%0 Report
        %A Cabral, Sónia
%A Garcia, Joana
%A Miranda, Raquel
%A Peralta, Susana
%A Santos, João Pereira dos
        %T Treasure Islands, Real Jobs? Workers and Anti-Avoidance Policies in a Tax Paradise
        %D 2025
        %8 2025 Mar
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 17799
        %U https://www.iza.org/publications/dp17799
        %X What type of employment exists in low-tax jurisdictions? How are employment and individual workers affected by reforms aimed at better aligning profits with real activities? Using a unique employer-employee dataset for Zona Franca da Madeira, a tax paradise on a Portuguese island, we show that workers are highly educated, perform specialized tasks, and benefit from a wage gap, particularly at the top. A reform designed to link profits more closely with real substance resulted in worker exits, while those who remained experienced wage increases and a higher likelihood of working for multiple firms simultaneously. New hires faced more precarious conditions, earning, on average, 30% less than incumbents, often working under temporary contracts. These results offer insights into policies promoting economic substance in low-tax jurisdictions.
        %K substance requirements
%K labor market
%K corporate tax avoidance
%K matched employer-employee data