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The ARRA: Some Unpleasant Welfare Arithmetic

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  • Casey B. Mulligan

Abstract

Distributions of tax rates on job acceptance and layoff margins are estimated for unemployed household heads and spouses under three benefit and tax rule scenarios: actual rules under the American Reinvestment and Recovery Act, rules as they would have been if they had not been changed since 2007, and rules as they might have been with a bigger fiscal stimulus. Two or three million unemployed household heads and spouses, with a variety of tax situations, had as much disposable income while unemployed as they would have by accepting a job that paid 80-100 percent of their previous one. The number would have been less than one million under 2007 rules, and about nine million under a bigger stimulus. Tax obligations and foregone unemployment insurance about equally erode the rewards from retaining a job, or starting a new one.

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  • Casey B. Mulligan, 2012. "The ARRA: Some Unpleasant Welfare Arithmetic," NBER Working Papers 18591, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18591
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    1. ACA and EMTRs
      by Eric Crampton in Offsetting Behaviour on 2014-04-11 09:02:00

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    Cited by:

    1. Casey B. Mulligan, 2014. "The Economics of Work Schedules under the New Hours and Employment Taxes," NBER Working Papers 19936, National Bureau of Economic Research, Inc.
    2. Clemens, Jeffrey, 2016. "The Low-Skilled Labor Market from 2002 to 2014: Measurement and Mechanisms," MPRA Paper 75690, University Library of Munich, Germany.
    3. Clemens, Jeffrey & Wither, Michael, 2014. "Just the Facts: Demographic and Cross-Country Dimensions of the Employment Slump," MPRA Paper 60228, University Library of Munich, Germany.
    4. Casey B. Mulligan, 2013. "Uncertainty, Redistribution, and the Labor Market," NBER Working Papers 19553, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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