Tax Interdependence in the U.S. States

State governments finance their expenditures with multiple tax instruments, so when collections from one source decline, they are typically compensated by greater revenues from other sources. This paper addresses the important question of the extent to which personal and corporate income taxes are used to compensate for sales tax fluctuations within the U.S. states. The results show that a one percent decrease in the sales tax revenue per capita is associated with a 3 percent or a 0.9 percent increase in the corporate and personal income tax revenue per capita respectively. On average then, an exogenous reduction of $4.5 in the sales tax revenue per capita is compensated, ceteris paribus, with an increase of either$3.4 in the collections per capita from corporate taxes or $3.6 in the ones from personal income taxes.Tax Mix, State Taxes,Instrumental Variables.

The Impact of State Corporate Taxes on FDI Location

This paper examines the effects of state corporate income taxes on the location of foreign direct investment in the U.S., taking into account the endogeneity of taxes and the outside options of investors. States have a set of characteristics that influence investors' decisions, some of them are not observable by a researcher but states take them into account when they set taxes. States can also act strategically with respect to other states when setting taxes. The former behavior bias the estimated tax effects because it creates correlation between the error term and the tax rate. The latter behavior directly implies an endogenous tax rate. I adapt a discrete choice model of differentiated products to estimate the tax effects. This approach allows me at the same time to control for the outside options of investors and to use instrumental variables to solve the problem of tax endogeneity. I find the tax elasticity to be consistently around -1.Foreign Direct Investment, State Corporate Income Taxes, Tax Endogeneity.

Wage Mobility Through Job Mobility

The purpose of this paper is to study the relationship between job mobility and wage mobility. One of the main points of this paper is that job mobility is not necessarily bad. Job mobility might be the quickest way in which workers can advance in their careers and move up in the wage structure. Specifically I am going to distinguish between voluntary and involuntary job changes in both the modeling of job mobility behavior and the determination of the wage gains associated with job changing activities. Using the National Longitudinal Survey of Youth data, I find that workers voluntarily leave their jobs whenever they find themselves being paid below the customary wage rate. In particular, a worker that earns 30% less than the average wage for a worker with his characteristics and labor market experience is more than one and a half times as likely to initiate a separation than a worker just earning the average wage rate. Conversely, a worker earning 30% more than the average wage for a worker with his qualifications and labor market experience faces almost a 50% higher risk of being laid-off. This result is consistent across models. Workers' post-separation wage gains also depend on this distinction. Voluntary job changes lead, on average, to gains on the order of 7%, while layoffs imply losses of 5%. That is, voluntary separations, on average, allow workers to improve their relative position in the wage structure. Laid-off workers, however, tendMobility, Job Turnover, Wage Differentials, Duration Analysis

Downward Adjustments in a Cyclical Environment: The Case of Chilean Pelagic Fisheries

This paper offers an empirical analysis of harvest functions for the two main Chilean pelagic fisheries, which are characterized by cyclical fish abundance. Two main results are obtained. First, we identify production-side effects that weaken the incentives to adjust towards lower fishing efforts: (i) increasing returns in the use of variable inputs are observed, which are strengthened by external economies associated to aggregate search effort for fish; and (ii) catch yields sensitive to changes in abundance, but where the strength of this effect decreases as abundance declines. Second, we confirm the empirical relevance of Translog harvest technologies. This contradicts a frequent practice in bio-economic models, i.e. considering harvest-input elasticities as being constant and independent from the scale of production.Chilean pelagic fisheries; harvest functions; panel estimation; fishing cycles.

Water, power and the production of neoliberalism in Chile, 1973-2005

Chile’s free-market economic and political reforms, designed and implemented under Pinochet’s military regime (1973-1990), have been important in discussions of neoliberal public policy and environmental governance. However, understandings of how and why these reforms unfolded often overlook the complex power dynamics involved. This paper examines the role of water in consolidating the design, implementation and outcomes of Chile’s neoliberal programme, through the contested production, retention and reform of the 1981 Water Code. Drawing on the idea that water and power are mutually constitutive, it demonstrates the significance of the transition to private tradable water rights with minimal state regulation not only for changing social relationships with water, but also for consolidating the neoliberal programme and the ambitions of the military regime, government technocrats and business conglomerates. I make three related arguments: first, that water was more central to the formation and effectiveness of the neoliberal programme in Chile, and the ambitions of its core supporters, than hitherto acknowledged; second, that political interest groups, and their alliances, can play crucial roles in neoliberalising nature; and, third, that water institutional reforms consolidate power relationships and produce waterscapes in particular ways