Cutting Obamacare Subsidies Would Benefit Poor, Says CBO | Economics21

August 18, 2017

The unsurprising part is CBO’s expectation that if CSR subsidies are withdrawn, sponsors of silver plans will hike premiums substantially.

The surprising part is that CBO found that not only would this generally not hurt low-income participants, it would on balance benefit them – especially older Americans below 400 percent of the poverty line.  The primary losers, under CBO’s analysis, would be federal taxpayers.  Add it all up, and terminating the CSR subsidies would paradoxically lead to a substantial increase in progressive income redistribution.

Source: Cutting Obamacare Subsidies Would Benefit Poor, Says CBO | Economics21


Explaining the decline in US entrepreneurship • AEI | Pethokoukis Blog » AEIdeas

July 25, 2017

the San Francisco Fed is out with a report on this issue of falling US business formation. It finds that in recent decades “the number of businesses in the United States has moved much more closely with workforce size” and that “[increasing] the labor supply and hence the supply of potential entrepreneurs can stimulate business formation by increasing demand without raising costs.”

Source: Explaining the decline in US entrepreneurship • AEI | Pethokoukis Blog » AEIdeas

Editor’s note: the CBO estimated that the ACA would reduce the size of the workforce by ~2 million workers; this SF Fed report would imply that would have an adverse effect on business formation.


Impact of Children’s Health Insurance Bene fit on Labor Supply: Evidence from Newly Arrived Immigrants in the United States by Keshar M. Ghimire :: SSRN

June 24, 2017

This paper exploits the State Children’s Health Insurance Program of the United States to investigate impact of a publicly funded health insurance benefit for children on work behavior of adult men and women. Drawing data from the Annual Social and Economic Supplement of the Current Population Survey and employing a triple- difference identification strategy, I find that public health insurance benefit for children decreases labor supply of women but increases that of men. Estimates suggest that, on average, labor force participation rate of women decreased by 7.4 percentage points while that of men increased by 5.5 percentage points as their families became eligible for State Children’s Health Insurance Program. The findings are supported by a number of robustness checks and a falsification exercise.

Source: Impact of Children’s Health Insurance Bene fit on Labor Supply: Evidence from Newly Arrived Immigrants in the United States by Keshar M. Ghimire :: SSRN


Cyclical Job Ladders by Firm Size and Firm Wage by John Haltiwanger, Henry R. Hyatt, Lisa Kahn, Erika McEntarfer :: SSRN

June 24, 2017

We study whether workers progress up firm wage and size job ladders, and the cyclicality of this movement. Search theory predicts that workers should flow towards larger, higher paying firms. However, we see little evidence of a firm size ladder, partly because small, young firms poach workers from all other businesses. In contrast, we find strong evidence of a firm wage ladder that is highly procyclical. During the Great Recession, this firm wage ladder collapsed, with net worker reallocation to higher wage firms falling to zero. The earnings consequences from this lack of upward progression are sizable.

Source: Cyclical Job Ladders by Firm Size and Firm Wage by John Haltiwanger, Henry R. Hyatt, Lisa Kahn, Erika McEntarfer :: SSRN


Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship by Tania Babina :: SSRN

March 6, 2017

Using US Census employer-employee matched data, I show that employer financial distress accelerates the exit of employees to found start-ups. This effect is particularly evident when distressed firms are less able to enforce contracts restricting employee mobility into competing firms. Entrepreneurs exiting financially distressed employers earn higher wages prior to the exit and after founding start-ups, compared to entrepreneurs exiting non-distressed firms. Consistent with distressed firms losing higher-quality workers, their start-ups have higher average employment and payroll growth. The results suggest that the social costs of distress might be lower than the private costs to financially distressed firms.

Source: Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship by Tania Babina :: SSRN


An Aging Dynamo: Demographic Change and the Decline of Entrepreneurial Activity in the United States by Joseph Victor Kopecky :: SSRN

February 7, 2017

The rate of new business startups has fallen drastically over the last thirty-five years, accelerating greatly since the year 2000. Other measures of business dynamism such as the job reallocation rate are consistent with this trend, raising serious concern given the importance that young, high growth, firms have in employment. The timing of this decline coincides with the start of a steady increase in the age of the United States workforce which has accelerated along with the aging of the baby boomers. I document an empirical ‘hump shape’ between an individual’s propensity to select into entrepreneurship as they age. I then construct life cycle model of entrepreneurial choice that accounts for this hump shape, and study a number of channels that link demographic forces to entrepreneurial selection. I find that demographic channels can account for a large portion of the recent decline in startup activity and predict a continued decline as the pool of potential entrepreneurs continues to age. I conclude with a discussion of the potential policy tools that will affect individual’s life cycle risk attitudes and the predicted effects that such measures will have on the rate of new business startups.

Source: An Aging Dynamo: Demographic Change and the Decline of Entrepreneurial Activity in the United States by Joseph Victor Kopecky :: SSRN


Estimating the Employment Effects of Recent Minimum Wage Changes: Early Evidence, an Interpretative Framework, and a Pre-Commitment to Future Analysis by Jeffrey P. Clemens, Michael R. Strain :: SSRN

February 2, 2017

This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015, and offers an interpretative framework to understand why it is of interest to study recent changes in isolation. Given the ongoing transitions of many states’ minimum wage rates, we also set the stage for a pre-committed analysis of the minimum wage changes scheduled for coming years. Through 2015, we estimate that employment among young adults and young individuals with less than a completed high school education expanded modestly less quickly in states that enacted one-time or multi-phase statutory minimum wage increases than in states that enacted no minimum wage increases. Across the specifications we implement and the samples we analyze, many of our estimates are statistically indistinguishable from zero. Data on the longer-run effects of this period’s minimum wage changes will be essential for more fully assessing these changes’ effects and for drawing strong conclusions regarding how minimum wage increases affect employment in this decade’s institutional and economic environment. As data become available for the full 2016 through 2019 calendar years, we will execute and report the results of analyses that follow the road map this paper develops.

Source: Estimating the Employment Effects of Recent Minimum Wage Changes: Early Evidence, an Interpretative Framework, and a Pre-Commitment to Future Analysis by Jeffrey P. Clemens, Michael R. Strain :: SSRN