measuring program impacts on earnings and employment do unemployment insurance wage reports from employers agree with surveys of individuals this article attempts to determine whether wage records reported by employers to state unemployment insurance ui agencies provide a valid alternative to more costly retrospective sample surveys o

distinguished lecture on economics in government the economist vs madmen in authority this lecture given to the society of government economists in january 1995 examines the influence of research on policy and vice versa using three widely believed propositions the first is that government spending is wasteful or ineffective and can readily be cut back in order to reduce the deficit the second is that welfare should be time limited and made conditional on people s behavior the third is that education and training are more than ever the ticket to individual and national prosperity the paper explores the interplay of facts of economic analysis with political and institutional constraints and public values

the benefits and costs of the section 8 existing housing program abstract the demand side section 8 existing housing program begun in 1975 is currently the second largest low income housing program in the united states with over one million units this paper presents estimates of the benefits and costs of the program and examines its allocative and distributive effects the effects of section 8 existing are compared with those under an alternative program of equal subsidy unrestricted cash grants among other things it is found that the average monthly subsidy of 100 is valued by recipients at 83 on average recipients are induced to consume 11 percent more housing and 6 percent less of other goods than they would with the cash grant recipient households near the eligibility income limits do not receive so large a benefit as to become better off than ineligible households the poorest and largest families receive the largest benefit other things equal however most poorer families are excluded while some richer families participate and equally situated families do not receive the same offer of assistance

social and spatial networks in labour markets social connections and referrals are ubiquitous in the labour market both on the job seeker side and on the employer side this article reviews recent developments in the study of referrals highlighting what we have learned regarding the use and impact of referrals on various labour market outcomes and pointing out the increasingly nuanced picture we are gaining on the effects of referrals it then discusses directions for future research emphasizing the importance of using newly available data and combinations of datasets and of making tighter connections with the burgeoning macro labour research that is based on a search and matching framework finally it evaluates the role of referrals from the point of view of policy makers discussing their social welfare implications and ways in which they could be explicitly incorporated into various labour market policies the importance of tighter collaboration between policy makers researchers employers and practitioners is stressed to conduct more rigorous experimentation and evaluation of potential referral based policies and programmes

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

bounds on elasticities with optimization frictions a synthesis of micro and macro evidence on labor supply how can price elasticities be identified when agents face optimization frictions such as adjustment costs or inattention i derive bounds on structural price elasticities that are a function of the observed effect of a price change on demand the size of the price change and the degree of frictions the degree of frictions is measured by the utility losses agents tolerate to deviate from the frictionless optimum the bounds imply that frictions affect intensive margin elasticities much more than extensive margin elasticities i apply these bounds to the literature on labor supply the utility costs of ignoring the tax changes used to identify intensive margin labor supply elasticities are typically less than 1 of earnings as a result small frictions can explain the differences between micro and macro elasticities extensive and intensive margin elasticities and other disparate findings pooling estimates from existing studies i estimate a hicksian labor supply elasticity of 0 33 on the intensive margin and 0 25 on the extensive margin after accounting for frictions

transfers in cash and in kind theory meets the data we review theoretical explanations for in kind transfers in light of the limited empirical evidence after reviewing the traditional paternalistic arguments we consider explanations based on imperfect information and self targeting we then discuss the large literature on in kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations including the samaritan s dilemma pecuniary effects credit constraints asymmetric information amongst agents and political economy considerations our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in kind transfer programs but that some of the other arguments may apply to specific cases political economy considerations must also be part of the story

measuring economic efficiency using inverse optimum weights abstract this paper provides a method to measure the traditional kaldor hicks notion of economic efficiency when taxes affect behavior in contrast to traditional unweighted surplus measuring efficiency requires weighting individual benefits or surplus by the marginal cost to the government of providing a 1 transfer at each income level these weights correspond to the solution to the inverse optimum program in the optimal tax literature they are the social planning weights that would rationalize the status quo tax schedule as optimal i estimate the weights using the universe of us income tax returns from 2012 the results suggest that measuring economic efficiency requires weighting surplus accruing to the poor roughly 1 5 2 times more than surplus accruing to the rich this is because 1 of surplus to the poor can be turned into roughly 1 5 2 of surplus to the rich by reducing the progressivity of the tax schedule following kaldor and hicks original applications i compare income distributions over time in the us and across countries the results suggest us economic growth is 15 20 lower due to increased inequality than is suggested by changes in gdp because of its higher inequality the u s is unable to replicate the income distribution of countries like austria and the netherlands despite having higher national income per capita

