WEBINAR This has focused policy attention on the su- Taxing the superrich perrich. Various political and economic ar- guments for at least partially offsetting this UBS Foundation Professor Florian Scheuer rise in inequality have been put forward. In particular, politicians have called for increas- Based on his research on taxation, UBS Foun- ing the tax burden on rich households, both dation Professor Florian Scheuer explores the Spotlight in the form of higher top rates for existing in- various approaches of how to tax the super- come taxes as well as new tax levies targeting Knowledge hub rich more effectively as a measure to create the superrich. Most prominently, the idea of The Center’s video library a fairer tax system. His data show not only introducing an annual wealth tax has recently includes recording of all public great differences in income and wealth ine- gained attention in the United States. events, short video summaries of qualities, but also in tax systems and policies The Public Paper provides an overview publications, and much more. across OECD countries. These differences of the tax situation the superrich currently are interlinked with the way the superrich face and evaluates various reform proposals. 2020 are taxed in different countries, especially re- garding income and wealth. Scheuer provides an overview of the tax situation the superrich currently face and evaluates various reform PUBLIC PAPER proposals. He also reviews the pros and cons of wealth taxes versus alternative policies that Disappearing achieve similar objectives – such as Joe Biden’s reform plans for the US tax system. Conclud- ing, Scheuer identifies a possible solution for middle class fixing capital taxation, suggesting a retrospec- Nir Jaimovich ment are met, we would be nowhere near the tive accrual tax where the statutory tax rate Public 2-degree limitation. Nordhaus identifies the rises with the holding period, but the tax is The creeping hollowing out free-rider problem as the biggest challenge for only assessed upon realization of capital gains. of the middle class and the global agreements to work, since the agree- simultaneous rise of au- dialogue ments are voluntary and without penalties PANEL DISCUSSION tomation have become for non-participation. To solve the free-rider Inequality – hotly debated topics in the problem, Nordhaus suggests forming a “cli- facts and consequences popular media and among mate club” among countries. The club struc- policy makers, and there ture aims to overcome free-riding as members Janet Currie, David Dorn, Branko Milanovic is certainly no shortage “pay dues” through costly abate- of dire predictions about Research insights on economic inequality and ments. At the same time, costly the ascent of robots and subsequent obsoles- its consequences take center stage in this dis- penalties are applied to non-par- cence of workers. But – doomsday prophecies cussion panel, bringing together three experts ticipants, e.g., in form of trade aside – what are the facts? What is happen- with multiple perspectives. While Branko Mi- tariffs. ing to workers, specifically middle-class ones? lanovic’s historical data show that the rise of And, from a policy perspective, what can (or Asia has led to a decrease in global inequali- should) be done to address this fundamental ty in the past decade and that the growth of shift in who – or what – does which jobs? the global top 1% has slowed down in recent WEBINAR This Public Paper tackles these questi- years, the discussants agree that overall, in- 29.4.2020 ons head-on. The author first identifies the equality is still very high. Janet Currie ar- types of individuals who are likely to work gues that there is too much inequality, when in middle-class occupations and tracks how Corona crisis there is a privileged group that can separate they act on the labor market outcomes. Then itself from a deteriorating public service, say In the media he evaluates policies proposed in recent years Switzerland through private hospitals or schools. UBS that have been aimed at combating the labor Foundation Professor David Dorn emphasizes market malaise middle-class workers have The Center’s affiliated researchers actively par- that the threshold – when inequality is clearly experienced. ticipate in public discussions on current issues harmful – is reached when some large income and provide expert advice to government or- groups cannot profit anymore from the overall ganizations and decision makers. growth in the country, like currently in the US. Finally, they discuss whether the corona Coronavirus pandemic will increase inequality or whether Our researchers are involved in public analysis it might even accelerate the progressive reduc- and discussion in national and international “It is a situation