With capital‐skill complementarity, the secular decline in the price of capital equipment due to equipment‐specific technological progress (ESTP) keeps pushing up the demand for skilled relative to unskilled labor and raising the skill premium. This paper quantitatively characterizes the...

Is the Spanish economy positioned at its optimal progressivity level in personal income tax? This article quantifies the aggregate, distributional, and welfare consequences of moving toward such an optimal level. A heterogeneous households general equilibrium model featuring both life cycle and...

The paper examines tax progressivity and income inequality using Census Bureau Current Population Survey (CPS) personal income data. The Kakwani index is used to derive tax progressivity for All, Male, Female, White and African American personal wage income of CPS respondents, respectively. The...

Many empiric analyses on the topic of the progression exist and despite their often contradictory results governments still include their conclusions in to their tax policies. Many questions arise in relation to the issue: What is the theoretical justification of progressive taxation? What are...

In this study, we examine the behavior of self-employed taxpayers who "bunch" at an income level just below a critical threshold, which triggers a transition from a simple tax regime to a more complex one. Under the simple regime, individuals complete their tax forms independently, while the...

The distributional impacts of fiscal policies are instrumental in reducing inequality in countries like the Philippines, where inequality has been persistently high. This paper assesses how equitable various taxes and transfers in the Philippines are by deriving the elasticities of Atkinson and...

This paper develops a model of Tiebout sorting with decentrally determined progressive income taxation and a built-in fiscal equalization scheme that redistributes money from richer to poorer regions. Both aspects are central to policy makers: the progressivity for equity reasons and the fiscal...

Analysis of the relationship between taxes and self-employment should account for the interplay between responses in self-employment and wage employment. To this end, we estimate a two-state multi-spell duration model which accounts for both observed and unobserved heterogeneity using a large...

We use a quantitative heterogeneous agent model with nominal rigidities and unemployment risk to analyze the effectiveness of several fiscal policies in stabilizing a demand-driven recession. The model delivers empirically realistic distributions of marginal propensities to consume (mpc) and...