 | Professor of Economics, Harvard University Verified email at fas.harvard.edu Cited by 2127 |
This paper analyzes the effects of dividend taxation on corporate behavior using the large
tax cut on individual dividend income enacted in 2003. Using data spanning 1980 to 2004-
Q2, we document a sharp and widespread surge in dividend payments following the tax ...
A central assumption in public finance is that individuals optimize fully with respect to the
incentives created by tax policies. In this paper, we test this assumption using two empirical
strategies. First, we conducted an experiment at a grocery store where we posted tax- ...
This paper presents new evidence on why unemployment insurance (UI) benefits affect
search behavior and develops a simple method of calculating the welfare gains from UI
using this evidence. I show that 60 percent of the increase in unemployment durations ...
R Chetty - The American Economic Review, 2006 - ingentaconnect.com
Abstract: I show existing evidence on labor supply behavior places an upper bound on risk
aversion in the expected utility model. I derive a formula for the coefficient of relative risk
aversion (γ) in terms of the ratio of the income elasticity of labor supply to wage elasticity ...
This paper presents new tests of the permanent income hypothesis and other widely used
models of household behavior using data from the labor market. We estimate the" excess
sensitivity" of job search behavior to cash-on-hand using sharp discontinuities in eligibility ...
Many households devote a large fraction of their budgets to" consumption commitments"--
goods that involve transaction costs and are infrequently adjusted. This paper characterizes
risk preferences in an expected utility model with commitments. We show that ...
In Project STAR, 11,571 students in Tennessee and their teachers were randomly assigned
to classrooms within their schools from kindergarten to third grade. This paper evaluates the
long-term impacts of STAR by linking the experimental data to administrative records. We ...
In this paper, we review the literature on the" spike" in unemployment exit rates around
benefit exhaustion, and present new evidence based on administrative data for a large
sample of job losers in Austria. We find that the way unemployment spells are measured ...
This paper tests whether providing information about the Earned Income Tax Credit (EITC)
affects EITC recipients' labor supply and earnings decisions. We conducted a randomized
experiment with 43,000 EITC recipients at H&R Block in which tax preparers gave simple, ...
R Chetty - Journal of Public Economics, 2006 - Elsevier
In an influential paper, Baily (1978) showed that the optimal level of unemployment
insurance (UI) in a stylized static model depends on only three parameters: risk aversion, the
consumption-smoothing benefit of UI, and the elasticity of unemployment durations with ...
Studies of risk in developing economies have focused on consumption fluctuations as a
measure of the value of insurance. A common view in the literature is that the welfare costs
of risk and benefits of social insurance are small if income shocks do not cause large ...
The debate between" structural" and" reduced-form" approaches has generated substantial
controversy in applied economics. This article reviews a recent literature in public
economics that combines the advantages of reduced-form strategies--transparent and ...
Since Feldstein (1999), the most widely used method of calculating the excess burden of
income taxation is to estimate the effect of tax rates on reported taxable income. This paper
reevaluates the taxable income elasticity as a measure of excess burden when individuals ...
How can price elasticities be identified when agents face optimization frictions such as
adjustment costs or inattention? I derive bounds on structural price elasticities that are a
function of the observed effect of a price change on demand, the size of the price change, ...
R Chetty… - manuscript, Department of Economics, Harvard …, 2004 - nber.org
Abstract This paper studies portfolio choice and asset prices in a model with two
consumption goods, one of which involves a commitment in that its consumption can only be
adjusted at a cost. Commitments effectively make investors more risk averse: they invest ...
This paper studies consumption and portfolio choice in a model where agents have
neoclassical preferences over two consumption goods, one of which involves a commitment
in that its consumption can only be adjusted infrequently. Aggregating over a population of ...
This paper develops a method of estimating the coefficient of relative risk aversion (g) from
data on labor supply. The main result is that existing estimates of labor supply elasticities
place a tight bound on g, without any assumptions beyond those of expected utility theory. ...
R Chetty… - The American economic review, 2006 - JSTOR
The 2003 dividend tax reform has generated renewed interest in understanding the
economic effects of dividend taxation. The reform introduced favorable tax treatment of
individual dividend income, whereby dividends are taxed at a rate of 15 percent instead of ...
Recent empirical studies of dividend taxation have found that:(1) dividend tax cuts cause
large, immediate increases in dividend payouts, and (2) the increases are driven by firms
with high levels of shareownership among top executives or the board of directors. These ...
