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- 2019
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Tidskriftsartikel (refereegranskat)
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- Ando, Michihito, 1981-
(författare)
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Essays on the Evaluation of Public Policies
- 2015
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- This thesis consists of four self-contained papers.Essay 1: This paper uses the synthetic control (SC) method to examine how the establishment of Nuclear Power Facilities (NPFs) in Japan in the 1970s and 1980s has affected local per capita income levels in the municipalities in which they were located (NPF municipalities). Eight quantitative case studies using the SC method clarify that the effects of NPF establishment on per capita taxable income levels are highly heterogeneous. The estimated effects are often economically meaningful and in some cases huge: the income level was 11% higher on average and 62% higher in one municipality in 2002 when compared with counterfactual units. On the other hand a few of the NPF municipalities have received only weak or negligible effects from NPF establishment. The post-estimation comparisons of employment between the NPF municipalities and the SC units suggest that the size of the direct labor demand shocks and subsequent indirect employment effects on nontradable service sectors have contributed to the increase in per capita income levels.Essay 2: In a regression kink (RK) design with a finite sample, a confounding smooth nonlinear relationship between an assignment variable and an outcome variable around a threshold can be spuriously picked up as a kink and result in a biased estimate. In order to investigate how well RK designs handle such confounding nonlinearity, I firstly implement Monte Carlo simulations and then study the effect of fiscal equalization grants on local expenditure in Japan using an RK design. Results in both the Monte Carlo simulations and the empirical application suggest that RK estimation without covariates can be easily biased, and this problem can be mitigated by adding basic covariates to the regressors. On the other hand, a smaller bandwidth or a higher order polynomial, even a quadratic polynomial, tends to result in imprecise estimates although they may be able to reduce estimation bias. In sum, RK estimation with a confounding nonlinearity often suffers from bias or imprecision and estimates are credible only when relevant covariates are controlled for.Essay 3: This paper investigates the effects of fiscal equalization grants on total expenditure and disaggregated expenditures by exploiting two different formula-based exogenous variations in grants. Examining the institutional settings of the Japanese fiscal equalization scheme and estimating local average grant effects with a regression kink design and an instrumental variable approach, I demonstrate that there exist heterogeneous grant effects for two groups of municipalities with different fiscal conditions. That is, estimated grant effects on total expenditure are approximately one-to-one for municipalities around the threshold of grant eligibility, but much more than one-to-one for municipalities that are heavily dependent on fiscal equalization grants. In addition, grant effects on disaggregated expenditures are dispersed across different expenditure items in the former type of municipality but concentrated on construction expenditures in the latter type. I then discuss that the observed grant effect heterogeneity is a consequence of the institutional settings of the Japanese fiscal equalization scheme.Essay 4 (with Reo Takaku): We evaluate the impact of patient cost sharing on the use of dentures and subjective chewing ability exploiting a sharp reduction in the coinsurance rate, the percentage of costs born by the user, from 30% to 10% at the age of 70 with a regression discontinuity design. Using data from the Japanese Study of Aging and Retirement (JSTAR), we find that the utilization rate of dentures increases from approximately 50% to 63% around the threshold, implying that the extensive margin elasticity of denture usage with respect to the coinsurance rate is about -0.41. In addition, we find this jump is almost entirely due to the change in the rate among women. On the other hand, we do not find a significant improvement in self-reported chewing ability. Our empirical findings are also confirmed by complementary analysis with randomization tests and placebo randomization tests.
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- Anil, Kumar, et al.
(författare)
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Estimating Taxable Income Responses with Elasticity Heterogeneity
- 2017
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We explore the implications of heterogeneity in the elasticity of taxable income (ETI) for tax-reform based estimation methods. We theoretically show that existing methods yield elasticities that are biased and lack policy relevance. We illustrate the empirical importance of our theoretical analysis using the NBER tax panel for 1979-1990. We show that elasticity heterogeneity is the main explanation for large differences between estimates in the previous literature. Our preferred, newly suggested method yields elasticity estimates of approximately 0.7 for taxable income and 0.2 for broad income.
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- Edmark, Karin, et al.
