Areas of Expertise
- Economic Policy
- Public Finance
- Tax Policy
- Poverty & Inequality
- Social Security
- Family Policy
- Retirement decisions and retirement savings
Alexander Gelber is an assistant professor at the UC Berkeley Goldman School of Public Policy and a Faculty Research Fellow at the National Bureau of Economic Research. His research concerns the economic effects of the social safety net, particularly relating to income taxation and social insurance, and has been published in leading academic journals including the Quarterly Journal of Economics, Review of Economic Studies, American Economic Journal: Applied Economics, American Economic Journal: Economic Policy (twice), Review of Economics and Statistics, Journal of Public Economics, National Tax Journal, and New England Journal of Medicine. During 2012 to 2013, he served as Deputy Assistant Secretary for Economic Policy at the U.S. Treasury Department, and in 2013 he served as Acting Assistant Secretary for Economic Policy and Acting Chief Economist at Treasury. He was an assistant professor at the Wharton School of the University of Pennsylvania from 2009 to 2012. He earned an A.B. magna cum laude, Phi Beta Kappa and a Ph.D. in economics, both from Harvard.
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Estimating Earnings Adjustment Frictions: Method and Evidence from the Social Security Earnings Test
GSPP Working Paper (May 2017)
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Using Kinked Budget Sets to Estimate Extensive Margin Responses: Method and Evidence from the Social Security Earnings Test
GSPP Working Paper (April 2017)
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The Effect of Pension Income on Elderly Earnings: Evidence from Social Security and Full Population Data (revise and resubmit, Quarterly Journal of Economics)
GSPP Working Paper (May 2016)
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GSPP Working Paper (May 2016)
The Effects of High-Skilled Immigration Policy on Firms: Evidence from Visa Lotteries (revise and resubmit, Journal of Political Economy)
GSPP Working Paper (February 2016)
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With Timothy Moore and Alexander Strand. Forthcoming, American Economic Journal: Economic Policy.
A crucial issue is whether social insurance affects work decisions through income or substitution effects. We examine this in the context of U.S. Social Security Disability Insurance (DI), exploiting discontinuous changes in the benefit formula with a regression kink design to estimate the income effect of payments on earnings and employment. Using administrative data on all new DI beneficiaries from 2001 to 2007, our preferred estimate is that an increase in DI payments of one dollar causes an average decrease in beneficiaries’ earnings of twenty cents and that annual employment rates decrease by 1.3 percentage points per $1,000 of DI payments. These findings suggest that the income effect accounts for a majority of DI-induced reductions in earnings.
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With Matthew Weinzierl. National Tax Journal 2016, 69(1), 11-40 (lead article; winner of the Musgrave Prize for the best paper in the National Tax Journal in 2016).
Empirical research suggests that parents, and therefore tax policy that affects them, can have a significant effect on their children’s future earnings abilities. We take a first step toward characterizing how this intergenerational link matters for tax policy design. We find that the utilitarian welfare-maximizing policy in this context would be more redistributive toward low-income parents than under current U.S. tax policy. The additional income under such a policy would increase the probability that low-income children move up the economic ladder, and we estimate that it would thereby generate an aggregate welfare gain equivalent to 1.75 percent of lifetime consumption.
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With Adam Isen and Judd Kessler. Quarterly Journal of Economics 2016, 131(1), 381-422.
Programs to encourage labor market activity among youth, including public employment programs and wage subsidies like the Work Opportunity Tax Credit, can be supported by three broad rationales. They may: (1) provide contemporaneous income support to participants; (2) encourage work experience that improves future employment and/or educational outcomes of participants; and/or (3) keep participants “out of trouble.” We study randomized lotteries for access to the New York City (NYC) Summer Youth Employment Program (SYEP), the largest summer youth employment program in the U.S., by merging SYEP administrative data on 294,100 lottery participants to IRS data on the universe of U.S. tax records; to New York State administrative incarceration data; and to NYC administrative cause of death data. In assessing the three rationales, we find that: (1) SYEP participation causes average earnings and the probability of employment to increase in the year of program participation, with modest contemporaneous crowdout of other earnings and employment; (2) SYEP participation causes a modest decrease in average earnings for three years following the program and has no impact on college enrollment; and (3) SYEP participation decreases the probability of incarceration and decreases the probability of mortality, which has important and potentially pivotal implications for analyzing the net benefits of the program.
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Gelber, Alexander. Children's Schooling and Parents' Behavior: Evidence from the Head Start Impact Study, with Adam Isen, Journal of Public Economics 2013, 101, 25-38.
Parents may have important effects on their children, but little work in economics explores whether children’s schooling opportunities crowd out or encourage parents’ investment in children. We analyze data from the Head Start Impact Study, which granted randomly-chosen preschool-aged children the opportunity to attend Head Start. We find that Head Start causes a substantial increase in parents’ involvement with their children—such as time spent reading to children, math activities, or days spent with children by fathers who do not live with their children—both during and after the period when their children are potentially enrolled in Head Start. These results are not predicted by the model of Becker and Tomes (1976), who argue that child schooling should crowd out parent investment in children.
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Gelber, Alexander. Taxation and the Earnings of Husbands and Wives: Evidence from Sweden. Review of Economics and Statistics 2014, 96(2), 287-305. (Earlier version circulated as "Taxation and Family Labor Supply.")
