I analyze the welfare effects of a policy of modern sector enlargement (MSENL), and a policy of increasing the efficiency of on-the-job search from the urban informal sector (IEOS) in a generalized Harris-Todaro model. I show that MSENL causes a Lorenz worsening of the income distribution and IEOS causes a Lorenz improvement. In a rare direct application of the Atkinson theorem, I conclude that MSENL decreases social welfare and IEOS increases social welfare for all anonymous, increasing and Schur-concave social welfare functions.
We analyze the effect of tax expenditures on the stabilizing power of the tax system. We propose a microsimulation strategy which exploits links that we identify between automatic stabilizers, tax expenditures, and effective marginal tax rates. Using the Survey of Consumer Finances from 1988 to 2009, we estimate that, on average, the Mortgage Interest Deduction and the Charitable Contributions Deduction increased the sensitivity of consumption to income fluctuations from a baseline of 0.14 by 1.13% and 0.97%, respectively.
I examine the welfare effects of immigration on United States workers. I build a dynamic search and matching model in which immigrants and natives differ according to their outside options, separation rates, wealth holdings and skill composition. Immigration affects native-born welfare by i) altering the skill composition of the labor force, ii) lowering the expected hiring cost of firms, and iii) altering the rate of return on wealth. I demonstrate that the transition period, during which the economy adjusts to immigration, involves both higher returns to wealth and inferior labor market conditions in comparison to the long run steady state. Thus, accounting for transition dynamics shifts the welfare effects of immigration in favor of wealthy households at the expense of workers.
We develop a microsimulation estimator for the size of the tax system's automatic stabilizers that describes the absorption effect of federal taxes relative to the response of aggregate consumption to income fluctuations. The measure improves upon previous microsimulation measures by taking into account whether the baseline consumption response is high or low. Using the Survey of Consumer Finances, we find that, on average between 1988 and 2009, the tax system decreased the response of aggregate consumption to income fluctuations by 19.5%. The tax system has played a much larger role in stabilizing the macroeconomy than previously thought.
Replication, reproduction, and falsification of published articles is an important part of the scientific endeavor. Apart from some notable exceptions, however, very few reproductions of economics articles are published or made available in any other public way. We describe and present the results of a large replication exercise. Of the 157 articles published in the American Economic Journal: Applied Economics for the years 2009-2014, 46 were successfully replicated. Reproduced articles are found to have fewer citations than articles that use confidential data (and thus were not reproduced in this paper).
Dataset containing playing statistics and birthplace information for every person to have played test rugby for the major nations. Python and R code used to webscrape and construct the data is also available. Download everything here.
The NBER Stata command taxsim9 calculates federal and state income tax liability using 21 input variables. However, these variables do not include taxable income. Kyle Rozema and I therefore wrote Stata and Matlab programs to calculate US federal tax liability and marginal tax rates from nominal taxable income for years 1913 to 2013. Visit the GitHub repository above for installation instructions.
R package co-authored with Yuxin Chen, Alice Chou and Lars Vilhuber that provides an interface for implementing the source C++ programs of the statistical model proposed in Synthesizing Truncated Count Data for Confidentiality by Sam Hawala, Jerry Reiter and Quanli Wang. Sponsored under NSF grant SES-1131897 to Cornell. Visit the GitHub repository above for instructions.
These notes form part of a workshop for the annual High Performance Computing for Economists camp held at Cornell University. The goal of the camp is to showcase high-performance techniques and tools targetted at 2nd year PhD students in economics and other social sciences. Trimmed down versions are also available: Command Line Slides, Git Slides.
A chapter in a collection of responses to Thomas Piketty's Capital from a range of New Zealand economists and commentators. It is published by Bridget Williams Books. You can find media coverage by idealog, Radio New Zealand, and the New Zealand Herald.
An essay in the Pantograph Punch reviewing Tangata Whenua: An Illustrated History, one of the first comprehensive histories of Māori. Tangata Whenua was written by Atholl Anderon, Judith Binney and Aroha Harris, and published by Bridget Williams Books.
A chapter in a report on unconscious bias and racial achievement gaps in New Zealand. My chapter reviews recent economic literature on racial achievement gaps in the United States, and attempts to draw comparisons between African American and Māori educational and economic outcomes. You can find media coverage by Maori Television, stuff.co.nz, and Radio New Zealand.