My research focuses on understanding the political economy of traditional and new

media. I study these issues by exploiting natural experiments, employing data techniques

borrowed from machine learning and using both observational data from traditional and

new sources.

This dissertation explores three topics in the economics of education and public economics. In chapter 1, I use a fuzzy regression discontinuity design to estimate how attending an after-school program in San Diego impacts short-run student academic and behavioral outcomes. I find that the after-school program has no impact on academic outcomes in math and English Language Arts for students in K-8. On the other hand, I find suggestive evidence that student behavior is affected, but the direction of the effect varies across years. In chapter 2, I evaluate the potential for changes in expected lifetime income by major that result from changes in the individual income tax law to affect college major choices, using one of the largest federal income tax reforms in recent U.S. history, the 1986 Tax Reform Act (TRA86), as a case study. Due to the limited differential impact on expected earnings across majors, I find that TRA86 is likely to have had a small impact on the composition of completed college majors after 1986. Lastly, in chapter 3, I study the peer effects of students who speak a language other than English at home (ESL) on native English speaking (ELO) students in grades 2 to 6 in California. I find that higher concentrations of ESL students have no effect on average math test scores and a negative effect on average English test scores of ELO students.

This dissertation explores three topics in the economics of taxation. In Chapter 1, I (coauthored with Daixin He and Langchuan Peng) conduct the first formal comparison of two approaches to estimate the elasticity of taxable income (ETI), a central parameter in the public finance literature. We find that while the bunching ETI estimates are small and stable, the tax reform ETI estimates increase concavely over time and are much larger in the long run. These stylized facts imply that very different behavioral responses are captured by the two approaches. Our findings imply that although the bunching approach has advantages in identification and application, the tax reform ETI estimates are generally more relevant for policy making due to the behavioral responses they are able to capture. In Chapter 2, I examine the reported income-consumption relation between employees and the self-employed and explore its implications on tax evasion and avoidance for U.S. households. I find that, on average for the self-employed in the U.S., the amount of tax evasion is comparable to that of tax avoidance. But the corporate self-employed rely more on tax avoidance while the non-corporate self-employed rely more on tax evasion. In Chapter 3, I study the effects of the financial transaction taxes (FTT) in Latin America on government revenues and tax bases. I find that the FTT have no crowding-out effect on the revenue of other taxes as a whole. But there seems a significantly positive association between the FTT and the CIT revenue, which suggests that the FTT may be beneficial to corporate activities. In addition, I find a negative effect of the FTT on its own tax base.

This dissertation studies empirical questions in public economics and labor economics, with a heavy emphasis on pension and retirement saving. The first chapter assesses the role of liquidity constraints on retirement saving. The second chapter evaluates the impact of pension reform on formal sector labor supply. Finally, the third chapter appraises the revenue and distributional effects of a potential tax reform that can diminish distortions and disincentives to saving.

Researches in public finance have clarified the effects of tax policies that are neither originally intended nor easily observable. This work contributes to the literature of public finance by rigorously examining the effects of three particular tax policies using quantitative models and econometric analysis.

Chapter 1 aims to answer the question as to what is the optimal apportionment formula for the US state corporate income tax. States have raised sales apportionment weight and lower payroll weight to stimulate local labor demand. However, the policy discussions often ignore the negative effect of sales apportionment tax; the tax distorts the sales allocation of firms across states and causes an increase in local price level in the state. I construct a quantitative model that incorporates the effects of apportionment formula both on local labor demand and on the price level. The calibration suggests that the sales weight should be zero for the optimal tax policy of a single state because the negative effect on price level outweighs the positive effect on local labor under a range of plausible parameters.

Chapter 2 studies the effect of taxation on entrepreneurs' risk-taking, portfolio choice, and economic growth in the presence of a moral hazard problem in a dynamic general equilibrium model. The moral hazard problem occurs because the return of a type of entrepreneurial project depends on entrepreneurs' effort, which is private information. By collecting proportional consumption tax and redistributing the revenue, the government offers an opportunity for risk sharing to encourage risk-taking and spur economic growth. We show that when the moral hazard problem is absent, the full insurance is optimal in terms of welfare, and the economy grows faster. But if the moral hazard problem exists even in a slight degree, risk sharing through taxation cannot improve welfare.

Chapter 3 examines the relationship between household marginal tax rates and the probability of owning rental housing. I focus on the special provisions about passive losses introduced by 1986 TRA to test the theoretical prediction about this relationship. The empirical results based on the Surveys of Consumer Finances offer modest support for the prediction.

This dissertation explores three topics in labor and public economics. Chapter 1 studies how coordination of hours among coworkers affects labor supply decisions and wage rates. Using rich data from Denmark we find that greater coordination of hours within firms is associated with higher wages, attenuated response to tax rate changes and spillover effects on hours worked by workers who are not directly affected by a tax change. Chapter 2 estimates the short-term effects of migration on employment of native workers in Italy using the exogenous, unanticipated and temporary migration resulting from the Arab Spring. I find significant and offsetting short-term effects across industries. The positive employment effects are consistent with a rise in sectoral employment operating through increased demand from immigrants. Both positive and negative effects on employment tend to dissipate over time. Chapter 3 uses rich data from Brazil to show evidence that exporters prepare to export by hiring workers from other exporters. We also show that poaching workers from other exporters is a strong predictor of various aspects of export-market success at the poaching firm.

This dissertation addresses several questions in corporate finance. A common thread is the study of stock market investors' processing of disclosure by public firms.

The first chapter studies the effect of public scrutiny on financial misreporting. I exploit the staggered implementation of the EDGAR system, which provides all investors with free and instant access to financial reports. Firms phased into EDGAR received higher public scrutiny and stronger stock market reaction to earnings announcements. A plausibly exogenous increase in public scrutiny incentivizes firms to substitute between different methods of earnings management. Moreover, the increase in public scrutiny impacts firms differently depending on the ex-ante level of scrutiny that firms already have, consistent with theoretical predictions.

The second chapter models investors' allocation of attention to financial disclosures and its impact on firms' voluntary disclosure. We jointly solve investors' optimal allocation of limited attention and managers' choice to disclose their privately observed signals (e.g., forecasts of future earnings). We predict an inverse-U-shaped relation between firms' likelihood of disclosure and investor attention, supported by our empirical tests. The third chapter also studies investors' reactions to financial reports. In particular, we examine whether earnings management by manipulating firms distorts investors' response to financial reports by (similar) non-manipulating firms. We exploit a unique setting in China's stock market that de-lists firms if they report consecutive negative annual earnings. We find that non-manipulating firms suffer from significant adverse capital market effects, resulting from investors' distrust.