Ph.D. Candidate in Economics
University of California, Berkeley
I will be on the job market in 2018-19 and available for interviews at the 2019 ASSA Meetings in Atlanta.
Fields: Public Economics, Development, Applied Microeconomics
This paper studies individual responses to wealth taxes and wealth tax enforcement using Colombian tax return microdata from 1993 to 2016 linked with the leaked "Panama Papers." We estimate elasticities of reported wealth with respect to (one minus) the wealth tax rate, exploiting discrete jumps in wealth tax liability and reforms varying exemption cutoffs and tax rates. We find clear evidence of immediate bunching responses to wealth taxes; individuals lower their reported wealth to reduce their tax burden. These immediate responses predominantly reflect avoidance and evasion, such as misreporting wealth items subject to less third-party reporting. In our main analysis, the short-term elasticity of reported wealth is two, and behavioral responses reduce revenues by up to one-fifth of projected revenues. We complement this analysis by studying offshore sheltering in Colombia’s most relevant tax havens. We show that offshore entities are predominantly used by the wealthiest taxpayers at least in part to hide assets from the tax authority. Finally, we show that better enforcement helps recover tax on offshore wealth. A voluntary disclosure scheme taking place between 2015 and 2017 encouraged evaders to disclose 1.7 percent of GDP in hidden wealth. Two-fifths of individuals in the wealthiest 0.01 percent disclosed under the scheme—disproportionately reporting concealed foreign assets—and, as a result, pay more taxes. Halfway through the scheme, the Panama Papers news story broke, shocking perceived detection probabilities and raising disclosures by more than 800 percent. This, possibly coupled with harsher noncompliance sanctions, contributed to improving wealth tax collection and enhancing tax progressivity at the top.
"Upstream and Downstream Impacts of College Merit-Based Financial Aid for Low-Income Students: Ser Pilo Paga in Colombia", with Fabio Sánchez and Catherine Rodríguez, R&R American Economic Journal: Economic Policy
How does financial aid affect college enrollment, stratification, and diversity? We present new evidence based on a large-scale program in Colombia available to low-income students scoring above a threshold in the national high school exit exam. RD estimates show immediate enrollment increased 80 to 167%, depending on the complier population. This rise, driven by matriculation at private high-quality colleges, closed the SES enrollment gap among high-achievers. Moreover, a DID approach suggests enrollment of aid-ineligible students also improved because college supply expanded in response to heightened demand. With ability stratification largely replacing SES stratification, diversity increased 46% at private high-quality colleges.
Does class diversity affect preferences for redistribution and academic performance? I present results testing the effect of exposure to poor individuals on rich individuals’ perceptions of inequality and poverty, beliefs of social justice, redistributive preferences, and academic outcomes. I exploit the plausibly exogenous timing of a financial aid program that generated an unprecedented and discontinuous jump in the presence of poor students at an elite university in Colombia and test the effect of this shock in peer characteristics using survey experiments. I find a significant positive effect of exposure to poor students on interactions among students with heterogeneous family backgrounds, an increase in perceived inequality, poverty and upward social mobility, a higher perception of meritocracy in college admissions, and a stronger support for redistribution. I find no significant effect on dropout rates and GPA. Moreover, I find weak evidence that younger cohorts are reacting to what has become a more competitive college admissions process by exerting more effort in preparing for the entry exam.
- Summary for broader audience: FocoEconómico
Selected Works in Progress
"The Impact of Large Cash Transfers on Individuals and their Communities", with Arlen Guarin and Christian Posso
"Technological Change and Tax Capacity: Evidence from a Financial Inclusion Reform", with Anne Brockmeyer