Sacha Dray

Sacha Dray

PhD Candidate in Economics

Department of Economics

Telephone
+44(0)7577 791 324
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Languages
English, French
Key Expertise
Public Economics, Political Economy

About me

Research interests
Public Economics, Political Economy (primary)
Development, Economic History, Applied Microeconomics (secondary)

Job market paper
Sources of Revenue and Public Spending: Historical Evidence from U.S. Cities

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This paper explores the importance of collecting revenue through taxes on public finances and services provided by cities. Using newly collected financial data of more than 300 U.S. cities over 1899-2000, I leverage source-specific variation in revenue through a shift-share research design. I report three main results. First, additional tax revenue causes greater spending on services than same-sized non-tax revenue, despite partial earmarking of non-tax revenue for this purpose. Second, tax revenue generates persistence in revenue. An initial increase in tax revenue has a 81% persistence on total revenue 10 years later, while similar non-tax revenue increase has dissipated after 3 years. This persistence can be explained by fiscal capacity improvements through higher effective tax rates, better enforcement and increased spending on revenue collection. Third, reliance on taxes has long-run effects on municipal finances and growth. Cities with initially higher tax revenue per capita in 1910-1936 have greater revenue and expenditure per capita throughout the next 60 years, as well as a higher median household income, larger population and migration.


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Contacts

Placement Officer
Professor Mark Schankerman

Advisors
Professor Sir Tim Besley
Professor Camille Landais

References
Professor Sir Tim Besley
Professor Camille Landais
Professor Stefanie Stantcheva

Contact information

Email
s.s.dray@lse.ac.uk

Office Address
Department of Economics,
London School of Economics and Political Science,
Houghton Street, London WC2A 2AE