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.

Exploring the Experience of Teachers Working with Exceptional Learners

Regular classroom teachers, who often report that they lack adequate training and resources, increasingly find themselves supporting students with special education needs (Connelly & Graham, 2009). Teachers working in challenging environments can thrive in their role and continue to experience professional growth and passion about their work with students with exceptionalities (Perry, Brenner, Collie, & Hofer, 2015). Thriving is one framework of psychological wellness that can provide insight into the experiences of teachers working with exceptional learners (Spreitzer & Porath, 2014). Chronic stress from occupational demands such as heavy workload and insufficient resources can negatively affect the wellbeing of teachers and lead to poor mental health (Desrumaux et al., 2015). Burnout and compassion fatigue are two constructs of poor mental health that can inform our understanding of teachers’ social and emotional experiences. The purpose of this study was to explore the social and emotional experiences of teachers working with exceptional learners in regular classrooms. The objective of this study was to describe the elements within teachers’ professional roles that they report contribute to their social and emotional experiences understood through the lenses of thriving, burnout, and compassion fatigue. Interviews were conducted with five teachers: one full-time in-service teacher and four teachers who are pursuing graduate studies in education. The theme of thriving emerged as a significant component of the interview with all five participants. All five participants described experiences of vitality and learning as essential to their workplace satisfaction and overall thriving. Although the data from this study did not suggest that participants were experiencing burnout or compassion fatigue, elements of the two constructs did emerge as relevant to the social-emotional experiences of the teachers.