My research statement can be viewed using this link.
Chapter 1. Benefits Cliffs and Aggregate Fluctuations (Job Market Paper - click here to access the latest version)
Abstract: Benefits cliffs — sudden decreases in public benefits that occur with a small increase in earnings — may inhibit upward mobility. I study the effect of a multitude of cliffs across the universe of benefits programs in nine southern US states on labor supply and aggregate fluctuations. Using the American Community Survey and proprietary data from the Georgia Center for Opportunity, I leverage geographic and household-structure variation. On average, individuals in households approaching benefits cliffs reduce their working hours by 40 hours annually. I then build a dynamic stochastic general equilibrium model that replicates this result, where my model design allows me to accurately capture the benefits cliffs of the US tax-and-transfer system. I find the aggregate implications of benefits cliffs on output are small, but welfare gains from their elimination are large and concentrated. In a counterfactual model that smooths over benefits cliffs, output increases about 1.6% more on impact in response to an aggregate productivity shock compared to the baseline model with benefits cliffs, but the welfare gain to formerly constrained households doubles.
Chapter 2. Place-Based Policy and Optimal Income Transfers in a Federalist Framework with Labor Elasticities in Three Dimensions
Abstract: What would an optimal income transfer system look like, taking into account the potential for both federal and state-level programs? I answer this question by building an optimal tax model that accounts for three labor elasticities: intensive, extensive, and mobility across states. I calibrate this model to the United States as a whole, as well as to individual US states. I find that, on average, states find it optimal to tax away federal income transfers, particularly when facing potential inter-state migration, reflecting fiscal constraints and a fear of attracting no or low-income earners. However, wealthier states supplement federal transfers due to increased fiscal space. States with larger pools of no-income earners aim to increase the differences of consumption between those with no and earned income to encourage employment.
Chapter 3. A Transparent Look at How Taxes Affect Growth: Evidence from Cross-Country Panel Data with Meng Hsuan Hsieh, Laura Kawano, and Joel Slemrod (submitted to the Journal of Public Economics). Link.
Abstract: We review the literature that estimates the effect of tax policy on economic growth using cross-country panel data and, in our own analysis, evaluate how different methodological choices affect the conclusions drawn. We find these analyses do not credibly support claims that tax rate changes have a statistically robust medium-term impact on national income. We further assess this literature in light of the recent econometric insights on estimation with staggered treatments. We show why the commonly-used linear projection approach yields biased estimates in this setting, and find that a causal estimate of the effect of the first tax change again yields no statistically significant effect of taxes on economic growth.
Works in Progress
Dynamic Federalism: State Reactions to Federal Fiscal Policy and Implications for Fiscal Multipliers
Abstract: How do states react to changes in federal fiscal policy? I answer this question using structural vector autoregressions in three specifications. I find that states react to unanticipated positive federal spending shocks by cutting expenditures and lowering taxes. In contrast, state spending reactions to unanticipated federal tax cuts are more ambiguous, but there is clearer evidence that states increase revenues in response to federal tax cuts. Both outcomes highlight the importance of state tax responses to fiscal stimulus, with a significant fraction of the federal spending multiplier likely driven by states themselves lowering revenues in response to an unanticipated positive federal spending shock. The results provide further insight into the mechanisms and effectiveness of fiscal multipliers.
Other Publications / White papers
Modeling the Economic Effects of Past Tax Bills with Stephen J. Entin and Scott Greenberg, Tax Foundation, 2016. Link.
From the Introduction: In this paper, we address the question, “What economic effects should we have expected from the major federal tax bills of the past several decades?” Our goal is to develop a baseline of expectations about the economic effects of past tax changes, to which the historical evidence can be compared. To do this, we employ the Taxes and Growth model, an economic model developed by the Tax Foundation, which is frequently used to evaluate tax proposals from members of Congress and presidential candidates. While the Taxes and Growth model is typically used to forecast the revenue and economic effects of proposed tax changes, it can also be used to “backcast” the effects of past tax changes, by using economic and taxpayer data stretching back to the 1960s... By modeling their economic effects, we hope to shed light on recent U.S. economic history and to contribute to the debate about the relationship between tax changes and the economy.