Lecture 1: Introduction to Graduate Public Economics

Stefanie Stantcheva

Fall 2016

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 Our Goals for this class

1 Learn skills and methods (theory and empirical).

2 Create a culture of key papers and read widely.
3 Get you inspired and ready for your own research.

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 Class Logistics

Meet once per week, 2.5-3 hours. Longer break halfway through.
3 problem sets.
One referee report.
One final exam.
I post office hours 1-2 weeks in advance – sign up whether class or
research related.
Reading group.
What I expect from you.

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 PUBLIC ECONOMICS DEFINITION

Acknowledgment: many slides are based on Emmanuel Saez’ grad econ

course at Berkeley.

Public economics = Study of the role of the government in the economy

Government is instrumental in most aspects of economic life:

1) Government in charge of huge regulatory structure

2) Taxes: governments in advanced economies collect 30-50% of National

Income in taxes

3) Expenditures: tax revenue funds traditional public goods (infrastructure,

public order and safety, defense), and welfare state (education, retirement
benefits, health care, income support)

4) Macro-economic stabilization through central bank (interest rate,

inflation control), fiscal stimulus, bailout policies
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 Figure 13.1. Tax revenues in rich countries, 1870-2010
60%

50% Sweden
Total tax revenues (% national income)

France
40%

U.K.

30%
U.S.
,

20%

10%

0%
1870 1890 1910 1930 1950 1970 1990 2010
Total tax revenues were less than 10% of national income in rich countries until 1900-1910; they represent between
30% and 55% of national income in 2000-2010. Sources and series: see piketty.pse.ens.fr/capital21c.

Source: Piketty (2014)

 Two General Rules for Government Intervention

1) Failure of 1st Welfare Theorem: Government intervention can help if

there are market or individual failures. Markets first, government second.
Why?

2) Fallacy of the 2nd Welfare Theorem: Distortionary Government

intervention is required to reduce economic inequality

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 Role 1: 1st Welfare Theorem Failure

1st Welfare Theorem: If (1) no externalities, (2) perfect competition, (3)

perfect information, (4) agents are rational, then private market equilibrium
is Pareto efficient

Government intervention may be desirable if:

1) Externalities require government interventions (Pigouvian

taxes/subsidies, public good provision)

2) Imperfect competition requires regulation (typically studied in Industrial

Organization)

3) Imperfect or Asymmetric Information (e.g., adverse selection may call for

mandatory insurance)

4) Agents are not rational (= individual failures analyzed in behavioral

economics, field in huge expansion): e.g., myopic or hyperbolic agents may
not save enough for retirement 55
 1. Externalities

Markets may be incomplete (e.g., smoking, pollution).

Achieving the Coasian efficient solution requires a coordinating institution,

such as a government.

Public goods (infrastructure, defense, education).

Important question: what public goods to provide, how to correct for

externalities.

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 2. Imperfect competition

Role for government regulation when markets are not competitive.

We will see some of this when we study R&D policies and innovation.

Typically we leave this to IO, but we shouldn’t!

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 3. Imperfect and asymmetric information

Adverse Selection in health insurance (reason for mandated coverage).

Capital markets and credit constraints (subsidies for education).

Intergenerational issues (future generations may not be valued

appropriately in today’s market).

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 4. Individual Failures

Behavioral issues, own-agency problems.

If agents do not optimize, may be best to intervene. E.g.: mandated

retirement savings.

Paternalism?

Currently very active area of research, theoretically and empirically.

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 Individual Failures vs. Paternalism

In many situations, individuals may not or do not seem to act in their best
interests [e.g., many individuals are not able to save for retirement]

Two Polar Views on such situations:

1) Individual Failures [Behavioral Economics View] Individual Failures

exist: Self-control problems, Cognitive Limitations

2) Paternalism [Libertarian Chicago View] Individual failures do not exist

and govt wants to impose on individuals its own preferences against
individuals’ will

Key way to distinguish those 2 views: Under Paternalism, individuals

should be opposed to govt programs such as Social Security. If individuals
understand they have failures, they will tend to support govt programs such
as Social Security.
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 Role 2: 2nd Welfare Theorem Fallacy

Even with no market failures, free market might generate substantial

inequality. Inequality is an issue because of people care about their
relative situation.

