I have been the Managing Editor of the Journal of Economic Perspectives since the first issue in Summer 1987. The JEP is published by the American Economic Association, which decided back in 2011–to my delight–that the journal would be freely available online, from the current issue all the way back to the first issue. You can download individual articles or entire issues, and it is available in various e-reader formats, too. Here, I’ll start with the Table of Contents for the just-released Summer 2024 issue, which in the Taylor household is known as issue #149. Below that are abstracts and direct links for all of the papers. I plan to blog more specifically about some of the papers in the few weeks, as well.
______________
Symposium: The Tax Cuts and Jobs Act of 2017
“Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017,” by William G. Gale, Jeffrey L. Hoopes, and Kyle Pomerleau
The Tax Cuts and Jobs Act (TCJA) of 2017 introduced sweeping changes to individual and corporate taxation. We summarize the major provisions, trace the origins of the Act, and compare it to previous tax changes. We also examine the effects on the government budget, economic activity, and distribution of resources. Based on evidence through 2019, we find that the TCJA clearly raised federal debt and increased after-tax incomes, disproportionately increasing incomes for the most affluent. Its effects on GDP and median wages seem modest at best, although clear counterfactuals are difficult to identify. The impact on investment is less certain, and research is only recently emerging that addresses this question. Empirical analysis of longer-term effects may prove difficult due to the disruptions created by the COVID-19 pandemic starting in 2020.
Full-Text Access | Supplementary Materials
“The US Individual Income Tax: Recent Evolution and Evidence,” by Jon Bakija
This paper assesses the current state of the US federal individual taxation, and considers its recent evolution, with an emphasis on the changes to the individual income tax enacted in the 2017 Tax Cuts and Jobs Act (TCJA), and evidence on their impacts. How has the design of the tax changed, and how has this affected tax revenues, the distribution of tax burdens, marginal tax rates, and the breadth of the tax base? What were the rationales for the changes, and what does economics have to contribute to the debate over whether the changes were a good idea? What have we learned so far from empirical research on the impacts of recent changes in individual tax policy, including especially the changes enacted since 2017, and what does this imply for the optimal design of individual taxation?
Full-Text Access | Supplementary Materials
“Lessons from the Biggest Business Tax Cut in US History,” by Gabriel Chodorow-Reich, Owen Zidar, and Eric Zwick
We assess the business provisions of the 2017 Tax Cuts and Jobs Act, the biggest corporate tax cut in US history. We draw five lessons. First, corporate tax revenue fell by 40 percent due to the lower rate and more generous expensing. Second, firms with larger declines in their effective tax wedge increased investment relatively more. In aggregate, we suggest a loose consensus from the literature that total tangible corporate investment increased by 11 percent. Third, the business tax provisions increased economic growth and wages by less than advertised by the Act’s proponents, with long-run GDP higher by less than 1 percent and labor income by less than $1,000 per employee. Fourth, provisions that increase foreign investment by US-based multinationals also boost their domestic operations. Fifth, some of the expired and expiring provisions, such as accelerated depreciation, generate more investment per dollar of tax revenue than others.
Full-Text Access | Supplementary Materials
“US International Corporate Taxation after the Tax Cuts and Jobs Act,” by Kimberly A. Clausing
The root dilemma that informs the past, present, and future of US international taxation is the tension between two desiderata: protecting the corporate tax base from erosion and ensuring the competitiveness of US multinational firms in the world economy. This article begins by exploring that tension, discussing the evidence behind these competing policy goals. It then considers the international tax provisions of the Tax Cuts and Jobs Act of 2017. TCJA enacted transformative changes in US corporate tax policy, but it did not resolve long held policy concerns. While research on TCJA is in early stages, evidence indicates that TCJA substantially reduced corporate tax revenues, that TCJA’s international provisions (as a whole) raised less revenue than expected, that offshoring and profit shifting remain large policy concerns, that changes in US multinational company competitiveness were mixed, and that underlying trends in wages and investment did not change due to TCJA. While TCJA was unable to resolve the tension between competitiveness and tax base protection, the Pillar 2 international tax agreement shows more promise in that regard. As countries throughout the world implement a “country-by-country” minimum tax on multinational income of 15 percent, this has the potential to disrupt long-standing arguments about international corporate taxation.
Full-Text Access | Supplementary Materials
“Are Opportunity Zones an Effective Place-Based Policy?,” by Kevin Corinth and Naomi Feldman
We evaluate the Opportunity Zones provision of the Tax Cuts and Jobs Act, focusing on its targeting and effects on investment and resident outcomes. The policy allowed substantial discretion for state governors to designate Opportunity Zones that were not necessarily the most distressed, though we find that in aggregate their ultimate selections were still somewhat well-targeted. However, we show that the policy is insufficient to encourage investment with a significantly below-market rate of return and provides the largest tax benefits to investment that would have occurred regardless of the policy. Consistent with these features of the policy’s design, a substantial amount of Opportunity Zone investment has been made, including in many lower-income areas. However, it appears that much of the investment would have occurred anyway, and the evidence to date mostly points to limited effects on resident wellbeing.