family labor supply and the timing of cash transfers evidence from the earned income tax credit abstract this paper exploits the unique disbursement timing and benefit rules of the earned income tax credit eitc to provide new evidence on how families adjust their labor supply in response to receiving anticipated cash transfers i find that income seasonality caused by eitc receipt leads to changes in the intra year labor supply patterns of married women on average receiving a 1 000 payment significantly reduces the proportion of married women who work by 1 3 percentage points in the month when the eitc is received additionally this labor supply response is mainly driven by those who are secondary earners or liquidity constrained

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

does job corps work impact findings from the national job corps study this paper presents findings from an experimental evaluation of job corps the nation s largest training program for disadvantaged youths the study uses survey data collected over four years and tax data over nine years on a nationwide sample of 15 400 treatments and controls the job corps model has promise program participation increases educational attainment reduces criminal activity and increases earnings for several postprogram years based on tax data however the earnings gains were not sustained except for the oldest participants nonetheless job corps is the only federal training program that has been shown to increase earnings for this population

housing demand and neighborhood choice with housing vouchers abstract this paper presents a new model of household choice of neighborhood and housing consumption and uses it to predict the effects of alternative housing voucher policies on the choices of voucher recipients and their levels of wellbeing the model is estimated using household level data from housing voucher recipients in pittsburgh aggregate data on unsubsidized households and a large dataset of neighborhood characteristics including crime rates school quality racial composition and housing prices using the estimated model this study predicts effects of a variety of interesting reforms of the housing voucher program namely a more generous voucher subsidy subsidy amounts that vary with census tract housing prices instead of metropolitan area prices subsidies that are proportional to the market rent of the specific units and a requirement that voucher recipients live in a census tract where the poverty rate is less than 30

the effects of housing and neighborhood conditions on child mortality in this paper we estimate the causal effects on child mortality from moving into less distressed neighborhood environments we match mortality data covering the period from 1997 to 2009 with information on every child in public housing that applied for a housing voucher in chicago in 1997 n 11 680 families were randomly assigned to the voucher wait list and only some families were offered vouchers the odds ratio for the effects of being offered a housing voucher on overall mortality rates is equal to 1 13 for all children 95 ci 0 73 1 70 1 34 for boys 95 ci 0 85 2 05 and 0 21 for girls 95 ci 0 01 1 04

do low income housing subsidies increase the occupied housing stock abstract a necessary condition for justifying a policy such as subsidized low income housing either via tenant based rental assistance or construction of public or private projects is that it has a real effect on market outcomes in this paper we examine one aspect of the real effect of subsidized housing does it increase the housing stock if subsidized housing raises the quantity of occupied housing per capita either more people are finding housing or they are being housed less densely on the other hand if subsidized housing merely crowds out equivalent quality low income housing that otherwise would have been provided by the private sector the housing policy may have little real effect on housing consumption using both census place and msa level data from the decennial census and from the department of housing and urban development we ask whether housing markets with more subsidized housing also have more total housing after accounting for housing demand we find that government financed units raise the total number of units in a market although on average one government subsidized unit adds only one third to one half of a unit to the total housing stock there is less crowd out in more populous markets and more crowd out in places where there is less excess demand for subsidized housing as measured by the number of government financed units per eligible person tenant based housing programs such as section 8 certificates and vouchers seem to be more effective than project based programs at targeting subsidized housing units to people who otherwise would not have their own

a comparison of the labor supply findings from the four negative income tax experiments between 1968 and 1982 the united states federal government sponsored four negative income tax experiments this paper provides a set of consensus estimates of the labor supply responses to these experiments it is found that despite the wide range of treatments and evaluation methodologies the results are remarkably consistent on average husbands reduced labor supply by about the equivalent of two weeks of full time employment wives and single female heads reduced labor supply by about the equivalent of three weeks of full time employment youth reduced labor supply by about the equivalent of four weeks of full time employment estimated income and substitution effects are quite similar to those obtained from nonexperimental studies

safety net the use of vouchers when a place based rental subsidy ends the us government moved to a private ownership model for providing affordable housing in the 1960s which resulted in millions of housing units being developed and governed by affordability restric

