Tim Cejka

Using Ramadan fasting as a natural experiment, we estimate the long-run impacts of in-utero health and nutrition shocks on adult outcomes. We exploit administrative tax return data comprising the universe of income tax returns filed in Pakistan during 2007–2009. The data allow us to link in-utero Ramadan exposure of individuals with their later life labor market outcomes. We find a robust negative effect of Ramadan exposure on earnings (a lower-bound estimate of around 2–3 percent). The exposed individuals are less likely to be in high-skilled occupations and less likely to be in the top of the income distribution. Using nationally representative survey data we show that our results are unlikely to be driven by selective timing of conception.

Sin taxes are increasingly being used to discourage the consumption of internality-producing goods. A major concern with sin taxes is that they are regressive. But the behavioral biases they seek to correct may also be concentrated among the poor. The welfare consequences of sin taxes are therefore not clear, depending inter alia on the distribution of the demand elasticity and behavioral bias in the population. In this project, we intend to exploit the introduction of South Africa’s Health Promotion Levy to estimate the extent and distribution of welfare gains created by a representative sin tax. We will extend the framework of Allcott et al. (2019) to allow imperfect pass-through of the levy, following O’Connell & Smith (2021). Combining administrative data from CIT, VAT, and Customs records with survey data and using event-study and difference-in-differences research designs we will then estimate the parameters required to assess how the levy affected the welfare of the poor and rich in South Africa.