2nd Welfare Theorem: Any Pareto Efficient outcome can be reached by (1)
Suitable redistribution of initial endowments [individualized lump-sum
taxes based on indiv. characteristics and not behavior], (2) Then letting
markets work freely

⇒ No conflict between efficiency and equity [1st best taxation]

Redistribution of initial endowments is not feasible (information pb) ⇒ govt

needs to use distortionary taxes and transfers ⇒ Trade-off between
efficiency and equity [2nd best taxation]

This class will focus on both roles, but first on 2).

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 Illustration of 2nd Welfare Theorem Fallacy

Suppose economy is populated 50% with disabled people unable to work

(hence they earn $0) and 50% with able people who can work and earn
$100

Free market outcome: disabled have $0, able have $100

2nd welfare theorem: govt is able to tell apart the disabled from the able
[even if the able do not work]

⇒ can tax the able by $50 [regardless of whether they work or not] to give $50 to
each disabled person ⇒ the able keep working [otherwise they’d have zero
income and still have to pay $50]

Real world: govt can’t tell apart disabled from non working able

⇒ $50 tax on workers + $50 transfer on non workers destroys all incentives to
work ⇒ govt can no longer do full redistribution ⇒ Trade-off between equity and
size of the pie
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 Normative vs. Positive Public Economics

Normative Public Economics: Analysis of How Things Should be (e.g.,

should the government intervene in health insurance market? how high
should taxes be?, etc.)

Positive Public Economics: Analysis of How Things Really Are (e.g., Does
govt provided health care crowd out private health care insurance? Do
higher taxes reduce labor supply?)

Positive Public Economics is a required 1st step before we can complete

Normative Public Economics

Positive analysis is primarily empirical and Normative analysis is primarily

theoretical

Positive Public Economics overlaps with Labor Economics

Political Economy is a positive analysis of govt outcomes [public choice is

political economy from a libertarian view] 15 55
 Plan for ec2450a Lectures (I)

(1) Optimal income taxation: Facts about inequality, theory.

(2) Optimal transfers: Optimal design, participation responses.

(3) Empirical evidence on responses to taxation: labor supply responses,

migration, taxable income responses.

(4) Social preferences for redistribution: Theory and empirical studies.

(5) Tax avoidance, evasion, and enforcement

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 Plan for ec2450a Lectures (II)

(6) Capital income taxation: canonical models, bequest and inheritance

taxation, a simpler theory, empirical evidence.

(7) Education and human capital

(8) New Dynamic Public Finance: methods and standard results,

applications, life cycle taxation, recent topics.

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 Plan for ec2450a Lectures (III)

(9) Policies for R&D and innovation: Theory of incentives and empirical
evidence.

(10) Corporate taxation: Theory and evidence on taxation, corporate

financial policy, and business investment

(11) Social Security and Retirement: theory of social security, evidence on

behavioral responses to policies, tax-favored retirement accounts: IRAs,
401(k)s.

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 My research

I do mostly public, but mixed with labor, macro, and (some) political
economy.

Both theory and empirical work.

Classical optimal tax theory (e.g.: labor market frictions, rent-seeking,

capital taxation)

Dynamic new Public Finance and Mechanism Design (e.g.: human

capital, R&D incentives).

Social preference theory.

Empirical experimental work on preferences for redistribution.

Empirical effects of taxes (e.g: migration, innovation, capital income).

Innovation policy.
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 Income Inequality: Labor vs. Capital Income

Individuals derive market income (before tax) from labor and capital:
z = wl + rk where w is wage, l is labor supply, k is wealth, r is rate of
return on wealth

1) Labor income inequality is due to differences in working abilities

(education, talent, physical ability, etc.), work effort (hours of work, effort on
the job, etc.), and luck (labor effort might succeed or not)

2) Capital income inequality is due to differences in wealth k (due to past

saving behavior and inheritances received), and in rates of return r (varies
dramatically overtime and across assets)

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 Macro-aggregates: Labor vs. Capital Income

Labor income wl ' 75% of national income z

Capital income rk ' 25% of national income z (has increased in recent

decades)

Wealth stock k ' 400 − 500% of national income z (is increasing)

Rate of return on capital r ' 5%

α = β · r where α = rk/z share of capital income and β = k/z wealth to

income ratio

In GDP, gross capital share is higher (35%) because it includes depreciation

of capital (' 10% of GDP)

National Income = GDP - depreciation of capital + net foreign income

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 Figure A6: The composition of capital income in the U.S.,
35% (details)

30%
% of factor-price national income

25%

Profits & interest paid to pensions

20%

Corporate profits
15%
Net interest

10%

Noncorporate business profits

5%

Housing rents (net of mortgages)

