Working Papers

Violation and Enforcement of Workplace Regulations: Evidence from Mexican Firm Inspections (updated version!)
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 in which monopsonistic firms set both wages and working conditions shows that 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. We test the model's predictions using administrative records of stratified random firm inspections in Mexico aimed at enforcing compliance with workplace safety regulations and mandatory worker training, linked to panel surveys and administrative employer-employee data for large manufacturing firms. Consistent with our model, firms that are more likely to be found in violation of regulations have lower productivity, employ a smaller share of women, are located in more concentrated labor markets and have a higher labor market share. We then show that inspections lead to higher levels of regulatory compliance, reflected in greater investment in worker training and fewer workplace accidents. Using a staggered difference-in- differences design, we estimate that inspections increase firm employment by approximately 4\% within one year, explained by both an increase in total firm hires and higher retention rates of incumbent workers. Average firm wages decrease by less than 2\%, driven equally by changes in workforce composition and adjustments in firms' average wage-setting. Back-of-the-envelope calculations bound workers' willingness to pay for an inspection between 1\% and 10\% of pre-inspection wages. Our results indicate that enforcing workplace regulations among large manufacturing firms can be an effective policy tool to improve working conditions and mitigate the effects of labor market power.
• Presentations: UZH Doctoral Development Seminar 2023, UZH Doctoral Labor Seminar 2024* 2025 2026*, Uppsala Firms and Public Policy Workshop 2025, IIPF Nairobi 2025, Firms, Workers, and the Labor Market Workshop Lausanne 2025, La Strada Bocconi 2025, Micro and Macro Perspectives of the Labor Market Duke 2026, YSEM 2026, Boston College PhD Conference 2026, EAYE 2026*, SSES 2026, BENA 2026, FILMAD Naples 2026*.
• 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 (updated version!)
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 quilibrium. Shifting statutory incidence toward the demand side reduces the consumer price, raises the supplier price, and increases quantity, whereas the tax revenue effect is ambiguous. Changes in the tax base and effective tax rates explain these results. We derive new empirically tractable incidence formulas in response to statutory incidence shifts, which we quantify using simulations in the payroll tax context. We apply these formulas to reduced form estimates of price changes after statutory incidence shifts, allowing us to point-identify elasticities and parameters like tax evasion. Finally, we apply our framework to OECD payroll taxes, documenting that employer shares rise with total payroll taxes and offset nominal tax differences. These stylized facts further highlight the importance of accounting for statutory incidence in policy and empirical analyses.
• Graphs, Files
• Presentations: Harvard Graduate Labor/PF Workshop*, Harvard Graduate Contracts Workshop*, UZH Doctoral Labor Seminar, NTA’s 118th Annual Conference on Taxation*

* Presented by co-author