Dario Tortarolo

Welcome! I'm a Ph.D. Candidate in Economics at UC Berkeley. My fields of interest are Public Economics and Labor Economics. I earned a B.S. and M.A. in Economics from Universidad Nacional de La Plata (UNLP), Argentina.

Before coming to Berkeley I worked at the Center for Distributive, Labor and Social Studies (CEDLAS) and UNLP Economics Department.

WORKING PAPERS

The response of salaried workers to large income tax changes
(with G. Cruces and V. Castillo); Job Market Paper (Slides)
Presentations: AAEP meeting (La Plata), RIDGE PF Workshop (Uruguay), PF Lunch Seminar (Berkeley), NTA (Philadelphia), Ministry of Labor (Argentina), Zurich PF Conference (Zurich), UNU-WIDER PF Conference (Mozambique), 18th IZA-SOLE

Incidence and wage effects of means-tested transfers: evidence from a change in the payment system
(with Santiago Garriga); Draft coming out soon

Dario Tortarolo

ABSTRACT

We explore how the way in which tax credits are disbursed affects employer's behavior, wages, and employment. We exploit a change in the payment system that was gradually rolled out between 2003 and 2010 in Argentina. Under the old system, employers were intermediaries that paid family allowances to their employees together with their corresponding salary, and they were allowed to deduct this transfer from employer social security contributions. The new system eliminated the intermediary role played by employers and centralized the payments in a government agency that started disbursing the allowances directly to eligible workers. Using employer-employee micro-data and an event-study design, we show that the way tax credits are disbursed is not neutral. Our evidence suggests that employers shift part of the incidence of the transfer by paying lower wages. The effect is mostly driven by big firms and firms located in less dense areas (proxy for monopsonistic power). Our findings are therefore in line with the hypothesis that transfers are not all captured dollar for dollar by workers.

Taxpayers' responses to tax and administrative notches across the revenue distribution
(with Santiago Garriga and Jorge Puig); Draft under review by the government

Dario Tortarolo

ABSTRACT

We estimate the response of self-employed and firms to two revenue taxes, Monotributo and the Turnover Tax, across the turnover distribution using rich administrative data from Argentina. We exploit several revenue-dependent discontinuities that provide incentives to underreport taxable income combined with a bunching design to estimate revenue elasticities. We also explore heterogeneities by firm size, type of activities, and type of taxpayers. In the case of small firms, we find sizeable bunching below the thresholds that is stronger for higher tax incentives. The response is stronger in sectors that have more space for manipulation, such as service-based activities. In the case of medium and large firms, bunching is more muted but it suggests that even large firms are able to underreport their gross sales to avoid facing higher tax rates. Firms also seem to find more costly the indirect administrative cost of becoming a collection agent than the direct fiscal cost of the turnover tax. We cannot rule out, however, that large firms adjust other margins (or taxes) to compensate for the higher tax pressure.

Imperfect competition in product and labor markets: an empirical analysis using firm-level production data
(with Roman D. Zarate); In progress (Slides)
Presentations: Labor Lunch Seminar, Trade Lunch Seminar, CAF Symposium

Dario Tortarolo

ABSTRACT

We disentangle the extent of imperfect competition in product and labor markets using plant-level data. We derive a formula for the ratio between markups and markdowns assuming cost-minimizing firms that face upward-sloping labor supply and downward-sloping product demand curves. We then separate this combined measure of market power by estimating firm-level labor supply elasticities instrumenting wages with intermediate inputs. Our results suggest that both markets exhibit imperfect competition, but the variation is mainly driven by markups. We also estimate the relative gains of removing market power dispersion on allocative efficiency, finding that markups are more important on TFP than markdowns.

