NBER Publications by Alexander M. Gelber

Empirical research suggests that parents’economic resources affect their children's future earnings abilities. Optimal tax policy, defined as the policy that maximizes the aggregate present-value dynastic utility of existing families, therefore will treat future ability distributions as endogenous to current taxes. We model this endogeneity, calibrate the model to match estimates of the intergenerational transmission of earnings ability in the United States, and use the model to simulate such an optimal policy numerically. The optimal policy in this context is more redistributive toward low-income parents than existing U.S. tax policy. It also increases the probability that low-income children move up the economic ladder, generating a present-value welfare gain of 1.28% of consumption in o...

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. We discuss a variety of mechanisms that are consistent with our findings, including a simple model we present in which Head Start impacts pare...

Hundreds of papers have investigated how incentives and policies affect hours worked in the market. This paper examines how income taxes affect time allocation in the other two-thirds of the day. 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 changes in "home production" account...