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insight

Using conservative estimates, LVT could raise enough funding to cover the entirety of either Defense spending, Social Security, or Medicare + Medicaid (roughly $1.1 trillion per year). More optimistic estimates suggest LVT revenues could reach $3.36 trillion per year, nearly enough to cover the enti…

empirical

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insight

A study of an Iranian cash transfer program that covered over 70 million people, and paid out the equivalent of $16,390 per family in its first year, found that “the program did not affect labor supply in any appreciable way.”

empirical

The program began in 2011, depositing monthly cash deposits into individual accounts at 28% of the median per capita household income. The payments were a response to the loss of e… View

insight

A universal earned income tax credit (refundable up to the first $10,000 on income) would cost roughly $1.3 trillion per year.

empirical

The author proposes an expansion of the EITC in order to capture many of the benefits inherent in a basic income, while avoiding some of the usual points of contention and politica… View

insight

If redistribution does not discourage work, then NIT-style programs better optimize social welfare functions relative to to EITC-style ones.

theoretical

Many existing models assume an 'equity-efficiency' tradeoff between redistribution and efficiency. Higher redistribution is assumed to reduce work incentives, reducing overall econ… View

insight

Primary income-support welfare programs that could be consolidated into a single basic income include: earned income tax credit (EITC), Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), temporary assistance for needy families (TANF), and supplemental security income (S…

empirical

In 2019, the US spent $70 billion on the EITC, $60 billion on SNAP, $31 billion on TANF, and $56 billion on SSI. In total, over $217 billion was spent on these programs alone. View

insight

Trapezoidal income support structures (like the Earned Income Tax Credit) may fail as an economy-wide stabilizer during periods of economic recession.

theoretical

"The Earned Income Tax Credit is the largest and perhaps most effective income support program in the U.S., providing roughly 63 billion dollars to about 25 million recipients in 2… View

insight

In the USA, the 1970's reforms to the welfare system that introduced targeted cash transfer programs conditional on work were associated with higher infant mortality rates.

empirical

"Results from targeted, conditional cash transfer programmes suggested that, in the USA, those that were accompanied by work conditions generally did not yield positive effects. Re… View

insight

A $500 per month UBI would more than compensate for the loss of SNAP and/or EITC benefits.

empirical

A UBI of $500 per person per month—$2,000 per month for a four-member household—would more than compensate for the loss of SNAP benefits (up to $192 per month for a single person a… View

insight

Relative to annual payments, more frequent, periodic payments of the EITC indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health.

empirical

"Evidence from the U.S. Earned Income Tax Credit program (EITC) may shed light on frequency’s impact in high-income economies. EITC recipient households often have limited access t… View

insight

Strength of codetermination is positively correlated with 'substantive' social responsibility policies such as the adoption of targets for reducing pollution.

econometric

“Our new measure of the strength of codetermination, the Mitbestimmungsindex  (MB-ix), shows a positive relationship with ‘substantive’ policies such as the adoption of targets for… View

insight

71% of Democratic voters and 56% of Independent voters support universal basic income, while only 34% of Republicans (a 7% percentage point increase from eight months prior).

fact

“Seventy-one percent of Democratic voters and 56 percent of independent voters believe the government should have a universal basic income program, a 15 and 12 percentage point inc… View

insight

69% of voters aged 18 - 49 support universal basic income, while only 34% of voters aged 65 and older are in favor.

fact

“The survey found an increase in support across demographic groups, primarily among younger voters and Democratic voters. Sixty-nine percent of voters ages 18 to 34 and 35 to 49 we… View

insight

55% of registered voters support universal basic income, while 45% are opposed.

fact

The poll ran from August 2nd - 5th in 2020, with a sample size of 2,850 registered voters. Support increased from 43% in February 2019, and 49% in September 2019. View

insight

“ When payment is conditional on work or narrowly targeted, basic income will increase workers’ market dependence and facilitate exploitation, but when it is generous, broadly available, and crucially, delinked from work, it will obstruct exploitation.”

anecdotal

Interpreting results from the Manitoba basic income experiments in the 1970's, the author finds that contrary to concerns that universal payments act as a subsidy for low-wages, wh… View

insight

Raising taxes on land value under a split-rate system can increase land value per acre. Residential land is more sensitive to these changes than commercial or industrial land.

empirical

Using municipality-level panel data, the study shows that raising the tax rate on land while lowering the tax rate on buildings leads to an increase in land value per acre. Further… View

insight

An open letter signed by 133 economists urged that Biden's expanded Child Tax Credit of $300 per month would benefit low-income families without raising inflation.

empirical

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insight

Skilled employees of German firms with 50% codetermination are protected against layoffs and adverse shock.

empirical

“Results based on German establishment-level data show that skilled employees of firms with 50% labor representation on boards are protected against layoffs during adverse industry… View

insight

Board-level representation is only one piece of the comprehensive codetermination regulatory strategy as practiced in Europe. Without a supporting framework that includes representation from the group up, codetermination may be less successful in the US.

empirical

In European countries where codetermination is in place, there are a variety of complementary labor institutions, such as works councils, which facilitate the overall success of th… View

insight

A $36 per metric ton carbon tax would – holding emissions constant – yield $190 billion per year.

empirical

US energy related carbon emissions amounted to 5.27 billion metric tons in 2018; a carbon tax of approximately $36 per metric ton would—holding emissions constant—raise $190 billio… View

insight

If worker-representatives have appropriate mechanisms for sharing information with the workforce, could increase productivity and innovation by improving information flow within firms.

theoretical

“Assuming that worker representatives have an appropriate mechanism for sharing information with the workforce, worker representation on boards will increase the flow of informatio… View

insight

Workers at a Volkswagen plant in Tennessee sought to establish the first German-style works council in the United States, but the union lost the plant workers’ vote.

fact

Simply importing European-style labor institutions may prove difficult in the US. View

insight

Codetermination and ESG governance measures provide complementary, but differing approaches to broadening stakeholder representation in corporate governance.

theoretical

“Theoretically, codetermination and ESG provide a similar benefit, while suffering from inverse drawbacks. Both systems provide a check on short-termism and the resultant inclinati… View

insight

In 2016, the popularity of codetermination among the German people rose to an all time high.

fact

“The recent performance of the German economy has begun to change the way people view codetermination. By 2016, its popularity among the German people rose to an all-time high. The… View

insight

In 2018, Germany was ranked as the world's most innovative economy, outperforming the US.

empirical

The analysis was performed by the World Economic Forum. Germany received a score of 87.5 out of 100, compared to the 2nd place US, with a score of 86.5. Germany’s high score is dri… View

insight

Safety net programs can have impacts in the long-term (on employment, earnings, and mortality) that don't show up in current government practices of limiting time horizons for cost-benefit policy analysis to the short-term.

empirical

“Once the positive long-run benefits to children are considered, many safety net programs are cost-effective. However, the current government practice of limiting the time horizon … View

insight

A review of cash transfer studies from 2000 - 2015 in low- and middle-income countries, spanning 165 studies, found positive effects on poverty, education, health and nutrition, savings, investment and production, work, and empowerment.

empirical

There were variations in size and strength of the underlying evidence across outcomes and indicators, but the positive effect was consistent across all outcome areas. View

insight

One option to protect landowners from the negative impacts of sudden changes in land valuation is to change the land valuation method to assume that current use is the ‘highest and best use’.

theoretical

“However, these higher investment incentives can come at a cost to some households who may see their land value change substantially due to zoning decisions. Protection against sud… View

insight

The potential trade-offs between UBI and other programs are largely unaddressed.

practical

“There is limited attention to the impact of the broader social and fiscal policy environment on outcomes within the existing body of evidence. It is widely agreed that financing a… View

insight

The contexts where interventions are introduced are relevant for anticipating how interventions may work across settings and are also important for determining what types of programs are considered as unconditional and universal.

practical

“Examining the variability in interventions that are claimed to approximate a UBI is important. In countries with minimal or fragmented welfare states, the injection of cash throug… View

insight

Findings are generally positive that UBI-type programs alleviate poverty and improve health and education outcomes and that the effects on labor market participation are minimal.

empirical

“There are a variety of other outcomes that have been pursued by researchers but where evidence is less certain. More research is needed on outcomes such as stigma and social cohes… View

insight

There is an obvious research evidence gap in the evaluation of an experimental, sustained UBI, which is considered the ‘gold standard’ for evidence.

practical

“There is a shortage of evidence that meets most or all of the definitional features of a UBI, and the interventions covered by this report vary significantly. To arrive at conclus… View

insight

Among recipients of the expanded Child Tax Credit, 50.9% of spending went towards food, with another 35.9% going towards essential bills.

empirical

Overall, between two-thirds to three-quarters of the payments were spent (as opposed to saved). Other popular consumption categories included clothing, rent/mortgage, and school ex… View

insight

Over 5 months of the expanded Child Tax Credit, the number of children kept from poverty each month grew from 3 million in July 2021 to 3.8 million in November 2021.

empirical

The growth in anti-poverty effects were due primarily to the IRS being able to reach more eligible children as the program progressed. View

insight

6 months into the expanded child tax credit, child poverty was reduced by more than 29%.

empirical

“…the first Child Tax Credit payment in July 2021, on its own, reduced the monthly child poverty rate by 26 percent—keeping 3 million children from poverty whose family incomes wou… View

insight

After raising land value tax rates in an Australian territory, the typical new home buyer will save between $1,000 and $2,200 on mortgage payments.

empirical

“We see evidence of mortgage savings from the lower prices in Canberra…where the size of average new home loans in ACT has grown far less than the other major States since the tax … View

insight

Raising land value taxes in an Australian territory did not affect the total cost of buying a home. The higher tax obligations were offset by lower land prices.

empirical

“In all, the expectations derived from economic theory and well-established empirical evidence is that the transition to higher land value taxes will not affect the total cost of b… View

insight

Raising land tax rates in Australia appears to have led to a decrease in land speculation.

empirical

“The main lesson is that a transition to a land value tax system can be achieved without radical disruption to property markets, and will have the added benefit of reducing specula… View

insight

Among new mothers who received an unconditional $333 per month, there was no decrease in employment, no increase in alcohol or tobacco use, more time spent in early-learning activities, and an increase in consumption of child-specific goods.

empirical

“Specifically, 1,000 racially and ethnically diverse mothers in four urban metropolitan areas in the United States were recruited in postpartum wards of hospitals shortly after giv… View

insight

In developed Mexican cities, cash transfers caused negligible increases in prices, while equivalently-valued in-kind transfers caused a 4% fall in prices.

empirical

However in less developed Mexican cities (well below median density), the price effects of cash transfers were stronger. The authors show that these inflationary effects are largel… View

insight

An econometric model finds that a tax-financed, $11,000 per year UBI may lead to significant welfare losses for future generations.

econometric

“We introduce a UBI policy that provides each household with $11,000 per year, financed by additional taxes. This policy has different implications in the short versus the long run… View

insight

A universal basic income could cause inflation by reducing the labor units required to earn the dollar.

theoretical

“As we explained in the subsection on price stability, the value of the dollar is determined on the margin by what must be done to obtain it. If money ‘grew on trees,’ its value wo… View

insight

A tax on the value of unimproved land reduces the incentive to search for better improvements.

theoretical

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insight

The Henry George Theorem – that in cities of optimal size aggregate land rents equal expenditures on public goods – holds under three conditions: (i) for all large economies in which (ii) the spatial distribution of economic activity is Pareto optimal and in which (iii) differential land rents are w…

theoretical

All three conditions are required, however; if any one of them is violated, Henry George's single tax on differential land rents may provide too much or too little tax revenue. Whe… View

insight

A tax credit provision alongside moving from single-rate to split-rate property taxing could mitigate regressive tendencies.

empirical

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insight

Pennsylvania is the only state in the U.S. to enable split-rate land taxation among local governments. Across 33 municipalities, 16 have maintained split-rates, 5 have rescinded them, and 12 have considered but never implemented.

fact

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insight

One-time unconditional cash transfers given to US citizens in poverty during the Covid-19 pandemic had no positive effects on financial or economic well-being, physical health, or cognitive capacity.

empirical

The transfers ranged in size from a control group receiving $0 (n=3,170), another group receiving $500 (n=1,374), and a third group receiving $2,000 (n=699). Expenditures rose in w… View

insight

Children with greater access to economic resources before age five experience an increase of 6% of a standard deviation (SD) in their adult human capital, 3% of a SD in their adult self-sufficiency, 8% of a SD in quality of their adult neighborhoods, 0.4% increase in longevity, and 0.5% decrease in …

empirical

Data covers 43 million Americans from the 2000 Census, and the 2001 to 2013 American Communities Survey. Results obtained using variation from the county-level roll-out of Food Sta… View

insight

Existing evidence on basic income comes from small policy trials. Paths to scaling the policy up to a national level require attention.

empirical

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insight

During a Canadian guaranteed income experiment (1974 - 1979), participant contacts with physicians declined, especially for mental health.

empirical

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insight

Canadian NIT led to 8.5% decrease in hospitalizations.

empirical

"The Canadian negative income tax was the only experiment to track health outcomes, and it found that recipients experienced an 8.5 percent decrease in hospitalizations compared to… View

insight

One review of the basic income literature suggests starting with a $500/month UBI, paid to every citizen on a biweekly basis and administered by the SSA, funded by consolidating some – but not all – existing welfare programs, plus a modest increase in taxes.

empirical

While this proposal represents a sharp break from current approaches, the authors do suggest a series of incremental changes that can smooth the path to such a basic income. View

insight

As to the size of a basic income payment, two primary options have emerged: $500/month, or $1,000/month.

empirical

“In discussions about the size of a UBI in the United States, two focal points have emerged: $500 per month (the figure suggested by Facebook cofounder Chris Hughes and used in the… View

insight

“ We re-analyze the data from seven randomized controlled trials of government-run cash transfer programs in six developing countries throughout the world, and find no systematic evidence that cash transfer programs discourage work.”

empirical

A common concern over cash transfer programs is that receiving unconditional cash will discourage work. While pilot programs cannot tell us all we need to know about the potential … View

insight

The least wealthy are mostly likely to face tax increases via LVT.

empirical

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insight

A 100% tax on land would reduce the market value of land to zero.

theoretical

“Second, if a pure land tax were to capture all current and future rent from the landowners, the market value of the land would become zero. This would be equivalent to the governm… View

insight

In a Mexican study, infants whose families received conditional cash transfers, averaging one third of household income, show long-term benefits to education, wages, geographic mobility, and family formation (20 years later).

empirical

The cash transfer is conditional upon a set of behaviors designed to improve health and nutrition. These include: i) accepting preventative medical care, ii) attending nutrition cl… View

insight

Recipients of Stockton's unconditional basic income experienced clinically significant gains in mental health.

