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Optimal Taxation to Correct Job Mismatching

Data and computer code associated to the article `Optimal Taxation to Correct Job Mismatching', by Guillaume Wilemme (Univ. of Leicester).

The model is calibrated and simulated with Julia, using moments built with Stata from the Current Population Survey.

Stata: From the raw tables to the moments

The raw data are the Basic Monthly CPS public files from January 2017 to December 2018.

The data are downloaded in the data/raw folder, going from jan17pub.dat to dec18pub.dat. I use the dictionnary file cpsbjan2015.dct provided by the NBER. It is downloaded in the code/stata folder.

In the code/stata folder, the file raw2ready.do sequentially opens the .dat tables, select the key variables and save the new tables in the folder data/ready with the names cpsjan17.dta to cpsdec18.dta.

In the same folder, the file ready2stats.do generates a file stats.csv in the data/moments folder. The stats.csv file reports the average wage and the share of employment for the 22 occupations. The file ready2transitions.do generates a file rates.csv in the data/moments folder. The rates.csv file reports the average monthly transition rates between the 22 occupations and unemployment.

These two csv files are in this repository.

Julia: calibration and simulation

The Julia code runs with Julia 1.0.5 on Linux. It uses the NBInclude package to display the code as a Jupyter notebook. Each code is commented with equations if needed. If GitHub does not manage to display a notebook, I suggest using the url on GitHub with the viewer https://nbviewer.jupyter.org/.

Routines and module Opmismatch

All The routines are in the code/julia/src folder. The file Opmismatch.ipynb generates a Julia module, calling all the other source codes of the folder.

structure.ipynb defines particular types for the allocation object or the tax object. data.ipynb opens the tables stats.csv and rates.csv and define the moments in Julia. equilibrium.ipynb provides routines to compute the equilibrium. calibration.ipynb provides routines to calibrate the model by distance-to-moment minimisation. desc.ipynb provides functions to compute statistics from the simulaions.

Initialisation

The file startup.ipynb initialises the parameters before calibration and before generating tables.

Calibration

The calibration of the model is the most time-consuming. Each of the nine versions in the paper and appendix follows the same calibration strategy. The three first steps serve as determining the best initial values for the coefficients, The fourth step calibrates the full model with these initial values.

First, a segmented model with many parameters fixed is calibrated (calib_step1.ipynb). This step takes less than 3 hours per version on the high-performance computer of the University of Leicester. Second, the mismatching coefficients are calibrated (calib_step2.ipynb) for one hour per version. Third, the occupation-specific frictions are calibrated (calib_step3.ipynb) for one hour per version.

The last step (calib_step4.ipynb) calibrates all the parameters together for 19 hours per version. Extending this computing time does not significatnly improve the convergence.

Notice that these codes are run as .jl files. The calibrated are saved in the code/julia/calibrated folder as step4_v1.csv to step4_v9.csv.

Simulations and final tables

The file stats_main.ipynb generates the two tables in the main text of the article, for the three main versions. It takes 3 hours in total on the high-performance computer. The file stats_secondary.ipynb generates the two tables in the appendix for the six other versions. It takes 6 hours in total on the high-performance computer.

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Data and Computer Code for `Optimal Taxation to Correct Job Mismatching'

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