Working Papers

Violation and Enforcement of Workplace Regulations: Evidence from Mexican Firm Inspections
with Agustina Colonna and Jorge Pérez Pérez

  • SSRN WP: 5557740
    Abstract This paper studies the characteristics of large formal firms that violate workplace regulations and analyzes how regulatory enforcement affects firms and workers. A stylized model of monopsonistic firms - in which employers set both wages and working conditions - shows that high levels of labor market power can lead to violations in workplace regulations, and that the enforcement of such regulations can raise firm employment through an expansion of labor supply. To test the model's predictions, we use administrative records of stratified random firm inspections in Mexico, which enforce compliance with workplace safety, health regulations, and mandatory worker training. We link these records to panel surveys and administrative employer-employee data for large manufacturing firms. We find that firms are more likely to be found violating regulations if they invest less in worker training, have lower productivity, employ a smaller share of women, and employ a larger share of the local labor market. Furthermore, inspections tend to increase regulatory compliance, reflected in greater investment in worker training, fewer workplace accidents, and a lower likelihood of future violations. Using a staggered difference-indifferences design, we estimate that inspections increase firm employment by 4 to 7% within one year. Average firm wages decrease by less than 2%, driven by changes in worker composition rather than changes in individual wage setting. Our results indicate that enforcing workplace regulations in large manufacturing firms can be an effective policy tool for improving working conditions, mitigating labor market power, and simultaneously increasing firm employment.
  • Presentations: UZH Doctoral Development Seminar 2023, UZH Doctoral Labor Seminar 2024*, UZH Doctoral Labor Seminar 2025, Uppsala Firms and Public Policy Workshop 2025, IIPF Nairobi 2025, Firms, Workers, and the Labor Market Workshop Lausanne 2025, La Strada Bocconi 2025
  • Honorable mention for Young Economist Award at the 81st IIPF Congress in Nairobi

Statutory Incidence of Ad Valorem Taxes: Revisiting Classical Theory and Policy Implications
with Konstantin Poensgen

  • SSRN WP: 5232926
    Abstract This paper revisits the canonical result that statutory tax incidence is theoretically irrelevant for economic outcomes in competitive equilibrium. We show that statutory incidence of ad valorem taxes changes the tax base and therefore effective tax rates. Shifting statutory incidence toward the demand side reduces the consumer price, raises the supplier price, and increases quantity. The effect on tax revenue is ambiguous. We derive empirically tractable incidence formulas and quantify them using simulations. Applying the framework to OECD payroll taxes, we find that accounting for statutory incidence is important since employer shares rise with total payroll taxes, offsetting nominal differences.
  • Graphs, Files
  • Presentations: Harvard Graduate Labor/PF Workshop*, Harvard Graduate Contracts Workshop*, UZH Doctoral Labor Seminar 2025

* Presented by co-author