Title

Essays on taxation, self-employment, and housing

Date of Award

1999

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Douglas Holtz-Eakin

Keywords

Housing, Taxation, Self-employment

Subject Categories

Economics | Labor Economics | Social and Behavioral Sciences

Abstract

This dissertation consists of three essays in public and labor economics. In the first two, I examine individual data on transitions into self-employment. Essay I examines whether or not the U.S. tax system discourages individuals from starting new businesses, and Essay II considers the effect of a self-employed husband on the transition decisions of married women. Finally, Essay III presents a dynamic simulation model of the impact of tax reform--specifically, of a Flat Tax--on owner-occupied housing values.

In the first, I estimate random effects probits of whether or not a male wage worker makes a transition into self-employment, controlling for a variety of individual, household, occupational, and regional characteristics. Unique to this study is the use of individual-specific differences in wage-and-salary and self-employment tax rates. Empirical results show that differential taxation has significant effects on the probability of becoming self-employed. Lower average tax rates in self-employment increase the probability of entry, while lower marginal tax rates in self-employment decrease the probability.

The focus in the second essay is on the effect of a husband's self-employment experience. Results show that having a husband with experience in self-employment nearly doubles the probability that a woman will start her own business. The effect is found to be strongest if the husband is actually self-employed at the time the wife is contemplating a transition. A series of robustness checks suggest that family businesses and assortative mating only partially explain this large effect. Intrahousehold human capital transfers might also play a role.

The third essay is co-authored by Douglas Holtz-Eakin. In it, we estimate the effects of a Flat Tax on owner-occupied housing, being careful to disentangle the transitional adjustments from long-run steady-state outcomes. Simulation results using plausible parameter values indicate that such a reform would not have devastating effects on housing values. This divergence is attributed to the business-side tax on new housing, which would make existing housing relatively tax advantaged in the immediate term.

Access

Surface provides description only. Full text is available to ProQuest subscribers. Ask your Librarian for assistance.

http://libezproxy.syr.edu/login?url=http://proquest.umi.com/pqdweb?did=733965001&sid=1&Fmt=2&clientId=3739&RQT=309&VName=PQD