Research

Working Papers

"Perception and Salience of Social Security Contribution Incentives: Evidence from Voluntary Contributions." CBT Working Paper 2025-01.

Abstract: In this paper, I investigate how individuals perceive the implicit contribution incentives provided by public pension systems. I use the unique setting of the Spanish public pension system, where self-employed workers are allowed to voluntarily determine the level of their Social Security contributions. Using quasi-experimental variations from three pension reforms, I find that most self-employed workers fail to take advantage of the extraordinary contribution incentives available in Spain, and often make suboptimal contribution choices. These results point to substantial challenges in perceiving implicit contribution incentives, which could lead to inefficiencies in raising Social Security contributions. Furthermore, my findings highlight the critical role of salience in improving the perception of contribution incentives, and thereby promoting greater economic efficiency.

I was awarded the Alexandre Pedrós prize for the best paper presented by young economists at the 28th Meeting on Public Economics.

"Tax-Induced Spatial Substitution and the Price Elasticity of Fuel Demand." with José M. Labeaga. CBT Working Paper 2025-03.

Abstract: This paper estimates the price elasticity of fuel demand in the presence of spatial variations in fuel taxes. Exploiting variations in fuel taxes across Spanish regions, we obtain two main results. First, we document substantial spatial substitution in diesel sales, with an elasticity reaching -14 near regional borders. Second, we demonstrate that failing to account for such spatial substitution can lead to over-estimating the fuel price elasticity of demand. When spatial substitution is ignored, we estimate an elasticity of -3, while diesel demand becomes inelastic once spatial substitution is controlled for. Our findings highlight the relevance of spatial substitution on the observed fuel demand responses to unilateral tax changes, and suggest a more limited effectiveness of localized environmental policies aimed at reducing CO2 emissions.

"Incidence and Avoidance Effects of Spatial Fuel Tax Differentials: Evidence using Regional Tax Variation in Spain." with José M. Labeaga. PSE Working Paper 2022-32.

Abstract: In this paper, we study the effect of spatial tax differentials on fuel tax pass-though and sales responses. We use two-way fixed effects methods to exploit regional variation in diesel excise taxes in Spain. Using a dataset containing daily diesel prices for the universe of petrol stations in Spain, we find that diesel tax pass-through is asymmetric depending on the sign of tax differentials with bordering regions. Petrol stations bordering with lower tax regions pass-through only 56% of fuel taxes, petrol stations bordering with higher tax regions pass-through 120% of fuel taxes. We provide evidence to attribute the asymmetric spatial incidence of fuel taxes to the market power given by the competitive tax advantage relative to competitors. Furthermore, we use diesel sales data aggregated at the province level and we find significant spatial tax avoidance responses to regional fuel tax differentials.

Work in Progress

"Uncovering the Channels of Bunching to the First Income Tax Kink: Evidence using Administrative Income Tax Records in Spain."

Summary: In this paper, I study the channels of behavioral responses to income taxes, with particular focus on the clarity of the income tax schedule and the availability of tax deductions. For this, I implement a bunching design to study the excess concentration of taxpayers around the threshold of income that allows not paying taxes, which is known as the first kink of the income tax schedule. I estimate taxpayers' bunching behavior using administrative income tax data for Spain. I compare the bunching behavior of taxpayers for income tax schedules in Spain that differ in the clarity of the first kink and depending on the availability of income tax deductions.

"The anatomy of the property tax pass-through in rental markets" with Isabel Micó-Millán and Darío Serrano-Puente.

Summary: In this paper, we examine the impact of real estate property taxes on housing rental markets using administrative tax microdata from Spain. Exploiting local variations in property tax payments across Spanish municipalities, we find that increases in property tax lead to a higher proportion of housing units reporting rental income. Furthermore, our analysis reveals that a significant portion of the property tax burden is passed on to tenants through higher rents.

"Income Mobility and the Inequality in Life Expectancy: Ex-ante Distributional Implications for Pension Systems." with Antoine Bozio, Simon Rabaté and Maxime Tô.

Summary: In this paper, we study the distributional implications of the income gradient of life expectancy from an ex-ante perspective, that is, at the time of making Social Security contributions. Using French data on taxpayers' income and mortality, we first estimate how mortality is associated with income class at a certain age, accounting for income mobility across the life cycle. We then calculate its ex-ante distributional implications for pension systems and the Social Security contribution schedule that could mitigate these effects. We find that (i) income mobility moderates the estimated income gradient of life expectancy and its ex-ante distributional implications for pension systems, (ii) differential mortality induces a sizeable implicit tax to the returns to contributions made by males and those with lowest incomes, (iii) the Social Security schedule that could mitigate the ex-ante regressive effect of differential mortality is more progressive under moderate income mobility across the life cycle and when governments are willing to redistribute from males to females.

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