Studies of risk preference have empirically established two regularities that are inconsistent
with the canonical expected utility model:(1) risk aversion over small gambles greatly
exceeds risk aversion over larger stakes and (2) insurance buyers play the lottery. This ...
The individual income tax burden on dividends was lowered sharply in 2003 from a
maximum rate of 35% to 15%, creating a unique opportunity to analyze the effects of
dividend taxes on dividend payments by US corporations. This paper uses data from the ...
R Chetty, J Rosenberg… - 2005 - nber.org
This paper investigates the effects of capital gains and dividend taxes on excess returns
around announcements of dividend increases and ex-dividend days for US corporations.
Consistent with standard no-arbitrage conditions, we find that the ex-dividend day ...
R Chetty… - American Economic Journal: Economic …, 2010 - ingentaconnect.com
Abstract: Recent evidence on the effect of dividend taxes on firm behavior is inconsistent
with neoclassical theories of dividend and corporate taxation. We develop a simple agency
model in which managers and shareholders have conflicting interests to explain the ...
We show that the effects of taxes on labor supply are shaped by interactions between
adjustment costs for workers and hours constraints set by firms. We develop a model in
which firms post job offers characterized by an hours requirement and workers pay search ...
R Chetty, A Guren, D Manoli… - The American Economic …, 2011 - ingentaconnect.com
Abstract: We evaluate whether state-of-the-art macro models featuring indivisible labor are
consistent with modern quasi-experimental micro evidence by synthesizing evidence on
both the intensive and extensive margins. We find that micro estimates are consistent with ...
This paper characterizes the welfare gains from redistributive taxation and social insurance
in an environment where the private sector provides partial insurance. We analyze stylized
models in which adverse selection, pre-existing information, or imperfect optimization in ...
Social safety nets in developing countries are far smaller than in developed economies. In
1996, the average expenditure on social insurance as a fraction of GDP in countries with
below-median per capita income was 6.8 percent; the corresponding figure in above- ...
Are teachers' impacts on students' test scores (“value-added”) a good measure of their
quality? This question has sparked debate largely because of disagreement about (1)
whether value-added (VA) provides unbiased estimates of teachers' impacts on student ...
This paper shows that existing evidence on labor supply behavior places an upper bound
on risk aversion in the expected utility model. I derive a formula for the coefficient of relative
risk aversion (g) in terms of (1) the ratio of the income elasticity of labor supply to the wage ...
R Chetty, A Guren, DS Manoli… - 2011 - nber.org
Macroeconomic calibrations imply much larger labor supply elasticities than
microeconometric studies. The most well known explanation for this divergence is that
indivisible labor generates extensive margin responses that are not captured in micro ...
Studies of the consumption-smoothing benefits of unemployment insurance (UI) have found
that the optimal benefit level is very small, perhaps even 0, for conventional levels of risk
aversion. In this paper, I derive a formula for the optimal benefit rate in terms of income ...
Abstract It is well known that unemployment insurance (UI) benefits raise unemployment
durations. This result has traditionally been interpreted as a substitution effect caused by a
reduction in the price of leisure relative to consumption, generating a deadweight burden. ...
A large theoretical literature predicts that housing has substantial effects on financial
markets, but empirical evidence on these effects remains limited. We estimate the causal
effect of changes in mortgages and home equity on portfolio allocations using two ...
Introduction• How do taxes affect labor supply and earnings behavior?• Microeconometric
studies examine short-run responses to small changes in tax rates for subgroups• Most find
intensive margin elasticities near zero (Heckman
R Chetty - UC Berkeley unpublished, 2005 - emlab.berkeley.edu
Abstract This paper shows that existing estimates of labor supply elasticities place a tight
upper bound on risk aversion in an expected utility model. I derive a formula that relates the
coefficient of relative risk aversion (7) to the ratio of the income elasticity of labor supply to ...
This paper derives empirically implementable formulas for the incidence and efficiency costs
of taxation that account for tax salience effects as well as other optimization errors. Contrary
to conventional wisdom, the formulas imply that the economic incidence of a tax depends ...
R Chetty - Review of Economic Studies, 2007 - Wiley Online Library
This paper studies the effect of interest rates on investment in an environment where firms
make irreversible investments with uncertain pay-offs. In this setting, changes in the interest
rate affect both the cost of capital and the cost of delaying investment to acquire ...
R Chetty - … paper, Harvard University. Available at http:// …, 2009 - faculty.chicagobooth.edu
Abstract This paper studies the identification of price elasticities in an environment with
optimization frictions such as adjustment costs or inattentive agents. I show that even when
one is uncertain about how such frictions enter the agent's decision problem, one can ...
