Assistant Professor of Economics
Broad Research Area: Public Finance, Human Capital, and Labor Economics
Current Research Topics:
- Optimal Dynamic Personal Tax, Welfare, and Social Insurance Policies
- Policy Design Implications of Child Development and Family Heterogeneity
Education: Ph.D. in Economics, University of Wisconsin-Madison
(JMP) "Children and Optimal Taxation of Families over the Life Cycle" Draft
What is the optimal design of the tax and transfer system for families who face labor market shocks and have children over their life cycle? In this paper, I develop and estimate a rich microeconometric life-cycle model and solve for the optimal child-dependent tax function. The model features endogenous family labor supply, consumption-saving, and the development of children’s cognitive ability in the family. First, I utilize the estimated model to evaluate the long-run effects of making the expanded child tax credits of the American Rescue Plan permanent. It has a modest negative effect on labor supply and increases children’s test scores at age 18 by 2 percent of a standard deviation. The ex-ante welfare gain from this policy is 14 percent higher than an unconditional cash transfer that costs the same. Next, I solve for the optimal child-dependent taxes using flexible linear spline functions. The optimal tax policy of families with one or two children consists of a large guaranteed income and earning subsidies with a high-tax phase-out region along with child tax credits at the top of the income distribution. For families without children, the optimal policy is an EITC-type transfer to low-income families with a drastic increase in marginal taxes of middle and high-income families compared to the status quo. The optimal tax policy enhances the social welfare by increasing non-working time of mothers, lowering consumption inequality, increasing consumption smoothing, and improving children’s abilities.
"History Dependence of Pension Systems" Draft Coming Soon!
In most countries that use a defined-benefit system, two functions govern the amount of pension benefit together: the first function summarizes the history of earnings into one variable (the history of earrings function), and the second function calculates the benefits based on that variable (the pension benefit function). History dependence of a pension system affects the timing of retirement and the level of consumption insurance of a retiree by governing how her pension benefit is influenced by the profile of lifetime labor market shocks. This is particularly important for workers who experience long unemployment periods and women who leave the labor market at child-bearing ages. Although there is a sizable literature on the optimal design of the pension benefit function, the design of the history of earnings function is an understudied area of research. In this paper, I address this issue by exploring how different ways to summarize the history of earnings affect workers and its interactions with the (non-history-dependent) tax system. I estimate a dynamic model of labor supply, saving, and retirement with different labor market shocks and quantify the heterogeneous effects of changing the history dependence of the pension system. I also study a counterfactual policy that changes the current US pension policy which uses the top 35 years of earnings to account for the lifetime earnings, common in other OECD countries.
Works in Progress
"Do We Really Need Age-Dependent Taxes?"
"Child Development and the Early Origins of Quantity-Quality Relationship"
"Children, Mothers, and Design of the Welfare State"
(Master Thesis) "Trade in Intermediate Goods and the Welfare Gain from International Trade" (with Seyed Ali Madanizadeh) Submitted Draft
(Undergraduate Thesis) Vahid Esfahanian, Saber Ahmadi Renani, Nima Mirkhani, Hassan Nehzati, Mohsen Esfahanian, Omid Yaghoobi, Ali Safayi (2013) "Design and Simulation of Air Cooled Battery Thermal Management System Using Thermoelectric for a Hybrid Electric Bus". In: SAE-China, FISITA (eds) Proceedings of the FISITA 2012 World Automotive Congress. Lecture Notes in Electrical Engineering, vol 191. Springer, Berlin, Heidelberg
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