"When the control group was compared to themselves as a baseline, there was no significant change in scores on the Kessler 10. However, the treatment group showed significant impro… View

insight

The median average change in tax liability after revenue-neutral LVT was -28.6%.

empirical

"This study’s results are summarized as follows. On an aggregate basis, a revenue-neutral LVT would shift the tax burden away from single-family residential properties and on to ot… View

insight

A study of French firms finds that labor-managed firms may use their inputs more efficiently than conventional firms.

econometric

“In several cases, no significant difference appears between the outputs a given type of firm would produce with the technology used by the cooperatives and with the conventional f… View

insight

A study of French firms found no significant difference in productivity between labor-managed and conventional firms.

econometric

“Overall, the GLS estimates suggest that in most industries there is no significant productivity difference between labor-managed and conventional firms. This result is in keeping … View

insight

A tax-funded, $1k/month UBI is modeled to raise prices by 0.56% over baseline after eight years.

econometric

Using The Levy Institute's model of the economy, The Roosevelt Institute ran econometric simulations to predict the effects of various levels of Universal Basic Income on the econo… View

insight

A deficit-funded UBI of $6k/year is modeled to increase federal debt by 63.5% by 2027.

econometric

Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans. View

insight

A deficit-funded, $6k/year UBI is modeled to decrease GDP by 6.1% by 2027, and 9.3% by 2032

Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans. View

insight

A $6k year UBI funded by an 11.25% payroll tax is modeled to increase federal revenues by 56.1% by 2027.

econometric

Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans. View

insight

As of 2018 there are 465 worker co-ops in the US employing 6,454 workers and generating $505 million in estimated revenue.

fact

A worker cooperative is a business that is entirely owned and controlled by its workers. View

insight

One econometric model predicts a NIT implies a 13% drop in the savings rate and a subsequent 22% reduction in the capital stock.

econometric

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insight

A $12k/year UBI funded via a 22% increase in consumption taxes would contract both capital and output.

econometric

This finding comes from the Penn Wharton Budget Model. View

insight

A NIT with marginal tax rate of 22% and a transfer of 11% of per-capita GDP implies a welfare gain equivalent to a 2.09% increase in annual consumption.

econometric

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insight

A tax-funded, $1k/month UBI is modeled to increase nominal wages by 0.51% over baseline after 8 years.

empirical

Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy. View

insight

A revenue-neutral swap of New York City's taxes for a 21.7% land value tax is simulated to increase wages by 4% and aggregate output by 91%, while decreasing city land price by 28%, and the poverty rate by 34%.

econometric

The authors developed a computable general equilibrium model of the New York City economy, which they emphasize has significant unknowns, and we should thus interpret results light… View

insight

If New York City were to swap out its income, property, and general corporation taxes with a land value tax, a LVT rate of 21.6% would be needed to maintain the level of tax revenue.

empirical

While a land value tax was originally proposed as a substitute for all other forms of taxation, in practice, local governments have explored more modest, revenue-neutral reforms th… View

insight

Owners of properties with high land-to-improvements ratios (like car dealerships) will tend to experience an increase in their tax liabilities when moving from uniform property taxation to split-rate land value taxation.

theoretical

“The argument that political opposition would mount against the change from uniform taxation to two-rate taxation is straightforward. The change in taxation will create winners and… View

insight

In Denmark, citizens pay 1% of the value of their property to the state on the first $470,000 of its value, and 3% for anything beyond.

fact

“In Denmark citizens pay 1 per cent of the value of their property to the state for the first DKK3.04m (£343,000) of its value and 3 per cent for anything over that. There is also … View

insight

Adam Smith supported land value taxation, writing that the burden would fall upon owners of "ground-rent", who always act as monopolists.

fact

“Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the ow… View

insight

The benefit of Medicaid coverage received by a newly insured adult is less than half what that coverage costs taxpayers, which is about $5,500 a year.

empirical

"The reason is simple: The uninsured already receive a substantial amount of health care, but pay for only a very small portion of it, especially when their medical bills are high.… View

insight

Most economists do not share the hypothetical concern that a UBI would cause high inflation

empirical

"...most economists do not share the hypothetical concern that a UBI would cause high and general inflation, because there is no reason to assume that a UBI could not be financed b… View

insight

German laws giving employees some management rights began during WWI, but were abolished by the Nazi Party.

fact

. View

insight

A $6k/year UBI funded by an 11.25% payroll tax is modeled to decrease hours worked by households by 3.2%

econometric

Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans. View

insight

A 2021 qualitative analysis finds that codetermination is an effective strategy for curbing corporate political power.

empirical

“But is codetermination an effective mechanism for constraining corporate power? That is the crucial question, and to answer it, this Article analyzes the mechanics, the strengths … View

insight

Any reallocation of tax burden between land and improvements will require resources for taxpayer education.

practical

"Moving away from an income-based approach will likely create a lot of taxpayer confusion. And even though the tax bills split land value and the value of improvements, these repor… View

insight

Pairing a national LVT with a UBI funded by the revenue would provide a net gain to two-adult households with property values at $500,000 or less.

theoretical

These figures assume a LVT rate of 100%, a $1.2 trillion estimate for America’s land rents, 209 million American citizens above the age of 18, and a land share of 50%. View

insight

The municipality of Altoona, PA, tried shifting to a land value tax, but ultimately gave up, due to lack of effectiveness and confusion.

empirical

In 2002, Altoona began split-rate taxation. By 2011, they shifted entirely to taxing land, with no tax rate on buildings. Five years later, they abandoned the program, returning to… View

insight

Denmark has used land value taxation since 1924. The rate ranges from 0.6 to 2.4% on the land's estimated market value, payable to local authorities/country, and the land value is revalued every two years.

fact

The report for LVT in London comments: “Such a tax raises the cost of holding developable land when demand, as expressed through rising market prices, increases. This should make h… View

insight

Estonia introduced a land value tax in 1993. While the tax is national, the rates annually determined by municipalities, who receive 100% of the revenue. Rates range from 0.5 to 2% of the market value of land. Agricultural land is taxed less.

fact

“Tax revenues from land continue to rise and increased by 171 per cent between 1994 and 1999. Much of this increase arose from revaluations, raising tax rates and improvements in c… View

insight

Finland uses a land value tax. The rate on land with buildings ranges from 0.5 to 1% of land value, with lower rates for land with permanent housing, higher rates for land used as summer cottages, and a ‘penalty’ rate of 3% on vacant lots in urban areas.

fact

“The most recent amendment [to the system] also contains a new section providing for a special ‘penalty tax’ on vacant lots in urban areas, raising their tax rate to 1.0 to 3.0 per… View

insight

The city of Harrisburg, Pennsylvania, offers a strong example of a successful land value tax.

empirical

Harrisburg enacted a LVT in 1975, reducing tax on buildings to one-half of those on land, and eventually increased the tax on land to six times that on property. From 1982 to 2009,… View

insight

In the period following Harrisburg, PA's land value tax, the number of vacant lots fell by 80%, the tax base rose from $212 million to $1.6 billion, and the crime rate fell 46%.

empirical

“In 1975 the city enacted LVT as a policy tool to stimulate development and to discourage land speculation. It reduced the tax on buildings to one-half of that on land and, over a … View

insight

“ On average, companies used to reinvest 20 cents of each dollar of their operating returns into their businesses; that amount has dropped by half—to just 10 cents of each dollar since 2002.”

empirical

“There are multiple factors driving corporations to reduce their level of reinvestment, including the growth of market concentration—and thus market power—across the economy, which… View

insight

Universal welfare programs do not act as employer subsidies, while programs conditional on work might, though not overwhelmingly so.

empirical

Programs conditional on work - like earned income tax credits - may apply minor downward pressure on wages, but the effect is more than compensated for by the overall net gains in … View

insight

Cash transfer studies in the developing world have found positive impacts on: income, assets, savings, borrowing, total expenditure, food expenditure, dietary diversity, school attendance, test scores, cognitive development, use of health facilities, labor force participation, child labor migration,…

empirical

"Second, evaluations have found a great diversity of positive impacts. For example, a partial list of outcomes affected in a positive way in one study or another, according to Bast… View

insight

If redistributive programs do not discourage work, then guaranteed income paired with high phaseout rates optimizes social welfare functions

theoretical

Many traditional economic models assume that if workers receive unconditional transfers, like basic income, they will reduce their working hours. However, recent experimental evide… View

insight

Following SNAP eligibility expansion, newly-eligible households are 20% more likely to own a business, driven by an increase in new firm birth of 12%.

empirical

Many of these new entrepreneurs who were newly eligible for SNAP didn't enroll in the expanded food stamps program. Instead, as Walter Frick writes in The Atlantic, "simply knowing… View

insight

Since implementing the APF - Alaska's quasi universal basic income - Alaska has experienced no spike in inflation, and notably, had lower inflation than the rest of the United States.

empirical

“Some further evidence we can examine is Alaska’s inflation statistics. Alaska has had a universal basic income via the Alaska Permanent Fund Dividend, which has provided each resi… View

insight

Across the U.S. economy from 2015 - 2017, companies spent 58.6% of their net profits on stock buybacks.

empirical

“The problem is not isolated to a few companies or to a few industries: In most industries, the majority of companies spent over half of their total profits on buybacks between 201… View

insight

From 2015 - 2017, the U.S. restaurant industry spent more in stock buybacks than it made in profits - 136.5%. Buybacks were financed through debt and cash reserves.

empirical

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insight

If McDonald's redirected all 2015 - 2017 funds used on stock buybacks to raises for its employees, it could have given each of its 1.9 million workers nearly $4,000 more per year.

empirical

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insight

If Starbucks reallocated its funding from stock buybacks to worker wages, every worker would receive a $7,000 raise.

empirical

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insight

If Lowes, Home Depot, and CVS each reallocated the money spent on buybacks in 2015 - 2017 to workers, each worker would receive a raise of at least $18,000 per year.

empirical

“The top spenders on buybacks in retail are Home Depot, Walmart, CVS, Lowe’s, and Target. On average, these companies spent 87 percent of their net profits on buybacks, and they co… View

insight

A primary criticism of stock buybacks is that they draw corporate resources away from other growth-inducing activities, like investing in research and development, spending on capital investments, or improving worker compensation.

“The terms “stock buyback” and “share repurchase” refer to the practice in which companies repurchase their own stocks from shareholders on the open market. This creates a scarcity… View

insight

From 2015 - 2017, the retail industry spent 79.2% of its net profits on stock buybacks, and the food manufacturing industry spent 58.2%.

empirical

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insight

The five companies who spent the most on stock buybacks from 2015 - 2017 were McDonald's, YUM Brands, Starbucks, Restaurant Brands International, and Domino's Pizza.

fact

The authors find that these companies could pay the median worker an average of 25% more if they spent buyback funds on wages instead. View

insight

Prior to the 1982 SEC ruling that rolled back restrictions on open-market share repurchasing, companies buying back their shares potentially faced civil and criminal penalties for manipulating markets.

fact

“The growth of stock buybacks can be traced to 1982, when the Securities and Exchange Commission (SEC) relaxed the rules governing the circumstances in which companies could be hel… View

insight

The 1982 SEC rolling back of penalties for open-market share repurchasing, together with the 1992 changes that allowed for corporate pay to be tax deductible (and in the form of stock options), are seen as the primary cause of the rise in stock buybacks.

empirical

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insight

Since March 2018, 57% of corporate tax savings from the Tax Cuts and Jobs Act have gone to shareholders through stock buybacks or dividends, while only 20% have gone towards job creation commitments, and 6% to employees as wages, bonuses, or benefits.

empirical

“Proponents of the new tax law promoted it to the American public as a job-creating and wage-boosting policy for American workers. Instead, public companies in the U.S. are spendin… View

insight

One rationale for stock buybacks is when companies have no other productive investment available, buybacks transfer cash to shareholders, which they can use to fund other productive investments.

theoretical

“Proponents of buybacks argue that corporate executives conduct buybacks when other value-creating investment opportunities are unavailable, and instead use that cash to reward sha… View

insight

85% of mining, quarrying, and oil and gas extraction companies spent more than half of their profits on stock buybacks between 2015 - 2017.

empirical

This made them the industry with the highest ratio. “Professional, scientific, and technical services” was second with 72.7%, and “information” was third, with 72.4%. Data from Sta… View

insight

An analysis by the SEC Commissioner found that executives frequently exploit stock buybacks to cash out their company shares at inflated prices.

empirical

“Even more disturbing, there is clear evidence that a substantial number of corporate executives today use buybacks as a chance to cash out the shares of the company they received … View

insight

Only 5% of Swedish corporate directors reported codetermination had a negative impact on company activities.

fact

Sample size of 293. Similarly, only 9% reported negative experiences with "employee board representation" more broadly (n=411). View

insight

Recently homeless recipients of a cash transfer saved an extra $8,172 of public expenditure by spending fewer nights in homeless shelters, more than recuperating the entire cost of the transfer program.

empirical

Cash recipients saved a total of $17,571 compared to their baseline shelter use. Non-cash participants only saved $9,399 compared to their baseline shelter use. View

insight

A report by the Committee on Banking, Finance, and Urban Affairs of the House of Representatives listed land value taxation as a key policy recommendation.

fact

"Land value taxation was a key policy recommendation made by the Committee on Banking, Finance and Urban Affairs of the House of Representatives 96th Congress whose ground breaking… View

insight

85% of Pennsylvanian homeowners pay less under split rate taxation than they did under traditional flat-rate taxes.

empirical

"In Pennsylvania 85% of homeowners pay less with this policy than they do with the traditional flat rate approach. For those who do pay more, it is not significantly more and they … View

insight

Following a large expansion in Pittsburgh's split-rate tax, their average annual building permit values increased by 70.4%, while 15 other cities had a 14.4% decrease in the same time period.

empirical

"A recent study (Table 3) by University of Maryland economists, Wallace Oates and Robert Schwab, compared average annual building permit values in Pittsburgh and 14 other eastern c… View

insight

Applied methods for distinguishing land value from property value are subject to error.

theoretical

- View

insight

Benefits of land value taxation persist even in cases where land values are estimated with error.

empirical

"Based on this reconceptualized model, we prove that a land value tax will have at most the distortion effects of a property tax of equivalent rate, even with the worst possible la… View

insight

Land or split-rate taxes exist in Denmark, Australia, parts of Indonesia, & 18 Pennsylvanian cities.

fact

- View

insight

Split-rate/land taxation alleviates the property tax's distortionary effect on the land/capital ratio, increasing capital stock.

theoretical

"The starting point for understanding the split-rate tax's effect on sprawl is that it should alleviate the property tax's distortionary effect on the land/capital ratio, increasin… View

insight

Split-rate tax increases development activity as measured by building permits.

empirical

"Oates and Schwab (1997) and Plassmann and Tideman (2000) show that the split-rate tax increases development activity as measured by building permits. This finding suggests the spl… View

insight

Split-rate tax in PA lowers the land/capital ratio, and does so more via more houses in a given land area than bigger houses (the improvement effect triumphs over the dwelling effect).

empirical

- View

insight

Split-rate in PA increased growth in number of housing units by 2-5% relative to control groups.

empirical

"Our central estimates, based on linear fixed effects regression, are that a split rate tax increases the growth in the total number of rooms by about 3-6 percentage points per dec… View

insight

By excluding capital from LVT tax base, people in quite different economic circumstances might be taxed equivalently.

theoretical

"Nor would it be fair or just to treat different circumstances equally for tax purposes. Two landowners may have equally sized plots of land in similar locations, but one of them m… View

insight

A revenue-neutral LVT (in a Texas municipality) would decrease average tax liabilities for single-family properties by 30%, shifting them onto commercial & industrial property classes.

empirical

- View

insight

LVT is theorized to be more efficient than the property tax because the supply of land is fixed, and thus will not be affected by taxation.

theoretical

- View

insight

LVT (in this Texas municipality) begins as mildly regressive, and becomes lightly progressive over time.

empirical

"Researchers examining property tax incidence often use the Suits index to measure a tax system’s overall progressivity (Suits, 1977).19 The Suits index can vary from –1 to +1, wit… View

insight

Under LVT, horizontal equity is worst for the lowest-valued properties.

empirical

"Horizontal equity requires that taxpayers with equal before-tax incomes should have the same effective tax rates…Figure 4 shows that the lowest-valued properties (i.e., those grou… View

insight

LVT might be more politically feasible in jurisdictions where the changes for homeowners/voters would most likely be beneficial.

practical

- View

insight

78% of Americans support the control of urban sprawl in land use planning.

fact

Poll by: https://smartgrowthamerica.org/about-us/our-history/ View

insight

Replacing taxes on building structures with taxes on land-value results in more improvements to the land, measured as a higher capital-land ratio.

empirical

"A shift from property to land taxation (or the movement to a “graded” tax system under which land is taxed at a higher rate than the structures on the land) will reduce the “penal… View

insight

Taxing land-values may distort the choice between earlier and later development of unused parcels of land in favor of projects that promise an earlier stream of revenue. This may distort efficient land use.

theoretical

"In particular, the taxing of land-values may distort the choice between earlier and later development of unused land parcels in favor of those projects that promise an earlier str… View

insight

Artificial neural networks are being tested as a method for mass appraisal of real estate.

fact

- View

insight

Land value taxation could create stronger incentives to repeal restrictive zoning policies, while repealing restrictive zoning would enable further beneficial effects of land value taxation.

theoretical

“Many people replied that Land Value Tax is useless until or unless you first fix zoning. First of all, Georgists are natural allies in fixing restrictive zoning policies. This is … View

insight

The Pittsburgh experience affirms standard economic theory, predicting that a major increase in land value taxation should be neutral. That is, have little impact on development decisions.

empirical

Critics of LVT in Pittsburgh suggest their experience with LVT was unconvincing, largely because of the minimal impacts on development. They cite surveys that found respondents rep… View

insight

Land value taxation is unique in that it can raise tax revenue without raising the adverse fiscal incentives that other tax measures impose.

