Momi Dahan: Scientific Biography

My work reflects a long-term research effort aimed at exploring the roots of economic inequality and its consequences. This research effort resulted in both theoretical, methodological and empirical contributions that expanded and deepened our understanding in several academic fields. Unlike a typical scholar, my research reflects a broad range of interests as can be seen in my list of articles that have been published in top journals in various academic fields: Economics, Public Policy, Political Science, Environmental Science, Area Studies, and Psychology.

The theoretical contributions cover a wide spectrum such as the interrelationship between inequality and economic growth, the role of the family in shaping overall income inequality and the optimal income tax schedule. To illustrate my diverse research agenda three representative contributions are presented. In a joint article with Daniel Tsiddon we have revealed why inequality may be harmful for growth. This paper was the first to explain why countries that have higher inequality also tend to have high fertility rate and low economic growth. This paper was well received by the scientific community as evidenced by the three-digit number of citations including two different handbooks in economics that are used in graduate programs in economics (Handbook of Economic Growth; Handbook of Economics of Education). The article with Alejandro Gaviria provides a surprising theoretical insight, according to which an important institution, the family, may increase rather than attenuate overall inequality in society due to unequal resource allocation between siblings. The third example of a theoretical contribution (joint with Michel Strawczynski) shows that the assumption on income effect was responsible for the dramatic shift from decreasing, in the old literature on optimal taxation, to increasing optimal income tax rates in the new one. Until the late nineties, most simulations have shown a decreasing pattern and relatively low tax rates at high income levels. More recent research shows that the optimal tax rates should go up at high income levels reaching a relatively high income tax rate at high levels of wage. This paper has been cited in the Handbook of Public Economics which is an indication of its significant contribution.

My theoretical contributions have also been complemented with sound empirical work that advanced our knowledge in a rich set of important economic policy areas. One of the common innovations of my empirical work is the use of creative methods to generate new, indirect information on important unobservable or unavailable phenomena. This includes an original methodology to uncover the Ultra-Orthodox Jews in official surveys, the degree of social mobility in Latin American countries that do not have longitudinal surveys, and more recently, a novel method of measuring the actual incidence of gambling expenditures when household survey data is unavailable or unreliable.

Prior to my research on the economic consequences of the Ultra-Orthodox Jewish way of life, we had no socioeconomic knowledge on that important and growing social group. In that article I had proposed a unique way to identify the Ultra-Orthodox Jews in income surveys. Employing this identification approach uncovered for the first time their socioeconomic characteristics and in particular the extent of poverty among Ultra-Orthodox Jews, which turned out to be the highest in Israel. Since then this identification method has become standard in research papers and official publications. In a recent official publication, it appears under the name “the classical approach” in the National Security Institute report. This work has had a significant impact on policy makers and received extensive national and international media coverage as well as citations in leading economic journals such as the QJE.

Another example of methodological contribution addresses the measurement of intergenerational mobility in countries with no information on the income of parents and their children. In a joint article with Alejandro Gaviria, we propose a new index of social mobility for developing countries based on the correlation of schooling outcomes between siblings. Our index measures the extent to which schooling outcomes can be explained by family background. Where perfect social mobility exists, family background would not matter, siblings would not be more alike than two people taken at random, and our index would be close to zero. Where little mobility exists, family background would matter very much, siblings would be very similar, and our index would be close to one. Computing this index reveals substantial differences in intergenerational mobility in Latin American countries. This methodology has been employed by other scholars and it is extensively cited in leading academic outlets.

My research reflects a dual commitment for both the scientific community as well as to the society I live in. While data from any corner of the world should be used to address general empirical and theoretical questions, a social scientist should be biased to his/her own society to draw universal insights that may be relevant and important to others. Consistent with this view, most of my empirical papers exploit Israeli data to promote our knowledge on significant questions, such as why do people vote in large elections despite their negligible chance of affecting the outcome, the importance of campaign finance in determining the winner in elections, as well as the effectiveness of policy tools in combating the soft budget constraint of local authorities. These research projects have been published in respected outlets and at the same time influenced public policy in Israel.

As a result of my theoretical and empirical research on the causes and consequences of economic inequality, I became a leading professional reference for top political figures and senior officials in Israel. Since I joined the Hebrew University I was invited to give my advice to key policy players in diverse fields, such as the Finance Minister, the director of Social Security and the IDF Chief of Staff. In addition, I am frequently asked by international institutions like the OECD and IMF, to outline my perspective on the Israeli economy. Giving advice to top decision makers may have helped shape public policy in Israel, but it has also been a source of inspiration for my research. A research project in collaboration with Avi Ben-Bassat is one good example of how my involvement in policy advisement has affected my research. This project was part of an effort of the Israel Democracy Institute to formulate a constitution for Israel. We created a new database on the degree of constitutional commitment to five social rights for 68 countries. We contributed to the public discussion in Israel by examining whether constitutional commitment to social rights is material for public policy in practice based on the experience of a cross-section of countries. This work also contributes to the empirical literature on the factors that determine government size and redistributive policy. The new database on constitutional commitment to social rights has been used by other scholars around the world.

Many of my articles have intentionally been published in Hebrew as well, to make them accessible to the Israeli public. This choice of mine probably comes with a cost, but it is in keeping with my obligation to give back to the people who fund our public university.