Search Results
Briefing
Estimating Aggregate Fiscal Multipliers from Local Data
Variations among regions in their responses to economic policies can be used to estimate the effects of those policies at the national level while minimizing or eliminating issues of reverse causation. Recent research has employed county-level data to look at the effects of federal government spending ? in particular, the 2009?12 stimulus ? on aggregate consumption.
Working Paper
Regional Consumption Responses and the Aggregate Fiscal Multiplier
We use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending. Our consumption data come from household-level retail purchases in the Nielsen scanner data and auto purchases from Equifax credit balances. We estimate that a $1 increase in county-level government spending increases local non-durable consumer spending by $0.29 and local auto spending by $0.09. We translate the regional consumption responses to an aggregate fiscal multiplier using a multiregional, New Keynesian model with heterogeneous agents, ...
Briefing
How Important Are Asset Price Fluctuations for Business Investment?
Previous recessions in the U.S. revealed to economists and policymakers that weak macroeconomic conditions may have been worsened by financial distress. Economists have theorized that this association is explained by a decline in physical asset prices that often precede recessions. When physical asset prices decline, firms pledge less-valuable assets to banks, which leads banks to reduce lending. Consequently, firms are not able to finance their investments, which reduces overall economic activity. In this article, we review more recent literature that may indicate that this mechanism is ...
Working Paper
Heterogeneity in labor supply elasticity and optimal taxation
Standard public finance principles imply that workers with more elastic labor supply should face smaller tax distortions. This paper quantitatively tests the potential of such an idea within a life-cycle model with heterogeneous two-member households. I find that younger and older-wealthier households have a larger labor supply elasticity than middle-aged households. The same is true for household members who are not the sole financial provider in the unit relative to primary breadwinners. To decrease inefficient distortions I study a tax system that uses information on the age, assets, and ...
Briefing
How Can We Make a Progressive Tax System More Efficient?
In the U.S., income tax rates rise as households earn more. However, such a system means workers have a reduced incentive to increase their earnings. In this article, I discuss a finding from one of my papers that explores the possible effects of targeting tax rates on additional characteristics besides income.
Journal Article
What Can We Learn from Online Wage Postings? Evidence from Glassdoor
We use millions of user-entry salaries from Glassdoor to evaluate how well data from online wage postings compare with more traditional, aggregated data, such as the Quarterly Census for Employment and Wages (QCEW) or household-level data such as the Panel Study of Income Dynamics (PSID). We perform our analysis across industries as well as geographical areas. We find that industry employment shares differ substantially between Glassdoor and QCEW. However, the correlation between industry- and region-specific average salaries in Glassdoor and the QCEW is fairly high. Similarly, the ...
Journal Article
Does Bank Lending Matter for Large Firms' Investment?
This paper analyzes how firm investment is affected by changes in bank lending. The analysis uses firm-level data on investment and bank loan issuance. To capture variations in credit availability, I use a firm's exposure to banks that experienced financial disruptions, in the spirit of Chodorow-Reich (2014). I find that firms in lending relationships with banks that sharply decreased their lending did not significantly decrease their investment compared with firms in relationships with healthier banks. In contrast, more traditional measures of bank lending show a strong correlation between ...
Working Paper
Labor-Market Uncertainty and Portfolio Choice Puzzles
The standard theory of household-portfolio choice is hard to reconcile with the following facts: (i) Households hold a small amount of equity despite the higher average rate of return. (ii) The share of risky assets increases with the age of the household. (iii) The share of risky assets is disproportionately larger for richer households. We develop a life-cycle model with age-dependent unemployment risk and gradual learning about the income profile that can address all three puzzles. Young workers, on average asset poor, face larger labor-market uncertainty because of high unemployment risk ...
Briefing
How Did Pandemic UI Benefits Affect Employment Recovery in Local Industry Markets?
We analyze the employment recovery of low-wage establishments relative to the employment recovery of high-wage establishments within local labor markets, and we find a slower recovery in low-wage establishments. We associate the difference with the expanded generosity of pandemic unemployment insurance (UI) supplements, which have a larger negative effect on the job-filling rate of low-paying establishments. We use a model of labor search to translate our establishment-level observations into a disincentive effect of pandemic UI benefits at the worker level.