American Economic Review Vol. 103 No. 3 2013
Using State Pension Shocks to Estimate Fiscal Multipliers since the Great Recession
Abstract
Has government spending raised income and employment since 2008? I use new data on state pension returns during the Great Recession to recover exogenous changes in spending. Instrumenting with these return shocks, I estimate that each dollar of windfall-financed spending raised local incomes by $1.43 and every additional $22,011 of spending created one contemporaneous job. These estimates are similar to those found in Shoag (2010) despite the non-overlapping datasets. Unlike Shoag (2010), however, the bulk of the employment increase post-2008 stems from decreases in unemployment rather than increased labor force participation.
- DOI
- 10.1257/aer.103.3.121
- Volume
- 103
- Issue
- 3
- Pages
- 121-124
- Language
- en
- Sources
- crossref openalex bibtex:phds-export.bib