Regression-Discontinuity-Based Control-Function Approach for Income Tax Effects on Male Work Hours
2013/05/21
研討會日期 : 2013-05-21
時間 : 14:30
主講人 : Professor Myoung-jae Lee
地點 : Conference Room C103
演講者簡介 : Myoung-jae Lee received his Ph.D. in Economics from University of Wisconsin-Madison in 1989. He is currently serving as Professor of Economics at Korea University. His research fields are econometrics and statistics, and labor and health economics.
演講摘要 : In finding the effect of income tax on work hours, there occurs a near simultaneity problem because income tax is determined by income that is wage rate times work hours. To deal with the endogeneity of income tax, we take advantage of jumps in income tax as the income passes thresholds in the income tax law; using jumps is based on the regression discontinuity (RD) idea. Whereas the usual RD estimators amount to local instrumental variable estimators, we propose a ‘local’ control function (CF) approach that combines the ‘global’ CF approach with RD: CF to remove the income-tax endogeneity, and RD to find a legitimate local instrument. Compared with the global CF, our new RD-based CF does not need a global instrument as it uses an “automatic” local instrument provided by RD. Also the parameters estimated by the RD-based CF approach are more structural than those estimated by the global CF approach, because the former can allow “smooth endogeneity” that the latter cannot. We develop a general econometric methodology for the RD-based CF approach first, and then apply the method to Korean data to find almost no effect of income tax on male work hours.