theoretical

This is because unlike other subjects of taxation, the supply of land is fixed, so raising tax rates cannot affect supply. View

insight

A revenue-neutral shift to a pure land value tax in the state of New Hampshire is projected to raise total employment by 0.35% and raise gross state product by 0.36%

econometric

Additionally, residential construction is projected to increase 1.16%, total exports by 0.19%, disposable income by 0.6%, and total population by 0.76%. View

insight

A simulation suggests a revenue neutral shift to a pure land value tax in New Hampshire would have positive short term effects that persist in the long term.

empirical

- View

insight

Adam Smith favored a land value tax, arguing that a tax on unimproved land value would not harm economic activity and would not increase land rents.

anecdotal

The theoretical case for a land value tax was held in high favor by classical economists from Smith to David Ricardo, John Stuart Mill, to Alfred Marshall. View

insight

Across South Africa, Estonia, Australia, Denmark, New Zealand, and Namibia, "there is no firm evidence that LVT was a consistently effective tool for bringing land forward for development." Instead of taxation, more direct measures such as land use planning, development control, and infrastructure i…

practical

Economic theory suggests a LVT would encourage the development of vacant or under-developed land by raising the tax burden of holding such land. View

insight

Pennsylvania cities that adopted split-rate land value taxes enjoyed significantly higher levels of construction activity than they would would with single-rate property taxes.

empirical

Researchers combined statistical analysis of the effect of split-rate taxes on the number of building permits with their effect on the value per permit in order to estimate the eff… View

insight

Rising housing prices entirely accounts for the rise in net capital share of income since the 1970's. Despite recent studies citing the role of increased capital accumulation in exacerbating inequality, this rise may entirely be due to rising housing prices.

econometric

- View

insight

Land value taxation offers a viable approach to financing public transit systems, and places the tax burden on those areas that benefit most from such public services.

empirical

“Our theoretical view of local tax options suggests that LVT is a reasonably effective means of financing public transportation capital improvements by levying taxes on the portion… View

insight

A 1% land value tax in the UK could fund a UBI of £16 per week, reducing poverty by 20% and benefitting 70% of the population.

econometric

The land tax alone applies to a base of £5.5 trillion in non-governmental land value, raising £55 billion per year. Alone, this tax would raise the Gini index by 0.08%, but distrib… View

insight

A land value tax in the UK would be mildly regressive, but distributing the revenue as a UBI would make the program highly progressive.

econometric

The land tax alone applies to a base of £5.5 trillion in non-governmental land value, raising £55 billion per year. Alone, this tax would raise the Gini index by 0.08%, but distrib… View

insight

A large share of the gains from economic progress are captured by higher land rents, as opposed to higher wages or capital yields, such that landlords capture an outsized share of development through charging higher rents.

empirical

“Much of the gains from economic expansion and greater productivity are captured by higher land rent more so than higher wages or capital yields. If entrepreneurial profits in a co… View

insight

If the rise in inequality between labor and capital is due to the rise in land value - as opposed to capital increasing its share of national income - then land value taxation for public benefit would reduce inequality while promoting efficiency.

theoretical

“The economic inequality as presented in works such as Capital in the Twenty-First Century by Thomas Piketty (2014) has been a global problem, but often incompletely analysed. Crit… View

insight

County and city assessors are skeptical of transitioning to a land value tax. Only 9% of Minnesota county and city assessors surveyed believed land value tax was an idea worth pursuing, while 40% strongly disagreed with pursuing one.

fact

- View

insight

Despite LVT's high theoretical appeal, administrative and political realities have generally outweighed and discouraged setting one up in practice.

theoretical

- View

insight

The Pittsburgh City Council President stated: "I'm not going to say the land tax is the only reason a second renaissance occurred, but it's been a big help".

anecdotal

But the conclusion is divisive among those close to the Pittsburgh experience. As the authors report: "In contrast, a major official and a close observer (independently) have asser… View

insight

Particular types of land can be exempted from land value taxation. Estonia exempts nature reserves, church land, and public water bodies. Queensland Australia exempts land used for agriculture.

practical

- View

insight

Lack of transparency and inconsistency in land valuation methods has led LVT in Australia to become one of their more disliked and least understood taxes.

anecdotal

"In Queensland Australia, valuations are ideally based on comparable land sales of ‘vacant or lightly improved land’, but where these are not available, improved land sales may be … View

insight

“ The technical difficulty of how to value unimproved land, while not insurmountable, is considerable and prone to generating confusion and a lack of transparency. There needs to be a good understanding regarding what LVT is and what it is supposed to achieve and sufficient resource put behind the val…”

practical

“There needs to be a good understanding regarding what LVT is and what it is supposed to achieve and sufficient resource put behind the valuation exercise. Use of automated valuati… View

insight

Whether or not a LVT incentivizes land development depends largely on whether the value of land is assessed according to its "highest and best use" (HABU) or its existing use.

theoretical

"The challenges associated with valuing land in its unimproved state are made potentially more complex if the valuation is to assume that the taxable asset (or land parcel) is assi… View

insight

Rapid land development is associated with loss of farmland and open space, higher costs of infrastructure and community services, roadway congestion, racial segregation, and concentrated poverty.

empirical

"Of serious concern to planners is the rapidly increasing rate of land consumption. Between 1970 and 1990, Nashville’s population grew by 28% while its urbanized area grew by 41% (… View

insight

Traditional policies to control urban sprawl can rub against commitments to private property rights. Land value taxation offers an alternative that's amenable to conservatives and progressive alike.

empirical

"Policy implementation in Nashville is particularly challenging because many of the policy instruments are often viewed as an infringement on private property rights that many Sout… View

insight

In theory, a land value tax encourages compact urban development.

theoretical

By raising the tax rate on land and lowering that on buildings, LVT promotes the incentive to develop improvements on existing land, rather than building on new land. View

insight

The unpopularity of land value taxation in the US flows from two alleged legal obstacles: "uniformity clauses", which require that all taxation be applied evenly within a jurisdiction, and "Dillon's Rule", which implies that municipal corporations owe their origins to, and derive their powers and ri…

theoretical

- View

insight

A land value tax encourages more development around preexisting development, raising urban density and counteracting urban sprawl.

econometric

"Thus, the marginal effect of a land value tax on the probability of land development is greater around preexisting development than in areas distant from preexisting development. … View

insight

The potential development benefits of a land value tax could be blocked by zoning restrictions.

theoretical

"The analysis presented above shows that if the city were to adopt a land value tax in the context of its current restrictive land use practices, this new tax regime would be unlik… View

insight

Land value taxation can help shift tax burden to land in urban centers that benefit the most from existing public spending.

theoretical

Land near public transport, in safe neighborhoods, and in close proximity to job centers all benefit from higher land values, through causes unrelated to landowners. LVT would shif… View

insight

In D.C., a primary obstacle to residential densification is the large number of lots occupied by single-family residential housing, 71% of which face a high zoning barrier to increasing density.

empirical

"The binding restriction for single family residential lots is not the lot size (in contrast to lots with commercial and multifamily buildings) but the number of dwellings allowed … View

insight

Under current zoning laws, D.C.'s Georgia and Rhode Island Avenues present the greatest opportunity for a pilot land value tax experiment.

practical

"On the other hand, a land value tax could bring much positive change in mixed-use zones along Georgia Avenue, and to some extent along Rhode Island Avenue between 13th St. NE and … View

insight

Zoning reforms that could complement LVT's aim to incentivize development include supporting the development of Accessory Dwelling Units and expanding mixed use zoning.

empirical

- View

insight

The value of land arises from three sources: the fact that land is both productive and limited, the growth of communities, and the provision of public services.

theoretical

The letter, co-signed by leading economists, states: “The rental value of land arises from three sources. The first is the inherent natural productivity of land, combined with the … View

insight

Already in 1990, a group of economists, including multiple Nobel Laureates, wrote that while the technical issues obstructing land value taxation need to be addressed, “none of them present any insoluble problems”.

theoretical

“The attached Appendix provides a brief technical discussion of issues of the duration of rights to use land, the transfer of land, the assessment of land, social protection agains… View

insight

Switching to a 90/10 LVT in Multnomah County, Oregon, would shift the tax burden towards wealthier landowners, changing the property tax burden from regressive to mildly progressive.

econometric

- View

insight

While LVT may be progressive on aggregate, there are situations where lower income home-owners may face increased costs.

theoretical

"A variety of mitigation techniques have been proposed to smooth the transition to LVT for those who are asset rich and low-income, and Oregon currently has other tax deferrals tha… View

insight

'Land rich, income poor' people pose an obstacle for land value taxation, as they stand to face higher tax burdens.

theoretical

"Specifically, people who are “land rich and income poor” pose a problem when considering a switch to LVT. One of the key motivators for LVT is to create a situation where those wi… View

insight

In Hawaii, LVT was abandoned because it was seen as a cause of overdevelopment in Waikiki in the 1970's.

empirical

If a primary effect of LVT is to spur development, there may be contexts in which further urban development is undesirable. View

insight

Research suggests the city of Pittsburgh repealed their split-rate LVT after nearly 100 years because of poor assessment and rate setting practices, despite evidence that LVT encouraged building activity.

empirical

- View

insight

Farms could experience tax hikes under LVT since they provide value without development, and may require exemptions.

theoretical

- View

insight

Mitigation strategies for the undue tax burden placed by LVT on those with low incomes but high asset values include grandfathering such households into previous tax arrangements until death or sale of property, or a gradual phase-in of LVT.

practical

- View

insight

In the case of Multnomah County, Oregon, the potential downsides of land value taxation - such as increasing taxes on low-income homeowners - can be mitigated through complementary legislation.

theoretical

"Ultimately, land-based property tax systems, whether a split-rate LVT or an AXI building exemption tax, do what they are designed to do—place more of the tax burden on wealthier l… View

insight

Raising land value tax rates drives down the price of land by reducing the portion of land's output that goes to owners.

theoretical

“So how does an LVT affect the price of land? Using the bathtub metaphor again, let's put a valve under the tap, so half of the water goes into the tub and half goes somewhere else… View

insight

Land value tax in Pittsburgh did not increase housing costs. Instead, the incentive effect trumped the liquidity effect, and increased the number of new housing units.

empirical

“For the case of new housing, it is shown that the incentive effect is significant but the liquidity effect is not. The incentive effect is found to encourage increases in the numb… View

insight

“ Tilting tax rates to favor improvements at the expense of land increase the intensity of land development when all other factors are held constant. The policy can increase land values when it is applied to a small portion of a housing market and can reduce land values when applied across the entire …”

empirical

- View

insight

Land prices decrease as a result of higher land taxation.

empirical

"The evidence verifies that tax capitalization appears to be occurring, but does not clearly determine the resulting price outcome. Land prices increased with a decrease in real pr… View

insight

“ The evidence indicates that LVT may not be the golden key, but it does appear to offer an effective tool for encouraging development in some central city areas.”

empirical

- View

insight

In German municipalities, land value tax does not increase monthly rent levels, and is associated with spillovers in amenities and provision of public goods.

empirical

"...land taxes do capitalize into land values, whereas the monthly rent level remains unaffected by the land tax. In addition, the results point to significant spillovers from amen… View

insight

LVT would increase land prices and provide minimal incentive to building construction.

empirical

This finding stands in general contrast to related findings. For an exposition of the assumptions underlying the finding, see Lars Doucet’s: Does Georgism Work? Part 2: Can Landlor… View

insight

Increasing the tax rate on land, balanced by a decrease in the tax rates on the income of capital and labor, can provide a fiscal means to stimulate the economy while maintaining current levels of expenditures and debt.

econometric

“The post-Corona economic environment puts a premium on finding fiscal means to stimulate the economy while continuing to finance current levels of expenditures and debt. We develo… View

insight

Increasing the tax rate on land from 0.55% to 5.55%, balanced by reductions in taxes on capital and labor by 28% and 10%, respectively, would increase the welfare of a representative household by 3.4%, and increase output by 15%.

econometric

If the model is tweaked to include separate groups of workers, capitalists, and landlords, the output gain remains the same while welfare gains rise to 6.4%. View

insight

In an econometric model, land value taxation yields double the amount of welfare and output gains as a wealth tax that raises the same revenue.

econometric

“Welfare and output gains for a wealth tax that raises the same revenue, and which increases the tax rates on capital and land equally, are only half as large as the baseline.” View

insight

There are three main approaches to land assessment: the market approach, the cost approach, and the income approach.

theoretical

- View

insight

The majority of complaints over total land value assessments are over buildings and improvements, not land value.

anecdotal

- View

insight

Taxing land at 85% builds in a comfortable margin for error to avoid potentially over-taxing land via mis-assessments.

theoretical

As opposed to 100%, which a full LVT would call for. View

insight

In 1911, J.J. Pasoriza, Houston's first Hispanic mayor, implemented a short-lived assessment and land tax policy known as "The Houston Plan".

fact

The plan lasted from 1912 -1913, assessed land at full market value, and assessed buildings at 25%, exempting personal property from all taxation. View

insight

Appraising land values via statistical methods is cheaper and faster than conventional property assessment methods, and no less accurate.

empirical

However, this requires access to high quality market transaction data, which was available for the study’s sample of Berlin, but not everywhere in the U.S. View

insight

Recently developed mass appraisal methods for land assessment include multiple regression analysis, nonparametric kernel regressions, nonparametric adaptive regressions, semiparametric regressions, and the Innovative Land Valuation Model (iLVM).

fact

This is only a small sampling of burgeoning methods. View

insight

A natural experiment of changing land value taxation rates occurred in Denmark in 2007. Results suggest that raising tax rates on land does not get passed onto tenants, but instead, gets fully capitalized into land and property prices.

econometric

“The results demonstrate a clear effect on sales prices of the observed changes in land tax rates. Furthermore, the magnitude of the changes implies full capitalization of the pres… View

insight

Based on the results of a natural experiment in Denmark, land value taxation doesn't distort economic decisions because it doesn't distort the user cost of land.

econometric

“The results imply full capitalization of the present value of future taxes under reasonable assumptions of discount rates. Consequently it gives an empirical confirmation of two s… View

insight

The burden of raising land tax rates falls on the owner at the time of the tax change. Future owners, although paying higher rates, are unaffected since they are fully compensated via a corresponding change in the land's acquisition price.

econometric

“The results imply full capitalization of the present value of future taxes under reasonable assumptions of discount rates. Consequently it gives an empirical confirmation of two s… View

insight

Alternative methods may provide greater residential tax relief than a LVT, such as a progressive property tax.

empirical

Lars Doucet comments: “LVT proponents claim that an LVT can't be passed on to tenants, but Wyatt is saying that if you turn around and spend that LVT money on making your city bett… View

insight

When Henry George advocated LVT as a single tax to replace all other taxation (the 1800's), there was no federal income tax, and state and federal spending were significantly lower.

empirical

Many suggest that LVT is no longer viable as a single tax, given the rise in other taxation that would need to be replaced by LVT revenue. Even as one tax among many, however, the … View

insight

Liberal and conservative economists alike - such as Paul Krugman and Milton Friedman - agree that LVT has no deadweight loss, making it an ideal tax in terms of efficiency. Or in Friedman's terms, the "least bad tax".

theoretical

“Liberal Krugman and conservative Milton Friedman both seem to agree that LVT has no deadweight loss, which means LVT, unlike income and capital taxes, doesn't create a drag on pro… View

insight

LVT disincentivizes land speculation by increasing the holding costs of land.

theoretical

- View

insight

Simulations of Multnomah County, Oregon, suggest that a LVT would provide a more equitable tax structure, incentivize development of underutilized properties, and discourage land speculation.

empirical

"Ultimately, land-based property tax systems, whether a split-rate LVT or an AXI building exemption tax, do what they are designed to do—place more of the tax burden on wealthier l… View

insight

A LVT only encourages the development of vacant or under-developed land in cases where land can be viably developed. Where land cannot be viably developed, there is no value to be gained from a LVT.

empirical

"Economic theory suggests that a land value tax based on highest and best use (HABU) would encourage the development of vacant or under- developed land because of the increased hol… View

insight

In 1981, a full LVT was estimated to raise 28% of national income, or $658 billion.

empirical

- View

insight

Five urban centers account for 48% of all urban land value in the U.S.

empirical

- View

insight

Between 2005-2010, New York City's urban land value was worth roughly $2.5 trillion (just the land alone).

fact

- View

insight

In 2019, a national LVT is estimated to raise anywhere from 25% ($1.1 trillion) - 76% ($3.36 trillion) of annual federal spending, depending on methodologies used to produce estimates.

