Experiments and Natural Experiments

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Unformatted text preview: 2004. The bandwidth is $400 in all kernel density estimations. The fraction self-employed in 16.1 percent and 20.5 percent in the population depicted on panels A and B (in the data sample, the unweighted fraction self-employed is 32 percent and 40 percent). We display in dotted vertical lines around the first kink point the three bands used for the elasticity estimation with δ = $1,500. Fraction of Tax Filers Who Report SE Income that Maximizes EITC Refund in 1996 4.1 – 42.7% 2.8 – 4.1% 2.1 – 2.8% 1.8 – 2.1% 1.5 – 1.8% 1.2 – 1.5% 1.1 – 1.2% 0.9 – 1.1% 0.7 – 0.9% 0 – 0.7% Source: Chetty, Friedman, and Saez NBER'12 Fraction of Tax Filers Who Report SE Income that Maximizes EITC Refund in 1999 4.1 – 42.7% 2.8 – 4.1% 2.1 – 2.8% 1.8 – 2.1% 1.5 – 1.8% 1.2 – 1.5% 1.1 – 1.2% 0.9 – 1.1% 0.7 – 0.9% 0 – 0.7% Source: Chetty, Friedman, and Saez NBER'12 Fraction of Tax Filers Who Report SE Income that Maximizes EITC Refund in 2002 4.1 – 42.7% 2.8 – 4.1% 2.1 – 2.8% 1.8 – 2.1% 1.5 – 1.8% 1.2 – 1.5% 1.1 – 1.2% 0.9 – 1.1% 0.7 – 0.9% 0 – 0.7% Source: Chetty, Friedman, and Saez NBER'12 Fraction of Tax Filers Who Report SE Income that Maximizes EITC Refund in 2005 4.1 – 42.7% 2.8 – 4.1% 2.1 – 2.8% 1.8 – 2.1% 1.5 – 1.8% 1.2 – 1.5% 1.1 – 1.2% 0.9 – 1.1% 0.7 – 0.9% 0 – 0.7% Source: Chetty, Friedman, and Saez NBER'12 Fraction of Tax Filers Who Report SE Income that Maximizes EITC Refund in 2008 4.1 – 42.7% 2.8 – 4.1% 2.1 – 2.8% 1.8 – 2.1% 1.5 – 1.8% 1.2 – 1.5% 1.1 – 1.2% 0.9 – 1.1% 0.7 – 0.9% 0 – 0.7% Source: Chetty, Friedman, and Saez NBER'12 Fortin – Econ 560 Lecture 1C 2) Other more recent approaches adopt a structural model by using a flexible functional form for the utility function or for the hours function, and construct a likelihood function of the choice of hours corresponding to each segment (and kink) of the budget constraint. For example, Blundell and Shephard (2008) develop a structural model max ,ℎ ; , subject to c≡ wℎ – wℎ , ℎ ; − ⋅ Ι{ > 0}, that allows for discrete choices over non-linear budget constraints and fixed costs of work and allows them to reexamine the problem of the optimal design of the transfer system. They also use the differences-in-differences to assess the validity of the parameters from their structural estimation which explicitly allows for different labour supply responses at the intensive and extensive margins. 430 Richard Blundell and Hilary Hoynes 25 A 200 Y Y i G 150 n g 100 0 C u 50 9 q? fl.! 22 4 Q 44 46 4 i 3 b(3 4 Hours worked ChildBenefit 0 Net Earnings Income Support Family Credit Rent Rebate I ocal Tax Rebate L Fig. 10.12 A , Single mother before WFTC; B, single mother after WFTC N otes; A , Single parent, April 1997, earning E3.50 per hour (2000 prices); B, single parent, April 2000, earning E3.50 per hour (2000 prices). cent of child care costs up to a maximum of & lo0per week for those with one child or El 50 per week for those with two or more children. The child care credit component is...
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This document was uploaded on 02/26/2014 for the course ECON 560 at UBC.

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