Abstract: We study the history and geography of wealth accumulation in the US, using newly collected historical property tax records since the early 1800s. The property tax in the US was a comprehensive tax on all kinds of properties (real estate, personal property, financial wealth, etc), making it one of the first ``wealth taxes.’’ Our new data allows us to reconstruct wealth series at the city, county, and state levels over time and to study the effects of property taxes on property values, migration, and investment. We first document the long-term evolution of household wealth in the US since the early 1800s, offering the first fine-grained and high-frequency estimates of household wealth over more than 200 years. The US had significantly lower wealth than Europe and only caught up with Europe after WW1, despite GDP per capita having been larger than that of France or the UK since the late 1870s. Second, we study the spatial allocation of wealth in the US over the long run. We show that the geography of wealth is extremely persistent: per capita wealth by county in the 1850s is still highly predictive of income per capita today. Factors related to geography and demographics correlate strongly with wealth at the city, county, and state levels. Finally, we leverage our data and policy variations to better understand the determinants of wealth accumulation, in particular the role of property taxation. Our data features large variation in property tax rates across more than 300 municipalities and we can study the changes in wealth and other outcomes following episodes of large, sudden, and persistent increases or decreases in effective property tax rates, in a Generalized Synthetic Control Design (Xu [2017]). We find an implied elasticity of capital income with respect to the net-of-tax rate on income of about .70 after 10 years. This implied elasticity can be broken down into an (extensive) elasticity of the population of about .26 and an intensive elasticity of per capita income of about .44. The intensive margin elasticity appears to be driven in part by reporting and avoidance responses, but also by significant capitalization of property taxes in local real estate prices.

Abstract: This paper develops and implements a framework that leverages consumption data to evaluate the welfare effects of pension reforms. Several countries have reformed their pension profiles to incentivize later retirement. Using administrative data in Sweden, we find that such pension reforms entail substantial consumption smoothing costs. On average, individuals retiring later have higher consumption levels than those retiring earlier, implying that recent pension reforms redistributed from low- to high-consumption households. We show that the differences in retirement consumption are mostly driven by differential changes in consumption around retirement, and also that the marginal propensities to consume are the lowest for late retirees. Accounting for selection on health and life expectancy further increases the redistributive cost of recent reforms. The cost of incentivizing later retirement is, however, lowest between the early and normal retirement age, where we document a striking non-monotonicity in consumption levels. We find similar patterns in consumption data from other countries, including the non-monotonicity, suggesting our findings are not unique to Sweden.

Abstract: What is the most efficient way to respond to recessions in the labor market? To this question, policymakers on both sides of the pond gave two diametrically opposed answers during the recent crisis. In the US, the focus was on insuring workers, by aggressively increasing the generosity of unemployment insurance (UI). In Europe, to the contrary, policies were concentrated on saving job matches, with the massive use of labor hoarding subsidies through short-time-work (STW) programs, on which so little is actually known. In this article, we try to understand who got it right. Building on the vast literature on UI and on a recent stream of papers on STW, we first provide a framework to determine the relative welfare effects of STW versus UI. We then show that UI offers more insurance value than STW, but tends to exhibit larger fiscal externalities, due to moral hazard. We finally focus on how STW and UI affect labor market equilibrium and how this interacts with inefficiencies in the labor market. We review recent evidence showing that STW can be an effective way to reduce socially costly layoffs in recessions. Overall, we conclude that STW is an important and useful addition to the labor market policy-toolkit during recessions, with strong and positive complementarities with UI.