Abstract
Consider individual labor supply and consumption from the life-cycle perspective. Because many of the elderly are retired, they may little directly benefit from state policies that increase wage income. But they may benefit indirectly: lower taxes on labor may consequently increase labor supply and reduce the price of services the elderly buy, for instance, nursing care.
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Notes
- 1.
- 2.
For the empirical literature, see the survey by Breuckner (2003).
- 3.
If a governor is replaced by another governor in midyear, a weighted sum of these values is calculated on the basis of the length of incumbency.
- 4.
See Sect. 5.3.1 on the relation of average temperature and elderly population ratio.
- 5.
As explained in Sect. 5.3.1, the statewide data for Hawaii are unavailable, so that we use city-level annual average temperature of Honolulu International Airport.
- 6.
We conducted panel data analysis without instrumenting the percent elderly population, to select fixed-effects versus random-effects models. The result of the test using the Sargan-Hansen statistic requires us to select fixed-effects model.
- 7.
We follow Chirinko and Wilson (2017) who use the governorship as an instrument.
- 8.
The updated data are available at http://www.statepolicyindex.com.
- 9.
The data are collected by Survey of Income and Program Participation, US Census Bureau, and retrieved from: https://www.census.gov/data/tables/2016/demo/wealth/wealth-asset-ownership.html.
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Terai, K., Glazer, A., Miyazato, N. (2021). The Effect of the Elderly on Taxation and Minimum Wages in the US States. In: The Political Economy of Population Aging. Advances in Japanese Business and Economics, vol 30. Springer, Singapore. https://doi.org/10.1007/978-981-16-5536-4_6
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