This paper examines the response of husbands’' and wives’' earnings to a tax reform in which husbands' ’and wives’' tax rates changed independently, allowing me to examine the effect of both spouses’incentives on each spouse’s behavior. I compare the results to those of more simplifi…ed econometric models that are used in the typical setting in which such independent variation is not available. Using administrative panel data on approximately 11% of the married Swedish population, I analyze the impact of the large Swedish tax reform of 1990-1. I …nd that in response to a compensated fall in one spouse’s tax rate, that spouse’s earned income rises, and the other spouse’s earned income also rises. A standard econometric speci…cation, in which one spouse reacts to the other spouse’s income as if it were unearned income, yields biased coefficient estimates. Uncompensated elasticities of earned income with respect to the fraction of income kept after taxes are over-estimated by a factor of more than three, and income e¤ects are of the wrong sign. A second common speci…fication, in which overall family income is related to the family’s tax rate and income, also yields substantially over-estimated own compensated and uncompensated elasticities. Standard econometric approaches may substantially mis-estimate earnings responses to taxation.
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Gelber, Alexander. Taxes and Time Allocation: Evidence from Single Women and Men, with Joshua W. Mitchell, Review of Economic Studies 2012, 79(3), 863-897 (lead article).
The classic model of Becker (1965) suggests that labor supply decisions should be analyzed within the broader context of time allocation and market good consumption choices, but most empirical work on policy has focused exclusively on measuring impacts on market work. This paper examines how income taxes affect time allocation during the entire day, and how these time allocation decisions interact with expenditure patterns. Using the Panel Study of Income Dynamics from 1975 to 2004, we analyze the response of single women's housework, labor supply, and other time to variation in tax and transfer schedules across income levels, number of children, states, and time. We find that when the economic reward to participating in the labor force increases, market work increases and housework decreases, with the decrease in housework accounting for approximately two-thirds of the increase in market work. Analysis of repeated cross-sections of time diary data from 1975 to 2004 shows that "home production" decreases substantially when market hours of work increase in response to policy changes. Data on expenditures show some evidence that expenditures on market goods likely to substitute for housework increase in response to a greater incentive to join the labor force. The baseline estimates imply that the elasticity of substitution between consumption of home and market goods is 2.61. The results are consistent with the Becker model. Meanwhile, single men show little response to changes in tax policy, and we are able to rule out an elasticity of substitution between home and market goods for this group of more than 1.66.
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Gelber, Alexander. How do 401(k)s Affect Saving? Evidence from Changes in 401(k) Eligibility, American Economic Journal: Economic Policy 2011, 3:4, 103-122.
This paper investigates the effect of 401(k) eligibility on saving. To address the possibility that eligibility correlates across individuals with their unobserved tastes for saving, I examine a change in eligibility: some individuals are initially ineligible for their 401(k) but become eligible when they have worked at their firm long enough. I find that eligibility raises 401(k) balances. Other financial assets and net worth respond insignificantly to eligibility, but the confidence intervals do not rule out substantial responses. In response to eligibility, IRA assets increase, consistent with a “crowd-in” hypothesis, and accumulation of cars decreases.
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Gelber, Alexander. Prize Structure and Information in Tournaments: Experimental Evidence, with Richard B. Freeman, American Economic Journal: Applied Economics 2010, 2:1, 149-164.
This paper examines behavior in a tournament in which we vary the tournament prize structure and the information available about participants' skill at the task of solving mazes. The number of solved mazes is lowest when payments are independent of performance; higher when a single, large prize is given; and highest when multiple, differentiated prizes are given. This result is strongest when we inform participants about the number of mazes they and others solved in a pre-tournament round. Some participants reported that they solved more mazes than they actually solved, and this misreporting also peaked with multiple differentiated prizes.
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With David Cutler. New England of Journal of Medicine, Vol. 360, pp. 1740-48, 2009.
Background: Policymakers have recently proposed ways of providing health care coverage for an increased number of uninsured persons. However, there are few data that show how the incidence and duration of periods in which persons do not have insurance have changed over time.
Methods: We used two data sets from the Survey of Income and Program Participation of the U.S. Census Bureau: one that covered the period from 1983 through 1986 (25,946 persons), and another that covered the period from 2001 through 2004 (40,282 persons). For each set of years, we estimated the probability that a person would be uninsured for some period of time and the probability that a person would subsequently obtain private or public insurance. We also estimated the probabilities that persons in various demographic groups would become uninsured over the course of a year and would remain uninsured for various amounts of time.
Results: The percentage of the population that lost insurance in a 12-month period increased from 19.8% in 1983-1986 to 21.8% in 2001-2004 (P=0.04). The percentage that was uninsured for a period of time increased markedly among persons with the lowest educational level and predominantly represented loss of private coverage. The percentage of new uninsured periods that ended within 24 months increased from 73.8% to 79.7% between the two study periods (P<0.001); increases were seen in all age groups and among persons of all educational levels. Transition from no insurance to private insurance decreased from 65.2% to 59.2% (P<0.001). Transition from no insurance to public insurance increased from 8.7% to 20.4% (P<0.001).
Conclusions: As compared with the years from 1983 through 1986, from 2001 through 2004, more people, particularly those with the lowest educational level, had periods in which they were not insured. The periods without insurance were shorter in 2001-2004 than they were in 1983-1986, since an increase in transitions to public coverage offset a reduction in transitions to private coverage. Our results portend difficulties if private coverage continues to decline and is not offset by further expansions of public insurance.
The New York Times, May 2, 2015
NBER Digest, April 1, 2015
The New York Times, January 29, 2014