ABSTRACT We show that the effects of taxes on labor supply are shaped by interactions
between adjustment costs for workers and hours constraints set by firms. We develop a
model in which firms post job offers characterized by an hours requirement and workers ...
It is well known that unemployment benefits raise unemployment durations. This result has
traditionally been interpreted as a substitution effect caused by a distortion in the price of
leisure relative to consumption, leading to moral hazard. This paper questions this ...
[CITATION] Forthcoming.“Salience and Taxation: Theory and Evidence.”
R Chetty, A Looney… - American Economic Review, 2007
Abstract It is well known that higher unemployment benefits lead to longer unemployment du
(rations. This result has been interpreted as evidence of qmoral hazardrsa behavioral
response to distorted marginal incentives to search. This paper shows that unem ( ...
R Chetty… - Mimeograph, UC-Berkeley, 2005 - econ.berkeley.edu
Abstract The Grossman and Laroque (1990) theory of adjustment costs in consumption has
been widely applied to analyze consumption and financial market behavior. An important
prediction of such adjustment cost models is that individuals who have recently purchased ...
[CITATION] Forthcoming.“How Does Your Kindergarten Classroom Affect Your Earnings? Evidence from Project STAR.”
R Chetty,
JN Friedman, N Hilger, E Saez… - Quarterly Journal of Economics
[CITATION] nSalience and Taxation: Theory and Evidence, oAmerican Economic Review, forthcoming
R Chetty, A Looney… - 2008
Abstract We build a theory of reference# dependent preferences based on adjustment costs
in consump# tion. The main contribution of the theory is that it endogenizes the evolution of
the reference point. The reference point generated by our model exhibits several features ...
[CITATION] Adjustment Costs, Firm Responses, and Labor Supply Elasticities: Evidence from Danish Tax Records
R Chetty… - 2009 - National Bureau of Economic …
This paper studies the effect of interest rates on investment in an environment where firms
make irreversible investments and learn over time. In this setting, changes in the interest rate
affect both the cost of capital and the cost of delaying investment. These two forces ...
R Chetty… - UC-Berkeley mimeo, 2008 - nber.org
Abstract This paper tests whether providing information about the work incentives created by
the Earned Income Tax Credit (EITC) amplifies its effects on labor supply. We conducted a
randomized field experiment with 43,000 EITC claimants at H&R Block in which half the ...
R Chetty, J Rosenberg… - 2005 - economics.harvard.edu
Abstract This paper investigates the effects of capital gains and dividend tax rates on excess
returns around announcements of dividend increases and ex-dividend days for US
corporations. We find that, consistent with standard models, the ex-dividend day premium ...
[CITATION] Consumption commitments
R Chetty… - National Tax Association …, 2011 - obs.rc.fas.harvard.edu
Public schools in the United States have traditionally received been funded by local taxes.
Although the share of revenues from local sources has fallen from 82% to 44% over the past
century, as states have taken up some of the burden from individual districts, local ...
[CITATION] nOptimal Taxation and Social Insurance with Private Insurance Markets
R Chetty… - Manuscript, Univ. California, Berkeley, 2008
[CITATION] QConsumption Commitments, Unemployment Durations, and Local Risk Aversion, R 2oo4
R Chetty - NBER Working Paper 1o211
R Chetty - draft, Department of Economics, Berkeley, 2009 - nber.org
Abstract This paper studies the identification of price elasticities in an environment where
agents face optimization frictions such as adjustment costs or inattention. I show that even
when one is uncertain about how such frictions enter the agentns decision problem, one ...
R Chetty - Presentation at the Employment Policy Institute, 2010 - epi.org
... An Economic Framework and Empirical Evidence Raj Chetty Harvard University May 2010
May 2010 () Extending UI Benefits 1 / 22 Page 2. ... May 2010 () Extending UI Benefits 21 / 22
Page 22. References Card, David, Raj Chetty, and Andrea Weber. ...
