Browsing by Author "Paukkeri, Tuuli"

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Essays on public economics
(2018) Paukkeri, Tuuli
School of Business | G5 Artikkeliväitöskirja
This doctoral thesis is a collection of four essays in public economics that look at various public policies and their impacts on low-income and otherwise vulnerable individuals. The essays share the general aim of studying the effectiveness of public policies in achieving their stated goals. The first essay is single-authored by the candidate, and the latter three are collaborations with one or more co-authors. In the first essay, I use a unique dataset compiled from Finnish registers and surveys to provide a comprehensive characterisation of the take-up behaviour of Finnish welfare benefits (housing allowance and social assistance) using descriptive methods. I provide various stylised facts on take-up and discuss how income dynamics matter for understanding take-up and benefit targeting. The second essay focuses on the impact of information on benefit takeup. We study the information campaign in the context of the introduction of the guarantee pension program in Finland in 2011 and find that receiving a mailed information letter and application form significantly increased take-up compared to non-recipients. In the the third essay, we analyse the impact of employers’ disability insurance (DI) contributions on the incidence of disability pensions among their workers. Experience rating is used in DI in Finland in order to increase employers’ incentives to prevent disabilities among their workers. We use detailed data and an empirical strategy that allows us to identify the causal effect of experience rating on disability inflow. Our analysis finds that the policy is not effective in reducing disabilities. The fourth essay uses a theoretical framework to provide optimal tax and transfer rules for poverty reduction in developing countries. We modify the standard optimal tax framework by restricting tax instruments to be linear, which are more feasibly implemented in countries with a lower administrativecapacity. We show that when we change from the standard objective of welfare maximisation to that of poverty minimisation, which better depicts the concrete objectives of such countries, the optimal tax and transfer rules are changed.
Optimal taxation and public provision for poverty reduction
(2018-02-01) Kanbur, Ravi; Paukkeri, Tuuli; Pirttilä, Jukka; Tuomala, Matti
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
The existing literature on optimal taxation typically assumes there exists a capacity to implement complex tax schemes, which is not necessarily the case for many developing countries. We examine the determinants of optimal redistributive policies in the context of a developing country that can only implement linear tax policies due to administrative reasons. Further, the reduction of poverty is typically the expressed goal of such countries, and this feature is also taken into account in our model. We derive the optimality conditions for linear income taxation, commodity taxation, and public provision of private and public goods for the poverty minimization case and compare the results to those derived under a general welfarist objective function. We also study the implications of informality on optimal redistributive policies for such countries. The exercise reveals non-trivial differences in optimal tax rules under the different assumptions.
Promoting education under distortionary taxation: equality of opportunity versus welfarism
(2022-06) Haaparanta, Pertti; Kanbur, Ravi; Paukkeri, Tuuli; Pirttilä, Jukka; Tuomala, Matti
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
A common claim in the policy discourse is that a government wishing to achieve equality of opportunity should use public provision of education for equalisation of opportunities rather than income taxation, which only equalizes incomes. We develop a framework in which the tax and education provision rules in the welfarist and non-welfarist/equality of opportunity cases can be transparently compared. We show that in addition to education policies, progressive taxation also plays a role in achieving equality of opportunity, and illustrate how its use may differ under the two objectives. We also show how the provision of public education depends on how private education choices respond, potentially differentially by higher- and lower-income families.