Ph.D. thesis defence by Oliko Vardishvili.
This thesis by Oliko Vardishvili investigates the driving forces behind income inequality and quantify potential education and fiscal policies which foster redistribution and efficiency.
The first chapter examines the relationship between education policies and students' decisions to drop out from post-secondary education in the U.S. Oliko Vardishvili shows that grants at college are not persistent between academic years and that this has a strong impact on college dropout decisions, a channel that is novel in the literature.
The second chapter quantifies the optimal joint design of income tax and targeted transfers in the U.S. They find that relative to the current U.S. fiscal system, the optimal policy consists of more generous means-tested transfers, which phase-out at a slower rate, together with less progressive income taxes.
The third chapter investigates the role of post-secondary education prices as a determinant of income inequality. They show that the price of education has a significant impact on explaining income inequality. In contrast with the existing literature, they find that labor tax progressivity plays a less significant role in explaining earnings inequality.