Working Paper: NBER ID: w18426
Authors: Casey B. Mulligan
Abstract: This paper calculates monthly time series for the overall safety net's statutory marginal labor income tax rate as a function of skill and marital status. Marginal tax rates increased significantly for all groups between 2007 and 2009, and dramatically so for unmarried household heads. The relationship between incentive changes and skill varies by marital status. Unemployment insurance and related expansions contribute to the patterns by skill while food stamp expansions contribute to the patterns by marital status. Remarkably, group changes in hours worked per capita line up with the statutory measures of incentive changes.
Keywords: Labor Income Tax Rates; Safety Net Programs; Unemployment Insurance; SNAP; Marital Status
JEL Codes: E24; H31; I38; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Changes in marginal tax rates (H31) | Labor supply decisions (J22) |
| Unemployment insurance expansions (J65) | Labor supply (J22) |
| Food stamp expansions (H53) | Labor supply of unmarried individuals (J22) |
| Marginal tax rates (H29) | Hours worked (J22) |
| Changes in hours worked per capita (J29) | Statutory measures of incentive changes (H29) |
| Unemployment insurance changes (J65) | Labor market behavior (J29) |