Miriam Kohl

Tax Transfer-system Reform

In a recent paper, Miriam Kohl and Philipp Richter question how effective a unilateral reform of a redistributive tax-transfer system in an open economy can be. They show that a unilateral increase in the tax rate reduces the market size of the reforming country relative to the market size of its trading partner. This leads to a positive terms-of-trade effect for the reforming country, as confirmed by the international trade policy literature. Due to this terms-of-trade externality, the distortions for the reforming country caused by the tax are less pronounced in the open economy compared to the closed economy. They further show that – for sufficiently small initial tax rates – the tax-induced decrease in income inequality is larger under international trade compared to autarky. Optimal tax rates based on the Atkinson social welfare function are positive in the open economy and higher than under autarky.

Ms. Kohl’s research focuses on the interaction of globalization and public policy. She works on the distributional effects of trade policy, the political economy of tariffs and taxes and on how to share the gains from globalization more widely. While visiting CESifo, Miriam Kohl will work on the interaction of taxes and labor market imperfections in the context of globalization. Together with Hartmut Egger and Udo Kreickemeier, Miriam Kohl studies the labor market consequences of globalization when a welfare state redistributing income is in place. The aim is to model a tax that is genuinely progressive in the presence of labor market imperfections, with the labor market being characterized by a fair-wage effort mechanism that leads to rent sharing. As a first step, Ms. Kohl aims to understand how this progressive income tax affects the occupational choice of individuals. As a second step, she will look at the labor market effects of trade liberalization in the presence of progressive taxation.

Miriam Kohl is a postdoctoral researcher at the University of Mainz. She received her doctorate from the University of Dresden in 2019 after having studied Economics at the University of Tübingen and University College London.