Spotlight on Young Researchers: Isabel Z. Martínez

 

Isabel Z. Martínez has been interested in how policies are put in place and how they affect people’s lives for as long as she can remember. After completing her Masters in Economics, she realised that academia was the ideal way to quench her thirst for analysing large data sets and finding answers to questions addressing people’s well-being and policy decisions. The Swiss-Spanish national has been studying income and wealth inequality in Switzerland for years and has now come to Luxembourg as a Postdoc at LISER to expand her research to the Grand Duchy. We spoke to Isabel about life as a research economist, and how it has already enabled her to travel across the globe, as well as work with some of the foremost researchers in her field.

What do you work on as an economist in research?

“I have been working on income and wealth inequality in Switzerland, with a special focus on top incomes, for several years now. Like in many countries, top incomes have been increasing in Switzerland over the past 20 years.

“I would like to extend this research on top incomes to cover Luxembourg. Luxembourg is a particularly interesting case due to its large financial sector, the firm-friendly tax environment, and its large share of foreigners working in the country. Luxembourg shares these and other characteristics with Switzerland, and I would like to compare the evolution of income and wealth inequality in the two countries to gain a better understanding of what is driving top incomes.

“In a new project, I study wealth inequality in Switzerland and across Swiss cantons, again with a focus on the wealthiest. The goal is to understand the role income and wealth taxes play on wealth concentration among the richest families in the long run.

“In my second strand of research, I study how people respond to tax incentives, for example by moving to an area with especially low income taxes, or by deciding to work more when income taxes decrease.”

Why did you decide to become a researcher?

“I first and foremost decided to become an economist. Ever since I can remember, I have been interested in what policies we put in place, how they affect people’s lives and how they influence the decisions they take. I studied Political Science and Economics and was intrigued by the tools economists use to analyse large amounts of data from surveys as well as administrative records, like your tax returns, or even ‘exotic’ data such as luminosity per square kilometre measured from space.

“After completing my Masters in Economics, I realized that the place where I could best continue analysing large data sets with statistical methods while at the same time finding answers to questions that address people’s well-being and policy decisions, was in academia. I decided to do a PhD and to continue my research during a postdoc.

“I have the luxury to set my own agenda and work on those research questions I find most interesting. And while it is a job in which people work long hours (9-10h/day are usual), it comes with some perks, too: I get to travel to conferences around the globe, which has taken me as far as Hawaii, and I obtained a fellowship to spend 3 semesters as a visiting researcher at UC Berkeley in California, where I was working with one of the stars in my field.”

Researching economy does not involve any ‘lab work’ – what is a typical day like in your research field?

“I spend a lot of the time in my office, analysing data, reading the literature in my field and on methods on how to analyse data, and writing my own research papers.

“My research is often co-authored with other economists; I have co-authors at LISER as well as abroad. Thanks to modern communication technologies it is has become easy to work with someone who is 10,000 km away.

“During summer and fall I usually go to a few conferences in Europe and the U.S. where I present my work. As a postdoc, I luckily don’t have too many administrative tasks so I can really focus on my research.”

For your PhD and Postdoc, you have mainly been analysing Switzerland. Why did you choose to expand your work to Luxembourg?

“I wanted to gain a new experience in Europe after living in the U.S. and I would like to extend my research on top incomes to cover Luxembourg. There is currently no research on top income and wealth shares in Luxembourg, a gap I would like to fill.

“For that, I need access to official statistics and administrative data, which is often easier when working for an institution within the country. So far, however, data access has turned out to be very difficult (if not to say impossible), something that has come a bit as a surprise, to be honest.

“I had thought that in a small country administrative hurdles would be smaller, yet there seems to be a reluctance to give researchers access to the data, even when working for a national research institute. Internationally, Luxembourg is often not seen as a representative economy and object of study because of its many peculiarities.

“If one still wants to contribute to the academic discussion and get good publications based on Luxembourgish data, one has to choose the research question carefully and it is crucial to have exclusive, high-quality data.

