Esteban Garcia Miralles defends his PhD thesis

Esteban Garcia Miralles defends his PhD thesis:"Essays on Retirement, Savings, Taxation, and Skill Formation"

Candidate

Esteban Garcia Miralles

Title:"Essays on Retirement, Savings, Taxation, and Skill Formation"

Time and place: 28 April 2021 at 15:00. Link to attend the defense folows here: https://ucph-ku.zoom.us/j/9536476672  

An electronic copy of the thesis may be otained here: charlotte.jespersen@econ.ku.dk

Assessment Committee

  • Asssociate Professor Meltem Daysal, Department of Economics, University of Copenhagen, Denmark (chairman
  • Professor Rafael Lalive, University of Lausanne
    Associate Professor Maria Fitzpatrick, Cornell University

Abstract.
The Ph.D. dissertation consists of four self-contained chapters. The first two chapters study how the design of public pension systems affect individuals’ behavior. The first chapter studies how pension eligibility ages impact the retirement behavior of couples. The second chapter explores how public pension provision affects private savings. The third chapter studies how optimal inheritance taxation depends on the social welfare function assumed and on the underlying individual heterogeneity. The fourth chapter explores human capital formation by estimating the causal effect of parental shocks on their children’s non-cognitive skills.

Chapter 1: Joint Retirement of Couples: Evidence from Discontinuities in Denmark (with Jonathan M. Leganza). We study joint retirement behavior and document underlying mechanisms. Exploiting administrative data and the discontinuous increase in retirement when individuals reach pension eligibility age, we estimate sizable spillover effects to their spouses. We show that age differences within couples are crucial determinants of joint retirement, which is primarily driven by older spouses working longer. Controlling for these age differences reveals that female spouses respond more, even controlling for relative earnings. Relative earnings play a role consistent with collective models of household behavior. A complementary analysis shows that a reform increasing eligibility ages induces similar spillovers, suggesting no significant adjustment costs.

Chapter 2: Public Pensions and Private Savings (with Jonathan M. Leganza). How does the provision of public pension benefits impact savings? We answer this question in the context of a Danish reform that increased social security eligibility ages. Using administrative data and a regression discontinuity design, we identify the causal effects of the policy. We find a lack of anticipatory savings responses after the announcement of the reform, whereas we find large increases in savings when delayed benefit eligibility induces extended employment. Individuals continue to work and continue to save in the same type of retirement accounts and at the same rate, highlighting how employer default contribution policies mediate responses to national reforms.

Chapter 3: The Crucial Role of Social Welfare Criteria and Individual Heterogeneity for Optimal Inheritance Taxation. This paper extends the calibrations of Piketty and Saez (2013) to unveil the importance of the assumed social welfare criteria and its interplay with individual heterogeneity on optimal inheritance taxation. I calibrate the full social optimal tax rate and find that it is highly sensitive to the assumed social welfare criteria. The optimal tax rate ranges from negative (under a utilitarian criterion) to positive and large (even assuming joy of giving motives). I also calibrate the optimal tax rate by percentile of the distribution of bequest received, as in Piketty and Saez, but accounting for heterogeneity in wealth and labor income. This leads to significant variation in the optimal tax rate among zero-bequest receivers, contrary to their finding of a constant tax rate.

Chapter 4: Are Children's Socio-Emotional Skills Shaped by Parental Health Shocks? (with Miriam Gensowski). Child skills are shaped by parental investments. When parents experience a health shock, their investments and therefore their children’s skills may be affected. This paper estimates causal effects of severe parental health shocks on child socio-emotional skills. Drawing on a large-scale survey linked to hospital records, we find that socio-emotional skills of 11-16 year-olds are robust to parental health shocks, with the exception of significant but very small reductions in Conscientiousness. We study short-run effects with a child-fixed effects model, and dynamics around the shocks with event studies. A sibling comparison suggests some long-run build-up of effects of early shocks.