in which one tion of global inequality. Research media. Based on research results and econom- should not only look for the help of ic models, they provide assessments of the eco- the state. In fact, even the individ- KEYNOTE nomic consequences in connection with the Inequality and the future corona crisis. In addition to contributions ual can do a lot to slow down the from their respective areas of expertise, they spread of the virus through changes of capitalism have published a joint position paper together in behavior.” with all professors of the Department of Eco- nomics at UZH. This paper summarizes the UBS Foundation Professor David Dorn consensus of the economic debate and outlines options for action for Switzerland. The coronavirus has put the world in a state of emergency. During the first wave, Switzer- US presidential elections land took far-reaching measures to stop the Which president is better for the global econ- virus from spreading. Back then, it was un- omy? Globalization, trade and labor expert certain how the situation would develop after “Enormous corporate power is David Dorn gives an assessment of the conse- the lockdown. In the webinar, UBS Founda- undermining competition and quences of the presidential election in the US. tion Professor David Dorn and cardiologist and immunologist Paul Mohacsi discussed transferring resources upwards, Top five He also explains why the economic decline from poor to rich.” of some regions in the US has deepened the how a gradual relaxation can be publications ideological divide, amplifying polarization. achieved considering economic and Nobel laureate Sir Angus Deaton medical aspects. This event was carried out in cooperation with our The Center’s researchers regularly publish Social mobility takes generations In his presentation, Sir Angus Deaton talks partner OEC Alumni UZH. their work in leading economics journals. While differences in income and wealth can about the advantages and disadvantages of be justified, low social mobility seems diffi- capitalism and the inequalities that result Autor, David, David Dorn, Gordon Hanson, cult to accept in meritocratic societies. Eco- from it. He emphasizes that capitalism has and Kaveh Majlesi. 2020. “Importing Politi- nomic historian Joachim Voth explains why FORUM FOR ECONOMIC DIALOGUE brought great prosperity in the past, even cal Polarization? The Electoral Consequenc- many people today are no better off than their OCT. / NOV. 2020 to poor countries. But the system has flaws es of Rising Trade Exposure.” American parents and why – as long as the rules of the that need to be fixed, such as the health care Economic Review, 110 (10): 3139–83. game remain broadly the same – system in the US. Thus, Deaton concludes, one should not have overly high Rethinking we need to repair capitalism through better Autor, David, David Dorn, Lawrence expectations of changes in the regulations and restore competition by fixing F. Katz, Christina Patterson, and John Van income position, even in a mer- inequalities antitrust, re-orienting the courts, campaigning Reenen. 2020. “The Fall of the Labor itocratic environment. We look back on an extraordinary edition of finance reform, enforcing rules on lobbying, Share and the Rise of Superstar Firms.” the annual UBS Center Forum. For the first and eliminating tax havens. The Quarterly Journal of Economics, time, the event took place online, spread over Volume 135, Issue 2: 645–709. four weeks. We were overwhelmed by the enormous resonance that Baranov, Victoria, Sonia Bhalotra, Pietro Events 2020 the event series has generated. Biroli, and Joanna Maselko. 2020. “Mater- It proves how topical and im- Center nal Depression, Women’s Empowerment, portant the debate on inequality is. and Parental Investment: Evidence from a KEYNOTE publications Randomized Controlled Trial.” American 21.1.2020 RESEARCH SLAM Economic Review, 110 (3): 824–59. (In-)Equality and prosperity The Public Paper series makes Bursztyn, Leonardo, Alessandra L. With several UZH researchers research on topics of key social The economics of González, and David Yanagizawa-Drott. relevance available to a broader 2020. “Misperceived Social Norms: Women What better way to open an event series on in- audience in a simplified, compact, climate change Working Outside the Home in Saudi Ara- equality than with a firework of different short and highly readable format. bia.” American Economic Review, 110 (10): presentations on the topic? The 35-minutes 2997–3029. session is packed with insights from ongoing research on different aspects of inequality. PUBLIC PAPER Epper, Thomas, Ernst Fehr, Helga Fehr-Duda, The first talk provides a political perspective, Claus Thustrup Kreiner, David Dreyer showing how confidence about one’s own fu- Lassen, Søren Leth-Petersen, and Gregers ture opportunities influences voting behavior. Taxing the Nytoft Rasmussen. 