empirical

- View

insight

"Most land rent is paid out as interest to banks and that bank credit is a major driver of increases in housing prices." In other words, unaffordable housing may not be a mere symptom of inequality, but rather, a key driver of it.

empirical

“Hudson (2012, 2018) has shown that most land rent is paid out as interest to banks and that bank credit is a major driver of increases in housing prices (“real estate is worth wha… View

insight

Land represents about 40% of household assets in the U.S.

empirical

Internationally, land represents over 40% of asset values in Spain, and 50-60% of asset values in the France and UK. View

insight

Using conservative estimates of national land value, a UBI funded by LVT revenues could provide roughly $5,750 per adult, per year.

empirical

Assumed national land rents is $1.2 trillion in 2020 (this follows the Federal Reserve’s method, using a low, 5% capitalization rate). Further assumptions include 209 million as th… View

insight

The top 1% of wealthiest U.S. citizens own 14.7% of all real estate value. The top 10% own 44.8%, and the top 50% own 88.5%.

fact

“Bill Gates, the world's fourth richest person, owns 242,000 acres of farmland across the U.S., making him the #1 owner of private farmland in the USA. But that's just farmland. If… View

insight

Land ownership is highly concentrated among the wealthy.

fact

The top 1% of wealthiest U.S. citizens own 14.7% of all real estate value. The top 10% own 44.8%, and the top 50% own 88.5% (data drawn from FRED for 2021). View

insight

A group of Nobel Laureate economists wrote that the social collection of land rent serves three main purposes.

fact

They write "it guarantees that no one dispossesses fellow citizens by obtaining a disproportionate share of what nature provides for humanity"; second, “it provides revenue with wh… View

insight

The US has experienced three major, differing systems of government finance. The period before 1839 was mostly financed through land sales and chartering corporations. The period between 1839 - 1933 was marked by local governments financed through property taxation, and the period after 1933 was mar…

empirical

“As shown by Wallis (2000), the US has experienced three major and very different systems of government finance, and one of them, over an entire century, in fact corresponded quite… View

insight

Land in the U.S. accounts for 51.1% of the stock of non-financial assets.

empirical

“A key input into our analysis is the share of land and other non-produced assets in the overall value of physical assets, which in addition include produced physical assets, mainl… View

insight

The marginal benefits in output of a 1% increase in land tax rates remain large until a tax rate around 10%, after which the output gains taper off.

econometric

“Policymakers can consider a range of different sizes of land tax reforms. We show that the relationship between the land tax rate and the resulting gain in output is monotonically… View

insight

Implementing LVT would likely cause an immediate drop in land values that may cause a small share of taxpayers to experience cash-flow problems. These effects can be mitigated by gradual implementation, direct relief, and over time, longer-term gains in output and income.

theoretical

“Nevertheless, short-term concerns cannot be entirely eliminated, because the increases in output and income invariably take time to develop, as shown in Section 8, while the immed… View

insight

Replacing all current taxation with a 20% land asset value tax and a 12.2% consumption tax would maintain current levels of government revenue, while raising welfare by 5.2% and output by 26%.

econometric

“The final simulation of our study has shown just how far the stimulus effects could be taken if a radical reform is not ruled out. It shows that optimal taxation can raise more th… View

insight

A group of Nobel Laureate economists co-signed an open letter sent to Gorbachev in 1990 advocating a land value tax, urging Russia not to follow the Western economies in the "danger" of allowing most of the rent of land to be collected privately. Co-signers included Robert Solow, James Tobin, Willia…

fact

They write: "...there is a danger that you will adopt features of our [Western] economies that keep us from being as prosperous as we might be. In particular, there is a danger tha… View

insight

Codetermination can dampen or eliminate information asymmetry between employers and workers.

theoretical

"Codetermination, however, ensures that the employee representatives have access to the same information as other board members. As a result, mandatory codetermination can mitigate… View

insight

German codetermination improved labor productivity (value-added per employee) by 16 - 21%.

econometric

"Does the additional capital reflect only unproductive amenities demanded by workers (such as nice break rooms) rather than directly productive capital inputs (such as machines)? O… View

insight

In 1981, the S&P 500 spent ~2% of its profits on buybacks. In 2017: 59% on buybacks.

fact

- View

insight

52% of likely 2018 voters supported codetermination, only 23% opposed.

fact

- View

insight

Americans are less polarized on economic democracy (codetermination, employee stock ownership programs, and management elections) than unionization.

empirical

- View

insight

On the whole, codetermination laws in European countries appear to have zero effect on the economy, or very small, positive effects on worker, firm, and macroeconomic outcomes.

empirical

- View

insight

Existing codetermination laws convey relatively little power to workers.

empirical

"Typically, workers are either granted a minority share of the seats on their company’s board, meaning they can always be overruled by unanimous shareholders, or they are given the… View

insight

European countries with codetermination laws already have high baseline levels of worker involvement in decision making, rendering the potential impacts of codetermination laws moot.

practical

"Second, European countries with codetermination laws have very high baseline levels of informal worker consultation and involvement in decision-making, stemming from an overall cu… View

insight

Codetermination laws have been passed in countries with already existing pro-worker institutions, such as centralized collective bargaining systems, high union coverage, and extensive labor market regulations. Thus, the low hanging fruit of codetermination's potential impact may already be plucked.

practical

"Third, codetermination laws coexist with other important pro-worker institutions whose influence may leave little room for codetermination to have an impact. European countries wi… View

insight

Codetermination can be formulated as either a mandate applied to all firms, or a right for workers in covered firms to take up codetermination, should they wish to.

practical

- View

insight

In Denmark, Norway, and Sweden, workers in about 53% of covered firms take up their right to codetermination. In Finland, the number is 15%.

fact

- View

insight

Workers and managers unanimously agree that worker representatives wield more influence over decisions about working conditions than over any other kind of decision.

anecdotal

Although recent surveys suggest codetermination doesn't grant significant authority to workers, it appears that their highest arena of influence under codetermination laws are work… View

insight

“ There is nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards.”

anecdotal

"There is nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards. Fewer than 5% of Finnish work… View

insight

Even without codetermination, European countries have high baseline levels of worker participation. Surveys of European managers suggest that the level of involvement in decision-making between workers with and without formal board representation are comparable.

empirical

"The evidence for a robust culture of informal worker involvement comes from interviews of European managers conducted as part of the European Company Survey. As illustrated in Fig… View

insight

The strength of a country's codetermination laws is uncorrelated with the percentage of firms in that country who report some kind of worker involvement in decision-making.

econometric

- View

insight

In countries like Germany, Norway, and Sweden, codetermination laws may have developed from pre-existing cultures of worker participation, rather than causing the development of those cultures.

anecdotal

"Rather, in our view, a reading of the historical evidence supports a different hypothesis: that in countries like Germany, Norway, and Sweden, codetermination laws arose because o… View

insight

In 2021, 64% of Americans were dissatisfied with government regulation of business and industry.

empirical

This represents a 5% decrease from the previous year, when 59% were dissatisfied. The poll was run from January 4th - 15th, 2021. View

insight

In 2021, 57% of Americans were dissatisfied with the state of the nation's economy.

empirical

This represents a 25% decrease from the previous year, when 32% were dissatisfied. The poll was run from January 4th - 15th, 2021. View

insight

Countries that switch from non-democracy to democracy achieve about a 20% increase in GDP per capita over the following 30 years.

econometric

This study does not focus on economic democracy specifically. They draw upon the Freedom House and Polity IV democracy indices to determine whether or not a country is democratic. View

insight

Democracy may encourage growth through: economic reforms, increasing human capital (especially through primary schooling), increasing investment, and reducing social unrest.

econometric

"Overall, we take these results as suggesting that democracy might be working through a number of channels, in particular, by encouraging economic reforms, increasing human capital… View

insight

The impact of democracy on growth does not seem to depend on the level of development.

econometric

"There is no significant interaction between democracy and the level of economic development in any of the specifications. Thus the impact of democracy does not seem to depend on t… View

insight

There is an economically and statistically significant positive correlation between democracy and future GDP per capita.

econometric

"Skepticism about the performance of democratic institutions is as old as democracy itself. Plato, for example, denigrated democracy as the second worst form of government after ty… View

insight

A German car dealership provides an example of a firm that went beyond mere codetermination, with a fuller application of economic democracy to their corporate governance structures. The company has done well, and remained competitive in its market for decades.

empirical

- View

insight

“ There is apparently consistent support for the view that worker participation in management causes higher productivity. This result is supported by a variety of methodological approaches, using diverse data and for disparate time periods.”

empirical

This quote, from 1982, comes from a survey Derek Jones and Jan Svejnar do of their empirical work studying worker participation View

insight

Stronger employee representation laws are positively associated with aggregate innovation.

econometric

Study data spanned manufacturing sectors of the USA, UK, France, and Germany from 1977 - 2005. View

insight

One reason firms repurchase shares is to avoid dilution from executive stock compensation programs.

empirical

"Analysts often treat buybacks as a stand-alone issue, but there is compelling research that suggests one of the main reasons companies conduct stock buybacks is to offset their ex… View

insight

Under German codetermination, firm resources are directed differently. The return on assets and equity decrease, as does the market-to-book ratio.

econometric

- View

insight

Firms with equal representation on the supervisory board (parity codetermination) have a 26% decline in market-to-book ratio, compared to firms with one-third representation.

econometric

"We find that firms with equal representation on the supervisory board have a significant 26 percent decline in the market-to-book ratio, compared to firms with one-third represent… View

insight

Under German codetermination, employees use their power in equal representation firms (1/2 parity codetermination) to increase the employees-to-sales and wage bill-to-sales ratios.

econometric

- View

insight

The proportion of workers in West Germany covered by codetermination has declined from 51% in the mid-nineties to 40% in 2018.

empirical

- View

insight

The proportion of East German workers covered by codetermination has declined from 43% in the mid-nineties to 33% in 2018.

empirical

“In order to get a meaningful picture of the (dwindling) coverage of workplace codetermination, attention should be directed to the proportion of employees who benefit from codeter… View

insight

The proportion of West German workers in firms with 500+ employees has mildly declined from 94% in the mid-nineties to 85% in 2018.

empirical

The authors speculate that declines may be driven by the rising service sector economy. View

insight

The proportion of eligible workers covered by codetermination in companies between 51 - 500 employees has decreased from 67% to 53% in West Germany and from 63% to 48% in the East.

empirical

- View

insight

Declining codetermination rates in Germany may be a result of the growing service sector.

empirical

- View

insight

During a 2018 rolling strike, Google employees included an employee representative sitting on the company board on their list of demands.

fact

This is particularly notable given that in Germany, codetermination began at the bottom, as a negotiation between employees and employers. Only later was it codified as national la… View

insight

Union density in Western Europe ranges from below 10% in France to almost 80% in Sweden; but collective bargaining coverage is over 80% in all but Germany, where it’s over 60%.

fact

-- View

insight

Theoretical arguments suggest that codetermination has scope for real efficiency gains in terms of both productivity & job satisfaction, but the latter is difficult to measure, while the former is mostly likely to show up in long-run data sets that are difficult to acquire.

theoretical

- View

insight

Americans prefer to work at democratic firms because they intrinsically value having more power at work.

empirical

“Respondents prefer to work at democratic firms in part because they intrinsically value having more power at work: Our experimental design also allows us to hold many other job se… View

insight

Impending one-third codetermination did not deter German incorporations of firms that would be impacted by the mandate.

empirical

"First, a McCrary (2008) test of the density of incorporations around the reform cutoff suggests that firms did not manipulate incorporation dates, e.g., by delaying incorporation … View

insight

1994 German codetermination sharply raised female board representation by 43%.

empirical

- View

insight

Codetermined firms have 40 - 50% larger fixed (long-term) capital stocks.

empirical

"Most importantly, we find that firms with shared governance have about 40 to 50% larger fixed (long-term) capital stocks – sharply contradicting the disinvestment predicted by the… View

insight

German codetermination had no effect raising the lowest wages.

empirical

"In contrast to the hold-up view, we find neither wage increases (or decreases) nor increased rent sharing – consistent with, and in fact helping rationalize, our first key finding… View

insight

Codetermination did not lower German profits.

empirical

"When measured by EBIT(DA) over revenue, we find a reduction in the profit margin by about 5ppt. EBIT(DA) over total assets yields an order of magnitude smaller effects, insignific… View

insight

Codetermination could jiu-jitsu the problem of corporate political speech (e.g. Citizens United) into a feature, rather than bug, by making corporate interests democratically representative.

theoretical

"Shareholders are not really owners, and they exercise little control over corporate political involvement. Employees, communities, consumers, and other stakeholders exercise even … View

insight

Property rights theory arguments against codetermination suggest that codetermination might create tension between innovation and employment, and may increase the time needed to make decisions.

theoretical

In practice, however, the opposite has generally been observed. View

insight

The “overwhelming majority” of supervisory board decisions under codetermination are unanimous.

anecdotal

The commission “Mitbestimmung” also discusses this point and argues that the overwhelming majority of all decisions are unanimous. View

insight

There is suggestive evidence for a positive impact of co-determination on innovation.

In this study, innovation is measured by the number of patents awarded to German companies before and after codetermination laws were introduced in 1976, controlling for several va… View

insight

"There is nothing inherently undemocratic in corporate speech, unless corporations themselves are undemocratic."

theoretical

"As the governance of corporations begins to take account of the interests of their stakeholders, the public voice of corporations would reflect the voices of those myriad stakehol… View

insight

Between 1940 and 1970, average CEO pay remained below $1 million (in 2000 dollars).

fact

- View

insight

In 1951, 90% of stocks were owned by individual households.

fact

In contrast, as of 2021, 80% of equity market capitalization was owned by institutional investors. View

insight

Companies with higher CEO pay compensate their boards more generously.

empirical

"In fact, there is strong evidence that companies with higher CEO pay compensate their board members more generously, a clear indication that board members are engaged in a corpora… View

insight

Stock buybacks redirect available cash from investments to repurchase shares, temporarily driving up share prices at the expense of investment.

theoretical

As William Lazonick has argued elsewhere, in some cases, buybacks can be viewed as "value extraction that lacks a theory of value creation." View

insight

"Patient capital" (low-interest, long-term loans) via public financing helped Germany resist colonization by institutional investors (seeking short-term gains).

empirical

"Yet, the literature also indicates that activist pressure has not been an overbearing presence, because there is enough “patient capital” available in the form of public financing… View

insight

Stock options comprise 63% of average CEO pay in America, but only 24% in Germany.

fact

. View

insight

In 2015, typical German CEO made $5.6 million, while their U.S. counterparts made $14.9 million.

fact

. View

insight

A 1998 German commission unanimously concluded that codetermination deepened trust between management and labor, improving information flow.

fact

"By contrast, the Komission Mitbestimmung, tasked in 1998 with evaluating the worth of Germany’s co-determination system, concluded unanimously that co- determination promoted the … View

insight

Employee-owned businesses in the U.S. pay 5 - 12% more in wages, have twice the retirement accounts, and are one-quarter as likely to be laid off.

fact

ESOPs—a form of worker ownership—have also been gaining policy attention recently as a means of redressing wage inequality. According to the National Center for Employee Ownership … View

insight

The larger the company, the more likely the directors indicated positive views of codetermination.

empirical

"Statistical analysis of the directors' responses indicated that the percentage of positive opinions is largest in companies with more than 500 employees." View

insight

61% of Swedish corporate directors reported positive experiences with employee board representation.

fact

19% reported "very positive", 42% reported "quite positive", and an additional 30% reported "as much positive as negative. Sample size was 411 corporate directors. View

insight

2/3rds of managing directors reported that union participation 'makes it easier to carry out decisions on shutting down a company, going into liquidation, or reducing the workforce.'

fact

. View

insight

Survey results of Swedish directors lend strong support to cooperative game theory, emphasizing the value of employee participation.

empirical

. View

insight

86% of Swedish managing directors did not believe that 'union participation contributes to conflict and slowing down of company operations.'

fact

. View

insight

Only 2% (7 out of 287) of Swedish directors completely agreed with the statement that union participation contributes to conflict and confrontation and inhibits the effectiveness of management.

fact

. View

insight

Data from 1972-76 and 1981-85 find codetermination had a small positive effect on productivity following the 1976 strengthening of codetermination laws.

empirical

"To overcome the problems inherent in cross sectional data, in the present paper we use panel data for 179 firms, from 1972-76 and from 1981-85, allowing for adjustment to the 1976… View

insight

Codetermination can be explicitly designed to mitigate the conflict between efficiency and distributional goals.

