Public Economics Program.

• Position: Program on Public Economics - Industry Trend or Event - Brief Article - Critical Essay

Members and guests of the NBER's Program on Public Economics met in Cambridge on November 18. Program Director James M. Poterba, NBER and MIT, organized the meeting and this program:

Bruce D. Meyer, NBER and Northwestern University; "Do the Poor Move to Receive Higher Welfare Benefits?"

Discussant: Julie B. Cullen, NBER and University of Michigan

Alan J. Auerbach, NBER and University of California, Berkeley, and Daniel R. Feenberg, NBER, "The Significance of Federal Taxes as Automatic Stabilizers"

Discussant: J. Karl Scholz, NBER and University of Wisconsin

2. Douglas Bernheim, NBER and Stanford University; Lorenzo Forni, Boston University; Jagadeesh Gokhale, Federal Reserve Bank of Cleveland; and Laurence J. Kotlikoff, NBER and Boston University, "The Adequacy of Life Insurance: Evidence from the Health and Retirement Survey" (NBER Working Paper No, 7372)

Discussant: Jeffrey Brown, NBER and Harvard University

James M. Poterba, and Andrew A. Samwick, NBER and Dartmouth College, "Taxation and Household Portfolio Composition: U.S. Evidence from the 1980s and 1990s" (NBER Working Paper No. 7392)

Discussant: Julie H. Collins, NBER and University of North Carolina

Jonathan Gruber, NBER and MIT, and Emmanuel Saez, NBER and Harvard University, "The Elasticity of Taxable Income: Evidence and Implications" (NBER Working Paper No. 7512)

Discussant: Austan Goolsbee, NBER and University of Chicago

Using 1980 and 1990 U.S. Census data, Meyer asks whether individuals "migrate" in order to collect welfare. He uses several different techniques to examine the evidence for welfare-induced migration, including some new methods based on comparison groups. He then combines the ideas of these methods with a model that relies on comparisons of the attributes of possible locations. All the different methods point toward the same result: there is welfare-induced migration, but it is modest in magnitude.

Despite the many changes in the U.S. economy and its tax system since the early 1960s, there has been relatively little net change in the role of the tax system as an automatic stabilizer. Auerbach and Feenberg estimate that the tax system's effectiveness at stabilizing aggregate demand was nearly as high in 1995 as it was at its estimated peak in 1981. In fact, the current impact is slightly higher than it was in the early 1960s, when people in the top marginal income tax bracket faced a tax rate of 91 percent. The authors estimate that perhaps 10 percent of...