René Livas

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René Livas

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Research and work in progress

Local Taxes and Suburbanization: Evidence from Philadelphia's Wage Tax

with Matthew Jacob | Link to paper

  

Awards: 2025 IPUMS Excellence in Research Award (Student Category), John Clapp Best Poster Award at the 2026 AREUEA/ASSA Conference, UEA Prize for Best Student Paper (Honorable Mention)

Media coverage: Broad and Liberty, Vital City


How do local taxes affect the location of economic activity inside cities? We study Philadelphia’s wage tax, which applies to residents regardless of where they work and to suburban residents who work in the city. Because city residents always pay the tax, it does not distort their workplace choices, whereas suburban residents are penalized only for working in Philadelphia. At the city boundary, rising wage tax rates should sharply reduce commuting to the city in suburban tracts relative to neighboring city tracts, while falling tax rates should increase it. With a spatial regression discontinuity design, we find that as the wage tax rose from 1.5 to 4.3% between 1960 and 1980, the change in the proportion of residents working in the city fell sharply in suburban tracts just outside the boundary; as the tax fell to 3.4% between 2003 and 2019, the change in that proportion increased sharply instead. Similar results hold along the boundaries of other cities with wage tax variation, such as Detroit and Cleveland, but not in cities without wage taxes. In our preferred estimate, a 1% tax increase reduces suburb-to-city commuting by 6.39%, holding wages, rents, and amenities constant. To estimate how the wage tax affects suburbanization once wages and rents adjust, we embed that estimate in a quantitative spatial model and replace the wage tax with a non-distortionary land value tax. We find that 26,000 jobs from the suburbs would return to Philadelphia, with such gains tripling when we allow for agglomeration forces.

The Rise of the South and the Deindustrialization of the North

with Gordon Hanson | Link to paper | Link to slides


During the middle of the 20th century, U.S. manufacturing reorganized itself. A substantial share of industrial jobs were reallocated from the U.S. North to the U.S. South, presaging the exodus of manufacturing from the global North to the global South that would occur several decades later. We study how the rise of the South affected labor market outcomes in the North after 1940, instrumenting for the South's industrial growth using insights from the literature on the region's structural transformation. Northern regions more exposed to the rise of the South saw larger declines in manufacturing employment, small offsetting gains in service employment, and decreases in overall employment rates that persisted out to 1980. These changes were accompanied by reductions in wage and salary income among low-wage workers, especially Black men, which reached their peak impact in 1960 and had mostly recovered by 1980. Impacts on real earnings may have been offset by differential reductions in the cost of housing, which also reached their peak impact in 1960 but remained depressed through 1980. Consistent with the hypothesis of Wilson (1987) on the origins of urban decline in former industrial cities after 1960, adverse changes in Northern labor markets were followed by more intense rioting during the social upheaval of the late 1960s, increased uptake of government transfers to low-income families following the launch of Great Society social programs, and reduced economic mobility of children born to low-income parents in the 1980 birth cohort relative to the 1940 birth cohort.

The Emergence of Public Transit and the Transformation of the American Downtown

with Prottoy Aman Akbar and Allison Shertzer | Link to paper | Link to slides


Did the transportation innovations of the late 19th century transform the American downtown? We study the impact of electrified transit in Philadelphia on the specialization of economic activity within the city beginning with the first subway and elevated railway in 1907. To measure worker place of residence, workplace locations, and commuting patterns, we construct a panel dataset of roughly one million entries from Philadelphia's city directories over the 1887--1930 period. Using a market access approach, we find that electrified transit caused blocks near the central business district to specialize as workplaces while blocks further away specialized as residences. This effect was especially pronounced for workers in professional services, whose jobs remained in the downtown while their places of residence shifted to the urban periphery. Our preliminary results suggest that electrified transit led to increasing specialization in land use.

Automation Technologies and Employment at Risk

with Alfonso Cebreros, Aldo Heffner-Rodríguez, and Daniela Puggioni | Bank of Mexico Working Paper 2020-04


Awards: Premio en Economía Víctor L. Urquidi (Honorable Mention), 2020


We use estimates for the probability of automation of occupations in Frey and Osborne (2017) together with household survey data on the occupational distribution of employment to provide a risk assessment for the threat that automation may pose to the Mexican labor market. We find that almost two thirds of total employment is at high risk of automation; slightly more than half if we only consider employment in the formal sector. We argue that, while these estimates provide a useful benchmark to start thinking about the impact that automation may have on the labor market, they should be interpreted with care as they are solely based on the technical feasibility to automate and do not reflect the economic incentives, or other factors such as the accumulation of human capital through education, to adopt automation technologies.

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