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David Powell

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Full-Text Articles in Econometrics

Synthetic Control Estimation Beyond Case Studies: Does The Minimum Wage Reduce Employment?, David Powell Dec 2016

Synthetic Control Estimation Beyond Case Studies: Does The Minimum Wage Reduce Employment?, David Powell

David Powell

Panel data are often used in empirical work to account for fixed additive time and unit effects.  The synthetic control estimator relaxes the assumption of additive effects for case studies in which a treated unit adopts a single policy.  This paper generalizes the case study synthetic control estimator to estimate treatment effects for multiple discrete or continuous variables, jointly estimating the treatment effects and synthetic controls for each unit.  Applying the estimator to study the disemployment effects of the minimum wage for teenagers, I estimate an elasticity of -0.44, substantially larger in magnitude than estimates generated using additive fixed effects.

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Does Labor Supply Respond To Transitory Income? Evidence From The Economic Stimulus Payments Of 2008, David Powell Jan 2015

Does Labor Supply Respond To Transitory Income? Evidence From The Economic Stimulus Payments Of 2008, David Powell

David Powell

Tax policy is often used to encourage consumer spending in recessions and a growing literature finds evidence that households increase short-term spending in response to receipt of tax rebates. The literature has largely ignored the effect on labor supply as rebates may crowd out labor earnings and households may consume additional leisure. The responsiveness of labor supply to transitory income has been underexplored more broadly so it is difficult to predict this labor supply effect. I exploit the randomized timing of the 2008 economic stimulus payments to study the effects of transitory income on monthly household labor earnings. Rebates can …

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