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on Central and South America |
| By: | Lucía Ramírez Leira (CEDLAS-IIE-FCE-UNLP); Carlo Lombardo (CEDLAS-IIE-FCE-UNLP & Cornell University); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET) |
| Abstract: | In Argentina, the national minimum wage (NMW) coexists with sectoral wage floors (WF) established through collective bargaining agreements (CBA). These WFs exceed the NMW for most registered workers, rendering the minimum wage largely ineffective. Using novel data on union-negotiated wages combined with administrative records, this paper analyzes the impact of WFs set in CBAs on employment, wages, and wage inequality among formal workers. The analysis is conducted at both the industry and individual levels, utilizing a fixed-effects model by year and sector and a linear probability model based on individual worker trajectories. Results indicate that CBAs reduce overall wage inequality by decreasing inequality at the upper end of the distribution without affecting the lower end. No significant employment effects are found, except for a negative impact in sectors with a higher proportion of small firms (MSMEs). However, at the worker level, CBAs reduce the probability of remaining employed for work- ers near the wage floors, with more negative effects observed in MSMEs. Finally, CBAs’ positive effect on wage increases and negative effects on employment are more pronounced in unfavorable macroeconomic conditions. |
| JEL: | J22 J31 J38 K31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:dls:wpaper:0353 |
| By: | Matias Giaccobasso (VATT Institute for Economic Research, Finnish Center of Excellence in Tax Systems Research); Marcelo Bergolo (IECON -Universidad de La Republica (UDELAR) and IZA); Gabriel Burdin (University of Siena and IZA); Mauricio De Rosa (IECON-UDELAR); Martin Leites (IECON-UDELAR); Horacio Rueda (U. of Houston and IECON-UDELAR) |
| Abstract: | This paper presents new evidence on how top income earners respond to changes in the personal labor income tax schedule, uncovering both own-and cross-tax base responses within a unified framework. For identification, we exploit a 2012 tax reform in Uruguay that generated quasi-random variation in top marginal rates within the top 1% of the labor income distribution. Our empirical approach relies on a difference-in-differences identification strategy and administrative records linked at the individual level across multiple tax bases. We estimate an own-tax base intensive margin elasticity of 0.77 and extensive margin semi-elasticity of 2.64. Extensive margin responses are mostly driven by taxpayers shifting from the personal labor income tax base toward corporate income or capital income tax bases (semi-elasticities of -0.79 and -0.75, respectively). Our preferred estimates suggest that the reform was effective in increasing tax revenues, with efficiency costs representing 27% of the projected increase. However, it had limited impact on inequality, most likely due to its narrow scope and income shifting toward tax bases with lower and flat rates. Overall, our results indicate that policy efforts aiming to reduce inequality by increasing top marginal tax rates should also focus on limiting income shifting opportunities to strengthen their redistributive effects. |
| Keywords: | Income taxation, top income earners, tax reform, reported income supply, income-shifting |
| JEL: | H21 H24 H30 J22 O23 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:34 |
| By: | Felipe Córdova; Pablo García Silva; Federico Natho; Josué Perez; Mauricio Salas; Francisco Vásquez |
| Abstract: | Climate change poses significant challenges to economies worldwide, including Chile, where adverse effects are already evident and expected to worsen. To assess the financial impact of climate change, understanding agents' exposure to natural events is crucial yet challenging due to data scarcity. This paper focuses on evaluating exposure to physical risks in Chile, utilizing a novel approach that combines micro-level administrative sales data, firm-level debt information, and physical risk scenarios at the municipality level. The dataset covers all invoice transactions at the firm level in Chile, enabling precise computation of physical risk exposures. This granular approach provides unprecedented insights into climate change's potential impacts on economic sectors, agents, and regions. There is a high concentration of sales and banking debt in municipalities with high physical risks. About half of sales and debt are in municipalities that might face extreme heat episodes in the future, this number decreases to 15% when dealing with urban fire risk. The study contributes to closing data gaps in climate-related research, offering a comprehensive evaluation of physical risk exposures in all 345 municipalities in Chile. Results highlight the diverse economic landscape of Chile and sheds light on the country’s unique challenges, including water safety, extreme heat, urban fires, hydroelectric generation, and heat mortality, emphasizing the need for targeted interventions to enhance economic resilience. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchee:144 |