Essays in Macroeconomics

Abstract

Understanding the role of public policy in shaping individual behavior, and thus broader economic outcomes, is fundamental to the design of effective policy interventions. Individuals do not make decisions in a vacuum: their choices are shaped by incentives, constraints, and the economic and institutional context in which they operate. This dissertation contributes to the ongoing discussion by examining how individual decisions interact with the design of public policies in two areas that are both economically and politically salient: social mobility and climate policy. Across three chapters, I investigate how structural features of the economic environment, such as regional disparities in labor demand and heterogeneity in household carbon emissions, mediate the effects of policy interventions. These features shape not only how individuals respond to policies, but also who benefits and who bears the costs, with significant implications for both the effectiveness of policies and their distributional consequences. <br/>

Chapter 1 explores how regional labor demand influences the persistence of occupational choices across generations, affecting income mobility. The study finds that accounting for regional and occupation-specific demand reduces occupational persistence by up to 10%, highlighting the importance of addressing regional disparities in job opportunities to improve social mobility. <br/>

Chapters 2 and 3 examine the distributional impacts of climate policies, focusing on carbon taxation and subsidies for carbon-neutral technologies. Chapter 2 finds that policies aimed at quickly reducing emissions, like carbon taxes with subsidies, tend to redistribute wealth from low- to high-income households, but financing them through progressive income taxes can balance emissions reductions with broader political support. Chapter 3 highlights regional differences, showing that rural households have higher carbon footprints than urban ones and proposing mechanisms like place-based transfers to avoid unfair redistribution and maintain political support for climate policies.