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Title: Essays in public finance and household lifecycle behavior
Author: Parodi, Francesca
ISNI:       0000 0004 8499 9084
Awarding Body: UCL (University College London)
Current Institution: University College London (University of London)
Date of Award: 2019
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This PhD thesis investigates the impact of direct and indirect taxation on households' consumption, saving and labor supply decisions over the life cycle. Chapter 1 focuses on indirect taxation. A dynamic model of households saving, durable and non-durable consumption decisions in a context of income uncertainty and borrowing constraints is set up. A novel feature of the model is the consistent integration of an intratemporal static demand analysis for different categories of non-durables - necessities and luxuries - with an intertemporal dynamic model for durables and savings. Simulated counterfactuals based on the estimated model show that revenue neutral reforms changing value added tax rates towards uniformity would be welfare improving, however, they would redistribute in favor of the wealthiest groups. Chapters 2 and 3 analyze direct and indirect taxation jointly. Chapter 2 extends the model in Chapter 1 by allowing for endogenous labor supply decisions, heterogeneous preferences and uncertainty in family dynamics. The model is estimated on micro-data and its rich structure is shown to be crucial in reproducing the empirical patterns of households' life cycle economic behavior. Marshallian elasticities are then simulated along several dimensions and show that the model accounts for mechanisms of interaction between households' economic behavior and the tax system that have not been considered together in previous studies. Chapter 3 applies the model of Chapter 2 to conduct a quantitative normative analysis. Under a utilitarian framework, it is found that durables should be subsidized in presence of pre-commitment and uncertainty and that the optimal combination of taxes on non-durables and labor income crucially depends on the degree of preference heterogeneity. Allowing for a generalized social welfare criterion with varying degrees of government inequality aversion, it is shown that the model can rationalize the tax systems observed in reality.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available