Arnau Valladares-Esteban
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Valladares-Esteban
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Arnau
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arnau.valladares-esteban@unisg.ch
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+41 71 224 26 93

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On the measurement of the elasticity of labour

2021-10 , Gottlieb, Charles , Onken, Jörn , Valladares-Esteban, Arnau

We use a simple theoretical framework, a building block of many macroeconomic models, to study the prominently debated relationship between the model parametrisation of the Frisch elasticity and the reduced-form evidence on the elasticity of labour. Focusing on tax holidays, we show that the elasticity measured with a reduced-form approach is only equal to the Frisch-elasticity parameter if there are no income or general equilibrium effects. Furthermore, for a wide range of standard values of the Frisch-elasticity parameter, the response of labour generated by a tax holiday in the model is aligned with the reduced-form evidence.

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Tax Incentives, Portfolio Choice, and Macroprudential Risks

2023-11-10 , Brenzel-Weiss, Janosch , Koeniger, Winfried , Valladares, Arnau

We use a rich lifecycle portfolio choice model to analyze how tax incentives shape household indebtedness, portfolio allocation and macroprudential risks. We gauge the effects of tax incentives by exploiting the fact that homeownership rates and credit supply conditions are similar in Germany and Switzerland, whereas tax incentives for amortising mortgage debt and voluntary pension contributions differ. We find that tax incentives have quantitatively strong effects on mortgage incidence and portfolio allocation, although their impact on aggregate tax revenue is negligible. Tax deductions for mortgage interest payments, which exist in many developed economies, shift the tax burden from the young and indebted to the old and wealthy homeowners. At the same time, more generous tax deductions for voluntary pension contributions shift the portfolio towards less liquid pension savings. The macroprudential implication, considering a bust with a house price correction of 20%, is that the consumption slump in the economy with tax deductions is 0.34 percentage points (pp) smaller on average, relative to the decrease of 6.3% in the benchmark economy. The average hides heterogeneity across age groups: for young homeowners the consumption slump is 1.24 pp smaller whereas it is 0.44 pp larger for homeowners close to retirement.

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On the Marriage Wage Premium

2023-06-23 , Mcconnell, Brendon , Valladares-Esteban, Arnau

We use a novel instrument based on local social norms towards marriage to present a new finding: being married has a positive causal effect on the wages of both men and women. Despite the striking changes in both the labor market and the composition of families over the past decades, the premium for men is sizable and has only slightly diminished over time. In contrast, we document a stark change for women: the effect of being married has evolved from a penalty into a premium. The premium for men can be mainly rationalized as a byproduct of household specializationà la Becker (1985, 1993): within married couples, men tend to concentrate on market work, which leads them to supply more market hours than their single counterparts and earn higher wages. In the past, the penalty for women was also a consequence of household specialization, with married women working significantly fewer market hours than singles. The degree of specialization between spouses has decreased over time, allowing married women to work virtually as many hours as singles and leading to the disappearance of the penalty. We present evidence indicating that the marriage wage premium for women in recent years can be explained by one of the channels in Pilossoph and Wee (2021): because of income pooling with their husbands, married women have a higher reservation wage, which allows them to select better-paid job opportunities than their single counterparts.

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On Households and Unemployment Insurance

2020-01 , Choi, Seky , Valladares-Esteban, Arnau

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The Impact of Tax Incentives on Portfolio Diversification and Economic Stability

2022-12-16 , Valladares-Esteban, Arnau

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On the Measurement of the Elasticity of Labour

2020-11 , Valladares-Esteban, Arnau , Onken, Joern

We use a simple macroeconomic model to illustrate the difference between the Frisch elasticity, understood as a structural behavioural parameter, and the elasticity of labour measured through a tax holiday; a setup used in the micro-applied literature to measure the responsiveness of labour to changes in the returns to work. We show that a high Frisch elasticity is compatible with a measured elasticity of the same order of magnitude as the micro-applied estimates.

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The Marriage Unemployment Gap

2017-06-06 , Choi, Sekyu , Valladares-Esteban, Arnau

In this paper we document that married individuals face a lower unemployment rate than their single counterparts. We refer to this phenomenon as the marriage unemployment gap. Despite the dramatic demographic changes in the labor market over the last decades, this gap has been remarkably stable both for men and women. Using a flow-decomposition exercise, we assess which transition probabilities (across labor force states) are behind the marriage unemployment gap. We find that, for men, the higher attachment to employment of married males is the main driver of the gap. For females, we find that the participation margin plays a crucial role.

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Tax Incentives and Mortgage Amortization

, Koeniger, Winfried , Valladares-Esteban, Arnau , Brenzel-Weiss, Janosch

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The Effects of Asylum Seekers on Political Outcomes

2020-10 , Valladares-Esteban, Arnau , Zurlinden, Noémie Martina

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