Upon whom does an energy tax fall? Who bears the burden?

Who Bears the Economic Costs of Environmental Regulations? by Don Fullerton, Erich Muehlegger

Abstract:
Public economics has a well-developed literature on tax incidence -
the ultimate burdens from tax policy.  This literature is used here
to describe not only the distributional effects of environmental
taxes or subsidies but also the likely incidence of non-tax
regulations, energy efficiency standards, or other environmental
mandates.  Recent papers find that mandates can be more regressive
than carbon taxes.  We also describe how the distributional effects
of such policies can be altered by various market conditions such as
limited factor mobility, trade exposure, evasion, corruption, or
imperfect competition. Finally, we review data on carbon-intensity
of production and exports around the world in order to describe
implications for effects of possible carbon taxation on countries
with different levels of income per capita.
Complete working paper from the National Bureau of Economic Research.

A new paper: Gender: An Historical Perspective

A new paper by Paola Giuliano
Social attitudes toward women vary significantly across societies. This chapter reviews recent empirical research on various historical determinants of contemporary differences in gender roles and gender gaps across societies, and how these differences are transmitted from parents to children and therefore persist until today. We review work on the historical origin of differences in female labor-force participation, fertility, education, marriage arrangements, competitive attitudes, domestic violence, and other forms of difference in gender norms. Most of the research illustrates that differences in cultural norms regarding gender roles emerge in response to specific historical situations, but tend to persist even after the historical conditions have changed. We also discuss the conditions under which gender norms either tend to be stable or change more quickly.

Wages and Perks

Wages and Perks

Today's Massachusetts jobs number: 4.3% U-rate; 200 jobs lost in July 2017

OVERVIEW

• The state’s total unemployment rate increased to 4.3 percent in July and lost 200 jobs according to the Executive Office of Labor and Workforce Development. 
• Since last July the state’s economy has added 45,200 jobs while the state’s labor force participation rate has increased by 1.5 percent. 
• The strongest job growth came in the Construction (+2,500), with Financial Activities and Education & Health Services each adding 1,300 jobs. 
• Trade, Transportation & Utilities lost 1,400 jobs over the month while Leisure and Hospitality lost 900 jobs. Information lost 300 jobs; Professional, Scientific and Business Services lost 100.
• Government lost 1,700 jobs over the month and Other Services lost 1,400 jobs.
• The new jobs estimate for June was revised to 10,900 from the 10,000 jobs reported originally.  
• Over the past year, the Health Care and Social Assistance subsector added 20,600 jobs, a sector whose year-over-year growth is nearly four times that of the growth of the Financial Activities sector. 
• On average, Massachusetts employment grew by 3,767 jobs a month since last July. 
• On average, the private sector generated 3,575 jobs monthly over the past 13 months. 

ANALYSIS 

The state’s unemployment rate, which inched up in July, has converged with the national rate at 4.3 percent. 

According to the EOLWD, the last time the state and national rates matched was April 2008 when the rate was 5.0 percent. Over the year, the state’s seasonally adjusted unemployment rate increased seven-tenths of a percentage point from 3.6 percent in July 2016. 

Meanwhile, the LFP rate increased by three-tenths of a point to 66.4 percent in July. 

The labor force decreased by 11,300 from 3,708,800 in June, says EOLWD as 11,500 fewer residents were employed and 300 more residents were unemployed.  

The unemployment rate remains at a stable low level but the state faces a skills gap. This may be reflected in the subpar growth of mid-tech jobs classified under Leisure and Hospitality and Other Services. 

“Although the unemployment rate remains low, we continue to see persistent gaps between the skill sets of available workers and the qualifications needed for in-demand jobs,” Labor and Workforce Development Secretary Rosalin Acosta said. 

Job growth in Massachusetts continues to rely on the strength of the Education and Health Care and Professional Services super-sectors, which saw gains of 21,900 and 9,500 over the past year, respectively. In related news, the most recent Boston metropolitan survey released this week by the Bureau of Labor Statistics showed job growth over the past year across all sectors except for manufacturing. 

Is it worth it to compare state sales taxes when making a purchase?

A new National Bureau of Economic Research working paper from Scott R. Baker, Stephanie Johnson and Lorenz Kueng that might underscore the ongoing effects of interstate sales tax competition. 

Abstract:

Using comprehensive high-frequency state and local sales tax data, we show that household spending responds strongly to changes in sales tax rates.  Even though sales taxes are not observed in posted prices and have a wide range of rates and exemptions, households adjust in many dimensions, stocking up on storable goods before taxes rise and increasing online and cross-border shopping.  Interestingly, households adjust spending similarly for both taxable and tax-exempt goods. We embed an inventory problem into a continuous-time consumption-savings model and demonstrate that this seemingly irrational behavior is optimal in the presence of shopping trip fixed costs. The model successfully matches estimated short-run and long-run tax elasticities with a reasonable implied reservation wage of $7-10.  We provide additional empirical evidence in favor of this new shopping-complementarity mechanism.  While our results reject non-salience of sales tax changes, on average, we also show that upcoming tax changes that are more salient prompt larger responses.

The paper, "Shopping for lower state sales tax rates," can be found here. 

About those low wage jobs and robots: People versus machines: The Impact of minimum wages on at-risk jobs

A growing automated workforce of robots does not bode well for low-income workers, particularly older ones. Minimum wages don't help. Here's a new working paper by Grace Lordan, and David Neumark 

Abstract:

We study the effect of minimum wage increases on employment in automatable jobs - jobs in which employers may find it easier to substitute machines for people - focusing on low-skilled workers from whom such substitution may be spurred by minimum wage increases.  Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing.  The findings imply that groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.

More at NBER.

Another study on health insurance for low-income adults based on the Massachusetts health care law

A new NBER Working Paper by Amy Finkelstein, Nathaniel Hendren, Mark Shepard 

Abstract:

How much are low-income individuals willing to pay for health insurance, and what are the implications for insurance markets? Using administrative data from Massachusetts' subsidized insurance exchange, we exploit discontinuities in the subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults.  As subsidies decline, insurance take-up falls rapidly, dropping about 25% for each $40 increase in monthly enrollee premiums.  Marginal enrollees tend to be lower-cost, consistent with adverse selection into insurance.  But across the entire distribution we can observe - approximately the bottom 70% of the willingness to pay distribution - enrollee willingness to pay is always less than half of own expected costs.  As a result, we estimate that take-up will be highly incomplete even with generous subsidies:  if enrollee premiums were 25% of insurers' average costs, at most half of potential enrollees would buy insurance; even premiums subsidized to 10% of average costs would still leave at least 20% uninsured. We suggest an important role for uncompensated care for the uninsured in explaining these findings and explore normative implications.

More here.