Treasure Islands, Real Jobs? Workers and Anti-Avoidance Policies in a Tax Paradise

Sonia Cabral (), Joana Garcia (), Raquel Miranda (), Susana Peralta and João Pereira dos Santos ()
Additional contact information
Joana Garcia: Banco de Portugal and NIPE/Universidade do Minho
Raquel Miranda: Banco de Portugal
João Pereira dos Santos: Queen Mary University of London, ISEG University of Lisbon, REM/UECE and IZA Institute of Labor Economics

No 26, Working Papers from EU Tax Observatory

Abstract: TThis paper offers the first detailed characterization of the labor market in a tax paradise and the first assessment of how a reform aimed at discouraging tax avoidance affected workers. We show that incumbents were highly educated, performed specialized tasks, and benefited from a wage gap, particularly at the top. Immediately after the reform announcement, several workers exited. Stayers experienced wage increases of around 8% and a higher probability of working for several firms simultaneously. New hires earned, on average, 30% less than incumbents, frequently on temporary contracts. The results offer insights into policies promoting economic substance in low-tax jurisdictions.

Keywords: Corporate tax avoidance; labor market; substance requirements; matched employer-employee data (search for similar items in EconPapers)
JEL-codes: F23 H26 H30 J08 J31 J38 J48 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2025-01
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Related works:
Working Paper: Treasure Islands, Real Jobs? Workers and Anti-Avoidance Policies in a Tax Paradise (2025)
Working Paper: Treasure Islands, Real Jobs? Workers and Anti-Avoidance Policies in a Tax Paradise (2025)
Working Paper: Treasure Islands, Real Jobs? Workers and Anti-Avoidance Policies in a Tax Paradise (2024)
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