The Redistribution Recession
Major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways after 2007. Economist Casey B. Mulligan argues that many of these changes were reasonable reactions to economic events, with the intention of helping people endure the recession, but they also reduced incentives for people to work and businesses to hire. He measures the startling changes in implicit tax rates that resulted from a labyrinth of new and expanded “social safety net” programs, and quantifies the effects of these changes on the labor market and the economy.
Major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways after 2007. Economist Casey B. Mulligan argues that many of these changes were reasonable reactions to economic events, with the intention of helping people endure the recession, but they also reduced incentives for people to work and businesses to hire. He measures the startling changes in implicit tax rates that resulted from a labyrinth of new and expanded “social safety net” programs, and quantifies the effects of these changes on the labor market and the economy.
Research Papers
- February 2014: The Economics of Work Schedules under the New Hours and Employment Taxes
- December 2013: Wedges, Wages, and Labor Market Behavior under the Affordable Care Act
- November 2013: Average Marginal Labor Income Tax Rates under the Affordable Care Act
- November 2013: Is the Affordable Care Act Different From Romneycare? A Labor Economics Perspective
- October 2013: Why Has the U.S. Elevated Marginal Tax Rates: Uncertainty, Redistribution, and the Labor Market
- February 2013: The ARRA: Some Unpleasant Welfare Arithmetic
- September 2012: Recent Marginal Labor Income Tax Changes by Skill and Marital Status
- May 2012: Do Welfare Policies Matter for Labor Market Aggregates? Quantifying Safety Net Work Incentives since 2007
The marginal labor income tax rate series constructed in Chapter 3 of The Redistribution Recession for the average marginal worker are available in an excel file hosted by nber.org as an appendix to NBER working paper no. 18088. The same excel file provides backup for MTR-related quantitative statements appearing in Chapter 3 (see the "Ch3TextBackup" tab).
After the book was finished, I used the Chapter 3 framework and policy parameters to prepare 10 separate marginal tax rate series by demographic groups distinguished in terms of skill and marital status that economists might want to consider for cross-section and longitudinal analysis. My forthcoming paper in Tax Policy and the Economy presents the methodology and results. nber.org is hosting an excel file with those 10 series.
I have also updated Chapter 3's marginal tax rate series through December 2016, with special attention to the Affordable Care Act. The same methodology is applied to the state of Massachusetts after their "Romneycare' health reform. nber.org is hosting excel files with those updates and extensions (use the version with "update" in the file name). This version reflects the sequestration of EUC benefits for the months 4/13 through 12/13.
Trevor Gallen and I have calculated sector- and skill-specific marginal tax rates with and without the ACA. Our tax rate estimates as well as our model for simulating labor market outcomes are available in an excel file hosted by nber.org as an appendix to NBER working paper no. 19771.
I have calculated the ACA's separate impacts on earnings and full-time employment tax rates. The tax rate estimates as well as my model for simulating labor market outcomes are available in an excel file hosted by nber.org as an appendix to NBER working paper no. 19936. (A version of this paper was entitled "Economic Consequences of the Health Reform: The Amount and Composition of Labor Market Activity")
