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Browsing PERC Publications by Issue Date, starting with "2018"
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Item Persistent Effects of Teacher-Student Gender Matches(Private Enterprise Research Center, Texas A&M University, 2018-01-18) Meer, Jonathan; Lim, JaegeumThe absence of same gender role models in STEM fields has been shown to discourage female student participation in STEM fields of study. In PERC Working Paper 1706, Persistent Effects of Teacher-Student Gender Matches, PERC professor Jonathan Meer and co-author Jaegeum Lim study the long term effects of teacher-student gender matches at the secondary school level.Item Risk and Risk Aversion Effects in Contests with Contingent Payments(Private Enterprise Research Center, Texas A&M University, 2018-01-18) Liu, Liqun; Meyer, Jack; Rettenmaier, Andrew J.; Saving, Thomas R.Firms seeking new products, investors backing competitors, and government agencies in search of design solutions are all examples of different models of contest design found in the marketplace. In PERC’s working paper 1707, Risk and Risk Aversion Effects in Contests with Contingent Payments, authors Liqun Liu, Jack Meyer, Andrew J. Rettenmaier, and Thomas R. Saving analyze contests with contingent payment of costs where only the winner pays for the resources used in the contest.Item Tax Reform...(Private Enterprise Research Center, Texas A&M University, 2018-01-18) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.The passage of the biggest tax reform bill in decades, the Tax Cuts and Jobs Act, comes with a substantial cut in the corporate tax rate and vast changes to the individual income tax code. In the PERCspectives on Policy Winter 2018 edition, Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier examine the economic rationales for corporate tax reform and its relationship to household income, the effects of individual tax code changes, and the bill's overall contribution to growing federal liabilities.Item Revisionist Economic History? Potential GDP in the United States(Private Enterprise Research Center, Texas A&M University, 2018-03-01) Jansen, Dennis W.; Ross, AaronU.S. Gross Domestic Product (GDP) has finally caught up with the Congressional Budget Office (CBO) estimates of potential GDP as of late 2017, even though the National Bureau of Economic Research dates the end of the Great Recession in 2009. This has been a widely recognized long slow recovery back to ‘full employment.’ What is less widely recognized is that this catch-up of actual GDP with potential GDP has occurred as much from CBO downward revisions of its estimates of potential GDP as from growth in actual GDP. Real time projections of potential and actual GDP given by the Congressional Budget Office to policymakers widely underestimated the severity of the recession and overestimated the U.S. economy’s ability to recover. These errors have real-time implications: policymakers used these estimates to assess the level of stimulus needed to boost the economy. This report examines CBO estimates of potential GDP, including estimates of historical values and forecasts of future values, and documents how the CBO continued to revise downward its potential GDP estimates for years after the end of the Great Recession. These CBO revisions were changes in both forecasts of future potential GDP values and estimates of past values of potential GDP. The authors also examine the behavior of factors contributing to the CBO revisions, including changes in the labor force participation rate.Item Taxation in the Fifty States, With Special Attention on the Lone Star State(Private Enterprise Research Center, Texas A&M University, 2018-03-30) Jansen, Dennis W.; Neumann, Corbin J.State taxes have been in the news nationally due to changes in the deductibility of state income taxes on federal income tax returns, as well as locally, as citizens in Texas and other states protest rising property taxes. State and local taxes differ of course across state (and local) boundaries. Given the outcry about property taxes in particular, the authors look at state-level data to examine how various states collect tax revenue, paying particular attention to how each relies on personal income taxes, property taxes, and sales taxes. This study illustrates the relative size of total tax collections by each state, with some state collecting a far higher percentage of their citizen’s personal income compared to other states. This study also looks at the intensity with which each of these various taxes are levied, examining how income taxes, property taxes, and sales tax vary relative to personal income across the fifty states.Item Fear the Machine?(Private Enterprise Research Center, Texas A&M University, 2018-03-30) Jansen, Dennis W.; Bradley, Michael D.Advanced automation and artificial intelligence, or ‘robot’ technology use, continues to expand across many industries. Recent decreasing labor market movements fuels the question: How do these technologies affect workers’ wages and jobs? Authors Dennis W. Jansen and Michael D. Bradley study the effects of automation and artificial intelligence on employment and labor income over multiple generations. This paper studies the potential impact of automation using two versions of an overlapping generations model, one with a single production technology where the share of output shifts from labor to capital, and one with two separated technologies where traditional technology and automation compete for labor and capital. Findings show that during the transition period, shifting to technology that uses limited labor can potentially lower wages and labor income. However, a policy of subsidizing labor can mitigate the decline in capital stock and negative economic impacts.Item Hydraulic Fracking: A Story of American Innovation(Private