We study tax evasion at the top of the U.S. income distribution using micro-data from audits and enforcement initiatives. Leveraging enforcement that revealed noncompliance, we find that recent individual random audit data fail to capture sophisticated evasion via offshore accounts and pass-through businesses. Consequently, estimates based solely on these data under-state evasion by the highest-income Americans. We construct new distributional estimates of US noncompliance. Circa 2006–2013, accounting for sophisticated evasion (holding estimated non-sophisticated evasion fixed) increases the share of unreported income belonging to the top 1% of the distribution by 9 to 33 percentage points.
Quantitative evidence on the extent of paternalism within families is scant. We provide a novel measure to study whether and how parents interfere paternalistically in their children's intertemporal decision-making. In an experiment with over 2000 members from 610 families in Bangladesh, we find that more than half of all parents are willing to pay money to override their children's choices in order to mitigate the (correctly anticipated) level of children's present bias. The extent of parental paternalism is strongly related to parenting styles and we discuss how it interacts with the intergenerational transmission of patience.
Limited post-secondary education infrastructure and opportunities partly explain low higher education attain ment in developing countries. This paper estimates the effect of a program that expanded higher education by constructing numerous university campuses across Uruguay. Exploiting temporal and geographic variation in the program's rollout, we use a dynamic two-way fixed-effects design and comprehensive administrative records to estimate the program's causal impact. By reducing the distance to the nearest campus, the program increased university enrollment by 34 percent relative to baseline, with especially large gains among less-privileged, first-generation students. Spillovers extend up to 30 kilometers from new campuses, with effects concentrated among students from less-educated families, thereby reducing spatial inequality. We also find that university expansion increased secondary-school enrollment and completion, a relevant result given that low secondary school comple tion rates remain one of the main barriers to higher education. These improvements occurred without lowering tertiary completion rates. A cost-effectiveness analysis reveals substantial private and social returns, with costs comparable to those of a scholarship program, while reducing spatial inequalities. Overall, the findings sug gest that place-based expansion of higher education can reduce spatial inequalities and foster intergenerational mobility in developing countries cost-effectively.
Many tax regimes collect revenue to the extent that other governments do not. This paper develops a theory of how such cross-border minimum taxes should be designed, focusing on choices that affect avoidance of the regime. Making a minimum tax more difficult to avoid retains more firms within the regime but weakens competition among tax havens. Havens then raise their rates toward the minimum, reducing the top-up tax rate on shifted profit. As a result, an avoidable minimum tax can raise more revenue for the governments that impose it than an unavoidable one.
Whether economic incentives matter for crime is studied in a novel way, from expensive precious metal thefts by thieves stealing catalytic converters from cars. Sharp and sizable variations in the prices of precious metals embedded in converters are combined with newly assembled U.S. crime data. Precipitously fast increases in precious metal prices generated a sizeable rise in auto-part thefts, while subsequent price declines and policy responses quickly reversed this pattern. The resulting boom-and-bust dynamics provide clean evidence that prices affect crime, and for these crimes that local resale infrastructure and target availability shape both the magnitude of this effect and the effectiveness of policy response.
