Research

Tax Design for the Long Run  (R&R at JPE Macro)
with Musab Kurnaz, Christopher Sleet, and Hakkı Özdenören 

Costs of adjustment delay and complicate behavioral response to tax change. To accommodate such response, we integrate a dynamic discrete choice framework into optimal tax theory. We identify long run outcomes with stationary distributions of workers over income-generating states and formulate optimal tax equations in terms of the sensitivity of such distributions to consumption variation. We obtain formulas for these sensitivities that facilitate quantitative evaluation of long run substitution patterns. Novel “inverted” optimal tax equations are derived that establish marginal costs of inducing long run population movements to states as sufficient statistics for optimal taxes. The optimal tax implications of a dynamic quantitative model of occupational choice are analyzed.

Marital wage and wealth premia: evidence from Germany
with Genaro Basulto

We develop a discrete-time, dynamic model of partner choice with endogenous separations and unobserved heterogeneity and provide identification proofs. Identification is achieved by exploiting the mixed Markov structure of the agents' choices and an instrumental variable that affects matching probabilities but remains orthogonal to other choice margins. The model is estimated with an Expectation-Maximization (EM) algorithm to avoid full-solution methods, reducing computation time.

Identification and estimation of dynamic matching models with unobserved heterogeneity
with Genaro Basulto

Marital wage and wealth premia have been measured in multiple developed countries, but their causal interpretation and their sources are still debated. To disentangle causal and selection effects, we estimate a structural model of partner choice, marriage, divorce, labor supply, and consumption-saving with unobserved heterogeneity using data from Germany’s Socio-Economic Panel (SOEP). Instruments provide plausibly exogenous variation that identifies causal effects. Using a novel imputation procedure, we complement the SOEP with yearly wealth information at the household level.

Matching and Optimal Taxation
with Ali Shourideh

Tax Design with Transition
with Christopher Sleet and Musab Kurnaz