Title: Insurance Effects of Tax-and-Transfer Progressivity

Speaker: Yunho Cho, Associate Professor, Department of Economics, Sogang University.

Abstract: We quantify the insurance effects of tax-and-transfer progressivity. Using household panel data and a semi-structural framework, we are able to distinguish a direct effect of progressivity on income risk from an indirect dampening effect on consumption due to partial self-insurance. Comparing between Australia and the United States as two countries with similar overall levels of consumption insurance but different progressivities, we find the more progressive system in Australia leads to a greater net effect on consumption insurance against permanent income risk, while heterogeneity across different types of households demonstrates how self-insurance mitigates the role of progressivity. A simple calibrated life-cycle model with non-homothetic preferences can replicate the patterns in the data and implies progressivity reduces self-insurance, with transfers generating fewer distortions than taxes.

Date & time: 29 May 2026, 14:00 - 16:00

Venue: B310, Zhixin Building, Central Campus, Shandong University