CANCELADO JRC B2 Seminar: "Profit shifting frictions and the geography of multinational activity" - Mathieu Parenti

Abstract

We develop a quantitative general equilibrium model of multinational activity embedding corporate taxation and profit shifting. In addition to trade and investment frictions, our model shows that profit-shifting frictions shape the geography of multinational production. Key to our model is the distinction between the corporate tax elasticity of real activity and profit shifting. The quantification of our model requires estimates of shifted profits flows. We provide a new, model-consistent methodology to calibrate bilateral profit-shifting frictions based on accounting identities. We simulate various tax reforms aimed at curbing tax-dodging practices of multinationals and their impact on a range of outcomes, including tax revenues and production. Our results show that the effects of the international relocation of firms across countries are of comparable magnitude as the direct gains in taxable income.

Speaker

Mathieu Parenti is an associate professor at the Université Libre de Bruxelles, a research fellow at the CEPR and a research affiliate at CESifo. His research interests include international trade, trade and corporate tax policy, and market power.


JRC B2 Seminar: “Pennies from Haven: Wages and Profit Shifting” – Johannes Scheuerer

Abstract

The ability of some multinationals to reduce their tax burdens by shifting profits to tax havens has drawn increasing criticism both because of the lost revenues to high-tax countries and the perceived inequality this creates in the tax burden across firms. We demonstrate that such concerns are not the only impacts of profit shifting by using rich matched employer-employee data to show that profit-shifting firms pay higher wages. This is particularly apparent among service firms where the wage premium is approximately 2%. Further, there is substantial within-firm heterogeneity with high-skill occupations earning higher profit-shifting wage premiums. CEOs gain the most, with their wages rising nearly 10%. Finally, our back-of-the envelope calculations indicate that higher wages lead to higher income tax revenues that offset around 12% of the fall in Norway’s corporate tax revenues due to profit shifting. Thus, profit shifting not only impacts government revenues, but contributes meaningfully to aggregate wage inequality.

Speaker

Johannes Scheuerer is a PhD Candidate in the School of Economics at University College Dublin and a Research Affiliate at SKATTEFORSK Centre for Tax Research. His research interests lie in the field of empirical international economics, with a focus on foreign direct investment and international corporate taxation. His current work revolves around the profit shifting activities of multinational firms and their consequences for the wider society.


JRC B2 Seminar: “Spatial microsimulation A promising avenue for EUROMOD research?” – Manos Matsaganis

Abstract

Spatial microsimulation makes possible the evaluation of the fiscal and distributional effects of public policies at local level. Adding spatial detail to microsimulation involves creating microdata that reflect the characteristics of individuals and households in particular regions, cities, or neighbourhoods. Since there are very few sources of geographically disaggregated (at regional, sub-regional and small area level) microdata, there is a need to create appropriate data by combining small area census tabular/aggregate data and national (or at best regional) survey microdata to simulate a synthetic population whose characteristics are as close to the real population as possible. In a nutshell, spatial microsimulation involves the creation of large-scale population micro datasets for the analysis of public policy at the local level. EUROMOD research often addresses questions of local variations of tax and benefit policies, and of the effects of such policies (at any level of decision making) on local communities. The presentation will showcase recent advances in spatial microsimulation, and current efforts to extend EUROMOD research in a spatial direction.

Speaker

Manos Matsaganis is Professor of Public Finance at Polytechnic University of Milan. Prior to this, he worked at the Athens University of Economics and Business (2004-2016), where he founded and directed the Policy Analysis Research Unit. Earlier he had been a lecturer at the University of Crete (1996-1999 and 2001-2004), a special adviser at the Greek Prime Minister’s Office (1997-2001), and a researcher at the London School of Economics (1990-1993). He holds degrees from the Athens University of Economics and Business (BSc 1986), the University of York (MSc 1988), and the University of Bristol (PhD 1992). He has collaborate     d with international organizations such as the European Commission, the OECD, UNICEF, and the World Bank. He was a member of the Expert Group on Social Investment for Growth and Cohesion, on the invitation of European Commissioner László Andor (2012-2013). He was Fulbright Scholar at Harvard University (2014) and University of California, Berkeley (2015), Visiting Scholar at Boston University (2017, 2018), and Visiting Professor at University of Vienna (2019). He is currently Head of the Greek & European Economy Observatory at the Hellenic Foundation for European & Foreign Policy ELIAMEP in Athens (since 2021). He sits at the Advisory Board of the diaNEOsis foundation in Athens (since 2016), and at the Scientific Committee of the Feltrinelli Foundation in Milan (since 2022). His current research focuses on the transformations of the European social model after the Eurozone crisis and Covid-19 (Orcid code). His Oxford University Press book (with Anton Hemerijck) “Who’s afraid of the welfare state now?” is due for release in 2023.


