Portail HAL Paris School of Economics (PSE)
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Consumption Tax Cuts in a Recession
No full textInternational audienceI study the effectiveness of temporary cuts to consumption tax rates as fiscal stimulus instruments during recessions using a structural life‐cycle model with multiple consumption categories. I find tax elasticities of 0.4 for nondurable luxuries and of 10.5 for durables. I show that the tax cut on nondurables has an intratemporal substitution effect, whereas the tax cut on durables acts through an intertemporal substitution mechanism that is stronger for high‐income, liquidity‐unconstrained, and younger households. This mechanism is amplified in less persistent recessions and dampened in absence of recessions due to durables' partial irreversibility and precautionary saving motives
Advancing Corporate Tax Transparency
No full textMultinational enterprises have risen to become dominant forces in the global economy, accompanied by a troubling trend of aggressive tax avoidance. In 2022 alone, an estimated $1 trillion in profits was shifted to tax havens by multinationals, amounting to 35% of all profits booked outside their headquarters countries (Alstadsæter et al., 2023). Despite tax avoidance being a major public concern, the specific practices employed by individual companies have remained largely opaque to the public due to a lack of transparency and public disclosure obligations. Comprehensive transparency measures promote informed policymaking, accountability, public trust, and sustainable development globally. This report examines the current landscape of corporate tax transparency and evaluates how emerging transparency measures could shape future developments in this critical area.We focus on corporate tax transparency measures via Country-by-Country Reporting (CbCR), where multinationals disclose detailed financial and tax-related information for each country of operation. We collected the publicly available CbCR reports and compiled them into a single database: the Public CbCR Database.This new data source highlights that large multinationals, particularly from Western Europe, are leading the way as primary publishers of such reports. Overall, the large multinationals publishing public CbCR account for less than 2% of large companies, and less than 5% of global revenues and global profits. Despite the small numbers, our research reveals an upward trend in voluntary CbCR disclosures, signalling increasing tax transparency practices. However, significant gaps remain, as U.S. multinationals and firms from major economies like China and Russia have only a few CbCR disclosures available.The European Union (EU) made an important step in furthering corporate tax transparency by adopting a mandatory CbCR directive that started applying this year in many EU countries. Our simulations reveal the impact this directive will have. Nearly one-third of large U.S. MNEs will be compelled to publish more disaggregated financial information than ever before publicly available. The increased disclosure from these U.S. corporate giants, who have historically been opaque, could be a breakthrough in tax transparency. However, the directive has serious limitations, as the requirements for geographical disaggregations are largely insufficient to truly evaluate the activity of multinationals. Broader adoption and enhancement of corporate tax transparency initiatives are crucial, we suggest several ways to improve the directive going forward
Révision de la taxation des boissons sucrées en France : quelles intentions pour quels effets ?
No full textInternational audienceTaxing sugary drinks is a public health measure that has been enacted in a growing number of jurisdictions over the past 15 years. This intervention needs to be evaluated, and its aims clarified. Based on the results of a multidisciplinary research project, in this article we report on the conditions that led to the revision of the taxation of sugar-sweetened beverages in France in 2018. We found an intention to improve the nutritional quality of the beverage offer rather than directly influence consumer behavior. We discuss some of the effects associated with the tax implementation.La taxation des boissons sucrées est, depuis 15 ans, une mesure de santé publique appliquée sur un nombre croissant de territoires. Cette intervention gagne à être évaluée, ce qui implique d’en clarifier les finalités. Basé sur les résultats d’un projet de recherche pluridisciplinaire, cet article analyse les conditions de la révision de la taxation des boissons sucrées en France en 2018. Il met en évidence que l’intention est plutôt de faire évoluer la qualité nutritionnelle de l’offre de boissons que d’influencer directement le comportement des consommateurs. Par ailleurs, il présente quelques effets associés à la mise en oeuvre de la taxe
When Effective teacher training falls short in the classroom: Evidence from an experiment in primary schools
No full textInternational audienceAlthough in-service teacher training programs are designed to enhance the performance of several cohorts of students, there is little evidence on the persistence of their effects. We present the two-year results of a randomized study of an intensive in-service teacher training program conducted in France during and after the training program's implementation. Our results highlight the short-run effectiveness of the training program: it successfully improves students' performance but only during the implementation year. A detailed analysis of teachers' outcomes indicates that teachers changed their pedagogical vision and practices but afterward struggled to apply skills to contents not directly covered during training
The Great Depression as a Savings Glut
No full textInternational audienceNew data covering 23 countries reveal that banking crises of the Great Depression coincided with a sharp international increase in deposits at savings institutions and life insurance. Deposits fled from commercial banks to alternative forms of savings. This fueled a credit crunch since other institutions did not replace bank lending. While asset prices fell, savings held in savings institutions and life insurance companies increased as a share of GDP and in real terms. These findings provide new explanations for the fall in credit and aggregate demand in the 1930s. They illustrate the need to consider nonbank financial institutions when studying banking crises
Missing Poor in the U.S.