theoretical

"To summarise the institutional set-up, industry unions bargain with employers’ associations over regional wages, and neither works councils nor employee board representatives are … View

insight

In 1994, between 98-100% of all German firms with 2000 employees or more had a works council, in contrast to only 17-20% of all firms.

fact

. View

insight

Theoretical models agree that there exists an 'optimal' degree of codetermination that maximizes for efficiency and productivity.

theoretical

"Most theoretical models agree that there is likely to be an optimal degree of co-determination in terms of efficiency, and ‘too much’ participation or employee representation will… View

insight

The macroeconomic effect of codetermination is influenced by both scope and threshold.

empirical

"In the scientific discussion on codetermination it is often stated, for example, that the German system of codetermination provides very high levels of influence for employee repr… View

insight

Higher levels of codetermination correlate with greater national equality.

econometric

"Out of this, the previously stated hypothesis can be confirmed by the analysed sample of EU countries. This strongly supports Vitols (2005) results, which indicated a negative biv… View

insight

Codetermination led to significantly lower income share for the highest decile of income, while union strength had no significant impact.

empirical

The results show that the level of codetermination in the private sector has a strong and strongly significant impact on the income distribution on both, the EU and the OECD countr… View

insight

Codetermination level has a stronger correlation with national equality than trade union density (together they explain more than 2/3rds of the variation).

econometric

The results show that the level of codetermination in the private sector has a strong and strongly significant impact on the income distribution on both, the EU and the OECD countr… View

insight

Codetermination had no significant influence on stock prices of effected firms in Germany.

empirical

In particular, the study looks at the period from 1974 - 1995, and subsequently zooms in on the introduction of the Codetermination Act of 1976. In both cases, the authors find tha… View

insight

American trade unions generally opposed codetermination in the 1970's (German unions fought for it).

anecdotal

Thomas Donahue, the Executive Assistant to the President of the AFL-CIO in 1976 said: "We do not wish to be a partner in management – to be, most likely, the junior partner in succ… View

insight

Switzerland rejected codetermination by popular vote in 1976.

fact

. View

insight

“ Laws on codetermination... have made European CEO's deeply committed to their employees, treating them more like partners in a long-term enterprise than anonymous factors of production. – Henzler, 1992”

anecdotal

This sentiment can be directly contrasted with Alchian, 1984: “The campaigns for … codetermination on boards of directors appear to be attempts to control the wealth of stockholder… View

insight

Codetermination enjoys majority support in every state *and* among Trump voters in all but 4 states.

empirical

Overall, 52% of likely 2018 voters supported codetermination, and 23% opposed. View

insight

Return on shareholder's equity declined between 1975 and 1983 for large German codetermined firms.

empirical

"In Table 4 we consider a measure of accounting profitability, return on shareholders' equity. The COD coefficient was not significantly different from zero in 1975, but declined t… View

insight

Total factor productivity declined from 1975 - 1983 in large German codetermined firms.

empirical

"Finally, we report the alternative approach of directly estimating total factor productivity (TFP) growth in Table 5. Again there was a negative size effect and a highly significa… View

insight

Overall productivity and profitability declined for German codetermined firms that went from 1/3 to 1/2 parity from 1975 - 1983.

empirical

"The change from one-third to almost-parity seems to have had a consistently negative effect on productivity and profitability, but little influence on labour cost, in our sample o… View

insight

Between 1998 - 2014, Germany had 210 stock buybacks to the US's 11,096.

fact

The global, non-US total number of stock buybacks was 9,034. Next closest was Canada, with 2,298. View

insight

The top 5 'highest quality democracies' as judged by the Bertelsmann Foundation (2018) were all codetermined.

empirical

"Giving voice to citizens at their worksites is an important cultural adjunct strengthening communitarian values and expectations of responsive public officials that are central to… View

insight

Americans would prefer to work at democratically organized firms.

empirical

"Respondents want to work at democratically organized firms: Our results show that respondents are more likely to prefer to work at firms with workers on their corporate board, emp… View

insight

Americans value economic democracy equivalently to a wage increase of $20/hr.

empirical

"To provide a further sense of the economic magnitude, we directly benchmark our workplace democracy results with respect to salary offers. Because we also randomized salary offers… View

insight

There is little evidence of partisan polarization over economic democracy.

empirical

"We find little partisan polarization around workplace democracy: Despite the spillover of partisan polarization into many areas such as hiring (Iyengar and Westwood 2015), dating … View

insight

Codetermination raised the probability of employees preferring to work at a firm by 7%; ESOP's by 10%.

empirical

"In the left panel, we find that respondents in general prefer to work at more democratic workplaces to the private corporation. Relative to the baseline condition, co-determinatio… View

insight

Codetermination rights may differ in at least four ways: the scope of who is covered, the method of worker representation, the kind of board level representation, and the level of power given to worker representatives.

theoretical

# 1. The scope of who is covered Usually determined by a range of thresholds based on the number of employees in a firm # 2. The method of worker representation Germany and Fran… View

insight

German firms moving from zero or 1/3rd parity to 1/2 parity codetermination increase their labor investment efficiency.

empirical

Labor efficiency is measured using a net hiring optimum for a sample of German firms between 1995 - 2015. Parity codetermination was found to reduce the deviation from the net hiri… View

insight

Codetermination increases financial leverage.

empirical

The study suggests that the primary mechanism for doing so is by inadvertantly aligning employees and banks' interests. View

insight

“ “...in the wake of the financial crisis, many companies have shied away from investing in the future growth of their companies. Too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks. (Laurence Fink, BlackRock CEO)”

anecdotal

The irony of such a sentiment expressed by the CEO of among the world's largest institutional investors is noted, with amusement. View

insight

Industries with more quasi-indexer institutional ownership and less competition invest less.

empirical

"We then analyze investment patterns at the industry- and firm- level. At the industry level, we find that industries with more quasi-indexer institutional ownership and less compe… View

insight

Share buybacks began increasing soon after 1982, when SEC rule 10b-18 allowed companies to repurchase shares on the open market without regulatory limits.

empirical

The authors find that private fixed investment in the U.S. over the past 30 years has been low, and find empirical support for the hypothesis that the under-investment is driven by… View

insight

Firms that rely heavily on stock-option-based compensation are significantly more likely to repurchase their stock than firms which rely less heavily on stock options for executive compensation.

empirical

"In particular, Almeida et al. [2016] show that the probability of share repurchases is sharply higher for firms that would have just missed the EPS forecast in the absence of a re… View

insight

Below average job participation has a substantial negative marginal effect on job satisfaction.

econometric

"More importantly, the authors find a substantial negative marginal effect of below average participation on job satisfaction (close to three times the magnitude of the next larges… View

insight

A statement co-signed by prominent conservatives, including Jonathan Berry, Marco Rubio, Oren Cass, and Jeff Sessions, advocated for codetermination and stronger labor institutions.

fact

The letter notes that strong labor institutions should be a point of bipartisan agreement, as they support economic prosperity, limited government, and strong communities. View

insight

Job satisfaction and profitability are positively correlated.

econometric

Data was collected through exit interviews of outgoing employees across management and support staff across five firms, both for-profit and non-profit. The low sample size should l… View

insight

In Norway, workers at codetermined firms have higher wages and less earnings risk, though the causal mechanism appears to be the size and unionization of codetermined firms, rather than worker representation.

empirical

"We find that a worker is paid more and faces less earnings risk if she gets a job in a firm with worker representation on the corporate board. However, these gains in wages and de… View

insight

In Norway, workers moving into firms with codetermination experience a 4% increase in wages relative to former co-workers moving into firms without codetermination.

empirical

"On average, we find that workers moving into firms with worker representation experience a four percent increase in wages, compared with their former co-workers moving between fir… View

insight

In Norway, workers moving *out* of codetermined firms experience a 3% drop in wages compared to their former co-workers moving between codetermined firms.

empirical

"On average, we find that workers moving into firms with worker representation experience a four percent increase in wages, compared with their former co-workers moving between fir… View

insight

During recessions in Norway, workers at codetermined firms only experience wage decreases of 0.2%, compared with 0.9% for workers at non-codetermined firms.

empirical

"The wages of workers in firms with worker representation are not only higher on average, but they are also better insured against fluctuations in firm performance. Controlling for… View

insight

"We report consistent evidence across approaches for a casual connection between board structure (outside directors and audit committees) and firm market value."

empirical

The causal connection studies a 1999 Korean law change that mandated 50% of the board be outside directors as an exogenous shock to assess the relationship between share price and … View

insight

Large Korean firms subject to a new mandate requiring 50% of board members being outside directors saw share prices rise by an average of 15% relative to mid-size firms unaffected by the mandate.

empirical

"The estimated effects are economically important. In our event study, large firms’ share prices rise by an average of 15% relative to mid-sized firms over a broad window covering … View

insight

The "real freedom" conception of social justice justifies granting each citizen the highest sustainable unconditional basic income payment, constrained by two conditions: respect for every individual's formal freedom, and an appropriate level of resources targeted towards the less able.

theoretical

This conception is advanced by Philippe Van Parijs, who elsewhere suggests that while the highest sustainable UBI is his ideal, it is more realistic to begin with a smaller, partia… View

insight

Universal and targeted programs, after accounting for financing, can achieve identical distributional outcomes.

fact

"When discussing a universal cash assistance program like Andrew Yang’s Freedom Dividend, one often hears, “Why\should Bill Gates get $1,000 per/month? Give it to the needy!” But t… View

insight

In 2021, the U.S. "tax gap" (difference between taxes owed and collected) totals around $600 billion, annually. The vast majority (roughly 65%) of dodged taxes are accounted for by the top 10% of the income distribution.

empirical

Over the next 10 years, the present tax gap represents roughly $7 trillion dollars of uncollected tax revenue. The majority of uncollected revenue stems from those with top incomes… View

insight

A 10% value-added tax in 2020 is estimated to have potentially raised $842 billion, rising to an average of $1 trillion in annual revenue over the following decade.

empirical

Paying out a UBI equal to the VAT rate times twice the poverty line (roughly $2,500 per person), the VAT would still raise an additional $247 billion per year. If the UBI were cut … View

insight

A NIT designed to eliminate poverty (in 2002) with a minimum payment of $9,359 that reduces by 25.6% per dollar earned is estimated to have costed $1.09 trillion.

empirical

This estimate uses the 2002 total US population of 285,933,410; provides $3,500 for persons younger than 18; $9,359 for persons aged 18-64; $8,628 for persons 65 and above; and ass… View

insight

A NIT set at 100% of the poverty line with a 50% phaseout rate would've cost $219 billion in 2004 (using 2007) dollars.

empirical

This program would eliminate poverty, and payments would phaseout entirely by 200% of the poverty line. Reducing the phaseout rate to 33% would have the payments phaseout by 303% o… View

insight

Andrew Yang's Freedom Dividend is estimated to have a gross cost of $2.8 trillion per year.

fact

“Calculating the gross cost of the Freedom Dividend is straightforward. According to an analysis of Yang’s Freedom Dividend by the UBI Center, an open source think tank researching… View

insight

A "pure" UBI (that entirely replaces welfare) would distribute earnings upwards.

empirical

"This implies that were we to eliminate current income support programs and apply the funds towards a pure UBI, there would be a relative redistribution from low-earners to zero ea… View

insight

In the UK, a UBI that replaces all other means-tested benefits would benefit the middle-class more than lower-income groups.

econometric

“As figure B1 shows, the overall impact of each of these schemes is progressive in that those in the bottom decile enjoy a substantial increase in average income while those in the… View

insight

In the UK, a UBI that replaces all other means-tested benefits would increase poverty rates for children, pensioners, and the working-age adults.

econometric

Specifically, child poverty could increase anywhere between 5.8% - 10.4% depending on program design. Pensioner poverty could increase between 3.9% to 16.8%. Working class poverty … View

insight

APF dividends were found to increase income inequality.

empirical

Findings were generated using an autoregressive distributed lag approach to cointegration and the Johansen cointegration approach, applied to annual time series data from 1963 to 2… View

insight

In 2021, 82% of Americans were dissatisfied with the nation's efforts to deal with poverty and homelessness.

fact

This represents a 4% drop from the previous year, when 78% were dissatisfied. The poll was run between January 4th and 15th, 2021. View

insight

A debt funded, $12,000/year UBI is modeled to raise prices by 3.77% over 8 years.

econometric

This estimate comes from using the Levy Model. View

insight

UBI may cause a transitive increase in price level, concentrated around middle-income housing or consumption goods.

econometric

“It is most likely that housing and consumption goods will constitute the majority of the price level spike. Specifically, it would be middle-income housing or consumption goods, a… View

insight

One econometric model finds that a Universal Basic Income in New York City would decrease inflation and rent prices.

econometric

“The most important results for the housing market are that the lower income for those at the top leads to lower rents and prices per square foot, and to a lower home ownership rat… View

insight

Welfare programs can be split into two categories: “income support”, or “insurance”. Basic income is, in theory, the best way to provide income support.

theoretical

"We argue that guaranteed income policy is, in abstract, the best way to provide income support, meaning that our safety net could be improved by replacing some or all of the polic… View

insight

As a result of disaggregated welfare programs, each with their own eligibility criteria and incentives, one in four low-wage workers face marginal tax rates above 70%, creating ‘poverty traps’ that disincentivize earning further income, lest they lose more in benefits than they gain in wages.

empirical

In practice, this means one in four workers face a situation where earning additional income disqualifies them from welfare programs of which they are recipients, ultimately losing… View

insight

The U.S. poverty rate in 2019 was 10.5% (34 million Americans), down from 11.8% in 2018.

fact

“The official poverty rate in 2019 was 10.5 percent, down 1.3 percentage points from 11.8 percent in 2018. This is the fifth consecutive annual decline in poverty. Since 2014, the … View

insight

A $1,000 increase in average CTC is associated with a 1.1% increase in labor force participation of single mothers

empirical

The 1.1% increase is equivalent to a 0.37 hour increase. View

insight

All basic income programs share four key features: payments are recurring, payments are in cash, payments go to individuals, and payments are unconditional.

theoretical

A fifth feature, “universal”, is included for UBI programs. View

insight

A child allowance costing $100 billion per year is estimated to reduce expenditures on children's and parents' healthcare costs by $3.5 billion per year.

econometric

In particular, this child allowance could be achieved by converting the current child tax credit, making it fully refundable, and increasing its value to $3,600 per child 0-5, and … View

insight

Marginal propensity to consume is 10 times larger for low income households than wealthy households.

econometric

Marginal propensity to consume is 10 times larger for low income households than wealthy households. View

insight

Basic income in Namibia led to an increase of citizens engaged in income-generating activities from 44% to 55%.

empirical

“Furthermore, the BIG led to an increase in economic activity. The rate of those engaged in income-generating activities increased from 44% to 55% (counting those above the age of … View

insight

Stockton's SEED basic income experiment found that the unconditional cash transfers removed material barriers to improving their economic position. In particular, recipients were able to reduce the number of part-time shifts to seek stronger positions, complete unpaid training and internship program…

empirical

“Shifts in employment patterns were tied to removing material barriers to full-time employment and removing time and capacity limits created by scarcity and precarity. Material bar… View

insight

A NIT with an income threshold at the federal poverty line and a 33% phaseout rate would cost $336 billion, and phaseout completely at 303% of the poverty line.

empirical

Raising the income threshold to 133% of the poverty line would've raised the cost to $635 billion. Increasing the phaseout rate would’ve reduced the cost to $219 billion. View

insight

A guaranteed income of $250/month per person under 65, the equivalent of expanding the existing refundable child tax credit to adults, would reduce the poverty rate by 5.9% (from 13.2% to 7.3%) , and the child poverty rate by 8.2% (from 12.6% to 4.4%).

empirical

JFI's position paper outlines their support for $250/month as a first-step towards implementing basic income. Drawing on research from Hartley & Garfinkel (2020), they suggest even… View

insight

A tax-funded, $500/month UBI is modeled to raise GDP by 1.65% over the baseline after eight years.

econometric

Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy. View

insight

The more inclusive welfare programs are, the more political support they generate.

empirical

Broadly, this paper suggests that the construction of the welfare state is not just a result of public attitudes, but that those attitudes are also shaped by the institutional desi… View

insight

Recipients of Stockton's unconditional basic income obtained full-time employment at more than twice the rate of non-recipients.

