Immigration and the Top 1 percent
Joint with Arun Advani, Felix Koenig, and Andy Summers. Conditionally Accepted, Review of Economics and Statistics
Abstract: In this paper we study the contribution of migrants to the rise in UK top incomes. Using administrative data on the universe of UK taxpayers we show migrants are concentrated at the top of the income distribution, with migrants twice as prevalent in the top 0.1 percent as anywhere in the bottom 96 percent. These high incomes are predominantly from labour, rather than capital, and migrants are concentrated in only a handful of industries, predominantly finance. Almost all (85%) of the growth in the UK top 1% income share over the past 20 years can be attributed to migration.
Media Coverage: Financial Times, The Economist, The Guardian, Forbes, VoxEU, The Times, Domani
Other Materials: Slides, Presentation at the Econometric Society’s World Congress in August 2020
Shirtsleeves to Shirtsleeves? Income Persistence, Family Firms, and Aristocratic Dynasties
Abstract: I document that present-day descendants of aristocratic dynasties enjoy high economic status in Italy, several decades or centuries after their ancestors first received a title. Over this period of time, Italy experienced wars, annexations, political reforms, and a structural transformation of the economy. Yet, the income distribution of noble taxpayers living in Milan in 2005 is shifted to the right relative to the one of all other taxpayers. On average, noble descendants obtain €41,125 (or 1.77 times) more, controlling for observables. Moreover, aristocrats are three times more likely to be involved in firms, either as shareholders or company officials. This paper shows that process of income transmission within families has longer memory than suggested by traditional measures of intergenerational mobility.
Who Writes the Check Does Matter: Evidence from Firm-to-Firm Links
Abstract: The design of tax collection is largely considered to be inconsequential in the academic literature, yet policy makers frequently implement reforms to it. Combining a new administrative dataset on firm-to-firm links from Italy and a quasiexperimental research design, I study how firms and markets adapt to a reform of the collection of Value Added Tax (VAT). The reform shifted the responsibility to remit payments of VAT from sellers to “trusted” buyers, such as government entities and large firms. I present three main findings. First, firm-to-firm links subject to the new rules are more likely to become inactive after the introduction of the new rules. Second, I find that the reform was costly for the average firm. Firms more exposed to the reform experienced lower sales and higher exit rates, relative to the counterfactual. Third, I document that the burden of the reform is not evenly distributed across firms. Small firms are hit hardest, while large firms do not appear to be negatively affected. As a result, I show that markets more exposed to the reform became more concentrated.