Tax Policy and Local Market Behavior
Author | : Daniel G. Garrett |
Publisher | : |
Total Pages | : 59 |
Release | : 2019 |
ISBN-10 | : OCLC:1293410331 |
ISBN-13 | : |
Rating | : 4/5 (31 Downloads) |
Download or read book Tax Policy and Local Market Behavior written by Daniel G. Garrett and published by . This book was released on 2019 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 2002, the US government has encouraged business investment using accelerated depreciation policies that significantly reduce investment costs. We provide the first in-depth analysis of this stimulus on employment and earnings. Our local labor markets approach exploits cross-industry differences in policy generosity interacted with county-level variation in industry concentration. Places that experience larger decreases in investment costs see a level increase in employment that implies a $53,000 cost-per-job. We find no positive effects on average earnings. In contrast, we document a persistent growth in capital. These results imply a capital-labor substitution elasticity that grows over time and can exceed unity.