New in FIT: Ran Sun Lyng

My name is Ran Sun Lyng. I am very happy to join the Centre of Excellence in Tax Systems Research (FIT) at Tampere University. I completed my PhD from Aarhus University, under the supervision of Professor John Kennes. Before joining the CoE, I was a postdoctoral fellow in the Department of Economics at the University of Toronto.

My primary research field is Applied Microeconometrics, with broad applications in education and financial markets. I am interested in sorting and matching in various markets: the market for CEOs, the retail banking market, and the labor market for school principals and teachers. I have experience with designing and conducting Randomized Controlled Trials. During my PhD, I apply causal inference methods (regression discontinuity, IV, difference-in-difference estimation) to household finance related problems. I am passionate about empirical work, see great potential in working with high-quality register data, and am working toward becoming a data scientist.

One project I am currently working on studies the role of taxation in the labor market for school principals and teachers, which aligns well with the interests of FIT. Taxation induces distortion along several margins resulting in a deadweight loss, for example, a tax increase can induce drops in the labor market participation (the extensive margin), as well as drops in hours of work (the intensive margin). We study an alternative distortion created by taxation, the matching distortion, that is the effect of taxation on sorting patterns, e.g., which workers work for which firms.The theoretical framework is very recently developed by Alfred Gallichon and Arnaud Dupuy. We apply a similar model to study the sorting of principals to schools and the sorting of primary school teachers to students, using the administrative register data from Denmark. The reason why taxes affect the principal-school (and teacher-students) sorting is because taxes reduce large transfers more than small ones. Taxation diminishes the extent to which productivity differences are reflected in post-tax wages. When tax rates are high, teachers are more likely to choose the schools they enjoy working for instead of the ones where they are most productive at. In Denmark and Finland, teachers’ wages are subject to salary cap, which can be seen as 100% tax after a threshold. When teachers can no longer be compensated by money, they can only be compensated by job amenities. For example, principals often offer “easy-to-serve” students to attract skilled and experienced teachers. Our project will develop operational tools for the policymakers to improve the quality and governance of public schools. We use a two-sided multidimensional matching model to provide a full cost-benefit analysis of public policies that impact the assignments of teachers to students and principals to schools.

I am also interested in how CEOs are sorted to firms. The job of a CEO is rewarding but difficult. CEOs are generally highly paid and many achieve great respect and admiration in society. However, the job also involves long hours and many sources of stress. On this account, there is evidence that many CEOs suffer from burnout, premature aging, and even early death. It is interesting to learn that do CEOs’ objectives go beyond just maximizing the NPV of their income? How do CEOs value broader compensations for their work? Do differences in the value of job amenities at different firms drive the placement of CEOs? In this study, we apply a two-sided multidimensional matching model and derive structural estimates of important job amenities in the market for CEOs. Our estimates allow us to further simulate the market in counterfactual policy experiments and derive insights on how amenities affect CEO compensation and assignment.

I am the principal investigator of a Danish national grant to do a matching and welfare analysis of the Danish mortgage market (approx. 189,000 Euro). Over the years, I have attracted fundings from private foundations to visit the Bank of Canada, and the University of Western Ontario. I have established a wide network of international collaborators, with both theoretical and empirical backgrounds.

My husband and I moved to Tampere in the end of July 2022. Tampere is a very charming city, a great place to live. The city offers so much fun activities in the summer, great concerts and amazing shows. We enjoy our after-dinner strolls around the lakes, appreciate the beautiful forests and the landscape. Finnish is an interesting language that we are eagerly learning. Afterall, being able to understand jokes shared by our colleagues would add a certain je ne sais quoi to the quality of our lives. 😊 We are looking forward to experiencing the city in the winter!

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