KOF Swiss Economic Institute
CH–8092 Zürich, Switzerland
Institutional Affiliation: KOF Swiss Economic Institute
NBER Working Papers and Publications
|November 2018||The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland|
with Andreas Beerli, Jan Ruffner, Giovanni Peri: w25302
We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-border workers increased foreign employment substantially. Although many cross-border workers were highly educated, wages of highly educated natives increased. The reason is a simultaneous increase in labor demand: the reform increased the size, productivity, and innovation performance of skill-intensive incumbent firms and attracted new firms, creating opportunities for natives to pursue managerial jobs. These effects are mainly driven by firms that reported skill shortages before the reform.
|May 2018||Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays|
with Isabel Z. Martinez, Emmanuel Saez: w24634
This paper estimates intertemporal labor supply responses to two-year long income tax holidays staggered across cantons in Switzerland. Swiss cantons shifted from an income tax system based on the previous two years' income to a standard annual pay as you earn system, leaving 2 years of income untaxed. We find significant but quantitatively small responses of earnings with an inter-temporal elasticity of .05 overall. Some groups, such as high wage income earners and especially the self-employed display larger responses with elasticities around .1 and .2 respectively. We find no effects along the extensive margin at all and almost no effects on hours of work suggesting that responses are driven primarily by tax avoidance rather than real labor supply.