“I think for Luxembourg to remain an attractive research destination for economists, access to high-quality data is a must.”

What do you want to achieve during your career as an economist researcher?

“Of course, publications are important and I would like to have at least one or two publications in one of the ‘top five’ academic journals in economics over the upcoming years. Publications are the currency in this business, and the top journals are the gold-standard.

“But more importantly, I would like to become a renowned expert in my field in Switzerland and abroad and use my expertise to inform policy decisions. Ultimately, I would like my work to have a real impact on policy discussions and ideally policy decisions.”

“This shows the share of total income that goes to the richest 1% of all taxpayers each year in different countries over the past 100 years. Top incomes have been increasing very fast in the U.S. since the 1980s, leaving European countries behind. However, starting in the 1990s, top incomes also started to increase in Switzerland and Germany. One possible explanation for the different trends are income taxes. Some scholars argue that when taxes on high incomes were low, top earners have seen their pre-tax incomes rise substantially over time and vice versa. What is striking about Switzerland, is its relatively stable evolution from the 1930s until the 1990s.”
Source: Foellmi, Reto & Martínez, Isabel Z. “Volatile Top Income Shares in Switzerland? Reassessing the Evolution Between 1981 and 2010”, forthcoming in: The Review of Economics and Statistics.
“We find that the recent rise in top labour income shares in Switzerland corresponds to a period where stock market capitalization, that is, the worth of stocks registered and traded in the country, rose remarkably above the level we observe in most countries. It would be interesting to have a similar country, such as Luxembourg, where stock market capitalization in percent of GDP rose just as much, for comparison.” Source: Foellmi, Reto & Martínez, Isabel Z. “Volatile Top Income Shares in Switzerland? Reassessing the Evolution Between 1981 and 2010”, forthcoming in: The Review of Economics and Statistics.
Isabel Z. Martínez

About Spotlight on Young Researchers

Spotlight on Young Researchers is an FNR initiative to highlight early career researchers across the world who have a connection to Luxembourg. This article is the 18th in a series of around 25 articles, which will be published on a weekly basis. You can see more articles below as and when they are published.

Spotlight on Young Researchers – revisited 5 years later: A post-PhD life in finance

When Eric Finn Schaanning was featured in Spotlight on Young Researchers in 2017, he had just defended his AFR PhD on fire sales and systemic risk in financial networks at Imperial College London. In 2017, Eric attended the Lindau Nobel Laureate Meeting and in 2018, won an FNR Award for his PhD thesis. 5 years after his PhD, we catch up with Eric, who has been working on cyber risks, financial and regulatory stress tests as well operational risk management – a career spanning Norway, Frankfurt and Zürich – and reflect on the value his PhD has added.

Spotlight on Young Researchers: Improving how industrial plants are engineered

Current engineering systems have an issue: It is fragmented – process, Piping and structural design are carried out by separate teams and involves an error-prone exchange of data. A research collaboration involving public research and industry is tackling this issue by creating a unique central data hub of a plant to which all teams have access, with promising effects on efficiency.

Spotlight on Young Researchers: Understanding the impact climate change has on crop-threatening insects

A type of insect known as whitefly spreads plant viruses and has devastating effects on the vegetables that we depend on and thanks to climate change their negative impact on agriculture is set to increase in the future. Current methods to protect crops depend on delicate relationships between whiteflies and their natural enemies, our crops, and microbial communities, a delicate balance threatened by climate change. Researchers are working with a ‘climate in the lab’ to get a better understanding of what could happen, with the ultimate goal to generate solutions to protect food security.

Spotlight on Young Researchers: Taking disruptions into account in life cycle/sustainability assessment

Global supply networks are more complex than ever, and recent global events have shown how susceptible society is to unpredictable disturbances. Scientists are working to understand the effect disruptions have on the sustainability of productive systems with the goal to provide solutions to support decision-making.

