Formalizing Domestic Work: Evidence from a Social Security Reform in Spain. Joint with Alejandro Iribas.
Can public policy increase formalization of labor and simultaneously improve working conditions in the formal sector? This paper evaluates the impact of the 2012 Spanish social security reform targeting domestic workers, a highly informal, female-dominated sector. The reform extended legal protections for formal workers, tied social security contributions to earnings, increased the number of labor inspections, and lowered employer costs through a temporary tax deduction and reduced contribution rates. We present four main findings. First, the reform led to a substantial increase in formal employment, cutting the informality rate from 60% to 30% over six years. Second, the increase in formalization comes at a cost: we find significant declines in social security contributions per worker. Third, the decrease in the social security contributions extends to workers who were formally employed prior to the reform. Fourth, we find an overall decrease in employment for this sector in the long run, both in the extensive and intensive margins, with the corresponding drop in annual earnings. This suggests that, while the reform lowered the cost of formalization, it introduced administrative complexities that altered hiring patterns and may have accelerated a shift toward agency-based employment.
Careers to Carers? Pension Policy and Mother's Economic Outcomes. Joint with
Eppie van Egeraat.
We use a policy that increased pension wealth for low-earnings mothers up to 6 years after giving birth in Norway to study the response of maternal labor supply in response to higher future income. This policy allows us to explore the trade-off between acknowledging unpaid care work in pension systems and disincentivizing labor supply of working-age mothers, which may in fact broaden the gender gap in pensions. We implement a regression discontinuity difference-in-differences (RD-DD) design to consider the impact of childcare-related pension credits on labor market outcomes up to 16 years after birth. We do not find any reductions in employment, earnings, nor take-up of other benefits as a result of the policy. This suggests that pension credits can narrow the gender pension gap with no or very small distortionary effects when applied early enough.
Preventing vs. Correcting Inequality: Childcare Pension Credits and Women's Retirement. Single-authored project.
I provide a comprehensive analysis of the impact of a pure change in pension wealth on retirement behavior. I exploit a 2010 Norwegian policy reform that retroactively extended childcare-related pension credits to mothers of children born between 1967 and 1991. I quantify the resulting increase in pension benefits and assess the policy's potential to narrow the gender pension gap, along with any distortionary effects on labor supply and pension claiming. Using population-wide administrative data from Norway, I estimate pension benefits for all beneficiaries had the policy not been adopted and implement a difference-in-differences design, leveraging the variation in the credits' impact on final pension benefits. My findings show that the policy increased pension benefits by an average of 2.5%, contributing to a 1.5 percentage point reduction of the gender gap in lifetime pension benefits. I find small, negative effects on employment, earnings, and take-up of other benefits driven by a decrease in the claiming age, along with preliminary evidence of spillovers within the household.
Tax Simplicity and Migration: Evidence from Norway’s Pay-As-You-Earn Tax Scheme. Joint with
Ana Bottega.
The role of firms in early retirement decisions. Joint with
Andreas Haller and
Julian Vedeler Johnsen.