Enterprise Research Center, Texas A&M University, 2018-04-01) Jansen, Dennis W.; Sasso, JohnA regular misconception is that Saudi Arabia is the largest producer of energy from oil and natural gas. Despite massive oil production, Saudi Arabia produces less than 1% of total energy from oil and gas. The U.S. currently holds that distinction, producing over 49 quadrillion Btu of energy in 2016. How has the U.S. climbed to the top spot and reversed the long-run trend of decreasing production? Authors Dennis W. Jansen and John Sasso examine the history and technologies used in hydraulic fracking and analyze natural gas production from each state.Item Discounting Environmental Benefits to Future Generations: Implications of a Coordinating Debt Policy and Tax Distortions in the Capital Market(Private Enterprise Research Center, Texas A&M University, 2018-04-28) Liu, Liqun; Rettenmaier, Andrew J.; Saving, Thomas R.Looking beyond today’s fiscal problems in the U.S., the debate about the how to best incorporate the well-being of subsequent generations in current public policy discussions continues. Authors Liqun Liu, Andrew J. Rettenmaier, and Thomas R. Saving discuss coordinating the evaluation of long-term environmental projects with debt reduction given that both benefit future generations. This paper establishes a cost-benefit rule used to assess whether long-term projects are Pareto improving with a focus on how the generational benefits and costs should be discounted. This paper goes beyond the existing analysis of intergenerational discounting by exploring the implications of tax distortions in the capital market that drives a wedge between the marginal productivity of capital (the gross rate) and the consumer’s interest rate (the net rate) which have historically been in the range of 7% and 3%, respectively. It concludes that while the lower net rate should be used for future benefits within generations, the higher gross rate is the relevant discount rate for future generations.Item U.S. Budget Woes, the CBO Projections(Private Enterprise Research Center, Texas A&M University, 2018-04-30) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.The latest projections from the Congressional Budget Office are worrisome and were expected to be so. In fact, federal debt held by the public is projected to be 106% of GDP by 2028 and deficits are expected to persist throughout the 10 year forecast horizon. In the Spring 2018 Issue of PERCspectives on Policy, Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier discuss the CBO's forecasts and the causes and long-lasting effects of these deficits.Item Federal Entitlement Spending(Private Enterprise Research Center, Texas A&M University, 2018-06-25) Liu, Liqun; Rettenmaier, Andrew J.; Saving, Thomas R.Federal spending has hovered at around 20% of GDP for the past 50 years. Recent CBO reports forecast deficits averaging around 5% of GDP each year for the next 10 years, combined with rising federal spending continue to raise the federal debt to unprecedented peacetime levels. Today, Social Security, Medicare and Medicaid are the three main transfer programs – accounting for almost 50% of all federal government outlays. In PERC Policy Study 1801, authors Liqun Liu, Andrew J. Rettenmaier and Thomas R. Saving compare federal spending over time, discuss the causes behind the rise in spending, and focus on transfer program reforms. The paper provides workable alternatives that constrain spending by adjusting the full retirement age and benefit formula of Social Security and Medicare, and also redefining the basis by which each state receives federal Medicaid contributions.Item Interview with Dr. John Cogan(Private Enterprise Research Center, Texas A&M University, 2018-07-06) Rettenmaier, Andrew J.Dr. John Cogan was the spring, 2018 recipient of the Kirby Distinguished Visiting Professorship. During his visit to Texas A&M University, he was interviewed by Dr. Andrew J. Rettenmaier.Item The Effect of Own-Gender Juries on Conviction Rates(Private Enterprise Research Center, Texas A&M University, 2018-07-11) Hoekstra, Mark; Street, BrittanyThe right to an impartial jury is the cornerstone of the U.S. justice system and is enshrined in the Bill of Rights, but are these juries truly impartial, or do they favor defendants who are similar to themselves? In PERC working paper 1803, PERC’s Rex Grey Professor Mark Hoekstra and co-author Brittany Street study whether gender matches between jurors and defendants affect criminal conviction rates using administrative data on the juror selection process and trial proceedings for two large counties in Florida. Findings show that own-gender juries result in significantly lower conviction rates on drug charges, though no evidence of effects were found for other charges. Estimates indicate that a one standard deviation increase in expected own-gender jurors (and estimated 10 percentage points) results in a 19 percentage point reduction in conviction rates on drug charges and a 13 percentage point decline in the likelihood of being sentenced to at least some jail time.Item Fear the Machine?