Working papers results

2015 - n° 77
ABSTRACT In this paper we allude to a novel role played by the non-linear income tax system in the presence of adverse selection in the labor market due to asymmetric information between workers and firms. We show that an appropriate choice of the tax schedule enables the government to affect the wage distribution by controlling the transmission of information in the labor market. This represents an additional channel through which the government can foster the pursuit of its redistributive goals.
Spencer Bastani, Tomer Blumkin, Luca Micheletto
Keywords: adverse selection,labor market,optimal taxation,pooling,redistribution
2015 - n° 76
ABSTRACT This paper examines how companies’ capital structure is affected by the corporate income tax system. Our analysis employs confidential company-level corporation tax return data in the UK. Our main identification strategy is based on variation in companies␣ marginal tax rates due to the existence of kinks in the corporate tax rate schedule. Using a dynamic adjustment model of capital structure, we find a positive and substantial long-run tax effect on companies' financial leverage. We show that there are considerable discrepancies between estimates of taxable profits reported in tax return data and in financial statements and that the estimated tax effect on capital structure using financial statements is likely to be biased downward. We find that companies adjust their capital structures gradually in response to changes in the marginal tax rate. Moreover, we find that the external leverage of domestic stand-alone companies and of multinational companies responds strongly to corporate tax incentives
Michael P. Devereux, Giorgia Maffini, Jing Xing
Keywords: corporate taxation,capital structure,tax returns
2015 - n° 75
ABSTRACT We investigate the effect of providing information about the benefits to children of attending formal child care when women intend to use formal child care so they can work. We postulate that the reaction to the information differs across women according to their characteristics, specifically their level of education. We present a randomized experiment in which 700 Italian women of reproductive age with no children are exposed to positive information about formal child care through a text message or a video, while others are not. We find a positive effect on the intention to use formal child care, and a negative effect on the intention to work. This average result hides important heterogeneities: the positive effect on formal child care use is driven by better-educated women, while the negative effect on work intention is found only among less-educated women. These findings may be explained by women’s education reflecting their work-family orientation, and their ability to afford formal child care.
Vincenzo Galasso, Paola Profeta, Chiara Pronzato, Francesco Billari
Keywords: female labour supply,education,gender roles
2015 - n° 74
ABSTRACT This paper reassesses the relationship between tax structure and long run income, using as indicators of tax structure both a new series of implicit tax rates based on Mendoza et al. (1997) and tax ratios, adopting a dynamic panel estimation strategy, and explicitly accounting for cross-section dependence in the panel. When implicit tax rates are used, the paper shows, the link between tax structure and long run income per capita is not robust to the adoption of different assumptions on observable and unobservable heterogeneity across countries. When tax ratios are used, there is some evidence of a negative impact of labour taxation on long run income, but this result is shown to capture non-fiscal effects coming from the evolution of the labour share. Turning to the short run, the research presented here finds strong evidence of a positive effect on per capita income of a tax shift from labour and capital taxation towards consumption taxation, which provides support for fiscal devaluations.
Giampaolo Arachi, Valeria Bucci, Alessandra Casarico
Keywords: long run income,tax structure,fiscal devaluation,cross-section dependence
2015 - n° 73
ABSTRACT Nell'ambito delle ricerche di storia economica, l'area lucchese appare relativamente trascurata dalla più recente storiografia italiana ed in particolare toscana. A parte indagini a carattere principalmente politico o demografico, il ricco patrimonio documentario conservato negli archivi lucchesi è stato fino ad oggi solo parzialmente sfruttato. Questa ricerca intende apportare nuovi dati e riflessioni inedite al dibattito che vede lo studio della disuguaglianza nella distribuzione della ricchezza come questione chiave nell’analisi dello sviluppo economico nel lungo periodo. Attraverso i dati rintracciabili negli estimi trecenteschi e cinquecenteschi e nel Catasto guinigiano dei primi anni del Quattrocento, fonti fiscali che si sono già dimostrate ottimi strumenti per misurare i livelli di ricchezza della popolazione censita e ricostruirne i trend macroeconomici di concentrazione, si cercherà di fornire un primo quadro d’insieme della distribuzione della proprietà nel contado della città della seta. Particolare attenzione sarà prestata anche al possibile impatto della Peste Nera che, stando alla storiografia più recente, pare aver determinato una lunga fase di declino nella disuguaglianza conclusasi solo attorno alla seconda metà del XV secolo. The area of Lucca seems relatively neglected by the most recent Italian economic historiography. Apart from research primarily devoted to political or demographic issues, some of which date back several decades, the rich documentary patrimony preserved in the archives of Lucca was until now only partially exploited. This paper aims to provide new data and reflections to the debate which sees the study of the inequality in the distribution of wealth as a key issue in the analysis of economic development in the long run. By using the data recorded by some fiscal registers (the estimi of the fourteenth and sixteenth centuries and the catasto guinigiano of the early fifteenth century), a kind of source which already proved to be an excellent tool to measure the levels of wealth of the surveyed population and to reconstruct its macroeconomic trends of concentration, we will try to provide a first overview of the distribution of property in the countryside of the city of silk. A particular attention will be paid also to the possible impact of the Black Death which, according to the most recent literature, seems to have led to a long period of decline in inequality ended only around the second half of the fifteenth century.
