Kline, Pat, et al. “
Who Profits from Patents? Rent-sharing at Innovative Firms”.
Quarterly Journal of Economics 134.3 (2019): ,
134, 3, 1343–1404. Web.
NBER WP 25245AbstractThis paper analyzes how patent-induced shocks to labor productivity propagate into worker compensation using a new linkage of US patent applications to US business and worker tax records. We infer the causal effects of patent allowances by comparing firms whose patent applications were initially allowed to those whose patent applications were initially rejected. To identify patents that are ex-ante valuable, we extrapolate the excess stock return estimates of Kogan et al. (2017) to the full set of accepted and rejected patent applications based on predetermined firm and patent application characteristics. An initial allowance of an ex-ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex-ante value patents yield no detectable effects on firm outcomes. Patent allowances lead firms to increase employment, but entry wages and workforce composition are insensitive to patent decisions. On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings. This share is roughly twice as high among workers present since the year of application. These earnings effects are concentrated among men and workers in the top half of the earnings distribution, and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace.
Manuscript.pdf
Appendix.pdf
Replication.zip
Slides.pdf Fajgelbaum, Pablo, et al. “
State Taxes and Spatial Misallocation”.
Review of Economic Studies 86.1 (2019): ,
86, 1, 333–376. Web.
NBER WP 21760Abstract
We study state taxes as a potential source of spatial misallocation in the United States. We build a spatial general equilibrium framework that incorporates salient features of the U.S. state tax system, and use changes in state tax rates between 1980 and 2010 to estimate the model parameters that determine how worker and firm location respond to changes in state taxes. We find that heterogeneity in state tax rates leads to aggregate welfare losses. In terms of consumption equivalent units, harmonizing state taxes increases worker welfare by 0.6 percent if government spending is held constant, and by 1.2 percent if government spending responds endogenously. Harmonization of state taxes within Census regions achieves most of these gains. We also use our model to study the general equilibrium effects of recently implemented and proposed tax reforms.
Manuscript.pdf
Appendix.pdf Zidar, Owen. “
Tax Cuts for Whom? Heterogeneous Effects of Tax Changes on Growth and Employment”.
Journal of Political Economy 127.3 (2019): ,
127, 3, 1437-1472. Web.
NBER WP 21035Abstract
This paper investigates how tax changes for different income groups affect aggregate economic activity. I construct a measure of who received (or paid for) tax changes in the postwar period using tax return data from NBER's TAXSIM. I aggregate each tax change by income group and state. Variation in the income distribution across U.S. states and federal tax changes generate variation in regional tax shocks that I exploit to test for heterogeneous effects. I find that the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups, and that the effect of tax cuts for the top 10% on employment growth is small.
Coverage: Washington Post, Bloomberg, Forbes, WSJ, Moneyweek, Washington Post, Financial Times, Washington Post, Marketwatch, Congressional Quartely, International Business Times, Washtington Post, Reuters, Huffington Post, International Business Times, The New York Times (Economix), Capital Ideas, Washington Post.
Manuscript.pdf
Appendix.pdf
Replication.zip