scholarly journals The Aging of the Baby Boomers: Demographics and Propagation of Tax Shocks

2020 ◽  
Vol 12 (2) ◽  
pp. 167-193
Author(s):  
Domenico Ferraro ◽  
Giuseppe Fiori
Keyword(s):  
Labor Force ◽  
Baby Boomers ◽  
Unemployment Rate ◽  
Age Groups ◽  
Marginal Tax Rate ◽  
Structural Shocks ◽  
Tax Rate ◽  
Tax Shocks ◽  
Tax Changes ◽  
Tax Cuts

We study how the changing demographic composition of the US labor force has affected the response of the unemployment rate to marginal tax rate shocks. Using narratively identified tax changes as proxies for structural shocks, we establish that the responsiveness of the unemployment rates to tax changes varies significantly across age groups: the unemployment rate response of the young is nearly twice as large as that of the old. This heterogeneity is the channel through which shifts in the age composition of the labor force impact the response of the unemployment rate to tax cuts. We find that the aging of the baby boomers considerably reduces the effects of tax cuts on aggregate unemployment. (JEL E24, E62, H24, H31, J21)

Estimating Dynamic Income Responses to Tax Reform

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Bertil Holmlund ◽  
Martin Söderström
Keyword(s):  
Tax Reform ◽  
Income Taxes ◽  
Tax Rates ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Long Run ◽  
Large Panel ◽  
Short Run ◽  
Tax Changes ◽  
Tax Payers

Abstract We study income responses to income tax changes by using a large panel of Swedish tax payers over the period 1991–2002. Changes in statutory tax rates as well as changes in tax bracket thresholds provide exogenous variations in tax rates that can be used to identify income responses. We estimate dynamic income models which allow us to distinguish between short-run and long-run effects in a straightforward fashion. For men, the estimates of the long-run elasticity of income with respect to the net-of-tax rate hover in a range between 0.10 and 0.30. The estimates for women are statistically insignificant. We simulate the fiscal consequences of a tax reform that reduces the top marginal tax rate by five percentage points. Such a reform may have negligible effects on tax revenues when the interactions between income taxes and other taxes are taken into account.

scholarly journals The Macroeconomic Effects of Income and Consumption Tax Changes

2021 ◽  
Vol 13 (2) ◽  
pp. 439-466
Author(s):  
Anh D.M. Nguyen ◽  
Luisanna Onnis ◽  
Raffaele Rossi
Keyword(s):  
Income Tax ◽  
Transmission Mechanism ◽  
Consumption Tax ◽  
Indirect Taxation ◽  
The United Kingdom ◽  
Tax Shocks ◽  
Tax Changes ◽  
Consumption Taxes ◽  
Narrative Account ◽  
Tax Cuts

This paper estimates the effects of exogenous changes in income and consumption taxes. The tax shocks are proxied with a narrative account of tax liability changes in the United Kingdom. Income tax cuts have large effects on GDP, private consumption, and investment. The effects of consumption tax cuts are modest and not statistically significant on GDP and its components. Shifting the burden of taxation from income to consumption is expansionary. Consistent with conventional public finance theories, these results indicate that it is crucial to distinguish between direct and indirect taxation when studying the transmission mechanism of fiscal policy. (JEL E21, E22, E23, H24, H25)

scholarly journals Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated US Tax Policy Shocks

2012 ◽  
Vol 4 (2) ◽  
pp. 145-181 ◽  
Author(s):  
Karel Mertens ◽  
Morten O Ravn
Keyword(s):  
Business Cycle ◽  
The United States ◽  
Real Wages ◽  
Hours Worked ◽  
Aggregate Consumption ◽  
Policy Shocks ◽  
Tax Shocks ◽  
Tax Changes ◽  
Anticipation Effects ◽  
Tax Cuts

