CV

Published Works:

“Corporate Behavioral Responses to TCJA for Tax Years 2017-2018”, with Tim Dowd and Christopher Giosa. National Tax Journal 73(4), December, 2020.

In Progress:

“Passive Saving, Active Liquidity: Automatically Accumulated Retirement Savings as Working-Life Liquidity Insurance.”

This paper shows that tax-favored retirement accounts can provide meaningful liquidity insurance during periods of low earnings. I examine this question in the setting of state auto-IRA programs, which increase retirement saving among passive savers—individuals whose balances rise because they remain at default contribution settings rather than actively choosing to save. Using variation in IRA wealth induced by automatic enrollment, I find that each additional dollar of induced IRA wealth increases withdrawals by 28 cents for every year of a large earnings decline. Interest and dividend records reveal that individuals making these withdrawals hold little liquid wealth in taxable accounts, consistent with retirement balances serving as a source of liquidity when earnings fall. I do not observe comparable withdrawal responses during periods of typical earnings, suggesting that these withdrawals do not primarily reflect regret about automatic saving. Instead, the evidence indicates that auto-IRA-induced balances relax liquidity constraints specifically in low-earning periods. Because earnings decline spells are common, the results further imply that a substantial share of the Roth IRA wealth accumulated by passive savers is likely to be used for working-life liquidity rather than preserved for retirement. I develop a framework to quantify the welfare consequences of this liquidity channel and find that the associated welfare gains are sizable.

“Winners and Losers of Employer Stock Ownership Plans,” with Elena Derby and Kathleen Mackie.

Over fifty years ago, the Employee Retirement Income Security Act of 1974 (ERISA), together with the Tax Reduction Act of 1975, created the option for firms to establish Employee Stock Ownership Plans (ESOPs), allowing companies to compensate employees through allocations of firm stock. Despite this long history, there remains limited evidence on who benefits from ESOP adoption and what costs are incurred in return. This paper provides a comprehensive analysis of firm and participant outcomes following ESOP establishment. Using Department of Labor Form 5500 filings matched to tax return data, we construct a panel of firms that adopted ESOPs in 2009 or 2010 and track their outcomes through 2022, comparing them to statistically similar non-ESOP firms. We find that ESOP adoption increases the wages of incumbent employees but decreases the wages of non-incumbents. We find evidence for moderate increases in retirement wealth for ESOP-enrolled employees, likely because of the forced savings aspect of ESOPs. Finally, we find that firms use the tax savings that come with ESOP adoption to increase employment and grow their valuations. Our findings indicate that ESOP adoption provides uneven benefits to employees, increasing the wages of only incumbent employees, slowing wage growth for new employees, and growing retirement wealth for all employees moderately.

Working Papers:

“Automatic Enrollment and Optimal Defaults with Multiple Passive Choices.”

Abstract

By assuming that passivity is exclusive to the default option, existing models of default design imply divergent optimal policies depending on whether default effects reflect welfare-relevant adjustment costs or behavioral biases. I show that this divergence can collapse when passivity is not limited to accepting the default. Using administrative tax records covering early-adopting U.S. states, I examine the default effects of state auto-IRA programs and find persistent increases in retirement savings accumulation, with participants retaining their savings even after job separation. However, increasing the auto-IRA default rate causes many participants to exit default saving and choose a zero saving rate. To explain these patterns, I extend standard models by incorporating two competing passive options—default saving and non-saving—each associated with its own friction. I structurally estimate the model, finding the optimal default rate to be stable between 2.8% and 3.7%, regardless of whether frictions reflect real costs or behavioral biases. This stability arises because changes in the default partially reallocate individuals across passive options rather than inducing large shifts toward active choice. The findings recommend a narrow range of moderate default rates, even if default effects reflect behavioral biases; in this case, the default rate acts as a second-best option that mitigates other distortions to saving behavior.