Unemployment Insurance Taxes and Labor Demand: Quasi-Experimental Evidence from Administrative Data

We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession.

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Enforcing Wealth Taxes in the Developing World: Quasi-Experimental Evidence from Colombia

American Economic Review: Insights ◽

10.1257/aeri.20200319 ◽

2021 ◽

Vol 3 (2) ◽

pp. 131-148

Author(s):

Juliana Londoño-Vélez ◽

Javier Ávila-Mahecha

Keyword(s):

Developing Countries ◽

Experimental Evidence ◽

Administrative Data ◽

Developing World ◽

Tax Compliance ◽

Tax Revenue ◽

Voluntary Disclosures ◽

Challenges And Opportunities ◽

Quasi Experimental ◽

Wealth Tax

This paper investigates the feasibility of wealth taxation in developing countries. It uses rich administrative data from Colombia and leverages a government-designed program for voluntary disclosures of hidden wealth as well as the threat of detection triggered by the Panama Papers leak. There are two key findings. First, there is substantial (primarily offshore) evasion: two-fifths of the wealthiest 0.01 percent evade taxes, with these evaders concealing one-third of their wealth offshore. Second, strengthening enforcement can have a significant impact on wealth tax compliance, tax revenue, and progressivity. These results highlight both challenges and opportunities for wealth taxation in the developing world. (JEL D31, G51, H24, H26, K34, O15)

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Unemployment Insurance Taxes and Labor Demand: Quasi-Experimental Evidence from Administrative Data

American Economic Journal Economic Policy ◽

10.1257/pol.20190031 ◽

2021 ◽

Vol 13 (1) ◽

pp. 266-293 ◽

Cited By ~ 1

Author(s):

Andrew C. Johnston

Keyword(s):

Unemployment Insurance ◽

Great Recession ◽

Firm Behavior ◽

Labor Demand ◽

Tax Rates ◽

Payroll Tax ◽

Administrative Records ◽

The Great Recession ◽

Quasi Experimental ◽

Regression Kink Design

To finance unemployment insurance, states raise payroll tax rates on employers who engage in layoffs. Tax rates are, therefore, highest for firms after downturns, potentially hampering labor-market recovery. Using full-population, administrative records from Florida, I estimate the effect of these tax increases on firm behavior leveraging a regression kink design in the tax schedule. Tax hikes reduce hiring and employment substantially, with no effect on layoffs or wages. The results imply unanticipated costs of the financing regime which reduce the optimal benefit by a quarter and account for 12 percent of the unemployment in the wake of the Great Recession. (JEL D22, E24, H25, H32, H71, J23, J65)

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