Spotlight on Young Researchers: Toward a risk assessment system for natural and biological systems

Is it possible to use mathematical indicators to alert about natural disasters and help in the early detection of disease and health issues? Over the past 15 years, scientists have been working on bridging mathematical theory and empirical evidence to do just that. To move the science forward, a key challenge is the underlying mathematical problem, as well as determining how the indicators should be applied.

Spotlight on Young Researchers: Neighbourhood characteristics as determinants of health

Unhealthy lifestyles – unbalanced diet and physical inactivity – are the main factor in the leading cause of death in the world: cardiometabolic disease. Our socioeconomic environment plays a role in these lifestyle choices. Over a 9-year period, researchers are looking at how socio-economic and physical environmental characteristics of residential neighbourhoods shape our physical activity, nutritional behaviour and cardiometabolic health.

Spotlight on Young Researchers: Shedding light on female writers in Luxembourg

Always has literature played a major role in the construction of any national identity – yet, Luxembourgish literature is very little known. Researchers are exploring the country’s literary identity, from a Francophone and a gendered perspective, with a particular focus on female writers.

Spotlight on Young Researchers: Dark patterns and the battle to free the web from manipulation

Online services are designed to offer great user experiences and accommodate our needs. They can also use manipulative design strategies to push us to disclose our personal information, purchase goods and subscriptions or spend an excessive quantity of time on apps and games. Learn about ‘dark patterns’ and an interdisciplinary research effort to free the web from manipulation.

Spotlight on Young Researchers – revisited 5 years later: From drones to space robotics

When we wrote about Miguel Olivares Mendez in the 2017 edition of Spotlight on Young Researchers, the researcher was working on an FNR JUMP project, focussing on developing algorithms for autonomous drones. The robotics scientist has continued to build his research career in Luxembourg – 5 years later, Miguel is a Professor leading a research group with a focus on space robotics.

Spotlight on Young Researchers: Environmental factors and their role in Parkinson’s Disease

An estimated 10% of Parkinson’s Diseases cases are due to genetic factors – in the search for answers as to what could cause the other 90%, research is increasingly finding evidence pointing to environmental factors. To paint a clearer picture of what role chemicals could play in the disease, researchers are for example looking for ‘fingerprints’ of chemicals in biological samples.

Spotlight on Young Researchers: Harnessing the potential of the Internet of Things and satellites to make smart agriculture a reality

Lack of access to fast and reliable Internet in rural and remote areas is a [multi-step] challenge that must be addressed to pave the way for smart agriculture and precision farming, a vital step toward ensuring food security in a changing climate. In the quest for smart agriculture, researchers are working on solutions for connecting Internet of Things (IoT) with satellite communication (SATCOM) systems.

Spotlight on Young Researchers: Membranes for clean water

As the global population sharply increases, so does the demand for clean water. At the same time, freshwater is gradually being depleted. Combine these two factors, and we have the potential for widespread water shortages – it is estimated that half of European basins will be experiencing water stress by 2030, and that 6 billion people will suffer from clean water scarcity by 2050. Researchers are working on cost-effective practices to address this impending crisis.

Spotlight on Young Researchers: Collecting individual and personal stories of the war generation in Luxembourg

Over 10,000 Luxembourgish women and men wore German uniforms during WWII in armed forces and civil organisations – many were drafted by the Nazi German authorities – and behind each name is a story waiting to be told. A team of researchers has been working with families in Luxembourg to piece together the personal stories of the war generation in Luxembourg.

Spotlight on Young Researchers: The hidden half of plants

The hidden part of plants – the root systems – play a vital role both in plant survival, and in our ecosystem, as plants store carbon in the soil. Scientists are working to understand how roots are affected by changes in water availability, but how do researchers even approach the study of roots?

Spotlight on Young Researchers: The human gut microbiome and the clues it holds

Research is steadily painting a picture revealing the significance the human gut microbiome plays in health and disease. From gastrointestinal tract disorders to the beginnings and treatment of Parkinson’s disease and beyond, the gut microbiome is a treasure trove of clues for researchers. We speak to three women in science – a biomedical scientist, a microbiologist and a bioscience engineer – about organs-on-chips and restoring an imbalanced microbiome.