0%
1913

1918

1923

1928

1933

1938

1943

1948

1953

1958

1963

1968

1973

1978

1983

1988

1993

1998

2003

2008

2013
 Figure 12: Capital shares in factor-price national income
1975-2010
40%

35%

30%

25%

20%

USA Japan Germany

15%
France UK Canada
Australia Italy
10%
1975 1980 1985 1990 1995 2000 2005 2010
Source: Piketty and Zucman (2014)
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 Figure 5.1. Private and public capital: Europe and America, 1870-2010
800%

700%
United States
Value of private and public capital (% national income)

600%

500% Europe

400%
Private
300% capital

200% Public
capital
100%

0%

-100%
1870 1890 1910 1930 1950 1970 1990 2010
The fluctuations of national capital in the long run correspond mostly to the fluctuations of private capital (both in
Europe and in the U.S.). Sources and series: see piketty.pse.ens.fr/capital21c.

Source: Piketty (2014)

 Income Inequality: Labor vs. Capital Income

Capital Income (or wealth) is more concentrated than Labor Income. In the
US:

Top 1% wealth holders have 40% of total wealth (Saez-Zucman 2014).

Bottom 50% wealth holders hold almost no wealth.

Top 1% incomes have 20% of total income (Piketty-Saez)

Top 1% labor income earners have about 15% of total labor income

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 Income Inequality Measurement

Inequality can be measured by indexes such as Gini, log-variance, quantile

income shares which are functions of the income distribution F (z )

Gini = 2 * area between 45 degree line and Lorenz curve

Lorenz curve L(p ) at percentile p is fraction of total income earned by

individuals below percentile p

0 ≤ L(p ) ≤ p

Gini=0 means perfect equality

Gini=1 means complete inequality (top person has all the income)

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 Key Empirical Facts on Income/Wealth Inequality Evolution

1) In the US, labor income inequality has increased substantially since

1970: due to skilled biased technological progress vs. institutions (min
wage and Unions) [Autor-Katz’99]

2) US top income shares dropped dramatically from 1929 to 1950 and

increased dramatically since 1980 [Piketty and Saez]

3) Top US incomes used to be primarily capital income. Now, top incomes

are divided 50/50 between labor and capital income (explosion of top labor
incomes with stock-options, etc.)

4) Fall in top income shares from 1900-1950 happened in most OECD

countries. Surge in top income shares has happened primarily in English
speaking countries, not as much in Continental Europe and Japan [Atkinson,
Piketty, Saez JEL’11]
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 Figure 1: Gini coefficient
0.50

● ●
● ●
●
●● ●
●
●● ●
0.45 ●●● ●
● ●
●
● ●●● ●
●
●●
●
●
Gini coefficient

● ●●
●●
●● ●
0.40 ●● ●
● ●●
●
●
●
● ●●
● ● ●●●● ●●●
●
●●
● ●● ●
● ●
●

0.35

● All Workers
Men
Women
0.30
1940 1950 1960 1970 1980 1990 2000
Source: Kopczuk, Saez, Song QJE'10: Wage earnings
Year
inequality
 Top  10%  Pre-­‐tax  Income  Share  in  the  US,  1917-­‐2014  
 

50%
Top 10% Income Share

45%

40%

35%

30%

25%
1917
1922
1927
1932
1937
1942
1947
1952
1957
1962
1967
1972
1977
1982
1987
1992
1997
2002
2007
2012
Source: Piketty and Saez, 2003 updated to 2014. Series based on pre-tax cash market income including realized
capital gains and excluding government transfers.
 Decomposing Top 10% into 3 Groups, 1913-2014
25%
Share of total income for each group

20%

15%

10%

Top 1% (incomes above $423,000 in 2014)

5%
Top 5-1% (incomes between $174,200 and $423,000)
Top 10-5% (incomes between $121,400 and $174,200)

0%
1913
1918
1923
1928
1933
1938
1943
1948
1953
1958
1963
1968
1973
1978
1983
1988
1993
1998
2003
2008
2013
 
 
Source: Piketty and Saez, 2003 updated to 2014. Series based  on pre-tax cash market income including realized
capital gains and excluding government transfers.
 Top 0.1% US Pre-Tax Income Share, 1913-2014

12%
Top 0.1% Income Share

Top 0.1% income share

10% (incomes above $1.9m in 2014)

