Essays in dynamic optimal taxation: working experience, unemployment scarring and poverty

This thesis investigates the design of optimal tax systems in dynamic environments. The first essay characterizes the optimal tax system where wages depend on stochastic shocks and work experience. In addition to redistributive and efficiency motives, the taxation of inexperienced workers depends on a second-best requirement that encourages work experience, a social insurance motive and incentive effects. Calibrations using U.S. data yield higher expected optimal marginal income tax rates for experienced workers for most of the inexperienced workers. They confirm that the average marginal income tax rate increases (decreases) with age when shocks and work experience are substitutes (complements). Finally, more variability in experienced workers' earnings prospects leads to increasing tax rates since income taxation acts as a social insurance mechanism. In the second essay, the properties of an optimal tax system are investigated in a dynamic private information economy where labor market frictions create unemployment that destroys workers' human capital. A two-skill type model is considered where wages and employment are endogenous. I find that the optimal tax system distorts the first-period wages of all workers below their efficient levels which leads to more employment. The standard no-distortion-at-the-top result no longer holds due to the combination of private information and the destruction of human capital. I show this result analytically under the Maximin social welfare function and confirm it numerically for a general social welfare function. I also investigate the use of a training program and job creation subsidies. The final essay analyzes the optimal linear tax system when there is a population of individuals whose perceptions of savings are linked to their disposable income and their family background through family cultural transmission. Aside from the standard equity/efficiency trade-off, taxes account for the endogeneity of perceptions through two channels. First, taxing labor decreases income, which decreases the perception of savings through time. Second, taxation on savings corrects for the misperceptions of workers and thus savings and labor decisions. Numerical simulations confirm that behavioral issues push labor income taxes upward to finance saving subsidies. Government transfers to individuals are also decreased to finance those same subsidies.

On the feasibility of time-lapse superconducting gravimetry for reservoir monitoring

The feasibility of monitoring fluid flow subsurface processes that result in density changes, using the iGrav superconducting gravimeter, is investigated. Practical targets include steam-assisted gravity drainage (SAGD) bitumen depletion and water pumping from aquifers, for which there is currently a void in low-impact, inexpensive monitoring techniques. This study demonstrates that the iGrav has the potential to be applied to multi-scale and diverse reservoirs. Gravity and gravity gradient signals are forward modeled for a real SAGD reservoir at two time steps, and for surface-fed and groundwater-fed aquifer pumping models, to estimate signal strength and directional dependency of water flow. Time-lapse gravimetry on small-scale reservoirs exhibits two obstacles, namely, a µgal sensitivity requirement and high noise levels in the vicinity of the reservoir. In this study, both limitations are overcome by proposing (i) a portable superconducting gravimeter, and (ii) a pair of instruments under various baseline geometries. This results in improved spatial resolution for locating depletion zones, as well as the cancellation of noise common in both instruments. Results indicate that a pair of iGrav superconducting gravimeters meet the sensitivity requirements and the spatial focusing desired to monitor SAGD bitumen migration at the reservoir scales. For SAGD reservoirs, the well pair separation, reservoir depth, and survey sampling determine the resolvability of individual well pair depletion patterns during the steam chamber rising phase, and general reservoir depletion patterns during the steam chamber spreading phase. Results show that monitoring water table elevation changes due to pumping and tracking whether groundwater or surface water is being extracted are feasible.