No full textInternational audienceGiven that poor individuals face worse survival conditions than non-poor individuals, one can expect that a steeper income gradient in mortality leads, through stronger income-based selection, to a lower poverty rate at the old age (i.e. the "missing poor" hypothesis). This paper uses U.S. state-level data on poverty at age 65+ and life expectancy by income levels to provide an empirical test of the missing poor hypothesis. Using average temperature as an instrument for mortality differentials, we show that instrumented changes in mortality differentials have a negative and statistically significant effect on old-age poverty: a 1 % increase in the mortality differential implies a 16 % decrease in the 65+ headcount poverty rate. Using those regression results, we compute hypothetical old-age poverty rates while neutralizing the impact of the income gradient in mortality, and show that correcting for heterogeneity in income-based selection effects modifies the comparison of old-age poverty prevalence across states
Impacts of repetitive droughts and the key role of experience : evidence from Nigeria
No full textWestern African Sahel faced severe droughts in the 1980s, affecting agricultural production and food security. In recent decades, farmers have faced uncertainty in the timing and amount of rainy seasons and are confronted with erratic rainfall with high interannual variations. Can the experience of past dry events reduce the vulnerability of households to short-term rainfall shocks? In this paper, I match three waves of panel household surveys focusing on agriculture in Nigeria (GHS, from 2010-2016) and high temporal resolution precipitation data set from the Climate Hazard Center (CHIRPS). I show evidence of the extreme importance of the long-dry period of the 1980s and identify more recent droughts in 2013/2015, which are in line with a change in the characteristics of the rainfall trends. Through a two-way-fixed effect strategy, I exploit the spatial variation of the exposition to the 2015 drought. First, I look at the short-term effects of being hit by a drought on agricultural production and food security indicators. I show that being hit by a drought decreases yields by 14%, and decreases the food diversity of households by around 1%. Second, I look at the impacts' heterogeneity according to the plot's experience, using the timing of the year of acquisition of the plot. I compare short-term droughts' effects on households that acquired their first plot before the 1980s dry period to those that acquired it after. Results suggest that acquiring the land before 1985 attenuates the harmful effects of a climate shock, as these particular households have only a 3% reduction in their yields due to the 2015 drought. This is especially the case when households were severely hit in the 1980s. This result might suggest that having a long-lasting experience under extreme dry events on cultivated land reduces vulnerability to rainfall variability
On Natural Interest Rate Volatility
No full textInternational audienceEpisodes of low natural interest rates, even transitory, pose a challenge to monetary policy, by possibly causing the effective lower bound (ELB) on the policy rate to bind. Those episodes are more likely to occur not only when the natural rate is low on average but also when fluctuations around its average level are large. We study the responsiveness of the natural interest rate to structural aggregate shocks affecting the aggregate supply of and demand for savings. Using a quantitative overlapping-generations model, we trace back this responsiveness to the slopes of aggregate savings supply and demand curves and argue that both curves have likely flattened over the past four decades in the US This implies a greater sensitivity of the natural interest rate to structural shocks affecting the supply of and demand for aggregate savings – making it more likely, all else equal, that it fall into negative territory
Where does money matter more?
No full textInternational audienceThere is much still to learn about the relationship between income and well-being, and in particular how this may depend on the economic and social context. We use Russian data to estimate individual Welfare Functions of Income, and examine two potentially context-dependent concepts: self-assessed income needs and welfare sensitivity to income (how well-being changes with income). The considerable geographical diversity in Russia provides within-country variation in GDP, inequality, population density, and unemployment. We first show that income needs exceed actual income on average in Russia, and that these needs are less sensitive to changes in income than in other countries. Second, income needs vary by individual characteristics, while welfare sensitivity does not. Welfare sensitivity is however related to the regional context. Last, our estimated contextual results help us to understand why the existing literature has produced such a wide range of results
Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control
No full textInternational audienceWe use Australian panel data to examine the impact of retirement on individual locus of control, a socio-emotional skill with substantial explanatory power for a broad range of life outcomes. Exploiting the eligibility age for the Australian Age Pension, we find that retirement leads to increased internal locus of control. This greater internal control explains around one-third and one-fifth of the positive effects of retirement on health and subjective well-being, respectively. We also show that locus of control is much more malleable at retirement than the other socio-emotional skills of the Big-Five personality traits, risk and time preferences, and trust