Michael J. Wasylenko

Firm relocation and site selection in suburban municipalities

Abstract This paper develops a model of the site choice decision of relocating firms in seven single-digit SIC industries. Hypotheses are tested using data on firms which have moved from Milwaukee City to its suburbs between 1964 and 1974. The industries considered are: construction; manufacturing; transportation, communications, and public utilities; wholesale trade; retail trade; finance, insurance and real estate; and services. While this problem has been examined for manufacturing with limited success, the results here are encouraging. The results show that agglomeration economies and an available labor force are important influences in the site choice among suburban locations for firms in all industries. Fiscal variables are at best only of secondary significance in the choice among suburban municipalities.

Mobility Patterns of Older Homeowners Are Older Homeowners Trapped in Distressed Neighborhoods

Using multiyear data from the Panel Study on Income Dynamics geo-code match file, the authors confirm that older homeowners were substantially less likely to move during the 1970s than younger homeowners. But unlike younger homeowners, older homeowners were also less likely to move from a distressed neighborhood than from a secure one. Of the population of older homeowners alive in 1980 who had lived in a permanently distressed neighborhood in 1970, only about 1 in 10 had moved to a secure neighborhood in the intervening 10 years. Younger homeowners in similar neighborhoods were three times more likely to have done so.

Some Evidence of the Elasticity of Supply of Policemen and Firefighters

estimation of the effects of unionization on the wage levels of public employees. The demand studies have assumed that the supply of public employees is perfectly, or at least very, elastic, so that the wage rates facing demanders of public sector employees are, for all practical or estimation purposes, exogenous variables (see Ehrenberg, 1973c; Ashenfelter and Ehrenberg, 1975). On the other hand, the studies which attempt to estimate the effects of public sector unionization on the wages of public employees have usually assumed that the supply of public employees is not perfectly elastic (see Ehrenberg, 1973a; Ehrenberg and Goldstein,

The subsidization of small business through federal credit programs: Analytical foundations

Abstract The relationship between federal credit programs and the allocation of financial and real capital has begun to attract more attention as such programs have grown. Defenders of these programs argue that various capital market imperfections necessitate federal credit assistance. Examining the relationship between such imperfections, credit programs and the tax system should facilitate a more careful evaluation of the rationales for and the effects of various alternative policy initiatives. This paper analyzes the optimal taxation of small and large businesses when smaller businesses face higher borrowing costs, whatever the cause. The optimal tax scheme derived here implies a progressive tax applied to all businesses. In the absence of such a progressive tax scheme, federal credit programs for smaller businesses that reduce small business borrowing costs may be viewed as an imperfect substitute. Importantly, the results regarding optimal taxation (subsidization) hold even in the absence of particular capital market imperfections and without resorting to social welfare functions weighting small business output greater than large business output.

Tenure choice and condominium conversion

Abstract In this paper, we examine the tenure choice decisions of households involved in the condominium conversion process. We apply a model of tenure choice selection to two separate samples; preconversion residents and postconversion residents. We find that the primary factors influencing homeownership in general, income and relative prices, are also strong influences in determining condominium ownership. However, the tenure choice decisions of preconversion residents, who are confronted with a forced choice, are more heavily influenced by income and expected mobility. Post conversion tenure choice varies more with demographic factors and is more price elastic in nature.

Tax reform 1986 and marginal welfare changes for labor

During the 1980s in the United States, before-tax income shifted away from the poor and toward the upper income groups. Changing the distribution of tax burdens or after-tax income is one way to redress a growing imbalance in before-tax income. Pechman [14], Feldstein [6], and Wallace et al. [17] have all shown that the Tax Reform Act of 1986 (TRA86) increased the progressivity of the combined personal and corporate income taxes, an achievement not accomplished in the last two decades of income tax reform [14]. Tax reform can also increase or decrease the welfare of individuals in an economy through its effect on the allocation of labor supply resources. TRA86 reduced the highest marginal income tax rates from 50 percent to 28 percent for high income persons and removed some lower-income persons from the tax roles. Such large marginal tax rate changes introduce significant potential for increased economic efficiency in labor supply and for welfare gains for the rich and poor alike. These changes should be part of the benefit analysis of tax reform. Indeed, Hausman and Poterba [10] report welfare cost changes that result from TRA86 for the average male and female. Their estimates, however, do not account for welfare cost changes throughout the income distribution. In addition to our use of microdata to estimate the marginal welfare cost of tax reform, we use more precise measures of marginal tax rates than other researchers. In this paper, we use Brownings partial equilibrium framework to examine the influence of the reduction in marginal tax rates from TRA86 on the distribution of welfare gains from labor supply reallocation for males by population decile and for females by population decile and by marital status. The empirical results illustrate how the tax reform affected low-income female household heads, where poverty is so heavily concentrated, as well as other household heads and spouses. The results indicate that TRA86 reduced welfare costs in the economy, but these welfare

Public sector forecasting m the third world

Abstract Fiscal forecasting in the Third World is still in its infancy. This paper indicates the many constraints faced by those attempting to make intermediate term (three to five year) forecasts of government revenues and expenditures. Because of the lack of extensive data and complex forecasting models of the economy, revenue projections are most commonly made from simple time series or elasticity-based models. Spending forecasts are generally made using deterministic methods, relying primarily upon current input combinations and assumptions concerning future changes in these inputs along with assumptions regarding price increases. The paper demonstrates how these techniques were used in Thailand during the early 1980s when the nation faced serious problems of deficits and had approached the World Bank for a structural adjustment loan. A portion of the loan proceeds was used to form an inter-agency forecasting group comprised of the key agencies involved in making short- and long-term economic and fiscal policy. The results of the exercise was a forecast that was subsequently used to alter both revenue and expenditure policies. The recent improvement in the central government fisc of this developing country may be at least in part attributed to the increased understanding that the forecasting effort fostered.

Black Student Demand for Higher Education at Large State Universities.

This paper uses an econometric model to explain differences in the percentage of blacks enrolled at the leading public university/universities in each state. It is shown that universities with higher black enrollment percentages are in higher academic classifications and are located in areas in which blacks make up a higher percentage of the population, in states in which blacks make up a higher percentage of the current high school graduates, and in states with no historically black colleges. The regression equation is used to generate an expected black enrollment percentage at each public university. Actual black enrollment percentages are then compared with expected enrollment percentages. These comparisons have significant implications for schools that want to increase their black enrollment percentage.