eur |
| By: | Katarzyna Bilicka (Utah State University, NBER, CEPR & Oxford Centre for Business Taxation; Jon M Huntsman School of Business, UT.); Evgeniya Dubinina (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czechia); Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czechia) |
| Abstract: | We study the consequences of multinational tax avoidance on the structure of government tax revenues. To motivate our analysis, we show that countries with high revenue losses due to profit shifting have lower corporate tax revenues and rates and higher indirect tax revenues and rates. To establish causality, we use German municipal data and analyse how changes in municipal trade tax rates levied on corporate profits affect local tax revenue structure. Following a trade tax rate increase, we find that municipalities with high exposure to aggressive multinationals experience a significant decline in trade tax revenue levels and shares. |
| Keywords: | Corporate Tax Avoidance, Profit Shifting, Multinational Corporations, Government Tax Revenue Structure |
| JEL: | E62 H26 H71 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2023_13&r=eur |