Spotlight on Young Researchers: Assessing the sustainability of Luxembourgish agriculture

Deforestation and soil degradation is one of many consequences of climate change. Food production systems alone are responsible for around a quarter of annual emissions. Researchers in Luxembourg are working with local actors to create models to help assess the sustainability of Luxembourgish farms.

Spotlight on Young Researchers: Nature’s shapes as mathematical challenges

In nature, we see hyperbolic forms in corals, flatworms, and many other species of reef organisms, such as sponges and kelps. The hyperbolic spaces are also of interest for mathematicians, who are looking to prove the solvability of invariant systems of differential equations in unusual spaces such as these.

Spotlight on Young Researchers: An algorithm to allocate satellite resources

When the first satellite was launched in the 1950s, earth orbit was a lonely place. Since then, more than 11,000 satellites have been launched into space and over 3,000 are still in operation. Estimates suggest an exponential increase in satellites in the next years, creating a challenge for the effective allocation of the needed bandwidth and power. Researchers are developing algorithms to more effectively allocate the resources where and when they are needed.

Spotlight on Young Researchers: Dementia in neurodegeneration – defining the role of microglia, the brain’s immune cells

An estimated 55 million people in the world suffer from dementia, with the number estimated to increase to 78 million by 2030. In Luxembourg, more than 10,000 people suffer from dementia, including patients affected by Alzheimer’s disease and Dementia with Lewy Bodies. These incurable diseases have an increasing socio-economic impact along with the burden on patients and caregivers. One of the approaches researchers are taking is studying microglia, immune cells in the brain.

Spotlight on Young Researchers: Measuring the environmental impact of investment funds

Sustainable capital market investments are expected to reach 53 trillion USD – about 1 in every 3 dollars invested – by 2025. Meanwhile, a much lower level of funds are going directly into climate-related projects, leading to an increasing concern of greenwashing in the market. Researchers are developing science-based tools to measure the environmental impact of financial investment decisions.

Spotlight on Young Researchers: The historical relationship between the European Community and the Soviet Union

As war rages in Ukraine, the topic PhD candidate Claude Ewert has been researching for the past three years is perhaps more relevant now than ever: the relationship between the European Community and the Soviet Union. The historian is gathering valuable information on the EC’s early foreign policy and the obstacles that had to be overcome to try to make the Community speak with one voice.

Overcoming antiquated ideas about history

To many, the Middle Ages are synonymous with the term the ‘Dark Ages’ – a time of decline. The term was coined hundreds of years ago by the era referring to itself as the ‘Renaissance’ – a rebirth of norms and standards. There is in fact much more to the complexity of the Middle Ages and historians are working on overcoming these antiquated ideas. For this research, Dr Christa Birkel won a 2021 FNR Award in the category ‘Outstanding PhD Thesis’.

Spotlight on Young Researchers: A fully automatic flood mapping algorithm

Flooding presents a major hazard in both rural and urban areas. Luxembourg was also affected by the significant floods that devastated parts of Germany in July 2021. With the goal of predicting areas that will flood, scientists are working on various aspects of flood-mapping using satellite data.

Spotlight on Young Researchers: Increasing the diversity of plant species used for vegetable oil

Vegetable oil – mainly palm oil – is heavily relied upon in the production of food, cosmetics, and biofuel. The increase in droughts also affects the standard cultivation of palm oil – alternatives are needed. Agricultural scientists are investigating the potential of a new alternative drought-resistant source for the most widely-used kind of vegetable oil.

Spotlight on Young Researchers: Glioblastoma and the challenge of getting cancer drugs to reach the brain

Glioblastoma is the most aggressive form of brain tumours in adults. The incidence is about 4 per 100.000 people and the average survival after diagnosis is about 14 months with current treatments. The tumour’s location represents a major challenge – few drugs make it past the blood brain barrier. Researchers are working on designing a novel kind of drug that could help do just that.

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