2020. “Time Discount- Three presenters focus on innovation, labor, ing and Wealth Inequality.” American and taxation, discussing the interplay between superrich “I hope that you can say that we, in Economic Review, 110 (4): 1177–1205. this generation, had the resolve to rising automation, job losses and correspond- Florian Scheuer overcome the obstacles and take ing policy measures. Another group presents findings from the field of development and be- the steps necessary to preserve our Over the past decades, havioral economics, showing that early inter- many developed countries unique and beautiful planet.” ventions in children’s life as well as learning to have experienced consid- be more patient can make a huge difference in Nobel laureate William Nordhaus erable increases in income education outcomes and wealth accumulation. and wealth inequality, led William Nordhaus did not sugarcoat any- by an extraordinary con- thing in his public lecture: International cli- centration among the very mate policy is at a dead end, he stated. Policy richest swath of households. makers are far off from reaching the 2-degree target and even if the goals of the Paris Agree- Professors Events 2021 The UBS Center fosters world-class research in economics on all levels by endowing several new permanent professorships and assistant The Center’s events come in different for- A closer professorships and awarding full doctor- mats, including two annual conferences with al scholarships. The thematic focus of the leading representatives from the academic, Center’s endowed professorships is on inter- private, and public sectors debating a key disciplinary and forward-looking research contemporary economic issue. that covers today’s major issues relating to The Opinions events feature top the economy and the financial markets. representatives from academia to voice their views in public speeches. look Prof. Sandro Ambühl UBS Foundation Assistant Professor for Behavioral Economics of Financial Markets

Prof. Pietro Biroli UBS Foundation Assistant Professor of Applied Economics

Prof. Gregory Crawford Center news About us Professor of Economics, Affiliated Professor at the UBS Center

Prof. David Dorn WIRTSCHAFTSPODIUM SCHWEIZ UBS Center UBS Center UBS Foundation Professor of APRIL 2021 Globalization and Labor Markets sets course at a glance Sustainable

for the future The UBS Center for Economics in Society, Prof. Ernst Fehr Professor of Economics, Affiliated social systems UBS Center in short, is an Associated Insti- Professor at the UBS Center In June 2020, UBS announced the extension tute at the Department of Economics of the Switzerland’s social security systems are fac- of its engagement for the University of Zurich University of Zurich. It was established in ing major challenges: an aging society, rising for an additional 10 years with a new dona- 2012, enabled by a founding donation by UBS, Prof. David Hémous health and care costs, low interest rates for tion of approximately 25 million Swiss francs, which the bank made on the occasion of its UBS Foundation Associate retirement provisions, as well as misguided enabling the UBS Center to build on its past 150th anniversary. In view of the generous do- Professor of Economics of Innovation and Entrepreneurship incentives in health care and early retirement. achievements. nation, the university named the UBS Center Growing demands are confronted with ques- after its benefactor. tions of feasibility. Where are the limits of the Bringing European values and views into The UBS Center serves two main aims. Prof. Nir Jaimovich welfare state? And what priorities need to be global dialogue First, it enables world-class research in eco- Professor of Economics, Affiliated set to ensure the sustainability of the social The University of Zurich has become one of nomics on all levels, to be conducted at the Professor at the UBS Center systems? the leading universities in Europe in the field University’s Department of Economics. It the- Experts from the fields of retirement pro- of economics – and this is in large part due reby supports the department’s ambition to vision and health care will discuss these and to the UBS Center, which has been able to es- become one of the top economics departments Prof. Dina Pomeranz other questions in two expert panels on the tablish itself in Switzerland as a driving force in Europe and to make Zurich one of the best UBS Foundation Assistant topics of “Solutions to secure retirement pro- and a platform for dialogue between scientists, places for research in economics. The UBS Professor of Applied Economics vision” and “The health care system between policy makers, and society. Center’s other aim is to