Essays on savings, housing, and taxation
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This dissertation consists of three essays on topics in macroeconomics. Chapter One studies whether the rich save a larger fraction than other economic groups. We use The Fiscal Analyzer, a detailed life-cycle consumption-smoothing program, to calculate lifetime net resources, including private wealth, human wealth, and net taxes. We identify a strong negative relationship between the average propensity to consume and lifetime net resources. The average propensity to consume decreases on each component of lifetime net resources except for liquid assets. The results do not change if we consider heterogeneous borrowing constraints among households. Results of models indicate that bequest motives could explain why the rich save more. Chapter Two measures the work disincentives, including explicit taxes and implicit loss of benefits, of the elderly. We use The Fiscal Analyzer to calculate remaining lifetime marginal net tax rates. We find that Uncle Sam is inducing the elderly to retire. The marginal net taxation of labor earnings is extremely high. A significant increase in earnings leads to a higher marginal net tax rate than earning a small extra amount of money. There is enormous dispersion in effective marginal remaining lifetime net tax rates facing households with the same age and resource level. Current-year marginal net tax rates can dramatically understate the work disincentives facing the elderly. Chapter Three explores the different implications of housing price and labor productivity on the skill ratio. I construct a spatial equilibrium model with two skill types of households. When the housing supply increases in the more developed region, the skill ratio in both regions decreases and both types of labor get higher utility. When the labor productivity of high-skilled labor in the more developed region increases, the skill ratio increases in the more developed region and decreases in the less developed region and only the high-skilled labor get higher utility.