Taxes, Fringe Benefits and Faculty, Issue 3455
National Bureau of Economic Research, 1990 - College teachers - 25 pages
The growth of employee benefits in academe has closely paralleled their economy-wide growth. This study estimates a complete system describing the demand for benefits and wages using panel data on nearly 1500 institutions of higher learning. The demand for benefits is quite responsive both to changes in real income and to variations in the tax price of benefits. These conclusions are robust with respect to varying definitions of the sample aid of the tax price. They are not altered by estimates that account for unmeasured individual effects on demand. Simulations using the estimates suggest that the Tax Reform Act of 1986 sharply reduced the demand for benefits. Extrapolating the impact to the entire economy suggests that the annual flow of compensation shifted away from benefits by at least $9 billion.
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AAUP data assume assumptions Barry Eichengreen Benefit Share benefits and wages benefits in academe benefits in total Bureau of Economic coefficient of variation coefficients covered by OASDHI demand for benefits demand system differenced data differences dummy variable Economic Research employee benefits equation estimates based excluding 2-year facing the median fraction growth of benefits health insurance heterothetic income effect income elasticities income tax rates increase Joint Single Joint joint tax schedules marginal tax rates measure median faculty member Michigan State University National Bureau National Income NBER nine-month salaries NIPA OASDHI coverage OASDHI tax percent percentage points preferences price and income price effects price of benefits real academic compensation relative price sample schools share of benefits simulations Single Joint Single single taxpayers social welfare function survey tax laws tax price tax rates facing Tax Reform Act tax scheme total benefits total compensation uncompensated price elasticities unionization Woodbury workers