Working Papers
Working Papers
Behavioral Responses to Tax Systems: Evidence from Costa Rica's Corporate Tax Reform (with Jonathan Garita) Draft here
Heinz König Award 2025, 3rd prize, by the ZEW – Leibniz Centre for European Economic Research
Abstract: This paper examines firms’ behavioural responses to Costa Rica’s 2019 corporate tax reform, which reduced distortions in the tax system but decreased its simplicity. Using 2016–2023 corporate tax return data and a difference-in-differences design, we analyse how firms adjusted to the reform’s rich variation in marginal and average tax rates. Our descriptive analysis suggests the reform reduced revenue and cost manipulation, previously evident in bunching around revenue thresholds and profit margin discontinuities. Our causal findings reveal two main patterns. First, firms responded asymmetrically, reacting more strongly to tax cuts than to tax increases. This likely reflects the removal of growth barriers for small firms, or the downward stickiness of reported profits driven by evasion costs. Second, firms responded to marginal but not average tax rates, contrasting with evidence that individuals simplify tax schedules. These findings suggest that well-communicated reforms can improve efficiency without increasing compliance errors.
Work in Progress
Low-Earning Workers and Social Security: Evidence from Costa Rica’s Contributions Reform (with Laura Abramovsky and Jonathan Garita). Draft coming soon!
Import Tax Evasion, Drivers and Recommendations for Tanzania (with Rufina Milamo).
Informality and Taxation: Evidence from a VAT Tax Base Expansion.
Publications
Climate change perceptions and adaptive responses of small-scale farmers in two Guatemalan landscapes. Agronomía Centroamericana, 30 (2) (with Bárbara Viguera, Francisco Alpízar, Celian Harvey, Ruth Martínez-Rodríguez and Milagro Saborío-Rodríguez).
Policy Work
Desarrollo de una propuesta metodológica y de una hoja de ruta para la medición de los recursos destinados a la niñez y adolescencia en Costa Rica: principales resultados del proyecto, UCR and UNICEF, 2020 (with Juan Robalino and Luis Oviedo) Document here.
Impacto económico del impuesto al plástico, UCR and UNDP, 2019 (with Juan Robalino, Rudolf Lucke, and Luis Oviedo) Document here.
Perspectivas de la energía eólica en Costa Rica: estado, retos y oportunidades, UCR, 2017 (with Pablo Sauma) Document here.