A common concern regarding unconditional cash transfers is that they might foster welfare dependency and discourage work. A growing list of studies find negligible impacts on work.… View

insight

In Norway, there is no evidence that adopting codetermination caused any change in wages.

empirical

While the authors did find that codetermination and wages are positively correlated, the evidence suggests that firm size and unionization - not worker representation - are the cau… View

insight

German companies with 50% codetermination trade at a 31% stock market discount compared to companies with only 33% codetermination.

empirical

_ View

insight

As of 2013, 28 million US employees were participating in 11,000 employee ownership plans.

fact

_ View

insight

An additional $4k/yr for the poorest households increases educational attainment by one year at age 21.

empirical

The unconditional wasn't exactly unconditional. Children were required to complete high school in order to receive the money by 18. Without completing high school, they had to wait… View

insight

Which parent receives unconditional income affects child outcomes.

“The findings also indicate that mothers who receive the exogenous increase in incomes affect the the child’s educational outcome, while fathers who receive the income affect the c… View

insight

In the case of an unconditional $4,000 provided to American Indian families financed via casino profits, recipient parents did not reduce labor hours.

empirical

The experiment took place in North Carolina. View

insight

Unconditional income improves parental quality.

empirical

"We find that parental interactions and experiences with the children in the affected households tend to improve dramatically. Both child and parent report improved behavioral effe… View

insight

American Indian children were required to finish high school in order to receive an unconditional $4,000 per year, otherwise they had to wait until 21.

empirical

"It is important to note that the American Indian children had an incentive to finish high school by age 18 as they became eligible for payment of the semi-annual casino payments t… View

insight

Unconditional income (an additional $4,000 per year) reduced arrests for 16 and 17 year olds by 22%.

empirical

"The results for parental arrests indicate that parents are engaging in less destructive behavior as a result of the increased income......with regard to the criminal arrests, Amer… View

insight

Parents and children report better relationships and supervision with unconditional income.

empirical

"Children report better relationships over time in the households with additional income, and parents report better supervision of their children over time in these same households… View

insight

UBI and NIT can have identical redistributive effects.

theoretical

"It is widely recognized that a BIG can be provided by means of either a UBI or an NIT, and that each of these two mechanisms are capable of achieving exactly the same net transfer… View

insight

The level of taxation required to fund a UBI is roughly double the amount for an equivalent NIT.

theoretical

"Second, after taking into account the reductions in conventional transfer payments a BIG would permit, the increase in government expenditures required to fund the NIT modeled in … View

insight

It's unclear that a basic income guarantee is the best use of society's redistributive capacity.

theoretical

"...In other words, the possible work-disincentive effects of a BIG are important, not only for determining the maximum BIG a society can sustain over time, but also because they u… View

insight

A UBI experiment in Finland had no effect on employment rates.

empirical

"The basic income experiment did not increase the employment level of the participants in the first year of the experiment. Based on an analysis of register data, recipients of a b… View

insight

Universal Basic Income improved mental health and self-reported cognitive function.

empirical

"The effects of the basic income experiment on wellbeing were studied through a survey. Survey respondents who received a basic income described their wellbeing more positively tha… View

insight

A "pure" UBI (that replaces all other welfare programs) redistributes money from the elderly and disabled towards those who are neither.

empirical

"This implies that were we to eliminate current income support programs and apply the funds towards a pure UBI, there would be a relative redistribution from low-earners to zero ea… View

insight

Universal Basic Income could lead to increased human capital investments that show up in the medium to long run.

theoretical

"Second, a UBI may lead to increased human capital investments, by both young people and adults. There is extensive evidence that credit constraints are binding on many students an… View

insight

Evidence from Alaska, Native casino payouts, and Manitoba all found no statistically significant changes in labor supply.

empirical

The Manitoba experiment tested a negative income tax; the Alaskan experiment tests a demogrant (universal payout to all citizens); the Cherokee experiment tests a more targeted dem… View

insight

The impacts of a Universal Basic Income significantly depend on the funding model used to pay for it.

"A “pure” UBI (providing a set benefit to all regardless of income, age, etc.) funded to meet basic needs for a household without earnings would be extremely expensive, about twice… View

insight

In a 2018 poll, 48% of Americans supported Universal Basic Income.

fact

Support is politically polarized. 65% of democrats support, compared with only 28% of republicans. View

insight

46% of UBI supporters would pay higher personal taxes to support UBI.

fact

64% of respondents with a bachelor's degree or higher supported personally paying higher taxes, compared to only 38% of those with less than a bachelor's. 55% of democratic respond… View

insight

80% of supporters say companies that benefit from AI should pay taxes for UBI.

fact

This broad support spanned across part lines. 88% of democratic respondents agreed, as did 74% of republican respondents. View

insight

Income guarantees effectively convert personal tax deductions into a universal credit.

practical

"...The plans range in gross cost from $720 billion to $1 trillion, yet the baseline tax reform would offset these costs by eliminating about $600 billion in redundant tax code tha… View

insight

The Alaska Permanent Fund had no impact on full-time employment.

"In our preferred specification, we do not detect any effect of the Alaska Permanent Fund dividend on employment, i.e. the extensive margin. We do, however, estimate a positive inc… View

insight

The Alaska Permanent Fund *increased* part-time employment by 1.8%.

empirical

"In our preferred specification, we do not detect any effect of the Alaska Permanent Fund dividend on employment, i.e. the extensive margin. We do, however, estimate a positive inc… View

insight

Unconditional cash transfers stimulate consumption, which can offset employment reduction.

empirical

"Our preferred interpretation of the empirical patterns we observe is that the null employment effect could be explained a by positive general equilibrium response offsetting a neg… View

insight

21% of Alaskan's report that dividends from the Alaska Permanent Fund *increased* their willingness and incentives to work.

empirical

"A representative survey of Alaskans conducted in March and April of 2017 (Harstad, 2017) shows that the dividends are popular and significant to Alaskan residents. For example, 40… View

insight

A federal debt-funded UBI expands GDP in the Levy model.

econometric

"Under the smallest spending scenario, $250 per month for each child, GDP is 0.79% larger than under the baseline forecast after eight years. According to the Levy Model, the large… View

insight

Universal Basic Income is a “bioindicator” for neoliberalism.

theoretical

"Paradoxically, then, UBI seems to be a crisis demand, brandished in moments of social retreat and austerity. As politics moves to the right and social movements go on the defensiv… View

insight

US welfare runs on disaggregated systems that do not share an integrated database, making nationwide eligibility identification difficult.

practical

"In short, the US does not have an integrated database that can be used to target individuals or households for aid; it has a variety of systems at the federal, state and local lev… View

insight

A data sharing agreement between the IRS and SSA could implement a near-universal program.

theoretical

Presently, the U.S. lacks the infrastructure to get payments into the hands of every citizen, as the pandemic stimulus payments highlighted. But by combining existing databases, br… View

insight

Universal welfare programs "blur the lines" between beneficiaries and contributors, creating a beneficial mirage of solidarity.

theoretical

"Although generous social provision clearly increases the total tax burden on the middle classes and involves significant cross-class redistribution, it may be difficult in practic… View

insight

In 2012, it would've cost $175.3 billion to raise every U.S. citizen's income to the poverty line, or 1.08% of GDP. Poverty-line unemployment insurance is estimated to cost between 6 to 35 times less than a UBI.

theoretical

"To be sure, you probably don't want to run a program that hunts out every family below the poverty line and brings them right up to it. Such a program would effectively involve im… View

insight

Universal healthcare may eclipse the health benefits of UBI/NIT.

theoretical

"There is little to no impact on health outcomes for Swedish lottery winners, likely because of the universal healthcare system in the country." View

insight

A systematic review of the existing empirical literature on UBI & labor supply found no evidence that it would discourage work.

empirical

The review surveyed 18 empirical cases and 38 studies. Instead, in some cases, especially in developing countries, cash transfers increased employment. A few decreases in working h… View

insight

A majority of the working population gains from switching from unemployment benefits to universal basic income.

econometric

For a simple utility function with both intensive & extensive margins, the unemployed have higher utility with basic income (BI) than unemployment benefits (UB). For a general util… View

insight

Days spent homeless by the group who received cash-transfer dropped from 77% to 49% in the first month.

empirical

For the non-cash control group, days homeless increased from 64% to 78%. The cash group spent 4,396 fewer nights homeless over 12 months. On average, cash recipients moved into sta… View

insight

67% of cash recipients were food secure after 1 month, an increase of 37% from baseline.

empirical

The non-cash control group only increased food security by 2% over the same period. Cash recipients retained greater food security across the full 12 months of the study. View

insight

Recently homeless cash transfer recipients spent 39% less on goods such as alcohol, drugs, or cigarettes.

empirical

This finding is in line with the broader research, finding that recipients do not use cash transfers on "temptation goods". View

insight

In terms of gender equality and democratized citizenship, a basic income may be preferable to a capital grant.

theoretical

"A basic income is a crucial part of any strategy for democratic social change because, unlike a capital grant, it could help break the long-standing link between income and employ… View

insight

Cash-transfer recipients invested 26 cents of every peso transferred in productive assets, raising long-term consumption by 1.6 cents.

empirical

From a study focusing on Mexico. View

insight

Alaska Permanent Fund dividends were found to increase income inequality.

econometric

Findings were generated using an autoregressive distributed lag approach to cointegration and the Johansen cointegration approach, applied to annual time series data from 1963 to 2… View

insight

Higher-income people might invest more of a cash-transfer into higher yield assets than those with lower-incomes, exacerbating income inequality in the long-run.

theoretical

While experimental results generally suggest the Alaska Permanent Fund dividends either decreased inequality, or had no effect, these cannot rule out the long-term possibility that… View

insight

Attendance, grades, and test scores were higher for children of families who received NIT, especially younger children and children from low-income households.

empirical

Headline results included an increase in average reading achievement in children grades 4 through 6. No beneficial effects were observed for older children. View

insight

Alaska’s Permanent Fund dividends help reduce Alaskan income inequality.

theoretical

"Two features of the dividend—it is an equal distribution to all residents and it is taxable as personal income by the federal government—contribute to it helping to level the inco… View

insight

Recipients of basic income in Kenya increased their spending relative to control groups by 13.5%.

empirical

"As expected, recipient households report significantly higher total expenditure: USD PPP 293 more expenditure than eligible households in control villages (Table 1, column 1), an … View

insight

Cash transfers in low and middle income countries do not reduce labor supply.

empirical

"Examining labor supply specifically, we do not find evidence that recipient households worked less; if anything, total hours worked by recipient households in agriculture, self-em… View

insight

Cash transfers increased economic activity (proxy for GDP at scale) in Kenya (via multiplier effects of 2.46 on expenditures and 2.73 on income).

empirical

Fiscal multipliers measure the effect that increases in government spending have on a nation's economic output. A multiplier of 1 implies every additional dollar spent yields an ad… View

insight

“ Almost without exception, studies find either no significant impact or a significant negative impact of transfers on temptation goods.”

empirical

Temptation goods are the likes of alcohol, tobacco, or drugs. These results hold across 28 separate studies spanning three continents. Only one study found a rise in temptation goo… View

insight

Perceived economic insecurity is more detrimental to mental health than actual, realized risk.

empirical

"In particular, perceived future risks are more damaging to mental health than realised volatility...For both genders it is the case that subjective measures of economic insecurity… View

insight

A $1,000 increase in average CTC is associated with a 0.37 hour increase in weekly working hours for single mothers.

empirical

Orthodox assumptions held that providing direct cash aid without a work-requirement would discourage work. These findings, in-line with a slew of other research on unconditional ca… View

insight

UBI is a 'pay now, tax later' approach. NIT uses means-testing to 'tax first, pay after'.

practical

"Guaranteed income programs are universal rather than targeted; they are not conditioned on unemployment, training or other activities; and they utilize a “pay now, tax later” appr… View

insight

Evidence from Kenya suggests frequency of cash transfers matter. More frequent payments are likely to improve consumption smoothing, while less frequent payments are likely to be spent on large assets.

empirical

Referencing Johannes Haushofer and Jeremy Shapiro's study,“The Short-term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya”. View

insight

Not only do unconditional cash transfers *not* lead to gambling, drug, or alcohol use, some studies find these behaviors are *reduced* by transfers, perhaps because they alleviate the financial and mental stresses that generate them.

empirical

"Decades of research on unconditional cash transfers (guaranteed income or otherwise) has consistently demonstrated that providing unrestricted aid does not lead to gambling, drug … View

insight

Basic income and a job guarantee aren't necessarily in opposition; they address mostly separate problems, and might coexist well.

theoretical

"It is clear that typical Jobs Guarantee proposals would offer more substantial aid than a guaranteed income but to a small subset of individuals and households (those with adults … View

insight

A meta-analysis of cash transfers on self-reported mental health found they significantly increase mental health in low and middle income countries (average effect size of 0.1 standard deviations).

empirical

"Two authors double-screened 1,147 records of potentially relevant studies, finding 38 studies suitable for inclusion in our meta-analysis, covering 100 outcomes and a total sample… View

insight

Poverty creates psychological feedback loops that perpetuate & entrench poverty.

empirical

In particular, the authors find that poverty drives stress and negative affective states that lead to short-sighted and risk-averse decision-making, perpetuating the cycles that te… View

insight

Funding a $12,000 UBI via consumption taxes would require a tax rate increase of 22%.

empirical

The author's model finds that doing so would decrease macroeconomic aggregates, largely driven by a drop in labor supply in response to the higher tax rate. View

insight

Basic income would assist in the social 'absorption' of social output.

theoretical

"From an institutionalist perspective, the creation of the social product is entirely a social activity and is more than the result of the efforts of individuals involved in the pr… View

insight

Business owners during Dauphin's Mincome experiment reported that while receiving the Mincome, new employee applicants were increasingly "unacceptable" because they were "not willing to train at reduced salary".

anecdotal

"It is unclear how common this perspective was, as firms were given little space for detailed commentary. One other business-owner made a short but substantive comment. As an emplo… View

insight

A generous, universal basic income boosted workers’ bargaining power, raising wages in Dauphin, Canada.

empirical

"It is often hypothesized that a guaranteed annual income will facilitate a ‘low-road’ economy as government top-ups free employers to reduce wages. To the contrary, this article l… View

insight

Higher welfare universalism is positively correlated with redistribution, poverty reduction, and social expenditures, while negatively correlated with inequality levels.

empirical

Specifically, the correlation coefficients with univeralism are -.59 for the Gini Index, .73 for public social expenditures, .67 for the redistribution index, and .56 for poverty r… View

insight

Taxing rising land values allows for the redistribution of landlord's unearned gains arising from city growth.

theoretical

“He [Henry George] also cited equity reasons for the 'single tax' on land. Namely, increases in land value (exclusive of improve- ments) in the early 1900s were due primarily to an… View

insight

The share of US employment accounted for by young firms has declined by almost 30% over the last 30 years.

fact

Since 2000, the rate of new business formation has been decreasing at an accelerating rate. Thus, the balance of businesses in the US economy is shifting towards older, incumbent b… View

insight

Uninsured risk from leaving wage employment is a primary barrier to entrepreneurship.

empirical

"Finally, I show that the empirical results are driven entirely by newly-eligible households that did not enroll, suggesting uninsured risk from leaving wage employment is the prim… View

insight

Raising public health insurance coverage rates increased self-employment by 15%.

empirical

These findings refer to data from the State Child Health Insurance Program, and the 15% raise in self-employment occurred in parents. View

insight

Stronger social safety nets increase entrepreneurship.

econometric

In this case, entrepreneurship is measured as firm formation, and safety net data was taken from the State Child Health Insurance Program, a large-scale public healthcare program s… View

insight

Allocating more government spending towards social and public goods relative to private subsidies is positively associated with entrepreneurship.

empirical

Much has been said about the relationship between overall government spending and entrepreneurship (generally chiding the stifling bureaucracy of 'big government'), but we can go a… View

insight

Reforming Unemployment Insurance to allow recipients to continue drawing benefits for a period after starting their own business, and guaranteeing UI eligibility if their venture failed, led to a 25% increase in firm creation.

empirical

Of the entrepreneurial jobs that were created, they displayed higher productivity than the incumbent jobs they displaced, leading to an overall rise in productivity. The authors ex… View

insight

A 10% value-added tax coupled with partial UBI would reduce inequality, raising the after-tax income of the bottom three income quintiles.

