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AN NBER PUBLICATION ISSUE: No. 4, April 2001

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The greater the decrease in the sole proprietor's marginal tax rate between 1985 and 1988, the greater the increase in the size of his or her business. It is a common belief among entrepreneurs and policymakers that the tax system is an obstacle to the establishment and growth of small businesses. To date, however, there has been little hard evidence to support this notion. In Personal Income Taxes and the Growth of Small Firms (NBER Working Paper No. 7980), authors...

Research Summaries

Article
For firms with fewer than 100 employees, each 10 percent rise in the subsidy raises health insurance spending levels by almost 7 percent. When a business provides its employees with health insurance, that benefit is not subject to either individual income tax, or to the payroll tax that finances the Social Security and Medicare programs. This "tax subsidy" benefits both the company and its employees. So, what would firms do if it were to disappear or diminish in size...
Article
Students who are exposed to unusually low achieving cohorts tend to score lower themselves. How can advanced economies get the biggest increase in human capital for their education dollar? That is, how productive are their investments in education? In answering these questions, one tricky problem is "peer effects": students are "good" peers if they produce positive learning spillovers, so that students exposed to them gain more for each dollar spent on their education...
Article
In the United States working more hours is not just important to one's immediate salary, but has a substantial effect on future earning potential as well. Europeans generally view Americans as far too obsessed with putting in hours at the office. A popular past-time among Europeans is making disapproving comments about how their American counterparts seem to be all work and no play. But while there is a tendency to view this as a cultural difference -- that somehow...

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