(författare)
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The Swedish Earned Income Tax Credit : Did It Increase Employment?
- 2016
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Ingår i: Finanzarchiv. - 0015-2218 .- 1614-0974. ; 72:4, s. 475-503
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Tidskriftsartikel (refereegranskat)abstract
- This paper analyzes the extensive-margin labor-supply effects of a Swedish earned income tax credit introduced in 2007. The reform was one of the government's flagship reforms to boost employment, but its actual effects have been widely debated. We exploit the fact that the size of the tax credit is a function of the municipality of residence and income if working, which yields two sources of quasi-experimental variation. The identifying variation, however, turns out to be small and potentially endogenous, which means that the question of whether the reform has delivered the hoped-for effects cannot be credibly answered.
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- Kumar, Anil, et al.
(författare)
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Credit constraints and GDP growth : Evidence from a natural experiment
- 2019
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Ingår i: Economics Letters. - : ELSEVIER SCIENCE SA. - 0165-1765 .- 1873-7374. ; 181, s. 190-194
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Tidskriftsartikel (refereegranskat)abstract
- Before 1998, Texas was the only state that greatly restricted home equity loans and cash-out refinancing for non-housing consumption. Such borrowing was authorized in Texas, for the first time, through a constitutional amendment in 1998. Using state-level panel data and recently developed synthetic control methods based on machine learning we find that the Texas' constitutional amendments relaxing credit constraints had an insignificant impact on GDP growth. Our findings have important policy implications for the stimulative effect of easier home equity access on GDP growth.
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- Kumar, Anil, et al.
(författare)
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Declining female labor supply elasticities in the united states and implications for tax policy : Evidence from panel data
- 2016
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Ingår i: National tax journal. - : University of Chicago Press. - 0028-0283 .- 1944-7477. ; 69:3, s. 481-516
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Tidskriftsartikel (refereegranskat)abstract
- Recent work has provided compelling evidence of a long-term decline in U.S. female labor supply elasticities with respect to wages and income. While previous work used cross-sectional data from the Current Population Survey (CPS), we reexamine the trend for married women using panel data from the Panel Study of Income Dynamics (PSID) from 1980 to 2006. We find evidence in support of a long-term decline in married females 'labor supply elasticities on the participation margin but less evidence in support of such a decline on the hours margin. We also investigate the implications of these results for the welfare effects of tax reforms. Policy simulations indicate that shrinking elasticities, mostly concentrated on the participation margin, have contributed to a dramatic decline in the welfare gains from actual and potential tax reforms since the 1980s.
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- Kumar, Anil, et al.
(författare)
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The Taxable Income Elasticity: A Structural Differencing Approach
- 2015
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We extend a standard taxable income model with its typical functional-form assumptions to account for nonlinear budget sets. We propose a new method to estimate a taxable income elasticity that is more policy relevant than the typically estimated elasticity based on linearized budget sets. Using U.S. data from the NBER tax panel for 1979-1990 and differencing methods, we estimate an elasticity of 0.75 for taxable income and 0.20 for broad income. These estimates are higher than those obtained by specifications based on linearization. Our approach offers a new way to address the problem of endogenous observed marginal tax rates.
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- Liang, Che-Yuan
(författare)
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Optimal inequality behind the veil of ignorance
- 2017
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Ingår i: Theory and Decision. - : Springer. - 0040-5833 .- 1573-7187. ; 83:3, s. 431-455
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Tidskriftsartikel (refereegranskat)abstract
- In Rawls’ (A theory of justice. Harvard University Press, Cambridge, 1971) influential social contract approach to distributive justice, the fair income distribution is the one that an individual would choose behind a veil of ignorance. Harsanyi (J Polit Econ 61:434–435, 1953, J Polit Econ 63:309–332, 1955, Am Polit Sci Rev 69:594–606, 1975) treated this situation as a decision under risk and arrived at utilitarianism using expected utility theory. This paper investigates the implications of applying cumulative prospect theory instead, which better describes behavior under risk. I find that the specific type of inequality in bottom-heavy right-skewed income distributions, which includes the log-normal income distribution, could be perceived as desirable. This optimal inequality result contrasts the implications of other social welfare criteria.
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