The ARRA: Some Unpleasant Welfare Arithmetic

Casey B. Mulligan

NBER Working Paper No. 18591
Issued in December 2012
NBER Program(s):   LS   PE

Distributions of tax rates on job acceptance and layoff margins are estimated for unemployed household heads and spouses under three benefit and tax rule scenarios: actual rules under the American Reinvestment and Recovery Act, rules as they would have been if they had not been changed since 2007, and rules as they might have been with a bigger fiscal stimulus. Two or three million unemployed household heads and spouses, with a variety of tax situations, had as much disposable income while unemployed as they would have by accepting a job that paid 80-100 percent of their previous one. The number would have been less than one million under 2007 rules, and about nine million under a bigger stimulus. Tax obligations and foregone unemployment insurance about equally erode the rewards from retaining a job, or starting a new one.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


This paper was revised on February 8, 2013

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18591

Users who downloaded this paper also downloaded these:
Mulligan w18426 Recent Marginal Labor Income Tax Rate Changes by Skill and Marital Status
Mulligan w19365 Average Marginal Labor Income Tax Rates under the Affordable Care Act
Mulligan w18088 Do Welfare Policies Matter for Labor Market Aggregates? Quantifying Safety Net Work Incentives since 2007
Auerbach and Gorodnichenko w18578 Output Spillovers from Fiscal Policy
Mulligan w17654 The Expanding Social Safety Net
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us