The ARRA: Some Unpleasant Welfare Arithmetic

Mulligan, Casey

The ARRA: Some Unpleasant Welfare Arithmetic

No 18591, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E24 H31 I38 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-hpe, nep-mac and nep-pbe
Note: LS PE
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Working Paper: The ACA: Some Unpleasant Welfare Arithmetic (2014)
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