8%

6%

4%

2%

0%
1913
1918
1923
1928
1933
1938
1943
1948
1953
1958
1963
1968
1973
1978
1983
1988
1993
1998
2003
2008
2013
Source: Piketty and Saez, 2003 updated to 2014. Series based on pre-tax cash market income including or
excluding realized capital gains, and always excluding government transfers.
 Real average national income:
70,000
Full adult population vs. bottom 90%

All adults
Average income in constant 2012 dollars

60,000

50,000 1.4%

40,000
2.0%

30,000

20,000 Bottom 90% adults

2.0% 0.7%
10,000

0
1946

1950

1954

1958

1962

1966

1970

1974

1978

1982

1986

1990

1994

1998

2002

2006

2010

2014
Real values are obtained by using the national income deflator and expressed in 2012 dollars. Source: Appendix Tables
XX.
 Top 10% wealth share in the United States, 1917-2012
90%

85%
% of total household wealth

80%
Capitalized income

75%
SCF

70%

65%

60%
1917

1922

1927

1932

1937

1942

1947

1952

1957

1962

1967

1972

1977

1982

1987

1992

1997

2002

2007

2012
The figure depicts the share of total household wealth owned by the top 10%, obained by capitalizing income tax returns
versus in the Survey of Consumer Finances. The unit of analysis is the familly. Source: Appendix Tables B1 and C4.
 Top 0.1% wealth share in the United States, 1913-2012
25%

20%
% of total household wealth

15%

10%

5%

0%
1913
1918
1923
1928
1933
1938
1943
1948
1953
1958
1963
1968
1973
1978
1983
1988
1993
1998
2003
2008
2013
This figure depicts the share of total household wealth held by the 0.1% richest families, as estimated by capitalizing income tax
returns. In 2012, the top 0.1% includes about 160,000 families with net wealth above $20.6 million. Source: Appendix Table B1.
Key Empirical Facts on Income/Capital Inequality Cross-Sectionally

Based on IRS tax returns data from Saez and Zucman (2015) for 2007.

Fact 1: Capital income is more unequally distributed than labor

income.

Fact 2: At the top, total income is mostly capital income.

Fact 3: Two-dimensional heterogeneity: even conditional on labor

income, a lot of inequality in capital income.

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Labor, Capital, and Total Income Distributions (Fact 1)

27 40
Labor, Capital, and Total Income Distributions (Fact 2)

28 40
Capital Income Conditional on Labor Income (Fact 3)

29 40
 Measuring Intergenerational Income Mobility

Strong consensus that children’s success should not depend too much on
parental income [Equality of Opportunity]

Studies linking adult children to their parents can measure link between
children and parents income

Simple measure: average income rank of children by income rank of

parents [Chetty et al. 2014]

1) US has less mobility than European countries (especially Scandinavian

countries such as Denmark)

2) Substantial heterogeneity in mobility across cities in the US

3) Places with low race/income segregation, low income inequality, good

K-12 schools, high social capital, high family stability tend to have high
mobility [these are correlations and do not imply causality]
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 A. Mean Child Income Rank vs. Parent Income Rank in the U.S.
70
60
Mean Child Income Rank
50
40
30

Rank-Rank Slope (U.S) = 0.341

(0.0003)
20

0 10 20 30 40 50 60 70 80 90 100
Parent Income Rank

Source: Chetty, Hendren, Kline, Saez (2014)

 B. United States vs. Denmark
70
60
Mean Child Income Rank
50
40
30

Rank-Rank Slope (Denmark) = 0.180

(0.0063)
20

0 10 20 30 40 50 60 70 80 90 100
Parent Income Rank
Denmark United States
 Source: Chetty et al. (2014)

The American Dream?

§  Probability that a child born to parents in the bottom fifth

of the income distribution reaches the top fifth:

USA Chetty, Hendren, Kline, Saez 2014 7.5%

UK Blanden and Machin 2008 9.0%

Denmark Boserup, Kopczuk, and Kreiner 2013 11.7%

Corak and Heisz 1999 13.5%

Canada

à Chances of achieving the “American Dream” are almost

two times higher in Canada than in the U.S.
 Source: Chetty et al. (2014)
The Geography of Upward Mobility in the United States
Probability of Reaching the Top Fifth Starting from the Bottom Fifth
US average 7.5% [kids born 1980-2]

Note: Lighter Color = More Upward Mobility

Download Statistics for Your Area at www.equality-of-opportunity.org
 Source: Chetty et al. (2014)
The Geography of Upward Mobility in the United States
Odds of Reaching the Top Fifth Starting from the Bottom Fifth
US average 7.5% [kids born 1980-2]
Indianapolis 4.9%