serve as a platform for ethics and affordability”. In the concluding dialogue between academia, business, politics, political panel these impulses will be taken up Additional professorship and continuation and the broader public, fostering continuous Prof. Florian Scheuer and the political priorities discussed. of PhD scholarships knowledge transfer. Delivering on these aims UBS Foundation Professor The extension of the initial 2012 framework will also strengthen the posi- of Economics of Institutions agreement includes the continuation of the tion of Zurich, and Switzerland activities of the UBS Center in their previ- more generally, as a leading ous scope. This applies in particular to the location for education and busi- Prof. Hans-Joachim Voth Center’s public events, publication series and ness. UBS Foundation Professor of Save Macroeconomics and Financial OPINION EVENT communication activities on various channels. Markets the date Ernst Fehr will remain director of the Center, UBS Foundation and management 26.5.2021 as will the strongly staffed advisory board and The UBS Center is governed by and financed the existing donated professorships. The UBS through an independent foundation, the UBS Prof. David Yanagizawa-Drott Foundation has now the opportunity to fund Foundation of Economics in Society, chaired Professor of Development and Steven Emerging Markets, Affiliated an additional professorship; the independent by former Federal Councillor Kaspar Villiger. Professor at the UBS Center appointment committee of the University of Pinker: Zurich will determine who will take up the Management and team professorship. Furthermore, the foundation Enlightenment will continue its scholarship program, thus HALLMARK carrying on its support for the Zurich Grad- Prof. Ernst Fehr now uate School of Economics. Director Advisory board

The Center’s Advisory Board, comprised of Prof. Hans-Joachim Voth some of the most renowned economists of our Scientific Director time, including several Nobel Prize laureates, ensures the high quality of the work at the UBS Center and provides guidance on all academic matters. “Here is a shocker: The world has “Scientific knowledge does not Dr. Matthias Ammann Chief Operating Officer made spectacular progress in every release us from making difficult Advisory board members Prof. Philippe Aghion single measure of human well-being. decisions in complex environments, Prof. Manuel Arellano Here is a second shocker: Almost no Stefanie Amstein, but it can provide insights that we Prof. David Autor one knows about it.” Event and Office Manager should take into consideration when Prof. Ernst Baltensperger Christopher Shenton, Digital Publisher Steven Pinker Prof. Marianne Bertrand making these decisions.” and Social Media Producer Dr. Mauro Dell’Ambrogio Dr. Maura Wyler, If you follow the news, the world appears to Kaspar Villiger, Prof. Esther Duflo * Head of Communication be sinking into chaos, hatred, and irrationali- Chairman of the Foundation Council Prof. Raquel Fernández ty. Is the world really falling apart? According Prof. Oliver Hart * to Steven Pinker, Johnstone Family Professor Prof. James J. Heckman * at Harvard University, the reality created by Prof. Chang-Tai Hsieh SOCIAL MEDIA YOUNG TALENTS the media is an illusion: a symptom of histor- Prof. Daniel Kahneman * ical amnesia and statistical fallacies. Relying Prof. Ulrike M. Malmendier on empirical data, he shows that our lives Prof. Joel Mokyr Promoting Scholarships have become longer, healthier, safer, richer, Prof. Yingyi Qian happier, and more peaceful – not just in the Prof. Thomas J. Sargent * dialogue West, but worldwide. The UBS Center Scholarships are scholarships Prof. Klaus M. Schmidt Pinker argues that this progress is the awarded every year to outstanding university Prof. Robert J. Shiller * result of the Enlightenment: the conviction graduates at the Graduate School of Econom- Prof. Kjetil Storesletten that reason and science can enhance human YouTube ics, run by the Department of Economics at Prof. Guido Tabellini flour-ishing. This ideology and its values are 4,000 subscribers the University of Zurich. Prof. Harald Uhlig threat-ened by the negative public discourse, Prof. Ekaterina Zhuravskaya Scholarship holders 2020 which fuels fears and results in a corrosive Chiara Aina * Nobel laureates fatalism. Pinker makes the case for reason, Twitter Agustina Colonna science, and humanism: the ideals we need 11,800 followers Maite Deambrosi to confront our problems and continue our Christian Decker progress. Emanuele DiCarlo In cooperation with Swiss Institute of LinkedIn Matteo Roberto Greco International Studies (SIAF). 630 followers Guohui Jiang Ursa Krenk Mia Lu Ante Malenica Gabriele Patete Ursina Schaede Martin Stancsics Garyn Tan Julian Teichgräber