Working Papers
Abstract: What are the business cycle implications of the fiscal impact of immigrants? Public and political concerns over the effects of immigration on the U.S. public finances heighten during recessions. This paper estimates the changes to the fiscal impact of immigration over the business cycle (2006 - 2018). I focus on the intensive margin - how much more likely are immigrants to make and receive transfers from the government?; and the extensive margin - how much do immigrants contribute to the government balances? The likelihood that an immigrant receives individual benefits decreases (pro-cyclical) relative to a native during a downturn. The difference in the net contributions between immigrants and natives is consistently positive and increases post-2012. These dynamic changes over the business cycle are due to variations in the immigrant composition since immigrants are more likely to be positively selected during recessions.
Abstract: We propose a simple way to address an endogeneity problem in tax multiplier studies. The endogeneity arises because lawmakers tend to propose and legislate tax cuts in anticipation of a slowing economy, making it difficult to identify the causal impact of tax changes on aggregate output. Although all proposed tax changes are likely to be correlated with the output expectations of lawmakers, only the legislated tax changes directly impact the economy. Hence, proposed tax changes that ultimately fail to become law can serve as a proxy for the unobserved output expectations of lawmakers. We web-scrapped data on proposed tax changes and the legislation process from the JCT and CongressGov websites to prepare a novel dataset. Using this proxy method and novel data on failed tax proposals, we obtain a tax multiplier of around -0.46 to -2.06 for the United States from 1975 to 2017. Our approach can have a wide variety of applications to other fiscal multiplier studies.
Presented at the 2019 ASSA Conference, American Economic Association in Atlanta, GA
Abstract: This paper studies the extent of the productivity gains in the IT-intensive manufacturing sector between 1980 and 2009. The four-factor productivity estimation assumes that average worker efficacy remains constant. However, changes to labour shares directly impacts the average worker efficacy in a sector depending on the alignment of comparative and absolute advantage. I use the methodology of Young (2014) to estimate the elasticity of average worker efficacy and changing labour allocations (+1.4) and use that to remeasure total factor productivity growth. The revised productivity measures provide some evidence that the lack of observed productivity gains in the IT-intensive manufacturing sectors is caused by a measurement issue resulting from the changing labour shares.
Abstract: This paper focuses on estimating the productivity in the Indian Manufacturing Industries. However endogeneity concerns due to the existence of simultaneity and selection bias dictate that an inconsistent estimate of the parameters will be obtained unless these biases are addressed. This paper discusses the pros and cons of the traditional approaches such as the Instrumental Variables method and the Fixed Effects method as well as the proxy variable approaches such as those introduced by Levinsohn and Petrin (2003). This includes a discussion on the direction of these biases and the extent of their correction.
Abstract: We propose a simple way to address an endogeneity problem in tax multiplier studies. The endogeneity arises because lawmakers tend to propose and legislate tax cuts in anticipation of a slowing economy, making it difficult to identify the causal impact of tax changes on aggregate output. Although all proposed tax changes are likely to be correlated with the output expectations of lawmakers, only the legislated tax changes directly impact the economy. Hence, proposed tax changes that ultimately fail to become law can serve as a proxy for the unobserved output expectations of lawmakers. We web-scrapped data on proposed tax changes and the legislation process from the JCT and CongressGov websites to prepare a novel dataset. Using this proxy method and novel data on failed tax proposals, we obtain a tax multiplier of around -0.46 to -2.06 for the United States from 1975 to 2017. Our approach can have a wide variety of applications to other fiscal multiplier studies.
Presented at the 2019 ASSA Conference, American Economic Association in Atlanta, GA
Abstract: This paper studies the extent of the productivity gains in the IT-intensive manufacturing sector between 1980 and 2009. The four-factor productivity estimation assumes that average worker efficacy remains constant. However, changes to labour shares directly impacts the average worker efficacy in a sector depending on the alignment of comparative and absolute advantage. I use the methodology of Young (2014) to estimate the elasticity of average worker efficacy and changing labour allocations (+1.4) and use that to remeasure total factor productivity growth. The revised productivity measures provide some evidence that the lack of observed productivity gains in the IT-intensive manufacturing sectors is caused by a measurement issue resulting from the changing labour shares.
Abstract: This paper focuses on estimating the productivity in the Indian Manufacturing Industries. However endogeneity concerns due to the existence of simultaneity and selection bias dictate that an inconsistent estimate of the parameters will be obtained unless these biases are addressed. This paper discusses the pros and cons of the traditional approaches such as the Instrumental Variables method and the Fixed Effects method as well as the proxy variable approaches such as those introduced by Levinsohn and Petrin (2003). This includes a discussion on the direction of these biases and the extent of their correction.
Work in Progress Papers
- The Fiscal Impact of Immigration in the United States and Canada (with Dr Ana Damas de Matos, OECD)
- The Dynamic Effects of Tax Reforms (with Dr Ethan Ilzetzki, LSE)
- The Labour Market Effects due to Forced Migration during the India-Pakistan Partition