Full-Text Access | Supplementary Materials
Symposium: Expanding the Appeal of Economics
“Seeking the “Missing Women” of Economics with the Undergraduate Women in Economics Challenge,” by Tatyana Avilova and Claudia Goldin
Economics is among the most popular undergraduate majors, especially in top colleges and universities. However, even at the best research universities and liberal arts colleges men outnumber women by two to one, and overall there are about 2.5 males to every female economics major. We discuss why women major in economics less than men and describe a project to increase the number of female economics majors. The Undergraduate Women in Economics (UWE) Challenge was a randomized controlled trial, with 20 treatment and 68 control schools, that we ran for one year in AY 2015–16 to evaluate the impact of light-touch interventions to recruit and retain female economics majors. Treatment schools received funding, guidance, and access to networking with other treatment schools to implement programs such as providing better information to incoming students about the application of economics, exposing students to role models, providing mentoring, and updating course content and pedagogy. Using 2001–2021 data from the NCES-Integrated Postsecondary Education Data System (IPEDS) on graduating undergraduates (BAs), we find that UWE was effective in increasing the fraction of female BAs who majored in economics relative to men in liberal arts colleges. Large universities did not show an impact of the treatment, although those that implemented their own RCTs showed moderate success in encouraging more women to major in economics. We discuss what we believe worked in the UWE program and speculate on the reasons for differential treatment impact.
Full-Text Access | Supplementary Materials
“Valuing Identity in the Classroom: What Economics Can Learn from Science, Technology, Engineering, and Mathematics Education,” by Sergio Barrera, Susan Sajadi, Marionette Holmes, and Sarah Jacobson
Economics faces stubborn underrepresentation of minoritized identity groups. Economics instructors also largely use antiquated instructional methods. We leverage the literature from the fields of science, technology, engineering, and mathematics education, which have rigorously studied instructional techniques and gathered evidence on a variety of methods that improve learning and reduce demographic gaps. We discuss four broad ideas: active and collaborative learning, role model interventions, modernized design of assessments and feedback, and culturally relevant, responsive, and sustaining pedagogy. We frame these approaches in the context of economics identity, share evidence regarding efficacy, and give examples of how the techniques have been and can be used in economics. In so doing, we provide a set of changes economics instructors can make, large and small, to improve their teaching for all students and to reduce demographic gaps in success and persistence in the field.
Full-Text Access | Supplementary Materials
“Lessons for Expanding the Share of Disadvantaged Students in Economics from the AEA Summer Program at Michigan State University,” by Lisa D. Cook and Christine Moser
Since 1974, the American Economic Association Summer Training Program has provided training and mentoring to students from disadvantaged backgrounds in economics. The aim of the program is to encourage and prepare these students to apply to PhD programs in economics and ultimately to increase diversity in the profession. The program has been hosted by different universities over the years. This paper provides insights and lessons learned from the program’s tenure at Michigan State University from 2016 to 2020. In addition to discussing the structure and outcomes of the program, we provide advice to students, faculty, and potential hosts who may be interested in the AEA Summer Program or similar programs.
Full-Text Access | Supplementary Materials
Articles
“What Went Wrong with Federal Student Loans?” by Adam Looney and Constantine Yannelis
At a time when the returns to college and graduate school are at historic highs, why do so many students struggle with their student loans? The increase in aggregate student debt and the struggles of today’s student loan borrowers can be traced to changes in federal policies intended to broaden access to federal aid and educational opportunities, and which increased enrollment and borrowing in higher-risk circumstances. Starting in the late 1990s, policymakers weakened regulations that had constrained institutions from enrolling aid-dependent students. This led to rising enrollment of relatively disadvantaged students, but primarily at poor-performing, low-value institutions whose students systematically failed to complete a degree, struggled to repay their loans, defaulted at high rates, and foundered in the job market. As these new borrowers experienced similarly poor outcomes, their loans piled up, loan performance deteriorated, and with it the finances of the federal program. The crisis illustrates the important role that educational institutions play in access to postsecondary education and student outcomes, and difficulty of using broadly-available loans to subsidize investments in education when there is so much heterogeneity in outcomes across institutions and programs and in the ability to repay of students.
Full-Text Access | Supplementary Materials
“On the Economics of Extinction and Possible Mass Extinctions,” by M. Scott Taylor and Rolf Weder
Human beings’ domination of the planet has not been kind to many species. This is to be expected. Humans have radically altered natural landscapes, harvested heavily from the ocean, and altered the climate in an unprecedented way. Recent concerns over the extent and rate of biodiversity loss have led to renewed interest in extinction outcomes and speculation concerning humans’ potential role in any future mass extinction. In this paper, we discuss the economic causes of extinction in two high-profile cases—sharks and the North American Buffalo—and then extend our analysis to multiple species and discuss the possibility of mass extinction. Throughout, we present evidence drawn from authoritative data sources with a focus on shark populations to ground our analysis. Despite large gaps in our data, the available evidence reveals a worrisome trend: extinction risks are rising for many species and policymakers have been very slow to react.
Full-Text Access | Supplementary Materials
“Recommendations for Further Reading,” by Timothy Taylor