[CITATION] Cash-on-Hand and Competing Models of
D Card, R Chetty… - 2007
[CITATION] qWhy do Unemployment Benefits Extend Unemployment Durations
R Chetty - Moral Hazard vs. Liquidity. rWorking Paper, 2005
[CITATION] vGeographical Heterogeneity in the Impacts of the Earned Income Tax Credit
R Chetty, J Friedman… - 2011 - wHarvard Working Paper
[CITATION] hWhy Do Unemployment Benefits Raise Unemployment Durations? Moral Hazard vs. Liquidity, iU. C
R Chetty - 2006 - Berkeley Working Paper
[CITATION] mCash'on'Hand and Competing Models of Intertemporal Behavior: New Evidence from the Labor Market. nNational Bureau of Economic Research ( …
D Card, R Chetty… - 2006
[CITATION] New Evidence on the Long-Term Impacts of Tax Credits
R Chetty, JN Friedman… - IRS Statistics of Income White Paper, 2011
[CITATION] October 2005.“
R Chetty… - Income Risk and the Benefits of Social Insurance
[CITATION] Salience and Taxation
R Chetty, A Looney… - 2007 - unpublished manuscript
[CITATION] Is the Elasticity of Taxable Income a Sufficient Statistic to Calculate Deadweight Loss?
R Chetty - 2007 - mimeo
[CITATION] Salience and Taxation: Theory and Evidence." Mimeo, University of California, Berkeley
R Chetty, A Looney… - 2008
D Card, R Chetty… - iQuarterly Journal of Economics, forthcoming, 2006 - nber.org
ABSTRACT This paper provides new evidence on the effects of cash-in-hand on household
behavior. Using sharp discontinuities in eligibility for severance pay and extended
unemployment benefits in Austria, combined with data on over one-half million job losers, ...
R Chetty… - NBER Working Paper, 2009 - elsa.berkeley.edu
Abstract This paper tests whether providing information about the Earned Income Tax Credit
(EITC) amplifies the programps effects on labor supply. We conducted a randomized ex)
periment with 43,000 EITC claimants at H&R Block in which tax preparers gave simple, ...
[CITATION] Do dividend payments respond to taxes?
R Chetty… - 2004
[CITATION] Forthcoming.“Adjustment Costs, Firm Responses, and Micro vs. Macro Labor Supply Elasticities: Evidence from Danish Tax Records.”
R Chetty, JN Friedman, T Olsen… - Quarterly Journal of Economics
[CITATION] October 2005.“Consumption Smoothing and the Welfare Consequences of Social Insurance in Developing Economies.”
R Chetty… - Working Paper
[CITATION] nSalience and Taxation: The $ ory and Evidence. oforthcoming American Economic Review
R Chetty, A Looney… - 2008
[CITATION] Why do unemployment benefits raise unemployment durations? Moral hazard vs
R Chetty - 2005 - Liquidity." Working Paper 11760. …
[CITATION] Versions of America: reading American literature for identity and difference
R Chetty - 2006 - Brigham Young University
We analyze linear models with a single endogenous regressor in the presence of many
instrumental variables. We weaken a key assumption typically made in this literature by
allowing all the instruments to have direct effects on the outcome. We consider restrictions ...
[CITATION] Sur cient Statistics for Welfare Analysis: A Bridge Between Structural and Reduced $ Form Methods
R Chetty - forthcoming Annual Review in Eco $ nomics, 2008
R Chetty… - 2008 - economics.harvard.edu
Abstract A growing literature has proposed that sconsumption commitmentstshed light on
several topics through their effects on risk preferences. This paper provides evidence for the
hypothesis that commitments affect risk preferences by examining the link between ...
R Chetty - 2007 - nber.org
Many governments now provide large-scale social insurance and pension programs as a
safety net for the elderly. As populations age, these programs have led to rapidly growing
fiscal obligations that governments must meet. However, under current tax policies, most ...
R Chetty… - bos.frb.org
United States? Because we can link students to parents in our data, we can measure the
intergenerational transmission of income directly in the STAR data. Consistent with earlier
research, we find that children of richer parents grow up to earn substantially more ...
Abstract Building on the literature on many weak instruments we analyze the properties of
conventional estimators including tsls, liml, btsls, and jive in the presence of various forms of
misspecification that allow for systematic direct effects of the instruments on the outcome. ...
[CITATION] Name Institution Workshop Title of Paper Paper Link
R Chetty…
V Asthana, D Barbezat, H Barreto… - The Journal of …, 2010 - Heldref Publications
The Journal of Economic Education is a peer-reviewed journal that could not be successful
without the valuable assistance from dedicated faculty members and other experts who
reviewed and refereed manuscript submissions. The Editors would like to thank and ...
D Card,
R Chetty, M Feldstein… - 2011 - papers.ssrn.com
Abstract: We argue that the development and expansion of direct, secure access to
administrative micro-data should be a top priority for the NSF. Administrative data offer much
larger sample sizes and have far fewer problems with attrition, non-response, and ...
