The (in)visible hand: role of race and sex in job selection decisions, with Philipp Doerrenberg and Danyang Li, 2023. (accepted at Journal of Public Economics)
We estimate the impact of employers' sex and race on the labor supply decisions of workers using data generated in an online labor market. The labor task requires workers to transcribe information from gasoline receipts, and employer's race and sex are signaled via a photograph of a hand holding receipts. Our empirical analysis reveals several findings. First, workers are more likely to correctly identify the race and sex of white and male employers compared to female and black employers. Second, we find mixed evidence of discrimination on the extensive margin. On the one hand, those who correctly identify the race (sex) of the employer are more likely to work for black (female) employers compared to white (female) employers. On the other hand, those who incorrectly identify race (sex) are less likely to work for black (female) employers compared to white (male) employers. Third, white workers transcribe fewer pictures and do so less accurately for black employers relative to white employers. Fourth, both male and female workers transcribe more pictures and do so more accurately for female employers relative to male employers. Finally, results from a survey of mTurkers suggest that the gaps we identify are not driven by statistical discrimination.
Does the Federal Budget Process Promote Fiscal Sustainability?with John L. Mikesell, and Justin M. Ross, 2023. (Revision requested)
Can the federal budget be constrained using congressionally self-imposed rules? The Budgetary Enforcement Act of 1990 (BEA90), in effect from 1992 to 2002, is frequently held up as a political control that largely succeeded in doing so and its expiration is considered a watershed event. This paper finds evidence supportive evidence of BEA90 as a constraint on non-defense discretionary outlays from a synthetic control using Lasso regression methodology. The effect of BEA90 is estimated to be around 10 percent, but the sampling variation suggests that the probability these results arose from chance to be around 30 percent. Confronted with a common applied empirical problem of having a large number of potential predictors (over 2,000) and a relatively short time-series (12 years), we propose novel additional checks that successfully cross-validate the synthetic control’s counterfactual model.
How Does Firm Tax Evasion Affect Prices? with Philipp Doerrenberg, 2023. (Revision requested)
How do firms' avoidance and evasion opportunities affect market prices? We investigate the causal link between tax-evasion opportunities and prices in a situation where firms remit sales taxes and have access to tax-evasion possibilities. In light of difficult causal identification with archival data, we design a controlled experiment in which buyers and sellers trade a fictitious good in competitive markets. A per-unit tax is imposed on sellers, and sellers in the treatment group are provided the opportunity to evade the tax whereas sellers in the control group are not. We find that the equilibrium market price in the treatment group is lower than in the control group, and the number of traded units is higher in treatment markets. The results further show that the after-tax incomes of sellers in the evasion treatment increases despite trading at lower prices. Our findings have implications for tax incidence. In particular, sellers with access to evasion shift a smaller share of the nominal tax rate onto buyers relative to sellers without tax evasion opportunities. Additionally, we find that sellers with evasion opportunities shift the full amount of their effective tax rate onto buyers. Results from additional experimental treatments show that this full shifting of the effective tax burden is due to the evasion opportunity itself rather than the evasion-induced lower effective tax rate.
The Tax Gain of Reforming State-owned Enterprises, with Yongzheng Liu and Hailun Wei, 2023. (Under review)
This study examines the tax compliance effect of SOEs reform using a large dataset of Chinese industrial firms. By exploiting the variation in SOEs ownership change - oversight authority shifted from a one level government to either a lower one (i.e., decentralization) or to the private sector (i.e., privatization) - , we estimate a difference-in-differences model to find that both decentralization and privatization causes an increase in tax compliance as measured by effective tax rates. In addition, we find evidence that while the decentralization results are driven by the reduced distance between a decentralized SOE and its oversight government, the privatization results are solely because of the greater tax-scrutiny. Decentralization and privatization are often seen as strategies to improve efficiency in the affected markets. Our results suggest that governments also benefit from higher tax revenues induced by improvements in tax compliance.
Financing the development of low-income housing: insights from a microeconomic framework, 2023. (Under review)
This essay uses a microeconomic theoretical framework to examine one demand- side and three supply-side affordable housing initiatives of the National Housing Trust (NHT) in Jamaica. The analysis shows that the effectiveness of these policies depends on how well they target the intended population and the price elasticity of housing supply. Poorly targeted policies and those constrained by supply-side limitations can inadvertently benefit higher-income individuals and existing home- owners at the expense of the housing insecure. Overall, supply-side policies appear to offer the largest potential to make a meaningful impact on affordable housing compared to demand-side policies. However, it is important that any shift in cur- rent policy be informed by empirical analysis that estimates the impact of NHT’s policies on the Jamaican housing market.
Automatic Nutritional Stabilizers and the Role of Charitable Food Assistance during Times of Crisis, with Luis Navarro and Shellye Suttles, 2023.
In this paper we examine the role of charitable assistance during periods of economic distress by looking at the donations from one of the largest food banks in the Midwest. First, we explore the historical determinants of in-kind food donations and financial donations, then we assess how donations change during the COVID-19 pandemic. We find that both in-kind and financial donations increased dramatically at the onset of the pandemic but these increases were not persistent. Moreover, the largest source of pandemic-era donations came from donors that were historically large donors. During this time, the food bank was able to not only maintain but increase the nutritional quality of its offerings. As a result, we argue that this is evidence of the charitable food system serving as an "automatic nutritional stabilizer" in accepting charitable donations on behalf of households in need during times of crisis.