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.

Using WebCT to Support a Community of Practice

Reflecting a view of “teaching as both an intellectual and practical activity” the Queen’s University Bachelor of Education program has multi-week in-school practicum sessions separated by periods of on-campus course work. The expectation is that teacher candidates will bring together theory and practice as they reflect upon their daily classroom experiences. The reality often is that, while isolated from the university environment and caught up in the pressures of teaching, little deep reflection takes place. For reflection and critical examination of experience to occur, teacher candidates need to share and discuss on a daily basis their practice teaching experience. For the past few years, students in my secondary school mathematics curriculum course, through a WebCT based conference, have been provided, while away from campus, with a place for on-going sharing of teaching stories and dilemmas. In the Fall of 2004 eight-five percent of the class took part in the discussions, posting a total of 667 messages over a 9 week period. In an effort to increase the value of this practicum conference we have analysed the topic threads arising in the conversation, surveyed the participants concerning their impressions of the sharing experience, and conducted in-depth interviews with a sampling of the class. This session will present the results of this study and provide an opportunity to discuss ways in which an online discussion can support the building of community and the exchange of experience while students in professional programs are disbursed in practice/clinical settings.