Selected Work in Progress

Behavioral Responses to Special Tax Regimes for the Super-Rich: Evidence from Switzerland 

Joint with Enea BaselgiaRevise and Resubmit at The Economic Journal.
Previous versions circulated as:
Abstract: We estimate the sensitivity of the location choice of super-rich foreigners to a special tax regime, under which wealthy foreigners are taxed on their living expenses, rather than their true income and wealth. We are the first to evaluate this controversial Swiss policy (sometimes referred to as “lump-sum” taxation, which bears similarities with “non-dom” taxation in the UK or Italy), and show that when some Swiss cantons abolished this practice, their stock of super-rich foreigners dropped by 30% as a consequence. We find no response for the Swiss super-rich, who were unaffected by the policy change.
Media coverage: Bilanz, 10vor10, NZZ (pdf). Also see Thomas Wiesel's sketch on the Swiss rich list (in French). 
Funding: SNSF Project Grant 176458 "The influence of Taxation on Wealth and Income Inequality -- Long-Run Evidence from the Swiss Cantons"

Intergenerational Mobility in Multiple Dimensions

Funding: SNSF Project Grant 212814 "Intergenerational Mobility: Multi-Dimensional Patterns, Determinants, and Effects on Beliefs"

The Carnegie Elasticity: Behavioral Responses to Sudden Wealth

Joint with Marius Brülhart, Aurélien Eyquem, and Enrico Rubolino

Wealth and Income Mobility over the Life-Cycle - Evidence from Swiss Tax Data

Abstract: We use Swiss cantonal tax data to study the ratio of private wealth and debt to income along the income distribution, and the mobility of income and wealth over the life cycle. The individual income and wealth tax data from the large canton of Bern, covering the period 2002–2018, allows us to further distinguish between life cycle and cohort effects. We explore the heterogeneity by income and wealth percentiles, marital status, and gender. To better understand wealth mobility and how it has changed over the past two decades, we further study the role of inheritances and inter-vivos gifts for wealth mobility of different groups. In line with the macroeconomic literature, we find that wealth-income ratios have been increasing between 2002 and 2018. Wealth-income ratios are U-shaped over the income distribution and increase steeply at the very top, reflecting the strong correlation between the tails of the income and wealth distributions. On average, the top 2% held 10 times their annual income in net wealth in 2018 (up from 6.5 in 2002). For the upper half of the income distribution, the wealth-income ratio is mainly determined by real estate—with the exception of the top 2% of the income distribution. Our preliminary findings further suggest that wealth mobility is substantially lower than income mobility. Persistence in wealth rank is especially strong in the tails: the bottom 20% seem to be stuck in a wealth trap, while those in the top 1% hardly ever leave the top 10% at all, unless they die. After 5 years, 71% are still in the top 1%, another 15% moved down within the top 10%. Only about 1% moves below the top 10%, with the rest leaving the sample. This contrasts somewhat to top earners, of whom about 53% remain in the top 1%,but 10% move below the top 10%.
Funding: SNSF Project Grant 176458 "The influence of Taxation on Wealth and Income Inequality -- Long-Run Evidence from the Swiss Cantons"

The Composition and Mobility of Top Earners - Evidence from Switzerland 


Draft (January 2019)
This paper is not dead, it's just resting.
Abstract: This paper studies income mobility at the top in Switzerland, where previous research Föllmi and Martinez (2017) has found that top income shares have been rising and have become more volatile since the mid-1990s. I use full-population social security data over the period 1981-2012 and find that persistence within the top 1% has been slightly decreasing, yet not enough to counteract rising inequality. In addition, I shed light on gender inequality at the top, and the share of foreign-born and self-employed among top earners in Switzerland. With a share of only 5%, women are strongly under-represented among the top 0.1% of earners. The share of foreign-born among the top 0.1%, on the other hand, rose from 20% to 40% in the 2000-2010 period. Finally, I study industry composition and the declining role of self-employment among top earners in Switzerland over the past 30 years.