Journal of Public Economics最新文献

This paper explores the effects of a federal law that obligates previously unregulated municipalities in Germany to set a minimum tax rate on firms’ taxable profits. In particular, we examine the tax-policy response of municipalities that compete locally with “tax-haven municipalities”, i.e.municipalities that originally have set lower and, in some cases, even zero tax rates. The analysis distinguishes treated and not-treated municipalities based on their distance to a tax-haven. Our results show that the majority of municipalities do not change their tax policy. Apart from the tax-havens, only high-tax municipalities show a response – they reduce the business tax rate without experiencing a decline in tax revenues.

This paper analyzes the federal urban renewal and slum clearance program. This program was one of the largest and most controversial policies used to rehabilitate neighborhoods in the United States. Using a newly constructed dataset, I examine the characteristics of neighborhoods cleared for redevelopment and the effect that such projects had on neighborhoods over time. I show that conditional on experiencing urban blight, Black neighborhoods were twice as likely as white neighborhoods to be targeted for clearance. Redevelopment led to a decline in housing density, population density, and the share of Black residents while simultaneously increasing median rents and incomes.

A strong consensus posits that the Earned Income Tax Credit (EITC) has had sizable effects on extensive margin labor supply, especially for single mothers. This paper reappraises the difference-in-differences and event study approaches that underpin much of this consensus. The paper investigates every EITC reform at the state and federal level since the inception of the policy. All reforms are analyzed in an event study framework and a comprehensive analysis of model uncertainty is presented. Apart from the federal 1993 reform, EITC expansions are not associated with any clear and robust effects on employment. Treatment impact estimates from about 500 event studies are symmetrically distributed around zero. Specifications with large elasticities are outliers in the distribution. The 1993 reform, on the other hand, is associated with large employment increases for single mothers. Based on a number of different analyses, the paper shows that these increases align more closely with confounding effects from welfare reform and the macroeconomy than with the EITC. Overall, difference-in-differences and event study analyses of EITC reforms are fragile to specification choices and do not support robustly large effects.

Recent research has found distinct electoral cycles in public spending, but the evidence for cycles in taxation is scarce, reflecting a lack of cross-nationally comparable measures of tax reforms. We use qualitative data provided by the IMF (Amaglobeli et al., 2018) to compile comprehensive tax reform indicators that cover the entire tax system for 22 countries between 1960–2014, including reforms of tax rates and bases for six tax types. Relating tax reforms to the timing of elections, we find results that are consistent with politicians postponing tax reforms to periods after elections. The results are most pronounced for tax increases, are stronger for tax rates than bases, and are driven by particularly salient tax types (personal income taxes and the VAT).

Due to population aging, the number of people needing long-term care is growing, and an increasing number of people are receiving this care at home, rather than in nursing homes. This trend has been driven in part by Medicaid, which has significantly increased public financing of formal home care over the past few decades. Using the 2000–2016 Health and Retirement Study and a difference-in-difference and triple-difference design, I investigate the effects of a Medicaid policy adopted in over half of states that increased formal home care utilization among low-income older adults by more than 50%. I show that the policy mainly replaces informal care, particularly from spouses and daughters. For daughters, there is an accompanying increase in labor supply: for approximately every three daughters whose parent receives formal home care due to the policy, one additional daughter works full-time.

We use regression discontinuity design and difference-in-differences methods to estimate the impact of a one-time hiring subsidy for low-educated unemployed youths in Belgium during the recovery from the Great Recession. Within a year of unemployment, the subsidy increases job-finding in the private sector by 10 percentage points. Over six years, high school graduates secure 2.8 more quarters of private employment. However, they transition from public jobs and self-employment, resulting in no net increase in overall employment, albeit with better wages. High school dropouts experience no lasting benefits. Additionally, in tight labor markets near Luxembourg’s employment hub, the subsidy results in a complete deadweight loss.

Rural households contend with numerous uninsured risks that hinder their ability to leverage profitable yet risky opportunities. We study whether the provision of insurance coverage for medical expenditure, one of the most substantial and unpredictable risk, can stimulate entrepreneurship and other risky financial decisions among rural households. We leverage the progressive nationwide rollout of a universal public health insurance program in rural China. We find that the introduction of health insurance led to a substantial increase in rural households engagement in entrepreneurship. This increase is mainly driven by the risk sharing of health insurance, rather than a reduction in realized medical expenses. The entrepreneurship-promoting effect is also evident at an aggregate level, fostering the growth of smallholder businesses in rural counties. Our findings shed light on the understudied, favorable impact of health insurance on household’s risk taking in rural markets of developing countries.

Can political leaders influence macroeconomic expectations on a global scale? We design a large-scale survey experiment among influential economic experts working in more than 100 countries and use the 2020 US presidential election as a quasi-natural experiment to identify the effect of the US incumbent change on global macroeconomic expectations. We find large effects of the change in US leadership on growth expectations of international experts. The effect works through both economic (more positive expectations about trade) and psychological (irrational exuberance at the defeat of an unpopular but powerful leader) channels. Our findings suggest important political spillover effects in the formation of macroeconomic expectations.

Multinational profit shifting is a major concern for low and middle income countries (LMICs). Many have enacted anti-profit shifting rules in order to constrain this type of tax avoidance behavior. Yet, not much is known on the rules’ effects. We offer a first empirical assessment, providing two pieces of evidence: First, we draw on macro data for more than 120 LMICs for a 30-year-period and show that the introduction of transfer pricing (TP) rules – provisions that constrain profit shifting from mis-pricing of intra-firm trade – significantly increased corporate tax revenue collection in LMICs. Second, we use rich tax administrative and trade data for South Africa to provide “first-stage” evidence for firms’ behavioral response to stricter TP provisions: we establish that a tightening of South African TP rules reduced intra-firm trade mis-pricing and increased taxable income reporting of affected multinational firms.

Despite a longstanding interest in the potential substitution of labor and capital, limited empirical evidence exists regarding the causal relationship between labor supply and the development of labor-saving technologies. This study examines the impact of exogenous changes in regional labor supply on automation innovation by leveraging a German immigrant allocation policy during the 1990s and 2000s. The findings reveal that an increase in the low-skilled workforce reduces automation innovation, as measured by patents. This reduction is most pronounced for large firms within the manufacturing sector and primarily concerns process-related automation innovations. This suggests that the effect is channeled through changes in internal demand for automation innovation. Consistent with a labor scarcity mechanism, the effect is confined to tight labor markets.