Research
Technological Change and Demand for Redistribution: Micro Evidence and Macro Implications (submitted)
Latest draft: February 13, 2024
Job Market Paper
Short Slides, Full Slides (latest coming soon)
Abstract: I study the role of technological change in explaining rising income inequality and non-increasing progressive taxes from 1978 to 2018. Linking occupation-level data with individual responses on preferences for the redistribution of income, I document that occupations that required increasingly more computer-related work experienced a larger decline in preferences for the redistribution of income, even controlling for individual earnings. To rationalize this finding, I develop a tractable quantitative model embedding technological change and voting for redistribution, in which workers who are more exposed to computerization have more to gain from skill investment, and thus are more hurt by more distortive progressive taxes. Therefore, they are more opposed to progressive taxation. A decline in equipment prices leads to an increase in earnings inequality, while the tax progressivity is non-increasing. If workers’ skill acquisition were not allowed or a policymaking process is of equal weight across voters during the technological change, the model generates a higher level of tax progressivity and inequality.
Presented at: Heller-Hurwicz Economics Institute Alumni Conference (Jul 2022); University of Minnesota - Department of Political Science (Sep 2022); Labor, Firms, and Macro Workshop (Mar 2023); Asian Meeting of the Econometric Society in China (Jun 2023); Asian Meeting of the Econometric Society (Jul 2023 Young Scholar's Funds Award); Econometric Society Australasian Meeting (Aug 2023 accepted); European Economic Association Congress-Econometric Society European Summer Meeting (Aug 2023); Korean Association of Public Finance (Nov 2023, Mar 2024); Hanyang University (May 2024, scheduled); North America Summer Meeting of the Econometric Society (Jun 2024, scheduled)
Political Participation, Intergenerational Transfer, and Capital Accumulation in General Equilibrium
Latest draft: September 15, 2021
Abstract: This paper studies the dynamic politico-economic theory in general equilibrium where repeated voting on an intergenerational tax and transfer system disproportionately aggregates policy preferences of households, and the relative political power depends on households' voting participation, i.e. endogenous turnout. In particular, I incorporate household's turnout decision in an otherwise standard overlapping generations model with capital accumulation. Political process is modeled by the probabilistic voting theory in which the political power emerges endogenously to household's primitives. I characterize the Markov perfect equilibrium and policy rules of the incumbent government and private sector saving. The Social Security tax exhibits a positive relationship with aggregate capital, in contrast to the independent relationship when voter turnout is exogenous. This suggests that agents are faced with a trade-off between political participation and economic welfare, and this trade-off depends on the extent to which the current generation extracts resources from the next unborn generation. The transitional dynamics shows that in response to population aging, capital accumulation and evolution of the endogenous tax rate are substantially different with exogenous and endogenous turnout.
Presented at: Asian Meeting of the Econometric Society in China (Jun 2022)
Work in Progress
Sustaining Industrialization through Education (with Sunghun Cho, and Jae-Hyung Kim)
Presented at: Korea Institute for International Economic Policy-Korea America Economic Association Workshop (Apr 2023)
Tax Progressivity and Business Cycles (with Kun Ho Kim, Wentao Hu, Wei-Biao Wu)
Technological Progress and Labor Market Mobility (with Han Gao)
Discussion Slides
Discussion Slides for “Perceived versus Calibrated Income Risks in Heterogeneous-agent Consumption Models,” by Tao Wang
Discussion Slides for “Unmasking Social Security: Navigating the Impact on Welfare Distribution,” by Eungsik Kim