JRC B2 Seminar: “Job Location Decisions and the Effect of Children on the Employment Gender Gap” – Adrian Nieto

Abstract

We study the effect of childbirth on local and non-local employment dynamics for both men and women using Belgian social security and geo-location data. Applying an event-study design that accounts for treatment effect heterogeneity, we show that 75 percent of the effect of the birth of a first child on the overall gender gap in employment is accounted for by gender disparities in non-local employment, with mothers being more likely to give up non-local employment compared to fathers. This gender specialisation is mostly driven by opposing job location responses of men and women to individual, household and regional factors. On the one hand, men do not give up non-local employment after childbirth when they are employed in a high-paid job, have a partner who is not participating in the labour market or experience adverse local labour market conditions, suggesting that fathers trade off better employment opportunities with longer commutes. On the other hand, women give up non-local jobs regardless of their earnings level, their partner’s labour market status and local economic conditions, which is consistent with mothers specialising in childcare provision compared to fathers.

Speaker

Adrian Nieto Castro is a researcher at the Luxembourg Institute of Socio-Economic Research. Before that he completed his PhD in Economics at the University of Nottingham and his MSc in Economics at LSE. His research interests include labour economics, family economics and economics of gender”.


Conferencia Externa: Pablo Amster - "Matemática para tus oídos: de Pitágoras a Xenakis”

Resumen: Cuando escuchamos una melodía, rara vez pensamos en números, proporciones o logaritmos. Sin embargo, muchas veces hemos oído decir que la música es matemática. ¿Qué relación hay entre ambas disciplinas? Las conexiones son múltiples, y se manifiestan en aspectos tales como la simetría, las proporciones, las relaciones numéricas entre frecuencias e intervalos, el ritmo o las reglas de la armonía. En esta charla presentaremos algunos de estos temas, en un breve recorrido que nos llevará desde Pitágoras a Xenakis.

JRC B2 Seminar: "Ensuring a just energy transition: a distributional analysis of diesel tax reform in Spain with stakeholder engagement" - Eva Alonso-Epelde y Manuel Tomás

Abstract

In Spain, the increase of the tax on diesel has sparked passionate debates. Arguments against it stressed its potential adverse effects on the economy and society. In this paper, we shed light on the distributional impact of raising the excise tax on diesel to the same level as on gasoline for final consumers and various compensation schemes jointly designed with several stakeholders. Results confirm that raising the diesel tax without offsets would have slightly regressive effects, with rural and middle-income households being the most affected in relative terms. However, the effects become progressive when the co-designed offsetting schemes are implemented.

Speaker

Eva Alonso-Epelde is a researcher from the Basque Centre for Climate Change (BC3). Her research is focused in the field of energy transition to a low-carbon economy. She is currently developing her PhD in socioeconomic assessment of climate policies with gender perspective.

Manuel Tomás is a researcher at the Basque Centre for Climate Change and is developing his Ph.D. Thesis in Economics at the University of the Basque Country. Before that, he worked as an Associate Lecturer at the University of Castilla-La Mancha. His research focuses on modelling consumer behaviour using different economic models to assess the macroeconomic, distributional, and environmental effects of energy and climate policies.


JRC B2 Seminar: "Taxing Households Energy Consumption in the EU: the Tax Burden and its Redistributive effect" - Antonio F. Amores

Abstract

The taxation of energy consumption is a central topic in the current policy debate of the European Union. While raising energy taxation is part of the European Commission's strategy for achieving its 2030/50 climate targets, the ongoing dramatic increases in the price of energy products are raising calls for reducing their taxation. Therefore, a close consideration of the incidence and redistributive effects of energy taxation is crucial to design compensatory measures and to ensure support for the Green transition. In this paper, we employ the EUROMOD microsimulation model to estimate the burden and the redistributive impact of energy consumption taxation on households across Member States. In doing so, we break down the role played by differences in consumption patterns, rates of taxation and their regressivity. We find that countries where energy taxation is the highest are often not the ones where its incidence on household income is the strongest. At the same time, the highest inequality impact is not always taking place in countries with the most regressive energy taxation. We therefore stress the importance of considering, not only the level of energy consumption taxation, but also its regressivity and its incidence over household income when assessing its inequality cost.

Speaker

Antonio F. Amores is an economic analyst at JRC Seville. He currently focusses on Indirect and Green Taxation (developing the EUROMOD microsimulation model Indirect Tax Tool and linking emissions to it). He has also wide experience in projects related with supply-use and input-output tables and on Productivity. Antonio previously worked for the Andalusian Regional Statistical Office and the Spanish Trade and Economic Office (Embassy of Spain in Chile). He is also Associate Professor in Pablo de Olavide University (Seville, Spain) with more than ten years’ of active experience in Quantitative Methods for Economics, on permanent special leave to serve at the European Commission since 2012. He was a visiting researcher at Tilburg University (the Netherlands).