“More Giving or More Givers? The Effects of Tax Incentives on Charitable Donations in the UK”
with Ben Lockwood and Kim Scharf (R&R Journal of Public Economics)
- ↳ Slides
- ↳ Abstract: This paper estimates the tax-price elasticity of giving using UK administrative tax return data for the period 2005-13, exploiting variation from a large tax reform in 2010. We make three main contributions: first, we estimate this elasticity both at the intensive and extensive margins. Second, we use a new instrumental variables strategy to address the endogeneity of the price of giving due to income changes. Third, we derive new conditions to evaluate the welfare consequences of changes in the generosity of the subsidy to donations. We find a small intensive-margin elasticity of -0.2 and a substantial extensive-margin elasticity of -0.8, yielding a total elasticity of about -1. These estimates mask considerable heterogeneity by income level: high-income individuals respond more on the intensive margin, while the extensive-margin response is stronger among low-income taxpayers. Taking this heterogeneity into account, we conclude that the current level of subsidy to charitable through the tax system could be increased under certain assumptions.
- ↳ Slides
- ↳ Abstract: We develop a conceptual framework that allows simultaneously for (i) bunching at the VAT registration threshold, and (ii) voluntary registration by some firms below the threshold. The framework predicts that higher intermediate input shares, lower product-market competition and a lower share of business to consumer sales (B2C) lead to voluntary registration. The predictions are exactly the opposite for bunching. We test the theory using linked administrative VAT and corporation tax records in the UK from 2004-2009, finding empirical support for the model’s predictions. We also find suggestive evidence that bunching is due to sales underreporting, rather than real output responses.
- ↳ Slides
- ↳ Media: El País
- ↳ Abstract: Using Spanish firm level data for the period 2002-2013, we explore the differences in the export behavior of firms during the years of sustained economic growth, 2002-2008, and during the Great Recession years, 2009-2013. Exploiting plausibly exogenous geographical variation in the reduction in domestic demand caused by the financial crisis, we document empirically the existence of a robust, within-firm negative causal relationship between demand-driven changes in domestic sales and export flows: firms whose domestic sales were reduced by more during the crisis observed a larger increase in their export flows. This negative relationship between domestic sales and export flows reflects the capacity of export markets to counteract the negative impact of local demand shocks.
- ↳ Abstract: traffic accidents cause more than one million annual deaths worldwide and yield substantial economic costs to society.
This paper studies the effects of a penalty points system (PPS) introduced in Spain in 2006. We find a 20% decrease in cumulative road fatalities in the five years after the reform, compared to a synthetic control group constructed using a weighted average of other European countries. Using estimates of the value of a statistical life, we calculate that the PPS yielded a net economic benefit of €4.6 billion ($6 billion) over this period, equivalent to 0.43% of Spain’s GDP.
- ↳ Status: submitted.
“Under the Radar: The Effects of Monitoring Firms on Tax Compliance”
with David Lopez-Rodriguez
American Economic Journal: Economic Policy , vol. 10 (1), Feb 2018, p. 1-38
- ↳ Manuscript
- ↳ Media: The Economist, El País, Nada es Gratis (twice)
- ↳Abstract: This paper analyzes the effects on tax compliance of monitoring the information trails generated by firms’ activities. We exploit quasi-experimental variation generated by a Large Taxpayers Unit (LTU) in Spain, which monitors firms with more than 6 million euros in reported revenue. Firms strategically bunch below this threshold in order to avoid stricter tax enforcement. This response is stronger in sectors where transactions leave more paper trail, suggesting that monitoring effort and the traceability of information reported by firms are complements. We estimate that there would be substantial welfare gains from extending stricter tax monitoring to smaller businesses.
“Are Men and Women-Economists Equally Distributed Across Research Fields? Some New Empirical Evidence”
with Juan J. Dolado and Florentino Felgueroso
SERIEs – Journal of the Spanish Economic Association, vol. 3 (3), Sep 2012, p. 367-393
- ↳ Abstract: this paper analyzes the gender distribution of research fields in economics based on a new dataset of almost 1,900 researchers affiliated to top-50 economics departments in 2005, as ranked by Econphd.net website. We document that women are unevenly distributed across fields and test some behavioral implications from theories underlying such disparities. Our main findings are that the probability that a woman works on a given field is positively related to the share of women already working on that field (path-dependence), and that this phenomenon is better explained by women avoiding male-dominated fields than by men avoiding female dominated fields. This pattern, however, is weaker for younger female researchers who spread more evenly across fields.
“From Great Depression to Great Credit Crisis: Similarities, Differences, and Lessons”
with Agustín Bénétrix, Barry Eichengreen, Kevin O’Rourke, and Gisela Rua
Economic Policy, vol. 62, April 2010, p. 219–265
- ↳ Media: Paul Krugman (NYTimes: I, II, III), Martin Wolf (FT blog)
- ↳ Abstract: The Great Depression of the 1930s and the Great Credit Crisis of the 2000s had similar causes but elicited strikingly different policy responses. While it remains too early to assess the effectiveness of current policy, it is possible to analyse monetary and fiscal responses in the 1930s as a natural experiment or counterfactual capable of shedding light on the impact of current policies. We employ VAR, instrumental variables, and qualitative evidence for 27 countries in the period 1925–39. The results suggest that monetary and fiscal stimulus was effective – that where it did not make a difference it was not tried. They shed light on the debate over fiscal multipliers in episodes of financial crisis. They are consistent with multipliers at the higher end of those estimated in the recent literature, and with the argument that the impact of fiscal stimulus will be greater when banking systems are dysfunctional and monetary policy is constrained by the zero bound.
Work in Progress
- ↳ Summary: we study the factors that determine fiscal capacity in a low-income country context, using administrative tax return data. We develop measures of tax evasion based on information already collected by the tax authority, and study the effects of an enforcement intervention on firm behavior.
- ↳ Status: in the field.
“Bunching vs. Diff-in-Diff”
with Michael Best
- ↳ Summary: how can we reconcile the wide differences between difference-in-difference estimates and bunching estimates of taxable income elasticities? We provide a simple framework showing how the dynamics of bunching estimates and diff-in-diff estimates around the time of tax reforms can shed light on the role of optimization frictions in determining taxable income responses. We implement our method on UK data and a reform to the top income tax brackets.
- ↳ Status: work in progress.