R Chetty - Web site edition: email - economics.harvard.edu
In an influential paper, Friedman (1953) showed that even countercyclical fiscal or monetary
policies can be destabilizing if they are weakly correlated with the state of the economy. I
show that this surprising conclusion is sensitive to the way in which uncertainty is ...
R Chetty… - Economic Review, 1989 - piketty.pse.ens.fr
This is the first of two courses in the graduate public economic sequence at Harvard. This
one-semester course covers basic issues in the optimal design of tax and social insurance
policies, with emphasis on combining theoretical models with empirical evidence. Topics ...
R Chetty… - aeaweb.org
The 2003 dividend tax reform has generated renewed interest in understanding the
economic effects of dividend taxation. The reform introduced favored tax treatment of
individual dividend income, whereby dividends are taxed at a rate of 15 percent instead of ...
DE Card, R Chetty… - econstor.eu
Zusammenfassung: In this paper, we review the literature on the spike in unemployment exit
rates around benefit exhaustion, and present new evidence based on administrative data for
a large sample of job losers in Austria. We find that the way unemployment spells are ...
[CITATION] Micro versus Macro Labor Supply Elasticities-Are Micro and Macro Labor Supply Elasticities Consistent? A Review of Evidence on the Intensive and …
R Chetty, A Guren, D Manoli… - American Economic Review, 2011
Chairman Baucus, Ranking Member Hatch, and Members of the Committee: Thank you for
asking me to appear before your Committee today. It is a pleasure to share my views on the
complexity of the tax code and its implications for taxpayer behavior and tax policy. ...
This Paper analyses the effects of dividend taxation on corporate behaviour using the large
tax cut on individual dividend income enacted in 2003. Using data spanning 1980 to 2004-
Q2, we document a sharp and widespread surge in dividend payments following the tax ...
HOWDYK CLASSROOM,
RAJ CHETTY… - … Quarterly Journal of …, 2011 - econ.berkeley.edu
1594 QUARTERLY JOURNAL OF ECONOMICS higher quality classrooms in grades K–3—
as measured by classmates' end-of-class test scores—have higher earnings, college
attendance rates, and other outcomes. Finally, the effects of class quality fade out on test ...
R Chetty… - NBER Book Chapter, 2007 - papers.ssrn.com
Social safety nets in developing countries are far smaller than in developed economies. In
1996, the average expenditure on social insurance as a fraction of GDP in countries with
below-median per capita income was 6.8 percent; the corresponding figure in above- ...
[CITATION] Burgess, Robin Camerer, Colin F. Campante, Filipe Campbell, John Y. Carroll, Christopher
H David, CN Avery, L Babcock, D Backus, G Baker… - MIT Press
A Szeidl… - 2004 Meeting Papers, 2004 - ideas.repec.org
This paper studies portfolio choice and asset prices in a model with two consumption goods,
one of which involves a commitment in that its consumption can only be adjusted at a cost.
Commitments effectively make investors more risk averse: they invest less in risky assets ...
R Chetty - 2003 - en.scientificcommons.org
Publikationsansicht. 34780580. Consumption commitments, risk preferences, and optimal
unemployment insurance / (2003). Chetty, Raj. Abstract. Thesis (Ph. D., Dept. of
Economics)--Harvard University, 2003.. Includes bibliographical references (leaves 111-118). ...
R Chetty… - 2010 - obs.rc.fas.harvard.edu
→ First difference (and time series) estimate biased Can improve on the difference by using
diff-in-diff DD=[PA1− PA0]−[PB1− PB0] State A: experienced a tax change (treatment) State
B: does not experience any tax change (control) Identifying assumption:“parallel trends:” ...
D TAXES, R Chetty… - Technology, 2005 - Citeseer
This paper analyzes the effects of dividend taxation on corporate behavior using the large
tax cut on individual dividend income enacted in 2003. We document a 20 percent increase
in dividend payments by nonfinancial, nonutility publicly traded corporations following the ...
R Chetty - Journal of Political Economy, 2008 - JSTOR
In the April 2008 issue of the Journal of Political Economy, there is an error on page 211.
The last sentence of the first paragraph of Section IV. C should read:“As a result, 75 percent
of individuals who received severance pay remain unemployed after 10 weeks, compared ...
A Szeidl… - 2005 Meeting Papers, 2005 - ideas.repec.org
This paper studies consumption and portfolio choice in a model where agents have
neoclassical preferences over two consumption goods, one of which involves a commitment
in that its consumption can only be adjusted infrequently. Aggregating over a population of ...
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