The Impact of Trade on Firm Labor Market Power: Evidence from Brazil (Job Market Paper) [Draft coming soon!]
Growing evidence suggests that import competition has long-lasting negative effects on local wages and employment. Why? I study a potential mechanism: trade-induced increases in firm labor market power. I first present theoretical and empirical evidence linking import competition to labor market concentration. I then investigate the implications for wage markdowns, the standard measure of firm labor market power. Using employer-employee linked data, tariff reductions from Brazil's 1990s tariff reform, and a framework of labor market oligopsony, I find that a 10 percent increase in import competition increased wage markdowns by 0.07 percent. However, this effect is too small to account for trade's large negative effect on wages, suggesting that: 1) even in oligopsony frameworks, sizable changes in labor market concentration can still be inconsequential for wage markdowns; 2) the negative effects of trade on wages were driven instead by reductions in the marginal revenue product of labor (i.e. price markups, demand, productivity), rather than by increased firm labor market power.
Tax Administration vs. Tax Rates: Evidence from Corporate Taxation in Indonesia, with M. Chatib Basri, Rema Hanna, and Benjamin Olken. October 2020. Appendices here. Previous version: NBER Working Paper #26150.
Abstract: We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into “Medium Taxpayer Offices,” with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining non-linear changes to corporate income tax rates, we estimate an elasticity of taxable income of 0.59. Combining these estimates, improved tax administration is equivalent to raising rates on affected firms by 8 percentage points. Improved tax administration flattened the relationship between firm size and enforcement, reducing the “enforcement tax” on large firms. On net, improved tax administration can have significant returns for developing countries.
Charter Schools and Suspensions: Evidence from Massachusetts Chapter 222. October 2020. Appendices here. SEII Discussion paper #2020.10.
Abstract: I evaluate the impact of Massachusetts Chapter 222—a policy that limited charter schools’ ability to suspend students—on student suspensions and test scores. Comparing charter attendance effects before vs. after Chapter 222, I find that Chapter 222 reduced charter suspensions by roughly 10 percentage points, but had no impact on charter learning. I then use variation in lottery offers and applicants’ pre-lottery suspensions to separate the effect of suspensions from that of charter attendance on test scores. Suspensions appear to be unrelated to achievement in charters, while the causal effect of charter attendance on test scores is large and positive.