Book

The Redistribution Recession

Casey B. Mulligan

Published in print November 2012 | ISBN: 9780199942213
Published online January 2013 | e-ISBN: 9780199980772 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199942213.001.0001
The Redistribution Recession

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Beginning in 2007, major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways. Many of these changes were reasonable reactions to economic events, with the intention of helping people endure the recession. But the increased redistribution itself also altered the path of the economy—and created employment losses according to age, skill and family composition—by dulling incentives for people to maintain their own living standards. This book presents evidence contradicting the Keynesian notions that work incentives suddenly stop mattering during a recession, or when the interest rate on Federal Funds approaches zero. This book uses prior results from labor economics and public finance to estimate that the labor market contracted two to three times more than it would have if redistribution policies had remained constant. In doing so, it offers novel interpretations of the interplay between unemployment and financial markets during the Great Recession of 2008–9.

Keywords: labor market; marginal tax rates; 2008–9 recession; social safety net; implicit taxes; productivity; work incentives; unemployment insurance; food stamps; economic stimulus

Book.  320 pages.  Illustrated.

Subjects: Public Economics

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Table of Contents

Introduction in The Redistribution Recession

Chapter

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The Rise of Labor Productivity in The Redistribution Recession

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The Expanding Social Safety Net in The Redistribution Recession

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Supply and Demand in The Redistribution Recession

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