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 the intertemporal labor supply (Frisch) elasticity of substitution exploiting an unusual tax policy change in Switzerland. In the late 1990s, Switzerland switched from an income tax system where current taxes were based on the previous two years' income to a standard annual pay as you earn system. This transition created a two-year long, salient, and well-advertised tax holiday. This change occurred both for the federal and local income taxes. Swiss cantons switched to the new regime at different points in time during the 1997--2003 period. Exploiting this variation in timing and using population-wide administrative social security earnings data matched with census data, we identify the Frisch elasticity. We find significant but quantitatively small responses of earnin...