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Unemployment and Public Budget Impacts of the Auto Bailout

Author

Listed:
  • Robert Baumann

    (Department of Economics, College of the Holy Cross)

  • Andrea Thompson

    (Department of Economics, College of the Holy Cross)

Abstract

We estimate the impact of the 2009 financial rescue of two large American automobile companies (General Motors and Chrysler) on unemployment in Michigan. We conservatively estimate that the auto bailout saved about 7,700 workers from unemployment each month over a period of four-and-a-half years. This translates to a public savings of between $1.3 and $1.6 billion via lower transfer payments and higher tax revenues.

Suggested Citation

  • Robert Baumann & Andrea Thompson, 2015. "Unemployment and Public Budget Impacts of the Auto Bailout," Working Papers 1504, College of the Holy Cross, Department of Economics.
    • Handle: RePEc:hcx:wpaper:1504
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    File URL: https://hcapps.holycross.edu/hcs/RePEc/hcx/HC1504-Baumann-Thompson_AutoBailout.pdf
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    More about this item

    Keywords

    bailout; public finance; unemployment; automobile industry;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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