Taxation and Migration: Evidence and Policy Implications (with Henrik Kleven, Camille Landais and Stefanie Stantcheva). Journal of Economic Perspectives, Spring 2020 34(2): 119-142.

Working Papers

The Effects of Labor Tax and Regulation Standards for International Trade [new draft soon]

This paper studies the effects of labor taxes and regulation standards on international trade, using administrative data on cross-border trade in services in Europe from 2004 to 2020. I exploit exogeneous variations in labor taxes and minimum wages faced by exporting firms engaged in a large trade program: the European posting policy. To avoid a “race to the bottom” in social standards, this EU policy required exporting firms to pay domestic minimum wages and labor taxes, and those prevailing rules vary across countries, sectors, and over time. Both reduced-form countries case-studies and theory-consistent gravity estimation show evidence of large trade responses to higher labor standards, with an elasticity that is above one. On average, a 1% increase in exporting firms' labor cost through labor standards harmonization reduces bilateral trade flows by 1.2%. Using the experiment provided by the 2005 “Bolkestein directive”, I show that the prevailing rules in the EU posting policy increased support for international integration in rich countries, rationalizing the political economy of social standards clauses in recent trade agreements.

Selected Work in Progress

Tax Design, Information, and Elasticities: Evidence From the French Wealth Tax (joint with Bertrand Garbinti, Jonathan Goupille, Stefanie Stantcheva and Gabriel Zucman)

We study a reform of the French wealth tax that dramatically reduced the amount of information that taxpayers must self-report below a certain level of wealth. Combining administrative micro-data with dynamic bunching and difference-in-differences approaches, we find large behavioral responses to this switch to a low-information regime. The reform caused a 0.5 percentage points average decrease in the annual growth rate of wealth reported by treated taxpayers each year following the switch to the low-information regime. This reduction is driven by a 4 percentage points decrease for taxpayers bunching at the information discontinuity threshold. Consistent with opacity leading to lower compliance, treated households do not experience a real change in their (third-party) reported labor and capital income. The wealth tax base becomes much more elastic in the low-information regime, illustrating the first-order role of information policy choices for tax base elasticities.

The Local Economic Implications of Mobile Pensioners: Evidence from the EU (joint with Benjamin Faber and Antoine Levy)

Persistent Labor Market Impact of Exposure to Temporary Migration (joint with Chloe de Meulenaer and Nina Roussille)