We provide evidence on the dynamic effects of tax liability changes in the United States. We distinguish between surprise and anticipated tax changes. Preannounced but not yet implemented tax cuts give rise to contractions in output, investment, and hours worked while real wages increase. There are no significant anticipation effects on aggregate consumption. Implemented tax cuts, regardless of their timing, have expansionary effects, on output, consumption, investment, hours worked, and real wages. Results are shown to be robust. Tax shocks are important impulses to the US business cycle and anticipation effects have been important during several business cycle episodes. (JEL E23, E32, E62, H20, H30)

scholarly journals The Long-Lived Cyclicality of the Labor Force Participation Rate

2021 ◽  
Vol 2021 (044) ◽  
pp. 1-48
Author(s):  
Tomaz Cajner ◽  
◽  
John Coglianese ◽  
Joshua Montes ◽  
◽  
...  
Keyword(s):  
Labor Force ◽  
Labor Force Participation ◽  
Unemployment Rate ◽  
Age Groups ◽  
Participation Rate ◽  
State Level ◽  
Labor Force Participation Rate ◽  
Family Responsibilities ◽  
The U.S ◽  
Negative Shock

How cyclical is the U.S. labor force participation rate (LFPR)? We examine its response to exogenous state-level business cycle shocks, finding that the LFPR is highly cyclical, but with a significantly longer-lived response than the unemployment rate. The LFPR declines after a negative shock for about four years—well beyond when the unemployment rate has begun to recover—and takes about eight years to fully recover after the shock. The decline and recovery of the LFPR is largely driven by individuals with home and family responsibilities, as well as by younger individuals spending time in school. Our main specifications measure cyclicality from the response of the age-adjusted LFPR, and we show that it is problematic to use the unadjusted LFPR when estimating cyclicality because local shocks spur changes in the population of high-LFPR age groups through migration. LFPR cyclicality varies across groups, with larger and longer-lived responses.

scholarly journals Work Incentives and the Two-Earner Deduction

1985 ◽  
Vol 13 (1) ◽  
pp. 63-73 ◽  
Author(s):  
Jane H. Leuthold
Keyword(s):  
Labor Force ◽  
Labor Force Participation ◽  
Married Woman ◽  
Probability Model ◽  
Married Women ◽  
Work Incentives ◽  
Income Dynamics ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Potential Impact

One consequence of the two-earner deduction is to lower the marginal tax rate on the first dollar earned by secondary workers and to encourage their labor force participation. This study estimates the potential impact of the two-earner deduction on the probability of labor force participation by married women and tests the sensitivity of labor force participation levels to changes in the rate of deduction. Probit estimates of a labor force probability model suggest that the two-earner deduction increases the probability that a married woman work outside the home and that the effect is stronger the higher the deduction rate and the greater the after-tax income of the husband. Data for the study were drawn from the 1979 Michigan Survey of Income Dynamics.

Information Practices of Baby Boomers as Caregivers

2013 ◽  
Author(s):  
Khuan Seow ◽  
Nadia Caidi
Keyword(s):  
Social Policy ◽  
Baby Boomers ◽  
Information Needs ◽  
Family Members ◽  
Age Groups ◽  
Maladie D’Alzheimer ◽  
Policy Makers ◽  
Age Related ◽  
The Family ◽  
Growing Age

Canada has an aging population with the fastest growing age groups (80 and 45-64 years old) vulnerable to age-related diseases such as Alzheimer’s disease. Caregiving responsibilities often fall to the family members of the afflicted without much attention and consideration being placed on the information needs of these caregivers. We call for a better understanding of these caregivers' information needs and uses by social policy makers as well as information providers.La population du Canada a tendance à vieillir considérablement, avec la hausse la plus rapide dans les groupes d’âge (80 et 45 à 64 ans). Les personnes âges sont très vulnérables à toute sorte de maladies, telles que la maladie d’Alzheimer. La responsabilité revient souvent aux membres de la famille qui doivent prendre soin des personnes atteintes de cette maladie. Or, nous ne connaissons que peu de chose sur les besoins en information des personnes qui prennent soin de ces malades de l’Alzheimer : qui sont-ils ? Quelles sont leurs sources... 

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