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ESSAYS IN APPLIED MICROECONOMICS

File(s)
Comey_cornellgrad_0058F_13525.pdf (6.09 MB)
Permanent Link(s)
https://doi.org/10.7298/rjgv-1w11
https://hdl.handle.net/1813/114008
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Cornell Theses and Dissertations
Author
Comey, Matthew
Abstract

This dissertation is composed of three separate papers in applied microeconomics. In Chapter 1, I study the extent to which the expansion of post-secondary career and technical education (CTE) at the sub-baccalaureate level has led to downward pressure on wages through labor supply effects. I construct a new measure of CTE education supply, which is unique by year, occupation, and metropolitan statistical area, and link the measure to wage data from the American Community Survey. I estimate the causal effect of education supply on wages via a regression analysis that controls for unobserved labor demand with a shift-share instrumental variables strategy paired with flexible fixed effects. The instrument is strongly predictive of actual supply and plausibly removes the influence of within-occupation shifts in labor demand that may be related to growth in linked instructional programs. Across a variety of specifications and sample restrictions, I find that CTE education supply has virtually no effect on wages. My findings are especially relevant given a surge in policy interest in free community college programs. In Chapter 2, I study the causal relationship between a state's average personal income tax rate and the size of its tax base, as measured by population, income, and income per capita. In doing so, I make important methodological improvements to past studies of state tax policy and growth. First, I simulate each state’s income tax schedule with respect to the national income distribution, in contrast to measuring average income tax rates using each state's endogenously-determined own income distribution. Second, I estimate growth effects using discrete tax policy reforms and a difference-in-differences design. This allows for a clearer formulation of identification assumptions compared to specifications common in the prior literature. I show that tax reforms tend to follow substantial downward trends in the size of the tax base relative to control states, suggesting that these reforms are endogenous. After adjusting for selection effects using an inverse probability of treatment weighting procedure, I find that average income tax rate reforms have asymmetric effects, with tax cuts increasing growth more than tax raises decrease growth. In Chapter 3, joint with Zhuan Pei and Amanda Eng, we study the identification of characteristics of units who benefit from random treatment assignment, a group we call supercompliers. In a binary-treatment instrumental variable framework, we define supercompliers as the subpopulation whose treatment take-up positively responds to eligibility and whose outcome positively responds to take-up. Supercompliers are the only subpopulation to benefit from treatment eligibility and, hence, are of great policy interest. Given a set of jointly testable assumptions and a binary outcome, we can completely identify the characteristics of supercompliers. Specifically, we require the standard assumptions from the local average treatment effect literature along with an outcome monotonicity assumption (i.e., treatment is weakly beneficial). We can estimate and conduct inference on supercomplier characteristics using standard instrumental variable regression.

Date Issued
2023-05
Keywords
Causal Identification
•
Econometrics
•
Economics of Education
•
Labor Economics
•
Public Economics
•
Taxation
Committee Chair
Lovenheim, Michael
Committee Member
Patacchini, Eleonora
Coate, Stephen
Degree Discipline
Economics
Degree Name
Ph. D., Economics
Degree Level
Doctor of Philosophy
Type
dissertation or thesis
Link(s) to Catalog Record
https://newcatalog.library.cornell.edu/catalog/16176398

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