India’s Services Sector Growth: The Impact of Services Trade on Non-tradable Services, with Karan Singh Bagavathinathan, Ritam Chaurey and Gaurav Nayyar. India Policy Forum, 2023.
Contagion and Information Frictions in Emerging Markets: The Role of Joint Signals, with Tobias Gruhle. Journal of Economic Behavior and Organization, 2022, vol. 200,147-173. [Accepted Manuscript]
When face-to-face interactions become an occupational hazard: Jobs in the time of COVID-19 , with Gaurav Nayyar. Economics Letters, 2020, vol. 197, 109648. [Accepted Manuscript]
Information Frictions and Tax Inertia, Economics Bulletin, 2019, vol. 39(3), 2210-2220.
Unmasking the Impact of COVID-19 on Businesses: Firm Level Evidence from Across the World, with Apedo-Amah et al. [World Bank Policy Research Working Paper 9434.]
Abstract: This paper provides a comprehensive assessment of the short-term impact of the COVID-19 pandemic on businesses worldwide with a focus on developing countries. The results are based on a novel data set collected by the World Bank Group and several partner institutions in 51 countries covering more than 100,000 businesses. The paper provides several stylized facts. First, the COVID-19 shock has been severe and widespread across firms, with persistent negative impact on sales. Second, the employment adjustment has operated mostly along the intensive margin (that is leave of absence and reduction in hours), with a small share of firms laying off workers. Third, smaller firms are disproportionately facing greater financial constraints. Fourth, firms are increasingly relying on digital solutions as a response to the shock. Fifth, there is great uncertainty about the future, especially among firms that have experienced a larger drop in sales, which is associated with job losses. These findings provide a better understanding of the magnitude and distribution of the shock, the main channels affecting businesses, and how firms are adjusting. The paper concludes by discussing some avenues for future research.
Can Tax Enforcement Increase Employment?
Abstract: This paper shows that tax enforcement can increase employment. I consider enforcement policies aimed at increasing the issuance of verifiable sales receipts, which reduces unregistered sales and therefore tax evasion by firms. At first glance, the associated increase in the tax burden should negatively impact employment. I argue, however, that tax enforcement of this form can also help firms monitor their employees. If employees can divert some of the unregistered sales from the firm to themselves, then tax enforcement can increase employment by reducing diversion. To test this hypothesis, I use administrative data and exploit quasi-experimental variation from a tax enforcement intervention in Portugal. The results support the diversion channel and suggest that the enforcement reform did in fact increase employment.
Optimal Capital and Labor Income Taxation in Small and Developing Countries. [MPRA Paper No. 89266] (R&R: Revision Requested)
Abstract: This paper argues that smaller and poorer countries have lower optimal tax rates on labor and capital income when markets exhibit imperfect competition. This difference in tax rates is efficient and not due to tax competition. The intuition is that monopolistic markups distort markets in a similar way as taxes. Hence, optimal tax rates are inversely related to markups. I further show that smaller and poorer countries have larger markups. Empirical analysis of the banking industry also supports the implied markup differences in the model.
The Effect of Attitudes toward Migrants on Migrant Skill Composition. [CESifo Working Paper No. 6919.] (R&R: Revision Requested)
Abstract: I investigate the effect of attitudes toward migrants on the average skill composition of immigrants in destination countries. A model is presented showing that negative attitudes toward migrants can reduce the average skill composition. The intuition for the result is that the highly skilled are more mobile and hence more sensitive to negative attitudes. To test the hypothesis, I use survey data on attitudes toward migrants as well as data on migrant stocks by education level and origin country. The empirical analysis is based on two classes of theoretical models and I find consistent evidence for the hypothesis that more positive attitudes increase the skill composition of immigrants. The results imply that general attitudes toward migrants can be relevant for policies seeking to attract highly skilled migrants.
Financing Costs and the Efficiency of Public-Private Partnerships, with Alfons J. Weichenrieder. [SAFE Working Paper No. 295] (R&R: Revision Requested)
Abstract: The paper compares provision of public infrastructure via public-private partnerships (PPPs) with provision under government management. Due to soft budget constraints of government management, PPPs exert more effort and therefore have a cost advantage. At the same time, hard budget constraints for PPPs introduce a bankruptcy risk and bankruptcy costs. Consequently, PPPs may be less efficient, although this does not result from PPPs’ higher interest costs.
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