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For as Long as We Shall Have a Place to Live: Sean Elliott

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Portrait of PhD candidate Sean Elliott
PhD Candidate Sean Elliott Photo: A. Macedo

Marriage rates have declined. Cohabitation rates are up. There’s another social change less spoken about. Fewer people than ever are matching up at all. Sean Elliott, a PhD candidate with the Department of Economics took a close look at data that captures the changing nature of happily ever after. The applied econometrician applied his research toolkit to understanding what amateur observers might call a romance shortage. Ironically, he used a methodology best known in industrial organization that sounds like it could be the framework for a dating app, but isn’t, called dynamic discrete choice econometrics. Unlike other research models, this one enabled Elliott to estimate the payoffs and costs of being in a relationship separately.

“The question was what theoretical framework do we have to address all these changes simultaneously? It turns out there isn’t a great one that exists,” Elliott explained. “So, I proposed a new one, a dynamic model that explains why fewer matches are formed even as those that do persist are more stable. I take it to the data and show that people have been enjoying their matches more, but entry costs have also been rising substantially, creating frictions that prevent matching.” [Read more…]

From Taylor’s Jet to Taxation for Climate Rescue: Tasnia Hussain

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Portrait of PhD Candidate Tasnia Hussain
PhD Candidate Tasnia Hussain Photo: A. Macedo

Criticism of Taylor Swift’s private jet flights inspired Tasnia Hussain. The PhD candidate’s job market paper, Optimal Carbon Policy Under Carbon Inequality, now contributes evidence for tax policies that will reduce carbon emissions and support the population’s long overdue breakup with fossil fuels.

“Two years ago, there was a lot of outrage on Twitter about celebrity private jet use,” Hussain remembered. “People were angry because carbon taxes felt regressive, most people feel them at the gas pump or when heating their homes. Meanwhile, the ultra-rich continue to fly private and sail on massive yachts. That moment made me realize this was the perfect intersection of my interests in inequality and climate.”

Carbon inequality is the idea that wealthy households are responsible for a disproportionate share of emissions and climate change compared to lower income households whose emissions are generated through heating their homes and commuting to work.

“Carbon inequality results not just because of the consumption habits of the wealthy, but also because of how they generate their wealth,” Hussain explained. “For the top 0.1% of the population, their income comes primarily from business ownership, and those businesses are often highly carbon intensive.”

[Read more…]

How to Best Help People When They’re Down and Out: Steven Ryan

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Portrait of recent PhD graduate Steven Ryan
Steven Ryan, PhD of Economics Photo: A. Macedo

In November 2014, the price of oil was already in decline. OPEC’s leadership decided not to cut production. As a result, throughout the beginning of 2015, oil prices continued to decline and tens of thousands of Canadian workers in the sector received lay off notices. The federal government responded in 2016 by retroactively extending employment insurance (EI) benefits for those affected. One group of workers received five weeks of additional benefits while others, who had worked in the industry longest, received up to 25 extra weeks. Steven Ryan, a recent graduate of the PhD program at the Department of Economics, examined this unprecedented program in his paper Riding Out the Downturn: The Re-Employment Effects of an Unemployment Insurance Extension to answer a simple question: Do more generous unemployment benefits help people find better jobs?

In short, yes.

“What I actually find is that the people who benefited from those additional weeks of unemployment insurance availability ultimately have higher earnings from employment,” Ryan explained. “Substantially higher! In fact, those higher earnings generate additional tax revenues that essentially offset the costs of the additional benefits.” [Read more…]

Death, Taxes and Understanding Capital Gains: Sobia Hasan Jafry

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Portrait of PhD Candidate Sobia Hasan Jafry
PhD Candidate Sobia Hasan Jafry Photo: A. Macedo

People in Canada don’t change how they behave in response to changes in capital gains tax rates. That doesn’t mean they don’t respond at all when they hear word of changes to the regulations governing the tax.  Their response is just short-lived. Sobia Jafry, a PhD candidate with the Department of Economics studied how people affected by the tax changes altered their capital gains realization behaviour. Her finding is that tax reforms lead to retiming effects, meaning when, not if people sell, but with no permanent change in gain realization behaviour. Along the way, she also learned how to correct common misunderstanding of capital gains.

“There’s a big misconception, or a fear, that if tax rates on capital gains are going to change, the biggest capital gain event in our life, selling our house, will be taxed,” the specialist in public and household finance explained. “But policymakers have accounted for that. In Canada, there’s a full exemption for gains on the principal residence.”

As a large majority of Canada’s population does not ever earn a taxable gain, they are not directly affected by taxation of capital gains income. [Read more…]

From Nonpartisan to Partisan: Dario Toman Examines How Party Affiliations Reshape Local Democracy

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Portrait of PhD Candidate Dario Toman
PhD Candidate Dario Toman Photo: A. Macedo

What happens when local elections include party affiliations on the ballot? Dario Toman, a PhD Candidate with the Department of Economics, examined how adding parties to local ballots reshapes who runs for office, who wins, and how voters make decisions. In his job market paper, Partisan Elections, Competition, and Candidate Selection: Evidence from School Boards, Toman’s findings show that this change can have far-reaching consequences for local democracy.

Since 2014, many school boards across North Carolina have introduced partisan elections, listing candidates’ party affiliations directly on the ballot. The change has been rolled out gradually, with party affiliations introduced in 39 school boards over the past decade. The recent nature of these changing conditions made the state’s school board elections especially interesting to study the role of party affiliation in shaping local election outcomes in the U.S. The district-by-district implementation of the rules for trustee elections allowed Toman to estimate the causal effects of adding party labels to candidate names on the ballot. [Read more…]

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