Research
Working Papers
Payroll Tax Incidence: Evidence from Unemployment Insurance Revise and Resubmit, Journal of Public Economics
Economic models assume that payroll tax burdens fall fully on workers, but where does tax incidence fall when taxes are firm-specific and time-varying? Unemployment insurance in the United States has the key feature of varying both across employers and over time, creating the potential for labor demand responses if tax costs cannot be fully passed on to worker wages. Using state policy changes and matched employer-employee job spells from the LEHD, I study how employment and earnings respond to payroll tax increases for highly exposed employers. I find significant drops in employment growth driven by lower hiring, and minimal evidence of pass-through to earnings. The negative employment effects are strongest for young workers and single-establishment firms.
The Impact of Preference Programs in Public Procurement: Evidence from Veteran Set-Asides (with Rodrigo Carril)
Veteran-owned businesses are given preferential treatment in the allocation of procurement contracts from the U.S. Department of Veterans Affairs – currently the largest civilian federal agency in terms of procurement spending. We exploit a 2016 Supreme Court ruling that significantly increased the scope of these set-asides, to study the impacts of preference programs on both the targeted businesses and procurement outcomes. The policy change increased the share of contracts awarded to the target population, service-disabled veteran-owned small businesses, and led to significant entry of new vendors, including those who had previously failed to win contracts. New entrants were also more likely to win future contracts, and the policy led to an increase in survival for targeted firms. We find no evidence of relevant spillovers to awards by other federal agencies, no decline in competition for awards, and no deterioration of contract execution performance by vendors. These findings suggest that VA set-asides have successfully improved outcomes for the target population without imposing significant costs on the government.
Work in Progress
New Employer Payroll Taxes and Entrepreneurship (with Melanie Wallskog) [Preliminary Draft]
How costly are new employer taxes for young firms? In this paper, we study how a payroll tax for new employers -- unemployment insurance (UI) -- distorts firms' entry, growth, and labor demand decisions. First, leveraging cross-sectional variation in the UI tax rates faced by new employers, we find that higher UI taxes discourage firm entry and lead to more positively selected entrants in terms of initial employment. Second, we study how changes in the UI tax rates faced by young firms affect their outcomes post-entry. An increase in taxes due to state policy changes leads more firms to exit, while also reducing employment for those who survive.
The Distributional Impacts of Unemployment Insurance Financing (with Mark Duggan and Jonathan Gruber)
Publications
Experience Rating as an Automatic Stabilizer (with Mark Duggan and Andrew Johnston) Tax Policy and the Economy (2023)
The Effects of State Business Taxes on Plant Closures: Evidence from Unemployment Insurance Taxation and Multi-Establishment Firms Review of Economics and Statistics (2023)
Would Broadening the UI Tax Base Help Low-Income Workers? (with Mark Duggan and Andrew Johnston) AEA Papers and Proceedings (2022)
The Finance of Unemployment Compensation and Its Consequences (with Andrew Johnston) Public Finance Review (2021)
To Work for Yourself, for Others, or Not At All? How Disability Benefits Affect the Employment Decisions of Older Veterans (with Courtney Coile and Mark Duggan) Journal of Policy Analysis and Management (2021)
What to Expect When You Are Expecting: Are Health Care Consumers Forward-Looking? (with Jonathan Zhang) Journal of Health Economics (2019)
Veterans' Labor Force Participation: What Role Does the VA's Disability Compensation Program Play? (with Courtney Coile and Mark Duggan) American Economic Review: Papers and Proceedings (2015)
Press Coverage: The Economist
Other Papers
Outsourcing, Occupational and Industrial Concentration (with Nicholas Bloom and Brian Lucking)
Labor Market Effects of Medicaid Expansion and Premium Subsidies: New Evidence from Panel Data (with Jonathan Zhang)