Table 6: Wage Effects of the Tax Cut

||(1)<br>log(wage)|(2)<br>log(wage)|(3)<br>log(wage)|(4)<br>log(wage)|(5)<br>log(wage)|(6)<br>log(wage)|(7)<br>log(wage)|(8)<br>log(wage)|
|---|---|---|---|---|---|---|---|---|
|After _×_ Treated|0.022|-0.019<sup>_∗_</sup>|0.008|0.007|-0.026|0.021<sup>_∗∗_</sup>|-0.021<sup>_∗∗_</sup>|0.011|
||[0.018]|[0.010]|[0.007]|[0.006]|[0.113]|[0.009]|[0.009]|[0.016]|
|After _×_ Treated _×_ TCR||0.221<sup>_∗∗_</sup>|-0.077|-0.071|0.249|-0.191<sup>_∗∗_</sup>|0.149<sup>_∗_</sup>|-0.129|
|||[0.090]|[0.070]|[0.053]|[0.925]|[0.085]|[0.081]|[0.215]|
|High TFP _×_ After _×_ Treated|||-0.046<sup>_∗∗∗_</sup>|-0.041<sup>_∗∗∗_</sup>|-0.068|-0.040<sup>_∗∗∗_</sup>|-0.045<sup>_∗∗∗_</sup>|-0.053<sup>_∗∗_</sup>|
||||[0.013]|[0.011]|[0.118]|[0.006]|[0.014]|[0.021]|
|High TFP _×_ After _×_ Treated _×_ TCR|||0.678<sup>_∗∗∗_</sup>|0.602<sup>_∗∗∗_</sup>|0.905|0.600<sup>_∗∗∗_</sup>|0.632<sup>_∗∗∗_</sup>|0.780<sup>_∗∗∗_</sup>|
||||[0.137]|[0.104]|[1.032]|[0.038]|[0.163]|[0.242]|
|Windfall rate _×_ After _×_ Treated||||||||0.546<sup>_∗_</sup><br>[0.277]|
|Windfall rate _×_ After _×_ Treated _×_ TCR||||||||-5.979<sup>_∗∗_</sup><br>[2.588]|
|**Pass-through rate**|||||||||
|All frms||0.221<sup>_∗∗_</sup>|||||||
|||[0.090]|||||||
|Low TFP|||-0.077|-0.071|0.249|-0.191<sup>_∗∗_</sup>|0.149<sup>_∗_</sup>|-0.129|
||||[0.070]|[0.053]|[0.925]|[0.085]|[0.081]|[0.215]|
|High TFP|||0.602<sup>_∗∗∗_</sup>|0.531<sup>_∗∗∗_</sup>|1.154<sup>_∗∗_</sup>|0.409<sup>_∗∗∗_</sup>|0.781<sup>_∗∗∗_</sup>|0.651<sup>_∗∗∗_</sup>|
||||[0.131]|[0.110]|[0.425]|[0.107]|[0.121]|[0.097]|
|Observations|13,429|97,789|97,789|93,666|4,123|112,713|82,910|97,789|
|New entrants vs. incumbents|new entrants|incumbents|incumbents|incumbents|incumbents|incumbents|incumbents|incumbents|
|Workers|all|all|all|same frm|poached|all|all|all|
|Part-time included|no|no|no|no|no|yes|no|no|
|One vs. two year change|one|one|one|one|one|one|two|one|
|Windfall rate included|no|no|no|no|no|no|no|yes|

_∗ ∗∗ ∗∗∗ p <_ 0 _._ 1, _p <_ 0 _._ 05, _p <_ 0 _._ 01 _Note_ : Table shows difference-in-differences estimates of the impact of the payroll tax cut on private sector wages. Column (1) estimates the effect on wages for new entrants who entered the labor market in the current year and so have less than 12 months employment using equations (11). Columns (2)-(8) estimate the wage change for incumbent workers (who have been continuously employed in the previous 12 months). Column (2) estimates wage change for all firms using equation (12), while columns (3)-(8) estimate heterogeneity by firm productivity using equation (13). Column (3) shows wage changes for all incumbent workers, while columns (4) and (5) show estimates for workers who stayed at the same firm and workers who were poached to another firm, respectively. In all columns except column (6) we focus on full-time workers. In column (6) we also include part-time workers in the analysis. In all columns except in column (7), we compare the wage changes between 2012 and 2013. In column (7) we study two-year wage changes and compare the wage change between 2012 and 2014. In column (8), we also interact the treatment, age, year, and tax cut rate indicators with the firm specific windfall rate, which reflects the size of the windfall received by the firm as a result of the tax cut. Following (Saez, Schoefer and Seim, 2019)) we calculate this as the (lagged) ratio of age- and occupation specific payroll tax cuts payable after the reform and the total payroll. The difference-in-differences estimate compares the change in wages among the 55-57 age group that was affected by the payroll tax cut with the change in employment among the 52 to 54 age group that was not affected by the tax cut. The pass-through rate at low-productivity firms is the _β_ 1 coefficient on the After _×_ Treated _×_ TCR term in equation (13), while at high-productivity firms it is the sum of the _β_ 1 coefficient and the _β_ 3 coefficient on the High TFP _×_ After _×_ Treated _×_ TCR term in equation (13). Standard errors are reported in brackets, clustered at the age _×_ period level.