Taxation and Redistribution

• Applicants: Professor Dr. Udo Kreickemeier; Professor Dr. Florian Unger
• Subject Area: Economic Policy, Applied Economics ; Economic Theory
• Term: since 2026
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 550491480

The aim of this project is to shed new light on the question how taxing workers and firms affects market outcomes in an open economy, taking the perspective of the modern, firm-based view of international trade. In doing so, we will analyse two broad questions. First, we will consider international trade in the presence of a welfare state redistributing income and analyse the role that redistributive income taxation can play in mitigating the consequences of globalisation for those that are negatively affected by it. And second, we will consider how corporate tax reform that is aimed at improving firm performance in an open economy affects firm export behaviour and the distribution of market incomes across individual workers. Both questions will be analysed using a framework featuring a heterogeneous firm population, income inequality between the groups of managers and production workers, and also inequality between individuals within each group, thereby allowing for a rich set of distributional effects. As part of the newly founded Research Unit IDoL, our research will benefit from significant synergies with other projects within the unit. Specifically, it will gain valuable insights from all other projects within the research unit. These are the "Global Value Chains", "Services", "Firm Organization", "Innovation and Technology", and "Superstar Firms" projects. Additionally, the "Data and Research Infrastructure" project will provide crucial input by offering support in data management.

• DFG Programme: Research Units
• Subproject of: FOR 5918: International Division of Labour (IDoL): New Challenges for Workers, Firms, and Policy Makers
• International Connection: Austria
• Co-Investigators: Professor Dr. Hartmut Egger; Professorin Dr. Lisandra Flach
• Cooperation Partner: Professor Dr. Michael Irlacher