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Monday, March 29, 2021 at 11:15am to 12:45pmVirtual Event
Cecile Gaubert, University of Californina, Berkeley
Abstract: Governments around the world redistribute to distressed areas by conditioning taxes and transfers on location. We show that when poor households are spatially concentrated, transfers from one location to another can yield equity gains that outweigh their efficiency costs, even when incomebased transfers are set optimally. Expressions for the optimal transfer size depend on the mobility of households, the earnings responses of movers, and sorting patterns. Surveys find support for targeting tax credits to poor Americans who live in distressed places. A calibration exercise finds optimal transfers of the same order of magnitude as prominent American zone policies.
If you are interested participating in this seminar, please email Ulrike Kroeller at firstname.lastname@example.org for Zoom information.