Place-Based Consequences of Person-Based Transfers: Evidence from Recessions

Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-2534-8164

Publication Date

8-2023

Source

Journal of Public Economics 224: 104923

Abstract

This paper studies how government transfers respond to changes in local economic activity that emerge during recessions. Local labor markets that experience greater employment losses during recessions face persistent relative decreases in per capita earnings. However, these areas also experience persistent increases in per capita transfers, which offset 16 percent of the earnings loss on average. The increase in transfers is driven by unemployment insurance in the short run, and medical, retirement, and disability transfers in the long run. Our results show that nominally place-neutral transfer programs redistribute considerable sums of money to places with depressed economic conditions.

DOI

10.1016/j.jpubeco.2023.104923

Publisher

Elsevier-ScienceDirect

Note

Upjohn project #35305

Sponsorship

We gratefully acknowledge funding from the 2018–2019 DOL Scholars Program (Contract # DOL-OPS-15-C-0060).

Subject Areas

ECONOMIC DEVELOPMENT; Local labor markets; Urban issues; UNEMPLOYMENT, DISABILITY, and INCOME SUPPORT PROGRAMS; Poverty and income support; Income support programs

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Citation

Hershbein, Brad and Bryan A. Stuart. 2023. "Place-Based Consequences of Person-Based Transfers: Evidence from Recessions." Journal of Public Economics 224: 104923. https://doi.org/10.1016/j.jpubeco.2023.104923