Francesco Ammannti
Keywords: economic inequality; social inequality; wealth concentration; middle ages; early modern period; Tuscany; Italy; Lucca; plague; Black Death
2015 - n° 72
Abstract We document the connection between land reform and violent crime in Mexico using the counter-reform (the transformation of ejido land into private property) carried out in 1992. Using data at a municipality level, we exploit the fact that municipalities have different exposure to the reform. We report a significant impact of the land reform on the number of murders: In those municipalities with a higher proportion of social land, and therefore more exposure to the land reform, the number of murders decreased more than in those municipalities less exposed to the land reform. Our results suggest that clearly specified and consistently enforced land rights reduce gains from violence, therefore leading to lower levels of violence as measured by the number of murders.
Tommy E. Murphy, Martín A. Rossi
Keywords: agrarian reform; murders; property rights
2015 - n° 71
ABSTRACT This research note presents and compares some first findings obtained by the project EINITE-Economic Inequality across Italy and Europe, 1300-1800. The main aim of the project is to investigate long-term trends in economic inequality in Italy and in Europe. Here we compare previously published data for Piedmont with some early findings for Lombardy and Veneto, in order to provide a broad picture of northern Italian inequality. The period we cover is particularly long (13th–early 19th centuries) for Piedmont, while for Lombardy and Veneto a somewhat shorter period is considered (15th–18th centuries). We provide an in-depth analysis of the archival sources usable to study long-term changes in economic inequality in northern Italy, and we provide some key measures of inequality over time (Gini indexes, top percentiles). We find evidence of a tendency for Italian inequality to increase almost everywhere and almost continuously over time, since about 1400 or 1450, confirming what has been suggested by previous studies that focused on Piedmont and Tuscany.
Guido Alfani, Matteo Di Tullio
Keywords: economic inequality; wealth concentration; poverty; wealth; middle ages; early modern period; northern Italy; Republic of Venice; Sabaudian State; State of Milan; Piedmont; Lombardy; Veneto
2014 - n° 70
ABSTRACT This paper provides an overview of economic inequality in the Florentine State (Tuscany) from the late fourteenth to the late eighteenth century. Regional studies of this kind are rare, and this is only the second-ever attempt at covering such a long period. Consistent with recent research conducted on other European areas, during the Early Modern period we find clear indications of a tendency for economic inequality to grow continually, a finding that for Tuscany cannot be explained as the consequence of economic growth. Furthermore, the exceptionally old sources we use allow us to demonstrate that a phase of declining inequality, lasting about one century, was triggered by the Black Death from 1348 to 1349. This finding challenges earlier scholarship and significantly alters our understanding of the economic consequences of the Black Death. We also take into account other important topics, such as the change over time of the patrimony of the Church and of poverty. Particular attention is paid to the latter, and estimates of the prevalence of the poor in time and space are provided and discussed, also taking into account the definition and perception of the poor.
Guido Alfani, Francesco Ammannati
Keywords: economic inequality; social inequality; wealth concentration; middle ages; early modern period; Tuscany; Florentine State; Italy; plague; Black Death; Church property; poverty; Florence; Prato; Arezzo; San Gimignano
2014 - n° 69
ABSTRACT The aim of this paper is to understand how traditional societies faced a period of general crises and more specifically, which behaviours were adopted to limit the increase of local socio-economic inequality. Thus, this paper focuses on a boundary area (the Geradadda) disputed by Milan and Venice that was constantly crossed and occupied by armies during the long period of the Italian Wars (1494-1559). Analysing the management of local finances, and specifically the local commons, it is possible to show the different ways in which these societies organized themselves and, generally, how economic growth occurred in the early modern period.
Matteo Di Tullio
Keywords: commons,inequality,cooperation,Italian wars,sixteenth century,rural societies
2014 - n° 68
ABSTRACT During the demographic transition that in Europe tended to take place from the early 19th to the end of the 20th century, the population in European countries and its overseas offshoots increased by a factor of five or less, which is low compared to the increase now taking place in most other regions of the world. This study provides simulations showing what global and regional population sizes would be if the rest of the world experienced similar population growth patterns as were observed in Europe. European culture distinguished itself through choices that led to the European marriage pattern, characterized by late marriage, significant shares not marrying, low levels of extramarital childbearing, and comparatively low fertility. One important consequence was the relatively low population growth characterizing the cultures, religions, and ethno-linguistic groups where the European marriage pattern was dominant.
Vegard Skirbekk, Marcin Stonawski, Guido Alfani
Keywords: Demographic transition; demographic simulations; European marriage pattern; Europe; fertility; transition multiplier; nineteenth century; twentieth century; historical demography