Publications

• Cross-border Labor Outflows, Turnover, and Adjustments of Firms - Labour Economics, 2026 - previously circulated as JMP under the title "How do Firms adjust to Negative Labor Supply Shocks? Evidence from Migration Outflows"  [slides] [WP version] [IZA WP] [BI WP] [codes]

This paper studies how firm adjustment to outflows of workers depends on the state of the local labor market and possibly the shock size. My difference-in-differences analysis leverages the gradual liberalization of the Swiss labor market for EU citizens, that generated an exogenous negative labor supply shock for Italian firms, with treatment intensity defined by their distance from the border. Using detailed social security data, I document a large outflow of workers and a sharp increase in turnover. In smaller, more constrained labor markets close to the border, surviving firms suffer immediate productivity losses and later adopt a cost-saving strategy by mitigating wage growth. In contrast, firms in wider markets further from the border, facing a weaker shock, do not experience a decline in productivity and are able to increase wages for incumbent workers. The negative effects are concentrated in high-skill intensive firms, consistent with higher turnover costs and the loss of firm-specific human capital in smaller labor markets. These outcomes can be rationalized within a standard competitive model in the presence of labor market imperfections.

• Fiscal drag in theory and in practice: a European perspective - European Economic Review, 2026; joint with ESCB microsimulation network [WP][ECB WP]

This paper presents a comprehensive characterization of “fiscal drag” — the increase in tax revenue that occurs when nominal tax bases grow but nominal parameters of progressive tax legislation are not updated accordingly — across 21 European countries using a microsimulation approach. First, we estimate tax-to-base elasticities, showing that the progressivity built in each country’s personal income tax system induces elasticities around 1.7–2 for many countries, indicating a potential for large fiscal drag effects. We unpack these elasticities to show stark heterogeneity in their underlying mechanisms (tax brackets or tax deductions and credits), across income sources (labor, capital, self-employment, public benefits), and across the individual income distribution. Second, we extend the analysis beyond these elasticities to study fiscal drag in practice between 2019 and 2023, incorporating observed income growth and legislative changes. We quantify the actual impact of fiscal drag and the extent to which government policies have offset it, either through indexation or other reforms. Our results provide new insights into the fiscal and distributional effects of fiscal drag in Europe, as well as useful statistics for modeling public finances. 

• Inflation, fiscal policy and inequality, Review of Income and Wealth, 2025, with Antonio F. Amores, Henrique S. Basso, Simeon Bischl, Paola De Agostini, Silvia De Poli, Maria Flevotomou, Maximilian Freier, Sofia Maier, Esteban García-Miralles, Myroslav Pidkuyko, Mattia Ricci, and Sara Riscado [ECB WP] [Replication files]

Following the inflation surge in the aftermath of the pandemic crisis, Euro Area governments adopted a large array of fiscal measures to cushion its impact on households. The inflationary shock and related fiscal measures affected households differently depending on their country, their consumption patterns, and their position in the income distribution. This paper uncovers the aggregate and distributional impact of this inflationary shock, as well as the impact of the government measures aimed at supporting households and containing prices. The analysis is carried out for 2022 and includes Germany, France, Italy, Spain, Portugal, and Greece. Our work confirms that the purchasing power and welfare of low-income households was more severely affected than that of high-income households. Fiscal measures contributed significantly to closing this gap, though with country differences. However, most fiscal measures were not particularly targeted at low-income households, implying a low cost-effectiveness in protecting the poorest in some countries.

• In the media: SUERF;

Working papers

• Measuring What Matters: Why Italy May Be in Better Fiscal Shape than the US, with Laurence J. Kotlikoff, Mauro Marè, and Marco Olivari [NBER WP]; submitted.

This study uses fiscal gap accounting (FGA) and generational accounting (GA) to compare US and Italian fiscal solvency. FGA and GA incorporate all government outlays and receipts, whether put on or kept off the books. FGA measures, in the form of reduced net outlays, the constant share of each future year’s GDP needed to balance the government’s intertemporal budget. GA calculates the lifetime net tax rate – lifetime taxes divided by lifetime labor earnings -- facing future generations if current generations pay nothing more, on net, than current policy mandates. Deficit accounting suggests that Italy’s 135 percent debt-to-GDP ratio places it in worse fiscal shape than the US with its 123 percent ratio. But on a fiscal-gap basis, Italy appears in far better shape regardless of the discount rate used. Based on the theoretically appropriate rate – the average real return to national wealth, the U.S. fiscal gap is 7.4%. Italy’s is 4.0%. These requisite solvency adjustments are far larger if delayed or if the UN’s more pessimistic demographic projections prevail. Neither country can expect future generations, on their own, to cover their government’s red ink. Doing so requires levying lifetime net tax rates, in each country, that exceed 100%. 

• The redistributive effects of in-kind transfers in Italy, with Marco Savegnago, Bank of Italy Occasional Papers n. 977/202; - R&R Fiscal Studies

In-kind transfers, such as healthcare and education, represent a substantial portion of public expenditure in most advanced economies, yet they are rarely included in analyses of tax-benefit systems due to the methodological challenges in assessing their monetary value. This paper adds an in-kind transfer module to an otherwise standard microsimulation model of the Italian household sector. Following established methodologies, we evaluate health, education, childcare, and social housing services enjoyed by each beneficiary. Using this enhanced framework, we analyse the distributional impact of Italy's welfare system, comparing traditional disposable income measures with an extended income concept that includes in-kind transfers. We further implement a Lerman and Yitzhaki decomposition to quantify how the contribution of each welfare component—including in-kind transfers—to overall inequality depends on its resource size, distribution, and correlation with total income. Our results indicate that in-kind benefits follow a more distinct U-shaped age profile and are more uniformly distributed across income levels compared to cash benefits. In-kind transfers increase net disposable income by 20 percent on average and 60 percent for lower-income households. Indeed, in-kind transfers play a crucial role in reducing inequality, comparable to the combined effect of taxes and cash transfers. These results confirm the importance of including in-kind transfers in distributional analyses for a more complete understanding of welfare systems.

• Jeux Sans Frontières: Effects of Cross Border Workers on Local Economies, with Sergio Galletta, and Enrico Rubolino. Slides and draft available soon.

Work in progress

• Inflation and policy responses, joint with ESCB Microsimulation network

Other works

• The Skill Content of Occupations Across Low and Middle Income Countries: Evidence from Harmonized Data (with Salvatore Lo Bello, Sebastian Monroy-Taborda, Ana Maria Oviedo, Maria Laura Sanchez Puerta, Indhira Vanessa Santos), IZA DP No. 10224