Maximilian von Ehrlich

Migration and Trade

Theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels. This paper assesses the functional form of the impact of migration on trade flows in a quasi-experimental setting. We provide evidence that the relationship is not log-linear. In particular, at small levels of migration (stocks) the elasticity of trade to migration is quite high, and it declines to zero at about 4,000 immigrants. If migration stocks exceed such a level, the evidence suggests that trade will not increase anymore. This suggests that cross-country network and other effects flowing from migration materialize at relatively low levels of migration, but there appears to be satiation as immigrant numbers increase by much.

The Taxation of Bonuses and its Eect on Executive Compensation and Risk Taking - Evidence from the UK Experience z

This paper explores the reaction of compensation components awarded to directors of UK nancial institutions following the temporary adoption of the bonus payroll tax in December 2009. Excessive bonuses are blamed for encouraging risk taking and are regarded as one of the pull factors of the nancial crisis. The British government attempted to reduce bonuses and accordingly corporate risk-taking by means of a special tax on cash-based bonuses. Using a comprehensive dataset on executive compensation we show that the introduction of the bonus tax decreased the cash bonuses awarded to directors by about 40%, accompanied however by a simultaneous increase in other compensation components leaving total compensation unaected.

Income Taxes, Sorting, and the Costs of Housing: Evidence from Municipal Boundaries in Switzerland

This paper provides novel evidence on the role of income taxes for residential rents and spatial sorting. Drawing on comprehensive apartment-level data, we identify the effects of tax differentials across municipal boundaries in Switzerland. The boundary discontinuity design (BDD) corrects for unobservable location characteristics such as environmental amenities or the access to public goods and thereby reduces the estimated response of housing prices by one half compared to conventional estimates: we identify an income tax elasticity of rents of about 0.26. We complement this approach with census data on local sociodemographic characteristics and show that about one third of this effect can be traced back to a sorting of high-income households into low-tax municipalities. These findings are robust to a matching approach (MBDD) which compares identical residences on opposite sides of the boundary and a number of further sensitivity checks.

Income Taxes, Sorting and the Costs of Housing: Evidence from Municipal Boundaries in Switzerland

This paper provides novel evidence on the role of income taxes for residential rents and spatial sorting. Drawing on comprehensive apartment-level data, we identify the effects of tax differentials across municipal boundaries in Switzerland. The boundary discontinuity design (BDD) corrects for unobservable location characteristics such as environmental amenities or the access to public goods and thereby reduces the estimated response of housing prices by one half compared to conventional estimates: we identify an income tax elasticity of rents of about 0.26. We complement this approach with census data on local sociodemographic characteristics and show that about one third of this effect can be traced back to a sorting of high-income households into low-tax municipalities. These findings are robust to a matching approach (MBDD) which compares identical residences on opposite sides of the boundary and a number of further sensitivity checks.

EU Regional Policy and the UK

This chapter sheds light on the effectiveness of EU Regional Policy with a particular focus on the UK. Some taxpayers in the UK might be concerned whether the EU spends their contributions to the EU Regional Policy budget wisely, independent of whether EU money returns to the UK or not. Also, some UK taxpayers might wonder whether the UK has benefited itself from EU funding. Finally, some UK citizens might be concerned about what would replace EU Regional Policy transfers to some regions in the UK, if the UK were to leave the EU. We address all of these questions and complement our analysis with some historical background on EU Regional Policy.

EU Regionalförderung: Ziele, Diagnose ihrer Wirkung und Empfehlungen für die Zukunft

Abstract In this paper we summarize recent research on the effects of European regional policy. Results point to a positive effect of this policy on average. One Euro spent even tends to generate more than one Euro in return in terms of GDP. However, the response varies drastically across recipient regions. First of all, there is evidence of existence of an optimum funding ratio (funds allocated relative to recipient GDP) where one Euro invested generates one Euro of return. About 36 percent of the regions receive higher funding than that, where one Euro generates less than one Euro of return (and, eventually, no return at all). Second, there is evidence of a bigger return on investment in regions with higher absorptive capacity level - measured by human capital endowments and the quality of recipient institutions. Insufficient levels of absorptive capacity lead to a wash of the Union’s transfers. About 70 percent of the regions exhibit such an insufficient level of absorptive capacity.