WORK IN PROGRESS (pipeline)

Assessing the role of tax preparers in tax compliance: direct and network effects
Status: in the field

Dario Tortarolo

Two understudied areas in Public Finance are the role of tax professionals and the role of networks in tax administration and enforcement (Slemrod, 2018). In this project I seek to answer two questions: First, whether it is more cost-effective to communicate tax preparers or taxpayers to improve tax compliance; Second, whether there are spillover effects from targeted to non-targeted taxpayers that form part of the same network (those sharing the same accountant). To that end, I run a large scale randomized communication experiment where I send deterrence emails to taxpayers and/or accountants (about 100,000 taxpayers in the treatment group and 900,000 in the control group).

An era of "bracket creep": labor responses to a non-indexed income tax
(with Guillermo Cruces); In progress

Efficiency costs and the Laffer curve: evidence from a luxury tax on cars
(with Nicolas Epele and Jorge Puig); In progress

Dario Tortarolo

We analyze the economic effects of taxes on consumption goods highly demanded by high-income people. The identification strategy hinges on quasi-random variation from a tax on luxury cars applied to automobiles above a price threshold ("notch") in Argentina. This surtax went from 0% to 10% in 2008, then increased to 50% in 2014, and decreased to 20% in 2016. We use data from the automobile industry spanning the period 2003-2019 and a diff-in-diff design to estimate own-price and cross-price elasticities by comparing the sales of brand-models above (affected) and below (not affected) the price cutoff. Our estimates allow us to test the predictions from the Atkinson-Stiglitz theorem.

Price controls, market power, and inequality in consumption baskets: evidence from retail scanner data
(with Ezequiel Garcia-Lembergman); In progress

Dario Tortarolo

We study the effciency and distributional effects of price controls. Despite the controversy surrounding the effects of this regulation, surprisingly little has been done in practice to test the contrasting predictions. In this project, we aim to fill this gap by exploiting scanner data and quasi-experimental variation from price regulations introduced in the Argentine retail sector in 2014. We first study the effect of price controls on the supply of targeted products, spillovers on similar products, and explore how it differs by the level of concentration in the product's industry. Guided by these results, in the second part of the paper we estimate markups at the product level and explore whether price controls can affect the level of concentration in the industry. In the third part, we study the distributional and welfare effects of price controls.

POLICY PAPERS

Anatomía del Impuesto a las Ganancias sobre los Asalariados: Argentina 2000-2016
In preparation for Revista de Trabajo (Ministry of Labor, Argentina)

Investment in ICT, Productivity and Labor Demand. The Case of Argentina
(with Irene Brambilla), World Bank Policy Research Working Paper No. 8325 (January 2018)

Pre-doctoral

Growth in Labor Earnings Across the Income Distribution: Latin America During the 2000s
(with Irene Brambilla), CEDLAS, Working Papers 182, CEDLAS, Universidad Nacional de La Plata, 2015.

An Empirical Analysis of Mark-ups in the Argentine Manufacturing Sector
(with Irene Brambilla), Department of Economics, Working Papers 104, Departamento de Economía, Universidad Nacional de La Plata, 2014.

Female Labor Supply and Fertility. Causal Evidence for Latin America
CEDLAS, Working Papers 0166, Universidad Nacional de La Plata, 2013.

Measuring Poverty in Argentina: the Food Energy Intake Method
(with Malena Arcidiácono), XLVII Annual Meeting of the Argentine Association of Political Economy, 2012.

Other Publications

Fiscal Decentralization and Economic Integration in Mercosur: Argentina and Brazil
(with Alberto Porto, Natalia Porto), Latin American Business Review, 15:3-4, 225-252, DOI: 10.1080/10978526.2014.931787

"Glocalization" and decentralization. The role of local governments in the new international context
(with Alberto Porto, Natalia Porto), Urban Public Economics Review, num. 20, pp. 62-93.

Chapters in books

La Calidad de la Administración Tributaria como Insumo de la Función de Producción Recaudatoria
(with A. Porto and W. Rosales), In Porto A. (editor), Temas de Economía de los Gobiernos Municipales, Buenos Aires: Ed. DUNKEN. 2012. ISBN: 978-987-02-6003-5.