Santa Rosa 10.0%

SF 12.2% Sacramento 9.7%
Modesto 9.4% Washington DC 11.0%
SJ 12.9%
Fresno 7.5%
SB 11.3% Bakersfield 12.2%
Charlotte 4.4%
LA 9.6%
San Diego 10.4% Atlanta 4.5%

Note: Lighter Color = More Upward Mobility

Download Statistics for Your Area at www.equality-of-opportunity.org
 Source: Chetty et al. (2014)

40 economic mobility

Table 1. Upward Mobility in the 50 Largest Metro Areas: The Top 10 and Bottom 10

Rank Commuting Zone Odds of Reaching Rank Commuting Zone Odds of Reaching
Top Fifth from Top Fifth from
Bottom Fifth Bottom Fifth
1 San Jose, CA 12.9% 41 Cleveland, OH 5.1%
2 San Francisco, CA 12.2% 42 St. Louis, MO 5.1%
3 Washington, D.C. 11.0% 43 Raleigh, NC 5.0%
4 Seattle, WA 10.9% 44 Jacksonville, FL 4.9%
5 Salt Lake City, UT 10.8% 45 Columbus, OH 4.9%
6 New York, NY 10.5% 46 Indianapolis, IN 4.9%
7 Boston, MA 10.5% 47 Dayton, OH 4.9%
8 San Diego, CA 10.4% 48 Atlanta, GA 4.5%
9 Newark, NJ 10.2% 49 Milwaukee, WI 4.5%
10 Manchester, NH 10.0% 50 Charlotte, NC 4.4%
Note: This table reports selected statistics from a sample of the 50 largest commuting zones (CZs) according to their populations in the 2000 Census. The columns report
the percentage of children whose family income is in the top quintile of the national distribution of child family income conditional on having parent family income in the
bottom quintile of the parental national income distribution—these probabilities are taken from Online Data Table VI of Chetty et al., 2014a.
Source: Chetty et al., 2014a.

that much of the variation in upward mobility across areas white and black low-income individuals a
may be driven by a causal effect of the local environment we find a strong negative correlation betwe
sures of racial and income segregation and
 Govt Redistribution with Taxes and Transfers

Govt taxes individuals based on income and consumption and provides

transfers: z is pre-tax income, y = z − T (z ) + B (z ) is post-tax income

1) If inequality in y is less than inequality in z ⇔ tax and transfer system

is redistributive (or progressive)

2) If inequality in y is more than inequality in z ⇔ tax and transfer system

is regressive

a) If y = z · (1 − t ) with constant t, tax/transfer system is neutral

b) If y = z · (1 − t ) + G where G is a universal (lumpsum) allowance, then

tax/transfer system is progressive

c) If y = z − T where T is a uniform tax (poll tax), then tax/transfer system is

regressive

Current tax/transfer systems in rich countries look roughly like b)

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 Federal US Tax System: Overview

1) Individual income tax (on both labor+capital income) [progressive](40% of

fed tax revenue)

2) Payroll taxes (on labor income) financing social security programs [about
neutral] (40% of revenue)

3) Corporate income tax (on capital income) [progressive if incidence on

capital income] (15% of revenue)

4) Estate taxes (on capital income) [very progressive] (2% of revenue)

5) Minor excise taxes [regressive] (3% of revenue)

47 55
 State+Local Tax System: Overview

1) Individual+Corporate income taxes [progressive] (30% of state+local tax

revenue)

2) Sales + Excise taxes (tax on consumption = income - savings) [about

neutral] (30% of revenue)

3) Real estate property taxes (on capital income) [slightly progressive] (30%
of revenue)

http://www.census.gov/govs/www/qtax.html

48 55
 CHAPTER 1 ■ WHY STUDY PUBLIC ECONOMICS?
1.2

Distribution of
Revenue Sources

The Distribution of Federal

and State Revenues, 1960
and 2008 • This figure
shows the changing
composition of federal and
state revenue sources over
time, as a share of total
revenues. (a) At the federal
level, there has been a large
reduction in corporate and
excise tax revenues and a
rise in payroll tax revenues.
(b) For the states, there has
been a decline in property
taxes and a rise in income
taxes and federal grants.

