Tax policy and local labor market behavior by Daniel G. Garrett, Eric Ohrn and Juan Carlos Suárez Serrato
By: Garrett, Daniel G
.
Contributor(s): Ohrn, Eric | Suárez Serrato, Juan Carlos.
Material type: 
ArticlePublisher: 2020Subject(s): POLITICA FISCAL | SOCIEDADES | TRIBUTOS LOCALES | REDUCCIONES TRIBUTARIAS | MERCADO DE TRABAJO | SALARIOS | ESTADOS UNIDOS
In:
The American Economic Review v. 2, n. 1, March 2020, p. 83-100Summary: Since 2002, the US government has encouraged business investment using accelerated depreciation policies that significantly reduce investment costs. We provide the first in-depth analysis of this stimulus on employment and earnings. Our local labor markets approach exploits cross-industry variation in policy generosity interacted with county-level industry location data. This strategy identifies the partial equilibrium effects of accelerated depreciation. Places that experience larger decreases in investment costs see an increase in employment and earnings. In contrast, the policy does not have positive effects on earnings-per-worker. Overall, our findings suggest federal corporate tax policy has large effects on local labor markets.
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| OP 2145/2019/3 The American Economic Review | OP 2145/2019/3-1 Reported effects versus revealed - preference estimates | OP 2145/2020/1 The American Economic Review | OP 2145/2020/1-1 Tax policy and local labor market behavior | OP 2145/2020/2 The American Economic Review | OP 2145/2020/2-1 Earnings risk in the household | OP 2145/2020/3 The American Economic Review |
Resumen.
Bibliografía.
Since 2002, the US government has encouraged business investment using accelerated depreciation policies that significantly reduce investment costs. We provide the first in-depth analysis of this stimulus on employment and earnings. Our local labor markets approach exploits cross-industry variation in policy generosity interacted with county-level industry location data. This strategy identifies the partial equilibrium effects of accelerated depreciation. Places that experience larger decreases in investment costs see an increase in employment and earnings. In contrast, the policy does not have positive effects on earnings-per-worker. Overall, our findings suggest federal corporate tax policy has large effects on local labor markets.
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