empirical

The UBI amount is based on family size and composition. It would be provided quarterly to each family, for an annual reimbursement equal to two times the poverty line, multiplied b… View

insight

Finnish codetermination had a slight, but positive impact on total factor productivity

econometric

In general, current empirical studies find that codetermination either has neutral or slightly positive economic effects. While this study found a small increase in productivity, t… View

insight

A small basic income of $250 per month for adults and children that begins phasing out at $150,000 of household income - financed via eliminating certain tax deductions that disproportionately benefit the wealthy, plus a $42 per metric ton carbon tax - would reduce poverty by 40%, and reduce child p…

econometric

A $500 per month benefit limited to adults financed solely by a carbon/consumption tax would reduce child poverty only to 10.3%. View

insight

A one unit increase in universalism is associated with a 4.8 point increase in redistribution.

empirical

"Coefficients in Model 1 show that a one-unit increase in universalism is associated with a 4.8 point increase in redistribution, which is roughly the difference in redistribution … View

insight

Citizens living in countries with higher levels of universalism tend to maintain stronger support for government redistribution.

empirical

Among a cohort of developed countries, the US has the lowest universalism index (measure of welfare programs), and the lowest support for redistribution. View

insight

106 million Americans live in economic insecurity (family income less than 200% of federal poverty line).

fact

In 2020, the federal poverty line was $12,760 for an individual, or $26,200 for a family of four. This places the economic security line at $25,520 for an individual, or $52,400 fo… View

insight

A tax funded, $1k/month UBI is modeled to increase the employment rate by 0.31% over baseline after 8 years.

econometric

Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy. View

insight

Findings on employment reductions from the U.S. & Canadian NIT experiments from 1968 - 1980 are often overstated.

empirical

Early results from a series of negative income tax experiments in the US found that recipients of unconditional cash significantly reduced their employment hours. Subsequent resear… View

insight

The Alaskan Permanent Fund Dividends appears to have boosted entrepreneurship, but the effects dissipate over time.

econometric

The positive effects were concentrated mostly in men, leaving female entrepreneurship rates mostly unchanged. The same pattern of findings applies to self-employment, with initital… View

insight

When Indian workers have more cash-on-hand, productivity rises by 6.2%, and mistake rates decline.

empirical

Results were found from a test group of low-income Indian manufacturing workers receive a cash infusion plus earlier paychecks (increasing overall liquidity). The extra cash was us… View

insight

A €12,000/year UBI paired with a 50% flat tax would yield a progressive tax burden distribution. No one earning below €24k pays net taxes.

empirical

Individuals earning €48k per year would pay €24k in taxes, while receiving the €12k UBI, yielding €12k in net taxes, for a 25% net tax rate. At the top, individuals earning €600k w… View

insight

Evidence from the Alaska Permanent Fund suggests that an additional one thousand dollars in APF payments decreases the probability of an Alaskan child being obese by as much as 4.5%.

empirical

Extrapolating a similar payment to the US, the authors find that 66,000 annual cases of childhood obesity could be averted, on average, resulting in medical savings of roughly $310… View

insight

“ Understanding codetermination solely as an instrument to protect employees or to improve corporate governance and/or performance fundamentally underestimates its potential contribution to society.”

theoretical

“However, this Article argues that understanding codetermination solely as an instrument to protect employees or to improve corporate governance and/or performance fundamentally un… View

insight

“ Economic growth is now necessary, but not sufficient, to significantly reduce poverty. Antipoverty policies must be reformed and expanded to address these new demographic and economic realities.”

theoretical

As economies evolve, so do they methods they use to meet their challenges. These authors argue that growth, once the primary target of economic development, must now be balanced am… View

insight

For a number of European countries, a micro-econometric model finds that a negative income tax financed via a flat-tax maximizes social welfare.

econometric

In this model, optimal welfare is determined using Kolm's social welfare function. View

insight

Financial insecurity undermines perceptions of 'existential meaning' in life.

empirical

Here, financial insecurity is defined as a subjective report of one's sense that they can afford what they need now, and in the foreseeable future. This sense of financial (in)secu… View

insight

In the case of several EU countries, both UBI and NIT outperform existing conditional welfare measures in terms of maximizing a social welfare function.

econometric

The researchers use a microeconometric model of labor supply, and Kolm's social wefare function to assess the optimality of different welfare programs. That status-quo performed th… View

insight

Basic income lets people assert their true work preferences, shaking constraints on working hours.

theoretical

"Many people may today be working longer hours than they would wish, while others have no work at all; basic income could encourage shorter hours and thereby release working time f… View

insight

From a Keynesian perspective, cash benefits will enhance macroeconomic efficiency if they uphold aggregate demand and raise employment.

theoretical

Keynes theorized that redistribution moves cash from the wealthy to lower-income people who are more likely to spend each additional dollar received. On the whole, cash benefits co… View

insight

Alaska's APF dividend was associated with a 17.7 gram increase in infant birth weight

empirical

Alaska's Annual Permanent Fund is a publicly-managed investment portfolio funded by a 25% tax on oil sales. Operating since the early 1980's, residents have received an annual paym… View

insight

Alaska's APF dividend was associated with a 0.4% - 0.7% decrease in low birth weight.

empirical

Alaska's Annual Permanent Fund is a publicly-managed investment portfolio funded by a 25% tax on oil sales. Operating since the early 1980's, residents have received an annual paym… View

insight

In Nepal, children living in households with grandparents eligible for unconditional old-age allowance had a 7% - 8% higher probability of survival 12 months after birth.

empirical

A review of 14 studies on the impact of cash transfer interventions on infant health. The study suggests that unconditional programmes yielded more positive outcomes regarding birt… View

insight

3 targeted & unconditional cash transfer programs found positive effects on infant health in the first year of life.

empirical

“All three low-income-targeted unconditional programmes demonstrated mainly improved outcomes during the first year of life. The Gary Experiment yielded 117.6–530.4 g higher birth … View

insight

Reforms to the US welfare system that made cash transfers conditional upon work were associated with an increase in infant mortality of 3.1 deaths per live birth for foreign-born Mexican women.

empirical

"Reforms to the US welfare system were associated with an increase in infant mortality rate for children of foreign-born Mexican women of 3.1 deaths per 1000 live births (SE: 0.001… View

insight

In high-income countries, cash transfer programs that carry work requirements are not associated with improved health of young children, whereas unconditional ones are.

empirical

“While our review uncovered only 14 papers, which together yielded some mixed results, 3 patterns stood out. First, in both low-income/middle-income and high-income countries, cash… View

insight

Childhood poverty in the US is estimated to cost $500 billion per year, or 4% of GDP.

empirical

The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health l… View

insight

Childhood poverty in the US is estimated to reduce productivity and output by an amount equal to 1.3% of GDP.

The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health l… View

insight

Childhood poverty is estimated to raise the costs of crime by 1.3% of GDP.

empirical

The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health l… View

insight

Childhood poverty is estimated to raise health expenditure by 1.2% of GDP.

empirical

The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health l… View

insight

In 2007, the U.S. spent $207 billion on means-tested welfare, and only lifted 9.7 million of the 37.3 million Americans living in poverty.

fact

Even after accounting for benefits from welfare program transfers that are excluded from official poverty numbers, 27.6 million Americans remained below the poverty line. According… View

insight

Reducing welfare eligibility criteria from patchwork means-testing to solely on the basis of income as reported to the IRS should increase take-up rates, reduce stigma, and significantly cut administrative costs relative to the current safety net.

theoretical

Presently, the U.S. has a number of overlapping welfare programs, requiring eligible recipients to fill out numberous forms for various agencies, presenting adminsitrative hurdles … View

insight

Regarding non-labor income such as basic income, income effects & substitution effects countervail one another, so that the overall effect on individual working time is ambiguous.

theoretical

"Economic theory suggests that the availability of a NIT might lead some to work less than they would in its absence. According to theoretical models, individuals’ hours of work ar… View

insight

Across four US and one Canadian NIT experiments, reduced labor supply averaged between 5% - 7.9% reduction for men, 17% - 21% for married women with children, and a 7% - 13.2% reduction for single women with children.

empirical

However, the authors go on to question the validity, and magnitude, of these findings. Even taken at face value, they don't represent the mass exodus from the labor market some exp… View

insight

NIT was shown to increase high school completion rates by as much as 25% to 30%.

empirical

"The NIT was shown to positively affect the academic test scores of children in some sites and increase high school completion rates by as much as 25% to 30% in others (Hanushek, 1… View

insight

NIT increased the number of adults pursuing continuing education in Seattle, Washington, and Denver.

empirical

"The NIT was shown to positively affect the academic test scores of children in some sites and increase high school completion rates by as much as 25% to 30% in others (Hanushek, 1… View

insight

A January 2013 Gallup poll found that 70% of respondents were either "somewhat" or "very" dissatisfied with the "nation's efforts to deal with poverty and homelessness."

fact

In 2021, this number of respondents reporting themselves as either very or somewhat satisfied with "The nation's efforts to deal with poverty and homelessness" was down to only 18%… View

insight

If basic income allows workers to modestly reduce their hours of work, this could benefit the economy by tightening the labor market - the vacated hours would open up jobs for job seekers to fill.

theoretical

"...at any given moment, tens of millions of people - both employed and thinking about employment - are making a complex calculation as to how many hours of paid labor they need to… View

insight

The lower NIT's phaseout rate, the lower the work disincentives are.

theoretical

Any form of basic income that reduces the benefit payment as one's income increases has a "phaseout rate" of the benefit. Higher rates mean each additional dollar earned loses a la… View

insight

The gross cost of a $12k/yr UBI paid to all adults, and $6k/yr to children is estimated at $3.4 trillion per year.

empirical

As a 'back of the envelope' calculation, these estimates make simplifying assumptions to provide a ballpark range. Gross cost refers to the total revenue required to implement the … View

insight

The net cost of a $12k/yr UBI to all adults and $6k/yr to all children is estimated at $539 billion.

empirical

As a 'back of the envelope' calculation, these estimates make simplifying assumptions to provide a ballpark range. The net cost refers to the cost of the program after taking into … View

insight

The net cost of a $12k/yr UBI to all adults is estimated at $1.69 trillion per year.

empirical

An equivalent negative income tax is estimated to cost roughly half as much, while achieving equivalent redistributional outcomes. View

insight

A basic income high enough to meet an individual's basic needs would ensure that workers' participation in the labor market is truly voluntary.

theoretical

Market economies are premised upon the notion of 'voluntary exchange' - then indivuals are not coerced into accepting trades in the marketplace. But some political philosophers sug… View

insight

Accounting for "inflation inequality", an additional 3.2 million Americans were classified as living in poverty in 2018 than suggested by the federal poverty line.

empirical

"Recent research also shows that prices have risen more quickly for people at the bottom of the income distribution than for those at the top — a phenomenon dubbed “inflation inequ… View

insight

There is a lack of research into the optimal amount of guaranteed income.

empirical

"...for a given budget constraint, each dollar disbursed on a guaranteed income is one not spent on other necessary programs, so it is reasonable to ask about cost-effectiveness: w… View

insight

A $12k/year UBI funded via a 22% increase in consumption taxes would contract both capital and output.

econometric

"In my second counterfactual exercise, I implement Andrew Yang’s proposal of UBI. I let the level of transfers be of US$12,000 annualy to each agent in the economy. In this scenari… View

insight

A $12k/year UBI funded via consumption taxes raises utilitarian welfare by 0.12%

econometric

The author constructs an econometric model of the US economy by developing an overlapping generations model with idiosyncratic income risk, inclusive of intensive and extensive mar… View

insight

In the state of Oregon, the cost of running the unemployment agency is about $500 per unemployed person per year.

fact

All welfare programs requires some degree of administration costs. Knowing these costs can help us measure their efficacy against simply disbursing cash equivalents to all citizens… View

insight

Unemployment insurance is a more effective insurance program against shocks than UBI.

econometric

A dynamic equilibrium model using data from the US during the years 1990 - 2011 was used to compare UI to UBI. The authors write: "One way to think of why UI so clearly dominates … View

insight

The introduction of a small UBI does not cancel out the value of unemployment insurance.

empirical

"We now want to compare both policies. As previously noted, both UI and UBI programs are significant improvements over the laissez-faire, i.e., self-insurance shown in the first li… View

insight

One econometric model predicts a NIT implies a 13% drop in the savings rate and a subsequent 22% reduction in the capital stock.

econometric

"Second, there is a negative relationship between the magnitude of the transfers and per-capita GDP, which decreases by 9% under the optimal NIT. The reason is simple: leisure is a… View

insight

With a basic income, high-productivity workers increase participation while low-productivity workers reduce participation, increasing the Gini coefficient for labor earnings.

econometric

"The composition of the labor force also changes: high-productivity agents increase participation at the expense of low-productivity agents. This is reflected by the fact that alth… View

insight

The optimal design of basic income (tax rates, transfer amounts) significantly depends on labor supply elasticity, where econometric models and real-world observations are in conflict.

theoretical

Two of the largest unanswered questions around basic income - how best to pay for it, and how much to pay - depend on questions regarding human behavior where economic models and r… View

insight

Further small-scale pilots of basic income would be of limited usefulness

theoretical

The number of small-scale basic income experiments in the US has grown significantly in recent years. As new small-scale experiments continue to be announced, the question looms: w… View

insight

Results from US NIT experiments in the 1970's overestimated labor supply effects by relying on self-reported estimates.

empirical

"The major findings of this paper can be briefly summarized. Estimates computed with interview data collected during the SIME/DIME experiment indicate that husbands, wives, female … View

insight

A UBI is preferable to subsidies of low-wage work on economic, moral, and political grounds.

theoretical

Economic arguments include work incentives and wage depression. Moral arguments include creating a realistic 'exit option' for recipients, allowing them to leave undesirable arrang… View

insight

Expanding and universalizing the EITC could provide a bipartisan, incremental step forward.

theoretical

The current Earned Income Tax Credit (EITC) provides a basic mechanism that could be updated & expanded to capture many of the benefits of a basic income, while establishing it all… View

insight

Low-income adults would benefit more from a dollar in cash than a dollar of government spending on health insurance.

empirical

"60% of government spending to expand Medicaid to new recipients ends up paying for care that the nominally uninsured already receive, courtesy of taxpayer dollars and hospital res… View

insight

Investing $5,500 per person to expand Medicaid coverage only delivers $2,200 worth of benefits that recipients were previously ineligible for.

empirical

"60% of government spending to expand Medicaid to new recipients ends up paying for care that the nominally uninsured already receive, courtesy of taxpayer dollars and hospital res… View

insight

A negative income tax that eliminates poverty, with a maximum benefit of $12,500 that phases out by $50,000 for single-adult households and $70,000 for two-adult households, is estimated to cost $839 billion per year.

empirical

Darrick Hamilton, Naomi Zewde, & co. released a proposal for a basic income that would (nearly) eliminate poverty. The payment would begin at $12,500, and begin phasing down at $10… View

insight

Existing guaranteed income programs, such as Supplemental Security Income, are plagued by low enrollment rates among the eligible. Greater reductions of poverty could be achieved by raising participation rates.

empirical

Many existing welfare programs are opt-in, requiring eligible recipients to fill out various forms and paperwork to receive benefits. Even among the already eligible, many programs… View

insight

Unconditional cash transfers aren't great tools for solving underlying market problems, such as information asymmetry, externalities, or barriers to entry, all of which distort the efficient distribution of goods and services.

theoretical

JFI's position paper outlines two distinct spheres of welfare programs: income-assistance, and public insurance. They suggest that basic income can be a good replacement for income… View

insight

Means-testing monthly payments can be problematic for those with unstable incomes, creating work disincentives and leaving vulnerable populations without assistance.

empirical

"Means-testing causes further problems when benefits are distributed throughout the yearin regular payments rather than in annual lump sum (a common feature in guaranteed income pr… View

insight

The Social Security Administration may be better equipped for guaranteed income disbursements than the IRS.

empirical

"The reforms to the Child Tax Credit (CTC) under the Biden administration (which they hope to make permanent) substantially improve upon the previous CTC by removing its work-condi… View

insight

Guaranteed income should be paired with public banking to ensure all citizens have access to their payments.

theoretical

"Even the Social Security Administration must deal with the problem of the “unbanked” or “underbanked.” Though most SSA program (OASDI, SSDI, SSI) beneficiaries receive their benef… View

insight

There isn't enough evidence on frequency of payments to determine the right strategy for basic income.

