Author: Arthur SeiboldPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Essays on Behavioral Responses to Social Insurance and Taxation
Author: Arthur SeiboldEssays on Behavioral Responses to Taxation
Author: Robert Andrew WhittenPublisher:
ISBN:
Category : Economics
Languages : en
Pages : 394
Book Description
This dissertation consists of three chapters that explore behavioral responses to taxation. The first two chapters are largely empirical, drawing on administrative tax data to study income reporting decisions and withdrawals from Individual Retirement Accounts (IRAs). The third chapter is an exploration of optimal tax theory when markets are imperfectly competitive and consumers do not maximize their own utility.
Behavioral Responses to Taxes - Essays on Tax Complexity and Individual Tax Compliance Behavior
Author: Daniela KühneEssays on Behavioral Responses to Corporate and Personal Income Taxation
Author: Sean Mc AuliffeBehavioral Responses to Public Insurance Programs
Author: Timothy F. PageEssays on Behavioral Responses and Tax Incentives
Author: Clive Noel WerdtEssays in Social Insurance
Author: Audrey GuoPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
This dissertation is comprised of three empirical studies of social and private insurance programs: Unemployment Insurance, Disability Insurance, and Health Insurance. It aims to contribute to our understanding of how both firms and individuals respond to the design of social insurance programs. The first chapter studies the effect of unemployment insurance taxation on firm behavior. I investigate whether and to what extent state-level differences in unemployment insurance taxes influence the location decisions and labor demand of multi-establishment firms. In the United States each state administers its own unemployment insurance (UI) program, and cross-state variation leads to significant differences in the potential UI tax costs faced by employers in different states. Leveraging the existing locations of multi-state manufacturing firms for identification, I find that high tax plants were more likely to exit during economic downturns, and less likely to hire during the recovery. Moving a plant's outside option from a high tax state to a low tax state would increase its likelihood of exit by 20% during the Great Recession. These findings suggest that decentralized administration of UI taxes may contribute to jobless recoveries and additional misallocation in the economy. The second chapter is co-authored with Courtney Coile and Mark Duggan, and studies the effect of the veterans disability compensation program on labor supply and entrepreneurship for Vietnam-era veterans. The U.S. Department of Veterans Affairs Disability Compensation (DC) program provides disability benefits to one in five military veterans in the US and its annual expenditures exceed $70 billion. We examine how the receipt of DC benefits affects the employment decisions of older veterans. We make use of variation in program eligibility resulting from a 2001 policy change that increased access to the program for Vietnam veterans who served with "boots on the ground" in the Vietnam theater but not for other veterans of that same era. We find that the policy-induced increase in program enrollment decreased labor force participation and induced a substantially larger switch from wage employment to self-employment. This latter finding suggests that an exogenous increase in income spurred many older veterans to start their own businesses. The final chapter of my dissertation is co-authored with Jonathan Zhang, and studies whether health care consumers exhibit forward-looking behavior. A fundamental question in health insurance markets is how do health care consumers dynamically optimize their medical utilization under non-linear insurance contracts? Our paper tests the neoclassical prediction that a fully forward-looking agent only responds to their expected end-of-year price. Our unique identification strategy studies families during the year of childbirth who will likely satisfy their annual deductible, thereby knowing their expected end-of-year price. We find that during the year of a childbirth, fathers increase medical spending by 11% per month after their deductible is satisfied, rejecting the null of fully forward-looking consumers. This behavior cannot be explained by fathers increasing utilization in response to the childbirth itself. Furthermore, this myopia translates to a 21-24% decrease in total annual medical spending, relative to the counterfactual of fully forward-looking behavior, and is concentrated in elective procedures; we find no response in low value or urgent care. Our findings suggest the need for modeling non-linear incentives while accounting for myopic behavior when studying the medical utilization responses to health insurance.