long term earnings and employment effects of housing voucher receipt abstract using a propensity score matching approach coupled with difference in differences regression analysis we estimate the effect of housing voucher receipt on the employment and earnings of a large longitudinal sample of low income families for 6 years following voucher receipt our results indicate that voucher receipt has little effect on employment but a negative effect on earnings the negative earnings effect is largest in the years immediately following initial receipt and fades out over time in addition we find that the pattern of recipient earnings responses to voucher receipt differs substantially across demographic subgroups several robustness tests are run to support the reliability of our findings we discuss the implications of our findings for research and policy

the effects of housing assistance on labor supply evidence from a voucher lottery this study estimates the effects of means tested housing programs on labor supply using data from a randomized housing voucher wait list lottery in chicago economic theory is ambiguous about the expected sign of any labor supply response we find that among working age able bodied adults housing voucher use reduces labor force participation by around 4 percentage points 6 percent and quarterly earnings by 329 10 percent and increases temporary assistance for needy families program participation by around 2 percentage points 15 percent we find no evidence that the housing specific mechanisms hypothesized to promote work such as neighborhood quality or residential stability are important empirically jel i38 j22 r23 r38

the future of the income tax the federal income tax has been under attack by the economics profession for more than a decade the attack comes from two directions supply siders who believe that progressive income taxation impairs economic incentives and more traditional economists who would substitute a progressive expenditure tax for the income tax 2 at one time support for the expenditure tax was confined to a few members of our profession including such distinguished names as john stuart mill irving fisher nicholas kaldor and james meade today it is fair to say that many if not most economists favor the expenditure tax or a flat rate income tax this group has joined the opponents of progressive taxation in the attack on the income tax despite an incessant barrage from both groups no country in the world is planning to abandon the income tax or is even considering a personal expenditure tax a wave of tax reform beginning with the u s reform in 1986 has been sweeping the world aimed at improving the income tax not at eliminating it tax preferences formerly regarded as sacrosanct are being removed and there is a distinct movement toward comprehensive income taxation 3 however individual income tax rates are being cut tax progressivity has been declining almost everywhere and reliance on the income tax has been diminishing it will come as no surprise to this audience that i approve of the base broadening feature of the current tax reform movement but i believe that the reduction in the redistributive effect of the income tax has gone too far in this paper i shall show that the progressivity of the u s tax system never very pronounced except during and immediately after the two world wars has been declining for more than two decades and that the tax reform act of 1986 reversed this decline but only slightly consequently we have a long way to go to improve the equity of the tax system i believe this can be done without punitive tax rates that will hurt economic incentives i begin with a brief review of recent changes in the u s distribution of income and follow this with an analysis of the effect of taxes on the income distribution i next examine arguments for and against the income tax with particular emphasis on its effects on economic incentives and its merits when compared with the expenditure tax i then evaluate the income tax as it emerged from the 1986 tax reform and conclude with tjoseph pechman passed away on august 19 1989 his presidential address was delivered at the onehundred second meeting of the american economic association december 29 1989 atlanta georgia joseph a pechman economic studies program the brookings institution 1775 massachusetts avenue nw washington dc 20036 i have benefited from the comments and suggestions on an earlier draft of this paper by henry j aaron richard goode jane g gravelle robert w hartman donald w kiefer herbert e klarman robert d reischauer clifford m winston and h peyton young but they should not be held responsible for the views expressed in this paper i am indebted to richard kasten for various simulations i am also grateful to stephen j kastenberg for research assistance and to diane a shugart valerie m owens and sara c hufham for secretarial assistance some of the more extreme supply siders argued that large tax cuts pay for themselves see for example laffer 1981 but i believe it is fair to say that this view has been totally discredited for a more reasonable supply side view see the economic report of the president 1982 2see for example michael j boskin 1978 david e bradford 1980 charles l ballard don fullerton john shoven and john whalley 1985 paul courant and edward gramlich 1982 martin feldstein 1978 robert hall and alvin rabushka 1985 john kay and mervyn king 1983 charles mclure 1987 mieszkowski 1980 and lawrence summers 1981 it is interesting that the recent popularity of the expenditure tax among economists was stimulated by a tax lawyer william d andrews 1974 3see pechman 1988

