What do leading economists think about Local Tax Incentives?

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Research Assistant Opportunities at Chicago Booth

We are looking for highly skilled and motivated individuals to work as full-time research assistants for a period of at least one year. Please apply if you are interested.

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11 Interesting Charts from the CEA’s Economic Report of the President

See the full ERP here

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Corporate Profits, Wages, and Shared Prosperity: Interview with President Obama

From Vox.com

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Do Dividend Tax Cuts Increase Investment and Hiring?

ozidar:

Here’s some of the best evidence we have on the impact of changes in dividend taxes on investment and hiring

Originally posted on owenzidar:

Abstract: Policymakers frequently propose to use capital tax reform to stimulate investment and increase labor earnings. This paper tests for such real impacts of the 2003 dividend tax cut – one of the largest reforms ever to a U.S. capital tax rate – using a quasi-experimental design and a large sample of U.S. corporate tax returns from years 1996-2008. I estimate that the tax cut caused zero change in corporate investment, with an upper bound elasticity with respect to one minus the top statutory tax rate of .08 and an upper bound effect size of .03 standard deviations. This null result is robust across specifications, samples, and investment measures. I similarly find no impact on employee compensation. The lack of detectable real effects contrasts with an immediate impact on financial payouts to shareholders. Economically, the findings challenge leading estimates of the cost-of-capital elasticity of investment, or undermine models in which…

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Evaluating Public Programs with Close Substitutes: The Case of Head Start

An interesting paper from Pat Kline and Chris Walters:

This paper empirically evaluates the cost-effectiveness of Head Start, the largest early- childhood education program in the United States. Using data from the randomized Head Start Impact Study (HSIS), we show that Head Start draws a substantial share of its participants from competing preschool programs that receive public funds. This both attenuates measured experimental impacts on test scores and reduces the program’s net social costs. A cost-benefit analysis demonstrates that accounting for the public savings associated with reduced enrollment in other subsidized preschools can reverse negative assessments of the program’s social rate of return. Estimates from a semi-parametric selection model indicate that Head Start is about as effective at raising test scores as competing preschools and that its impacts are greater on children from families unlikely to participate in the program. Efforts to expand Head Start to new populations are therefore likely to boost the program’s social rate of return, provided that the proposed technology for increasing enrollment is not too costly.

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Capital Taxation in the 21st Century

From Alan Auerbach and Kevin Hassett for their upcoming AEA talk. The session looks interesting.

Jan 03, 2015 8:00 am, Sheraton Boston, Independence Ballroom
American Economic Association

A Discussion of Thomas Piketty’s “Capital in the 21st Century” (D3)
PresidingN. GREGORY MANKIW (Harvard University)
Capital and Wealth in the 21st Century

DAVID N. WEIL (Brown University)

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Capital Taxation in the 21st Century

ALAN J. AUERBACH (University of California-Berkeley)
KEVIN HASSETT (American Enterprise Institute)

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Yes, r>g. So what?

N. GREGORY MANKIW (Harvard University)

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About Capital in the 21st century

THOMAS PIKETTY (Paris School of Economics)
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