Essays in Public Finance
Author: Alisa TazhitidnovaPublisher:
ISBN:
Category :
Languages : en
Pages : 185
Book Description
In this thesis I explore how the elements of tax systems affect individuals' behavior. The goal is to enhance our understanding of how tax responses are affected by search and adjustment costs, information frictions, hassle costs and behavioral biases in general. In the first chapter, I provide theoretical and empirical evidence on the importance of statutory incidence in labor markets in presence of asymmetric frictions. Using a theoretical model I show that labor supply responses are stronger when the statutory incidence of taxes or labor rules falls on firms. The asymmetry of response stems from the assumption that firms have a greater ability to respond to incentives than workers because it is easier for firms to change working hours. The result holds even if wages adjust to equalize differences in labor costs stemming from taxes and regulations. I explore these mechanisms by studying labor responses to incentives generated by the "Mini-Job" program aimed at increasing labor supply of low-income individuals in Germany. Using administrative data, I show evidence of a strong behavioral response - in the form of sharp bunching - to the mini-job threshold that generates large discontinuous changes both in the marginal tax rates and in the total income and payroll tax liability of individuals in Germany. Sharp bunching translates into elasticity estimates that are an order of magnitude larger than has been previously estimated using the bunching approach. To explain the magnitude of the observed response, I show that in addition to tax rates, fringe benefit payments also change at the threshold. Using a large survey of businesses and a household survey, I compare wages and fringe benefits around the mini-job threshold and find that mini-job workers are paid higher gross wages but receive smaller yearly bonuses and fewer vacation days than regular workers. These results indicate that lower fringe benefits make mini-jobs attractive to employers, thus facilitating labor supply responses in accordance with the model's predictions. In the second chapter, I study behavioral responses to changes in marginal tax rates of social security and income taxes. I find that responses depend on individual's employment status: whether a worker is a wage earner, self-employed, or a proprietor. In line with the existing literature I document weak (but statistically significant) bunching at kink points of the tax schedule among wage earners. Starting from 1999, wage earners accumulate pension credits when they exceed a certain threshold, however, no contributions are due until earnings reach a second, higher threshold. Even 10 years after this reform I find no bunching to the right of the eligibility threshold, suggesting that individuals do not assign a high value to pension benefits. Lack of bunching is persistent across age groups and unlikely to be explained by friction costs as individuals are able to bunch at other kink points. I find strong responses to tax incentives among the self-employed but the responses differ by the type of kink. I find sharp bunching at the first kink, medium bunching at the top kink and weak bunching at the middle kink. Comparing responses before and after a tax reform that changed the magnitude of kinks I find that self-employed individuals aggressively reduce earnings to bunch at the lower, more salient kink points. In the third chapter, I study information reporting, which has been argued to be an effective tool against evasion. However, even the simplest reporting requirements can prove to be costly to taxpayers. The trade-off between evasion and compliance costs suggests that reporting rules should only be imposed on a subset of the population. In this paper I address the question of how to optimally determine such reporting thresholds. In the first part of the paper I use a natural experiment to document that reporting rules are indeed costly to taxpayers but are successful at reducing evasion. I study a reform that simplified reporting rules for an income tax deduction of noncash charitable contributions in the U.S. Relying on a revealed preference approach, I find that relaxing reporting requirements led to a steady increase in reported donations but that nearly 50% of these new donations were untruthful. The tax revenue loss, however, was offset by substantial savings for taxpayers because reporting requirements impose substantial hassle costs: $90 on average per person. In the second part of the paper I develop a framework which allows me to characterize optimal reporting thresholds. I show that the determination of optimal thresholds should take into account the utility loss from reporting experienced by individuals and a loss in externality benefits from charitable giving against the tax revenue loss generated by evasion. The size of a reporting threshold is primarily governed by the type and magnitude of cheating. Calibrations of the model shows that in the case of noncash charitable donation deductions, the optimal threshold is more than twice lower than the threshold chosen by the government.
Essays on Estate Taxation
Author: Wojciech KopczukPrivatizing Social Security
Author: Martin FeldsteinPublisher: University of Chicago Press
ISBN: 0226241823
Category : Political Science
Languages : en
Pages : 484
Book Description
This volume represents the most important work to date on one of the pressing policy issues of the moment: the privatization of social security. Although social security is facing enormous fiscal pressure in the face of an aging population, there has been relatively little published on the fundamentals of essential reform through privatization. Privatizing Social Security fills this void by studying the methods and problems involved in shifting from the current system to one based on mandatory saving in individual accounts. "Timely and important. . . . [Privatizing Social Security] presents a forceful case for a radical shift from the existing unfunded, pay-as-you-go single national program to a mandatory funded program with individual savings accounts. . . . An extensive analysis of how a privatized plan would work in the United States is supplemented with the experiences of five other countries that have privatized plans." —Library Journal "[A] high-powered collection of essays by top experts in the field."—Timothy Taylor, Public Interest