residence and source based capital taxation in open economies with infinitely lived consumers abstract in this paper we investigate tax competition in a neoclassical growth model where each country may use both residence and source based capital taxes we show that both types of capital taxes are zero at any interior steady state just as in a closed economy for symmetric countries and even for countries that differ only with respect to size and productivity we prove analytically and verify numerically that the open economy policies coincide exactly with the closed economy policies in all time periods for countries that are asymmetric in other dimensions we find that source based taxes are used to manipulate the intertemporal terms of trade in the short run either way the fiscal externalities of source based taxes vanish once residence based taxes are allowed

in kind transfers cash grants and labor supply abstract in kind and cash transfer programs are compared in their impacts on labor supply it is demonstrated that labor supply is higher under an in kind transfer program if in kind transfers and leisure are hicks substitutes leisure is normal and in kind transfers are over provided it is further shown that under these conditions a one dollar increase in in kind coupled with a one dollar cut in cash transfers increases tax revenues finally the paper proves that weak separability of preferences between leisure and other goods in addition to normality of leisure and normality and over provision of in kind transfers is also sufficient to ensure a higher level of labor supply under in kind transfers

moved to opportunity the long run effects of public housing demolition on children this paper provides new evidence on the effects of moving out of disadvantaged neighborhoods on the long run outcomes of children i study public housing demolitions in chicago which forced low income households to relocate to less disadvantaged neighborhoods using housing vouchers specifically i compare young adult outcomes of displaced children to their peers who lived in nearby public housing that was not demolished displaced children are more likely to be employed and earn more in young adulthood i also find that displaced children have fewer violent crime arrests children displaced at young ages have lower high school dropout rates

a new paradigm for policy reform and economic development throughout much of the world significant institutional changes are in the air wind and water evidence is accumulating that democracy has won the political battle and that markets have won the economic battle some serious scholars have even argued that the history of thought about first principles including those governing political and social organizations has come to an end fukuyama for those who hold this view hegel was simply too early in forecasting the end of the evolution of thought about such first principles nearly two centuries ago the entire marxian experiment was nothing more than a 150 year detour which corroborated hegel s view that the end of history coincided with the emergence of liberal democratic states following the french and american revolutions regardless of whether the history of ideology is over a new consensus on economic political and civil freedoms has emerged this consensus means more than simply adjusting macroeconomic policy achieving stability and selling off a few government owned enterprises in an attempt to set developing countries on a path toward broad based economic growth instead it means creating a vision of an open economy underpinned by an open polity identifying and removing the obstacles to economic participation obstacles that lock the ordinary citizen out of the game enhancing the availability and utility of information resources by shaping incentives and helping to establish the basic rules of social transactions encouraging more efficient organization of economic activity whether by market hierarchy or hybrid modes williamson in ways that may lead to fundamental restructuring of an economy and fostering institutional frameworks that expand the role of human choice and promote the full panoply of entrepreneurial energies

compensation and political feasibility facilitating welfare improving coalitions there is a broad consensus among economists policymakers and informed citizens that free market economies do not preclude many inefficiencies in resource allocation there are many circumstances where policy interventions have the potential to achieve a pareto improvement in the sense of making some people better off without making others worse off the challenge to any particular market oriented society is to design those mechanisms organizations and institutions that identify the limitations of free markets and result in those reforms that seek pareto improved outcomes

there is no free house abstract this paper estimates the effect of a housing relocation program on the labor supply and living conditions of low income households across major cities in south africa using panel microdata collected between 2008 and 2014 it exploits the arbitrary eligibility rules of the policy with a fuzzy regression discontinuity design to obtain reduced form estimates there are three main findings first in the short term of 2 to 4 years following relocation the labor supply of recipient households decreases driven mostly by a reduction of female hours second the large increase in distance km to economic opportunities seems to be an important factor behind the decline directly or indirectly through family shifts in earning strategies finally evidence is limited regarding improvements in housing and neighborhood quality overall there is no clear indication that the net welfare effect of relocation is positive

in kind transfers and work incentives recent developments in rationing theory are used to examine the differences between the effects of in kind and cash transfers on labor supply it is not possible to tell a priori which type of transfer will cause the greater reduction in hours of work the answer depends on the extent to which in kind transfers distort consumption choices and on the relationship between the transferred commodities and leisure hicks allen complements can cause greater reductions in labor supply than equally generous cash transfers while strong hicks allen substitutes can induce increases in market work

