On 25 April 1974, a military coup toppled Western Europe’s oldest dictatorship, Portugal’s Estado Novo. The following years were characterized by political and economic instability with a wage explosion and the reduction of working hours for the country’s labor force, the expropriation of...

We study the role of property taxes on entrepreneurial activity using a quasi-natural experiment, which unexpectedly reduced the upper bound of the Portuguese property tax rate for urban properties in 2008. Using a difference-in-differences approach, we nd that treated municipalities (i.e.,...