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Working Paper
Did the Tax Cuts and Jobs Act Create Jobs and Stimulate Growth?
The Tax Cuts and Jobs Act (TCJA) of 2017 is the most extensive overhaul of the U.S. income tax code since the Tax Reform Act of 1986. Existing estimates of TCJA’s economic impact are based on economic projections using pre-TCJA estimates of tax effects. I exploit plausibly exogenous state-level variation in tax changes from TCJA and find that an income tax cut equaling 1 percent of GDP led to a 1.3 percentage point faster job growth and nearly 1.5 percentage points higher GDP growth. The impact on growth was the strongest in the year of the tax change, with much smaller effects in the ...
Journal Article
Less-tight labor market helps Texas grow faster than U.S. during pandemic
Data from the Job Openings and Labor Turnover Survey (JOLTS) indicate that Texas and the U.S. have more openings than people to fill to them. However, the vacancy–unemployment ratio suggests that the state’s labor markets are less tight than the nation’s. Amid widespread reports of worker shortages, Texas' not-so-constricted labor markets have helped the state outpace the nation in job growth.
Journal Article
Texas Sees Coverage Gains Under Health Care Act
While Texas was among the states choosing not to participate in the Medicaid expansion under the Affordable Care Act, it nonetheless has seen improvement in the share of the population with health insurance coverage. Gains are notable among the non-college-educated working-age population in Texas, a state that has long ranked near the bottom in health care coverage nationally.
Journal Article
Spotlight: Texas subprime mortgages: metros vary on risky loans--and delinquencies
The current financial crisis has brought a severe decline in subprime mortgage lending. Like the nation, Texas and its metros still have exposure to existing loans. Housing prices, unemployment and overall economic activity will play a significant part in determining how many of them run into trouble.
Journal Article
Wage flexibility in Texas may ease impact of tighter monetary policy
Because wages are more flexible in Texas than in other parts of the U.S., the state?s unemployment rate will be less prone to rise when interest rates increase.
Journal Article
Hotter summer days heat up Texans but chill the state economy
As climate change intensifies over the next decade, summer heat waves will likely become more common and severe. The effect on Texas GDP growth is likely to be twice as pronounced as in the rest of the U.S. Meanwhile, the effect on job growth will likely be relatively subdued but vary widely across sectors.
Working Paper
Nonlinear Budget Set Regressions for the Random Utility Model
This paper is about the nonparametric regression of a choice variable on a nonlinear budget set when there is general heterogeneity, i.e., in the random utility model (RUM). We show that utility maximization makes this a three-dimensional regression with piecewise linear, convex budget sets with a more parsimonious specification than previously derived. We show that the regression allows for measurement and/or optimization errors in the outcome variable. We characterize all of the restrictions of utility maximization on the budget set regression and show how to check these restrictions. We ...
Journal Article
Did home equity restrictions help keep Texas mortgages from going underwater?
With relatively stable house prices in Texas, the incidence of underwater mortgages was a fraction of what occurred in hard-hit states.
Journal Article
Globalizing Texas: direct investment and business cycles
Hundreds of foreign companies, employing almost 400,000 workers, have put down roots in Texas. The highest concentration of jobs is in manufacturing, but more foreign firms are finding their way into services. ; Early this decade, Texas exceeded the nation in attracting foreign direct investment (FDI) assets, but the state has since lost its edge. Its FDI-related employment as a share of overall jobs ranks in the middle of the pack. ; In the September/October issue of> Southwest Economy, an article on globalizing Texas focused on export growth and related employment, including jobs in high ...
Working Paper
Did Tax Cuts and Jobs Act Create Jobs and Stimulate Growth? Early Evidence Using State-Level Variation in Tax Changes
The Tax Cuts and Jobs Act (TCJA) of 2017 is the most extensive overhaul of the U.S. income tax code since the Tax Reform Act of 1986. Existing estimates of TCJA’s economic impact are based on economic projections using pre-TCJA estimates of tax effects. Following recent pioneering work of Zidar (2019), I exploit plausibly exogenous state-level variation in tax changes and find that an income tax cut equaling 1 percent of GDP led to a 1 percentage point higher nominal GDP growth and about 0.3 percentage point faster job growth in 2018.