Essays on Public Economics

This dissertation gathers three essays on public economics. The first chapter studies the effects of local income taxation on tax base and individual mobility since the early 2000s in Italy. I combine novel fine-grained data on the universe of tax residence’s transfers with 89,860 local income tax changes and income bracket-by-municipality-level panel data on the tax base. I propose different empirical strategies, resting on tax rate variations both over time and across individuals within locations. I find that taxation significantly affects the location of the tax base. The mobility response mostly reflects tax residence relocation and involves a separation between residence and work-place. Yet, my estimates imply that efficiency losses due to tax-induced mobility are relatively small, thus making local redistribution feasible at least in the medium-run. The second chapter studies the effects of stricter tax enforcement on tax collections, public goods provision and local tax rates. I study these links in the context of the Ghost Buildings program: an anti-tax evasion policy that detected buildings not reported on land registry in Italy. Using cross-municipality variation in scope for enforcing buildings’ registration, I show that tax collections account for around three-fourth of the projected revenue increase. I find complementarity between enforcement and local tax rates on property and income, which ultimately led to larger investments in schools. The third chapter studies the effect of regulation on intergenerational transmission of occupations. Focusing on the case of Italy since the early 2000s, we exploit the impact of two major reforms in the regulation of professional services. Leveraging the differential effect of regulation among occupations and over time, we show that the progressive liberalization of professional services has affected the allocation of individuals across occupations, leading to a substantial decrease in the propensity to follow the parents’ career.