Public Finance and Public Policy Jonathan Gruber Third Edition Copyright © 2010 Worth Publishers 22 of 24
 US Tax System: Progressivity and Evolution

1) Medium Term Changes: Federal Tax Progressivity has declined since

1970 but govt redistribution remains substantial especially when including
transfers (Medicaid, Social Security retirement, DI, UI various income
support programs)

2) Long Term Changes: Before 1913, US taxes were primarily tariffs,

excises, and real estate property taxes [slightly regressive], minimal welfare
state (and hence small govt)

http://www.treasury.gov/education/fact-sheets/taxes/ustax.shtml

50 55
 2. Federal Average Tax Rates by Income Groups
(individual+corporate+payroll+estate taxes)
80%

70%
1970
60%

50% 2000

40%
2005
30%

20%

10%

0%

P99.9-99.99
P0-20

P20-40

P40-60

P60-80

P80-90

P90-95

P95-99

P99-99.5

P99.5-99.9

P99.99-100
Source: Piketty and Saez JEP'07
 CHAPTER 1 ■ WHY STUDY PUBLIC ECONOMICS?
1.2

Distribution of
Spending

The Distribution of
Federal and State
Expenditures, 1960 and
2007 • This figure shows
the changing composition
of federal and state
spending over time, as a
share of total spending.
(a) For the federal
government, defense
spending has fallen and
Social Security and
health spending have
risen. (b) For the states,
the distribution has been
more constant, with a
small decline in education
and welfare spending and
a rise in health spending.

Public Finance and Public Policy Jonathan Gruber Third Edition Copyright © 2010 Worth Publishers 21 of 24
 REFERENCES CITED

Atkinson, A., F. Alvaredo, T. Piketty, E. Saez, and G. Zucman World Wealth and
Income Database, (web)

Atkinson, A., T. Piketty and E. Saez “Top Incomes in the Long Run of History”,
Journal of Economic Literature 49(1), 2011, 30–71. (web)

Chetty, Raj, Nathan Hendren, Patrick Kline, and Emmanuel Saez, “Where is the
Land of Opportunity? The Geography of Intergenerational Mobility in the United
States,” Quarterly Journal of Economics, 129(4), 2014, 1553-1623. (web)

Kopczuk, Wojciech, Emmanuel Saez, and Jae Song “Earnings Inequality and
Mobility in the United States: Evidence from Social Security Data since 1937,”
Quarterly Journal of Economics 125(1), 2010, 91-128. (web)

Piketty, Thomas, Capital in the 21st Century, Cambridge: Harvard University

Press, 2014, (web)

Piketty, Thomas and Emmanuel Saez “Income Inequality in the United States,
1913-1998”, Quarterly Journal of Economics, 118(1), 2003, 1-39. (web)
53 55
 GENERAL BOOK REFERENCES

Graduate Level

Atkinson, A.B. and J. Stiglitz, Lectures on Public Economics, New York: McGraw
Hill, 1980.

Auerbach, A. and M. Feldstein, eds., Handbook of Public Economics, 4 Volumes,

Amsterdam: North Holland, 1985, 1987, 2002, and 2002. (web)

Auerbach, A., Chetty, R., M. Feldstein, and E. Saez, eds., Handbook of Public
Economics, Volume 5, Amsterdam: North Holland, 2013 (web)

Kaplow, L. The Theory of Taxation and Public Economics. Princeton University

Press, 2008.

Mirrlees, J. Reforming the Tax System for the 21st Century The Mirrlees Review,
Oxford University Press, (2 volumes) 2009 and 2010. (web)

Piketty, Thomas, Capital in the 21st Century, Cambridge: Harvard University

Press, 2014, (web)
55
 REFERENCES ON EMPIRICAL METHODS:

Angrist, J. and A. Krueger, “Instrumental Variables and the Search for

Identification: From Supply and Demand to Natural Experiments,” Journal of
Economic Perspectives, 15 (4), 2001, 69-87 (web)

Angrist, J. and Steve Pischke. Mostly Harmless Econometrics: An Empiricist’s

Companion, Princeton University Press, 2009.

Bertrand, M. E. Duflo et S. Mullainhatan, “How Much Should we Trust

Differences-in-Differences Estimates?,” Quarterly Journal of Economics, Vol. 119,
No. 1, 2004, pp. 249-275. (web)

Imbens, Guido and Jeffrey Wooldridge (2007) What’s New in Econometrics? NBER
SUMMER INSTITUTE MINI COURSE 2007. (web)

Meyer, B. “Natural and Quasi-Experiments in Economics,” Journal of Business and

Economic Statistics, 13(2), April 1995, 151-161. (web)

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