evaluating public programs with close substitutes the case of head start this paper empirically evaluates the cost effectiveness of head start the largest early childhood education program in the united states using data from the randomized head start impact study hsis we show that head start draws a substantial share of its participants from competing preschool programs that receive public funds this both attenuates measured experimental impacts on test scores and reduces the program s net social costs a cost benefit analysis demonstrates that accounting for the public savings associated with reduced enrollment in other subsidized preschools can reverse negative assessments of the program s social rate of return estimates from a semi parametric selection model indicate that head start is about as effective at raising test scores as competing preschools and that its impacts are greater on children from families unlikely to participate in the program efforts to expand head start to new populations are therefore likely to boost the program s social rate of return provided that the proposed technology for increasing enrollment is not too costly

mechanism experiments and policy evaluations randomized controlled trials are increasingly used to evaluate policies how can we make these experiments as useful as possible for policy purposes we argue greater use should be made of experiments that identify the behavioral mechanisms that are central to clearly specified policy questions what we call mechanism experiments these types of experiments can be of great policy value even if the intervention that is tested or its setting does not correspond exactly to any realistic policy option

the impact of housing assistance on child outcomes evidence from a randomized housing lottery one long standing motivation for low income housing programs is the possibility that housing affordability and housing conditions generate externalities including on children s behavior and long term life outcomes we take advantage of a randomized housing voucher lottery in chicago in 1997 to examine the longterm impact of housing assistance on a wide variety of child outcomes including schooling health and criminal involvement in contrast to most prior work focusing on families in public housing we focus on families living in unsubsidized private housing at baseline for whom voucher receipt generates large changes in both housing and nonhousing consumption we find that the receipt of housing assistance has little if any impact on neighborhood or school quality or on a wide

landlords avoid tenants who pay with vouchers this paper uses a correspondence experiment with fictional housing applicants to test how landlords respond to tenants paying with a subsidized voucher landlords respond positively to those wishing to pay by voucher only half as often as to those indicating no such desire within the set of apartments eligible for voucher rent limits the voucher penalty increases with monthly rent landlord behavior places quantitatively important restrictions on the quantity and type of apartments available to voucher recipients

housing vouchers income shocks and crime evidence from a lottery abstract employing exogenous variation in randomized wait list positions assigned using a lottery we identify the causal effects of section 8 housing vouchers on arrests of adult household heads based on administrative records from houston we find that voucher receipt has no effect on the likelihood of arrest even among the groups with the highest propensities for crime the vouchers have no impact income effects for these adults are particularly large relative to neighborhood effects leading us to believe that this large income shock does little to alleviate financial pressures that could lead to crime

labour supply effects of winning a lottery our article investigates how winning a substantial lottery prize affects labour supply analysing data from dutch state lottery winners we find that winning a lottery prize reduces labour earnings in the year of the winning as well as in the years after the winning this suggests that winning a lottery prize makes one work fewer hours the effects are small but statistically significant we do not find a significant effect of lottery prizes on the probability of being employed

does emergency financial assistance reduce crime abstract does emergency financial assistance reduce criminal behavior among those experiencing negative shocks to address this question we exploit quasi random variation in the allocation of temporary financial assistance to eligible individuals and families that have experienced an economic shock chicago s homelessness prevention call center hpcc connects such families and individuals with assistance but the availability of funding varies unpredictably consequently we can determine the impact of temporary assistance on crime by comparing outcomes for those who call when funds are available to those who call when no funds are available linking this call center information to arrest records from the chicago police department we find some evidence that total arrests fall between 1 and 2 years after the call for violent crime police arrest those for whom funds were available 51 less often than those who were eligible but for whom no funds were available single individuals drive this decrease the decline in crime appears to be related in part to greater housing stability being referred to assistance significantly decreases arrests for homelessness related outdoor crimes such as trespassing however we also find that financial assistance leads to an increase in property crime arrests this increase is evident for family heads but not single individuals the increase is mostly due to shoplifting and the timing of this increase suggests that financial assistance enables some families to take on financial obligations that they are subsequently unable to meet overall the change in the mix of crime induced by financial assistance generates considerable social benefits due to the greater social cost of violence

do means tested transfers reduce labor supply abstract it is frequently argued that recipients of means tested government transfers work less than they would in the absence of the transfer this note shows that this conclusion may not be accurate for many participants in a major housing program