empirical

"It is not yet clear whether Guaranteed Income should be disbursed in small, regular payments. Given the harmful effects of income shortfalls and the prevalence of income volatilit… View

insight

Guaranteed incomes greater than $250/month will likely require funding mechanisms that reach beyond progressive income taxes.

empirical

Simply by consolidating existing patch-work welfare programs and raising progressive income taxes, a small basic income of around $250 per month could be paid for. However, program… View

insight

In 2011, the government spent $1.03 trillion on 83 separate but overlapping means-tested welfare programs. In the same year, 46.2 million Americans remained in poverty, for a poverty rate of 15%.

fact

This analysis was provided by Jeff Sessions, ranking member on the United States Senate Budget Committee. View

insight

The overall effects of any guaranteed income program depend on both the benefit payouts and the effects of taxes used to pay for the program.

theoretical

While it's tempting to evaluate guaranteed income programs based on their sticker price, evaluating their overall impact requires factoring in the effects of funding strategies, su… View

insight

Making the Child Tax Credit universal caused no statistically significant changes in employment rates.

empirical

Breaking from decades of welfare strategies, President Biden expanded the child tax credit in July 2021, providing payments to all families below a given income threshold. Many hav… View

insight

Fear of unemployment is the most damaging form of economic insecurity, particularly for males.

econometric

Data was collected from the British Household Panel Survey. Headline findings included that perceived future risks are more damaging to mental health than actual, realized volatili… View

insight

A child allowance that costs $100 billion per year could generate up to $865 billion per year in monetary and non-monetary benefits

empirical

The two main sources of gains are improvements to children's health & longevity ($650 billion), and increased future earnings of recipients' children ($80 billion). View

insight

“…codetermination is not a standalone institution. Rather, it is part of a broader institutional and cultural package whose other elements complement codetermination and supply its practical infrastructure. The recent American policy discourse has seen several proposals to introduce other elements o…

empirical

Codetermination in Europe relies on related labor institutions, like widespread union representation and collective bargaining. These elements are crucial not only in understanding… View

insight

"The available evidence indicates that the European model of codetermination is neither a panacea for all of the problems faced by 21st-century workers, nor a destructive institution that is dramatically inferior to shareholder primacy. Rather, as currently implemented, it is a moderate institution …

empirical

A 2021 review of the existing evidence on codetermination, concentrated in Europe. View

insight

Codetermination appears to have had null, or slightly positive, impact on job satisfaction.

econometric

"The available evidence indicates that the European model of codetermination is neither a panacea for all of the problems faced by 21st-century workers, nor a destructive instituti… View

insight

A 2021 survey of codetermination studies finds that the existing empirical evidence "points to nonexistent or very small positive effects of codetermination on key proxies for worker welfare, including wages, rent-sharing, voluntary and involuntary separations, health, and subjective job quality."

empirical

“Our overall conclusion in this section is that the existing empirical evidence points to nonexistent or very small positive effects of codetermination on key proxies for worker we… View

insight

A synthesis of case studies, interviews, and surveys suggests that existing codetermination laws grant workers power in three areas: moderate control over working conditions, small influence in layoffs, and small influence over wage setting.

empirical

"The qualitative evidence paints a picture of an institution that gives workers some control over their immediate working conditions, but grants them negligible authority beyond th… View

insight

"Several important labor market institutions—sectoral collective bargaining, widespread union representation, and extensive regulation—may already capture most of the low-hanging fruit when it comes to affecting worker outcomes, leaving little room for German and Nordic codetermination to make an im…

empirical

In addition, the authors consider two additional explanations for codeterminations negligible economic impact in Europe: a higher existing baseline of informal worker participation… View

insight

There is little precedent for how codetermination might be implemented in the US, since European models rely on the near-universal presence and legitimacy of union representatives, a feature lacking in the US.

practical

“Overall, much of the practical infrastructure of codetermination in European countries relies on the near-universal presence and widespread legitimacy of union representatives. Th… View

insight

Boosting worker power in a hostile atmosphere of industrial relations may just intensify negative-sum conflict between workers and managers, whereas in a cooperative atmosphere (as in Europe), this conflict may be less pronounced.

theoretical

“Cooperative industrial relations may be a crucial complement to codetermination. A long-standing hypothesis is that the effects of increasing worker power crucially hinge on the p… View

insight

Following Germany's 1976 strengthening of codetermination laws to 1/2 board representation for 2,000+ employee firms, capital-labor ratios declined (favoring capital formation), productivity declined, and profitability increased.

econometric

Study uses panel data set of 63 firms covering years between 1970 - 1985, concluding that parity-codetermination (1/2 board representation) is associated with lower productivity bu… View

insight

Codetermination can help protect the democratic process by curbing excessive corporate power.

theoretical

“However, this Article argues that understanding codetermination solely as an instrument to protect employees or to improve corporate governance and/or performance fundamentally un… View

insight

The largest corporations already account for a larger share of the economy than at almost any time during the last 100 years, and the emerging data economy threatens to further consolidate economic resources.

empirical

"ML [machine learning] tools allow corporations to leverage their power in unprecedented ways. For the first time, corporations are able to engage in first degree price discriminat… View

insight

By allowing employees to elect a significant portion of corporate directors, codetermination can play a similar role as that of the Constitutional separation of powers.

theoretical

“Allowing employees to elect a sizable portion of corporate directors in large corporations imposes an effective check on the power of shareholders and managers. Thus, codeterminat… View

insight

If the goal of codetermination is to curb excessive political power, it may be sufficient to impose mandates that affect only a handful of the largest corporations, without making codetermination a generalized feature of the US corporate landscape.

theoretical

“To protect democracy from excessive corporate power, it would be sufficient to impose mandatory codetermination at a handful of the nation’s largest corporations. In other words, … View

insight

The "non-domination principle": excessive power in the hands of a few corporations is a threat to the democratic state.

theoretical

"Which role corporations ought to play in the democratic process is controversial. Some scholars hold the view that corporate involvement in politics is inherently problematic, whi… View

insight

A 2020 report by the Committee on the Judiciary of the House of Representatives found that the Big Four tech firms - Amazon, Apple, Facebook, and Google - engage in systematic anticompetitive practices.

empirical

“For example, in 2020, the Committee on the Judiciary of the House of Representatives wound up a lengthy investigation of four big “tech” firms— Amazon, Apple, Facebook, and Google… View

insight

"...the very quality that renders employees problematic from an efficiency perspective—namely the broad range of different interests they bring to bear— enhances their potential as guardians of our democracy."

theoretical

"Moreover, codetermination also deconcentrates power in a more substantive sense in that it gives power to a group — employees — with highly diverse interests. Employees have inter… View

insight

German firms subject to the 1976 codetermination empowerment laws are less likely to make large political contributions to conservative parties.

empirical

“...CEOs in firms that are subject to codetermination have a strong incentive to refrain from using corporate funds to lobby Congress or administrative agencies in ways that benefi… View

insight

Countries with strong codetermination regimes - Austria, Germany, Luxembourg, Denmark, Sweden, and Finland - tend to have low levels of corruption compared to other OECD countries like the US or UK.

empirical

"Tellingly, European countries with strong codetermination regimes — Austria, Germany, Luxembourg, Denmark, Sweden, and Finland — tend to have remarkably low levels of corruption, … View

insight

In 2015, only 7.2% of US private sector workers were covered under collective bargaining agreements. Meanwhile, 50.2% in Germany.

fact

The authors suggest that the potential benefits of codetermination, such as sharing information between employers and workers, depend on widespread collective bargaining. Without i… View

insight

Codetermination may create more friction and obstacles for corporate mergers and acquisitions.

theoretical

"In other words, while Germany’s codetermination regime may render hostile takeovers more challenging, it is not clear that the number of hostile takeovers would be much higher in … View

insight

Codetermination could raise incentives for companies to (re)incorporate in foreign tax-havens.

theoretical

The U.S. is already familiar with incentives that drive companies to base themselves in foreign countries whose corporate tax laws are more hospitable. If U.S. companies were now a… View

insight

From 1981 - 2010 in Germany, there were only 338 mergers. Over the same period in the US, there were 60,244 mergers.

fact

Given the differences in business dynamics between the U.S. and Germany, a concern over codetermination is that giving workers voting power would reduce events such as mergers and … View

insight

Codetermination may help societies weather exogenous shocks, such as COVID-19, by creating a mechanism through which firms and employees can take coordinated action.

theoretical

Giving employees voting power in corporate decision-making processes may help mitigate conflicts at the source. During periods of upheaval that tend to pit the interests of corpora… View

insight

Of the 14 European countries that enacted codetermination laws, only 2 (Hungary and the Czech Republic) walked them back. Even after, the Czech Republic re-implemented codetermination for large corporations.

fact

Even the walk-backs were not absolute, and in the Czech Republic, did not last. Hungary retained codetermination for firms with two-tier boards (covering most firms in Hungary), an… View

insight

From the perspective of large corporations, codetermination may be a more preferable measure to lessen their power than alternatives, such as higher tax rates, or being split into several smaller corporations.

theoretical

“The relatively soft constraint imposed by codetermination becomes especially apparent if one considers other mechanisms that the U.S. Congress has used or could use to tame concen… View

insight

If the motivation behind codetermination is to meaningfully reduce corporate power, a substantial percentage of board seats must be held by worker-representatives.

empirical

As the European experience suggests, codetermination mandates do not necessarily confer workers meaningful power. As the authors write: "If a codetermination statute is to contribu… View

insight

If limited liability companies are exempt from codetermination, the problem of regulatory arbitrage arises. Thus, codetermination ought to be applied to a wide range of business types.

theoretical

“If limited liability companies are exempt from codetermination, the problem of regulatory arbitrage arises. Entrepreneurs seeking to avoid codetermination may form limited liabili… View

insight

82% of Swedish managing directors report that codetermination led to decisions becoming better rooted among employees

empirical

Survey data from nearly 300 Swedish managing directors was gathered from 1984, 1996, and 1998 to assess their experience with codetermination. View

insight

51% of Swedish managing directors reported that codetermination led to new ideas being presented to management

empirical

Survey included 293 Swedish managing directors in 1996. View

insight

81% of Swedish managing directors report codetermination does not hinder effective decision-making.

empirical

Survey data from nearly 300 Swedish managing directors was gathered from 1984, 1996, and 1998 to assess their experience with codetermination. View

insight

Codetermination in the U.S. may entail reducing the flexibility of corporate law, i.e. enacting more regulations, in order to prevent regulatory arbitrage.

theoretical

From the source: "One of the less obvious costs of codetermination lies in the need to reduce the flexibility of corporate law to prevent regulatory arbitrage. Corporations may see… View

insight

Expected economic insecurity within the next year reduces mental health by 0.18 of a standard deviation from the mean

empirical

This finding holds for both males and females. As other insights from this paper show, expectations of worsening financial situations are more harmful to mental health than the rea… View

insight

Even the currently employed, especially men in full-time positions, experience economic insecurity as a significant negative factor on mental health

empirical

This paper used data from the British Household Panel Survey to explore the effects of economic insecurity on mental health in the working age UK population. While much literature … View

insight

Given an unequal economy, a uniform flat tax on capital & labor income is a nearly optimal mode of redistribution

empirical

The authors use a dynamic general equilibrium model with uninsurable idiosyncratic risk, and replicate the distribution of income and wealth in the United States. Increasing margin… View

insight

Empirical evidence does not support the conclusion that there exists a tradeoff between redistribution and growth

empirical

Neoclassical theory has long held that redistribution comes at the price of economic growth. A review of the existing macroeconomic data by the International Monetary Fund, using a… View

insight

In rural Kenya, an unconditional cash transfer equivalent to $1,076 had greater positive impacts on psychological (and economic) well-being than a 5-week psychotherapy program

empirical

The study compared the effects of cash transfers, a five-week psychotherapy program, and a combination of both among 5,756 individuals in rural Kenya. Psychotherapy alone had no me… View

insight

Finnish codetermination is more of an information-sharing institution than a distribution of power via formal voting rights

empirical

The Finnish form of codetermination uses a relatively low threshold, granting workers the right to elect up to 20% of the board at large companies. This suggests that the percentag… View

insight

Finnish codetermination is associated with moderately positive, but statistically insignificant effects on firm survival, total factor productivity, and the capital-labor ratio.

empirical

The authors preferred interpretation of the results is as finding the absence of negative effects. The positive effects are methodologically precarious, but the absence of negative… View

insight

Finnish worker-representatives do not believe they can affect wages, investment, outsourcing, or other strategic decisions

empirical

Different degrees of codetermination confer workers with varying degrees of power. In Finland, workers at firms with greater than 150 employees have the right to elect up to 20% of… View

insight

99% of Finnish firms above 150 employees have a shop-floor representative, 88% have a works council, and 100% have a health and safety representative/committee

fact

Relative to the US, Finnish workers benefit from far more robust labor institutions. View

insight

The Finnish transition to worker representation is associated with a 12% - 22% reduction in job separations

empirical

Job separations include voluntary separations, like leaving for another company, and involuntary, like getting fired. The study found about a 7% reduction in job-to-job transitions… View

insight

Finnish transition to worker representation is associated with a small, 2% reduction of annual separation rates into non-employment

empirical

Reduced separation rates into non-employment may suggest reduced layoffs and increased job security. View

insight

Surveys suggest the Finnish transition to worker representation slightly increased perceived job quality

empirical

While surveys suggested small increases in perceived job quality, other findings studying revealed preferences found no evidence of significant increases in job quality. View

insight

Finnish codetermination slightly raised wages for the lowest wage-earners within firms, compressing overall within-firm wages

empirical

While Finnish codetermination had little impact on executive compensation, by slightly raising wages for the lowest wage-earners, it reduced overall inequality within firms. View

insight

Finnish codetermination had no effect on executive compensation

empirical

Codetermination is sometimes suggested as one potential remedy for the growing inequality between worker and executive pay. The authors find that in Finland, codetermination had li… View

insight

Finnish codetermination did not lead to an increase in labor's share of a firm's profits

empirical

The "hold-up hypothesis" suggests that giving workers power in corporate governance will lead to an increase in labor's share of firm profits. Evidence from Finnish codetermination… View

insight

Finnish codetermination does not have a negative effect on firm survival rates

empirical

The authors note that, if anything, their estimates suggest codetermination had a marginally significant positive effect on firm survival. View

insight

Finnish codetermination is associated with small increases in labor productivity

empirical

The Finnish introduction of codetermination in 1991 gave workers the right of up to 20% represenatation on company boards, compared with Germany's 50%. Consistent with studies else… View

insight

Finnish codetermination had a neutral, or slightly positive, effect on firms' capital formation, as measured by fixed assets

empirical

Contrary to the "hold-up hypothesis", which predicts involving workers in corporate governance will distort incentives away from capital investment, Finnish codetermination is gene… View

insight

76% of Swedish corporate directors reported positive experiences with codetermination

A survey of Swedish stakeholders with experience in codetermination yielded broadly favorable attitudes towards codetermination, across both workers and executives. View

insight

Finnish codetermination had no negative effect on profitability.

One concern regarding codetermination is that it may grant workers too much power, biasing firm decisions towards labor at the expense of capital formation. Most existing studies f… View

insight

There is no evidence that Finnish firms seek to avoid falling under the codetermination law

Some worry that passing a codetermination mandate would motivate companies to organize just beneath qualifying criteria to avoid the mandate. In Finland, this study finds no eviden… View

insight

In a survey of Finnish shop-floor representatives, 76% say worker representation "feels like a formality", and 65% believe the rights of worker representatives are too narrow

In practice, codetermination may confer less real power to workers than theory suggests. In Finland, the specifics of the codetermination mandate have left workers reporting neglig… View

insight

From 1978 - 2018, inflation-adjusted CEO compensation increased by 940.3%, while typical worker wages grew by only 11.9%

Since the 1970's, workers have lost significant bargaining power, while executive pay has skyrocketed. View

insight

CEO-to-worker compensation increased from 20-to-1 in 1965 to 278-to-1 in 2018

The growing disparity between executive and worker compensation is a significant factor in rising inequality. View

insight

30% of all US innovation since 1974 came from immigrants (twice their share of the population)

Immigrant-led innovation also appears to fuel the adoption and diffusion of ideas across borders. View

insight

A $6k/year UBI funded by an 11.25% payroll tax is modeled to decrease GDP by 1.7% by 2027.

Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans. View

insight

A tax funded, $1k/month UBI is modeled to increase GDP by 2.6% over the baseline after eight years.

Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy. View

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