(Private Enterprise Research Center, Texas A&M University, 2018-07-11) Jansen, Dennis W.; Bradley, Michael D.How do the technological changes caused by increased automation and A.I. affect workers’ wages and jobs? This article summarizes PERC working paper 1801, PERC’s Director Dennis W. Jansen and co-author Michael D. Bradley study the effects of automation and artificial intelligence on employment and labor income over multiple gen-erations.Item The Effect of Own-Gender Juries on Conviction Rates(Private Enterprise Research Center, Texas A&M University, 2018-07-11) Hoekstra, Mark; Street, BrittanyThe right to an impartial jury is the cornerstone of the U.S. justice system and is enshrined in the Bill of Rights, but are these juries truly impartial, or do they favor defendants who are similar to themselves? In PERC working paper 1803, PERC’s Rex Grey Professor Mark Hoekstra and co-author Brittany Street study whether gender matches between jurors and defendants affect criminal conviction rates.Item Alternative Approaches to Comparative nth-Degree Risk Aversion(Private Enterprise Research Center, Texas A&M University, 2018-07-30) Liu, Liqun; Neilson, William S.Economists have used the risk premium and the probability premium that are revealed through individual choices to compare how risk averse two individuals are. These behavioral, or choice-based, measures of risk aversion – such as the risk premium and the probability premium – are important because they can be used in experimental investigations into individual characteristics like gender, age, or income that affect the strength of risk aversion. Higher- degree risk aversion (e.g. downside risk aversion or prudence) has recently been shown to play critical roles in decision making under uncertainty. Consequently, it is important to study how to measure the strength of higher-degree risk aversion. In working paper 1805, Alternative Approaches to Comparative nth-Degree Risk Aversion, PERC researcher Liqun Liu and co-author William S. Neilson generalize the three main existing behavioral approaches to measuring risk aversion – including the probability premium approach, the risk premium approach, and the comparative statistics approach – to measuring higher-degree risk aversion. Findings show that, within the expected utility framework, behavior patterns in these behavioral approaches to measuring higher-degree risk aversion are equivalent and can be characterized by the same set of conditions on the utility functions.Item The Relationship Between Health Insurance and Early Retirement: Evidence from the Affordable Care Act(Private Enterprise Research Center, Texas A&M University, 2018-08-27) Aslim, Erkmen GirayBeginning with the first round of the Affordable Care Act’s Medicaid expansions, which specifically targeted low-income adults without dependent children, the uninsured rate reached a record low in 2015. However, the spillover effects of the Medicaid expansion, such as the relationship between health insurance and labor supply, have become a point of interest for both researchers and policy makers alike. In working paper 1807, PERC postdoctoral research associate Erkmen Giray Aslim investigates whether the increased availability of Medicaid through the ACA’s expansions affects the retirement decisions of targeted workers. Among low-income childless adults, findings show that the expansions increased Medicaid enrollment for both men and women, and that enrollment resulted in women retiring early, whereas no significant change was observed for men.Item Household Debt Overhang and Transmission of Monetary Policy(Private Enterprise Research Center, Texas A&M University, 2018-08-27) Zubairy, Sarah; Alpanda, SamiMonetary policy was used during the Great Recession to stimulate the U.S. economy, but were its effects dependent on prevailing levels of high household debt? In working paper 1806, PERC Professor Sarah Zubairy and coauthor Sami Alpanda study the role of household debt on the effectiveness of monetary policy shocks. Using a state-dependent time-series model, findings show that the effectiveness of monetary policy is reduced during periods of high household debt. A small-scale theoretical model on interest rate cuts and home-equity loans points to one possibility why this may occur- higher initial debt levels may slow down the increase in home equity extractions when policy rates are cut.Item Whither the Trade War with China?(Private Enterprise Research Center, Texas A&M University, 2018-09-21) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.In the ongoing trade dispute between the U.S. and China, the U.S. has demanded reducing or even eliminating tariff and non-tariff barriers and that China halt intellectual property theft and forced technology transfers. The current U.S. position has evolved from its earlier focus on attempting to reduce the trade deficit with China. Which country has the most to lose if the dispute escalates further? In this issue of PERCspectives on Policy, Dennis W. Jansen, Liqun Liu, and Andrew J. Rettenmaier discuss the history of U.S. – China trade relationship, the effects of the tariffs, and the bargaining and economic positions of each country as the trade dispute continues.Item Economic Indicators of the College Station-Bryan MSA, September 2018(Private Enterprise Research Center, Texas A&M University, 2018-09-27) Bullock, Ashley; Jansen, Dennis W.; Navarro, Carlos I.; Rettenmaier, Andrew J.The Business-Cycle Index rose at an annualized average of 3.9% in July, about the same growth rate as in June. The unemployment rate dropped to 2.9% in July, a slight decrease from June. Real (inflation-adjusted) wages grew at an annual rate of 14.3% during the first quarter of 2018. Also, real taxable sales stood at $333.6 million in July and are up 7.1% from the same time last year in the College Station-Bryan MSA.Item Texas Movers - Migration and Income Along the Border(Private Enterprise Research Center, Texas A&M University, 2018-10-01) Navarro, Carlos I.Not only are Texas residents among the most mobile in the nation, but over a million Texans move from one county to another within the state. This brings important questions to the table regarding urban, education, healthcare, and security policy planning at the local and state level. In this report, author Carlos Navarro analyses the major migration links for outflows and inflows of households and individuals who live along the Texas-Mexico border, with special attention placed on the Rio Grande Valley and the El Paso commuting zones. A comparison of the average income of movers relative to non-movers is also presented.