Taxes and jobs within multinational firms.

The paper investigates how employment and wages within multinational enterprises (MNEs) are affected by taxes on labour and capital. The analysis uses detailed data on employment and wages within foreign-owned enterprises located in the United Kingdom combined with tax reform variation in the country of the MNE headquarter. By investigating how taxes at the headquarter level affect employment within the UK we can disentangle international relocation of jobs from the loss of jobs due to taxation. We find that especially taxes on labour lead to international relocation of jobs within multinational firms. In preliminary analysis, we further find a strong negative effect of both labour and corporate taxes on wages.