Job Market Paper
I study an effort by the Ecuadorian government to mitigate offshore tax avoidance through a tax havens outflows tax. First, I find that the outflows tax led to a sharp decrease in dividend payments to tax havens. I document a decrease by 66% in dividend payments sent to tax havens relative to non-havens following an increase in the relative cost of transacting with tax havens by 5%. I show that this drop implies net-of-tax elasticities of dividend payments abroad of between 13 and 40. Firms exposed to this legislative shock decreased overall dividend payouts by 50% and increased retained earnings in the short run by 600%. This response was largely unaccompanied by any change in post-tax investment behavior or extensive margin dividend payout behavior. Using administrative data on shareholder-company linkages to identify individuals highly connected to tax havens, I find that exposed individuals increased their domestic income reporting by 40% compared to the universe of unexposed taxpayers and paid 55% more in personal income taxes. This response was mainly driven by newly reported domestic capital and independent labor income flows and is consistent with a lasting reduction in offshore tax evasion. These results suggest the substantial scope for countries to act unilaterally in mitigating tax haven use and increasing tax collections.

Working papers
I study how charitable contributions reported by nonprofit entities respond to variation in the federal and state estate tax rate. I focus on the asymmetric response by nonprofit vehicle type to changes in federal and state estate tax policy since 2002— distinguishing between private charities and public charities and between family foundations and non-familial private foundations. I find that private foundations respond between 2.5 and 5 times as strongly as public charities in response to variation in the top estate tax rate, exhibiting reported contributions elasticities of around 2.5 for changes in the federal estate tax and around .5 for same-state-level reforms. I also document a significant positive (negative) relationship between private foundation entry (exit) and estate tax rates. I document no significant difference in response between familial and non-familial foundations. Finally, I show that private foundations feature greater opacity in terms of their charitability objectives, demonstrate higher propensity to engage in self-benefiting transactions, and allocate greater shares of their expenses to administrative activities. This work demonstrates that the well-documented positive relationship between charitable bequests and estate taxation is largely driven by private foundations whose activity is associated with greater measures of private benefit.

We leverage variation in the timing of permanent housing recipiency by homeless individuals in Los Angeles County to determine the effects of housing the homeless on their employment, earnings, and benefits absorption. Placement into 2-year Rapid Re-Housing increases extensive-margin labor market participation by 60% from a baseline of 15pp, while Permanent Supportive Housing recipients exhibit no change. We perform a cost-benefit analysis of these programs and estimate the net public cost of placing an individual into Rapid Re-Housing at approximately zero Dollars, whereas placing an individual into Permanent Supportive Housing costs approximately USD 150,000 per 10 years per recipient.

We study the question of whether women, on average, pay a price premium -- a so-called "pink tax" -- for the products they buy. A particular concern facing policy makers is whether such differences are a form of gender based price discrimination. Using scanner data, we find that averaged across the entire retail grocery consumption basket, women pay 4% more per unit for goods in the same product-by-location market as do men. This price differential is generated by a 15% higher average per unit price paid by women on explicitly gendered products, like personal care items, as well as a 3.8% higher average per unit price paid by women on ungendered products, like packaged food items. Higher prices paid by women could be the result of differences in demand elasticity, competitive structure, or sorting into goods with differing marginal costs. To disentangle these mechanisms, we estimate demand differences between men and women and structurally decompose price differences into markups and marginal costs. We find that women are, on average, more price elastic consumers than men, suggesting that as a consumer base women are not likely to be charged higher markups under price discrimination. Overall, we find that the pink tax is not sustained by higher markups charged to women, but by women sorting into goods with higher marginal costs and lower markups.

What is the impact of extending public funding to the arts? I draw evidence from the first major instance of federal funding to the arts via New Deal programming to evaluate the impact of artist employment programs on the per capita number of artistic professionals in US cities and how this effect persists over time. I employ a set of New Deal spending instruments in an instrumental variables differences-in-differences design to identify the causal impacts of these programs. I determine that the program induced large increases in local per capita levels of writers and visual artists of specific disciplines that has endured to the present-day. Namely, present-day population-shares of writers and visual artists (namely photographers and designers) increased by approximately 100 and 1000 professionals, respectively, per 1 million people in response to an investment of $1,000 per professional in 1935 ($20,000 present-day). I document positive, yet less temporally persistent impacts of music and theater funding on their respective fields. A subsequent variance decomposition demonstrates modest, yet non-negligible explanatory power (5-15%) of Federal Project Number One in determining variation both within and across cities in the decades following the New Deal, often enduring to the present day. These results have important implications for policy aimed at influencing urban growth, informing the effectiveness of amenity-oriented policy levers that may influence urban-sorting processes.

Economics journal articles
We study panhandling in Downtown Manhattan. Surprisingly few people panhandle there at any given moment: about 8–10 people on average at a busy time, in a small area with an economy the size of Latvia's. The redevelopment of Ground Zero and the resulting surge in economic activity—including the opening of North America's tallest building—changed where panhandlers operated within the neighborhood, but did not significantly increase panhandling overall. The response was muted because the labor supply of panhandlers appears to be inelastic. On the other hand, good places to panhandle are relatively abundant. Hence the benefits of the boom in economic activity accrued mainly to incumbent panhandlers themselves; as would the benefits of greater donor generosity.

Non-economics journal articles
What does wise public policy toward panhandling look like? When a willing, reasonably well informed donor gives money to a panhandler, both are better off, and inequality goes down. Policy should encourage transactions like this. When a pedestrian is upset by a panhandler’s presence, does not give, and maybe even alters course, no one is better off and at least one person is worse off. Policy should discourage this kind of interaction. We examine an array of programs to deal with panhandling to see how well they encourage welfare-improving interactions and discourage welfare-reducing ones. Tentatively, credentialing programs are the most promising

  • Income tax evasion penalties: evidence and optimality

  • Multinational profit shifting and the book-tax gap (with Bilicka, K. and Fisher, J.)

  • Tax avoidance and the tax preparation industry (with Avivi, H., Bilicka, K., and Lobel, F.)

  • Retaining your tax base: Ecuador’s experiences in taxing transactions and incentivizing accurate reporting of activities in tax havens. (with Bachas, P.)

  • Property taxation externalities of homelessness housing programs (with Wieselthier, J.)

Jakob A. Brounstein


PhD Candidate in Economics
Department of Economics
University of California, Berkeley

Design courtesy of Vasilios Mavroudis