Papers Containing Tag(s): 'Internal Revenue Service'
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Authors
John Voorheis - 22
Maggie R. Jones - 16
John Haltiwanger - 16
Martha Stinson - 15
Javier Miranda - 13
Viewing papers 21 through 30 of 334
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Working PaperMeasurement Matters: Financial Reporting and Productivity
December 2025
Working Paper Number:
CES-25-72
We examine how differences in financial reporting practices shape firm productivity. Leveraging new audit questions in the U.S. Census Bureau's 2021 Management and Organizational Practices Survey (MOPS), and complementary tax return data from the Internal Revenue Service (IRS) and detailed financial records from Sageworks, we find that (i) variation in reporting quality explains 10-20 percent of intra-industry total factor productivity dispersion, and (ii) evidence of complementarity between the effects of financial audits and management practices driving firm productivity. We then examine the underlying mechanisms. First, audits function as a managerial technology, improving the precision of internal information and raising efficiency, with stronger effects in competitive, low-margin industries and among younger firms. Second, exploiting cross-state variation in tax incentives, we show that audits constrain underreporting and mitigate the downward bias in measured productivity. Together, these results highlight the underrated importance of financial reporting quality driving firm productivity.View Full Paper PDF
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Working PaperParental Death, Inheritance, and Labor Supply in the United States
December 2025
Working Paper Number:
CES-25-71
We are the first to study how inheritances affect labor supply in the U.S. using large-scale administrative data. Leveraging federal tax and Social Security records, we estimate event studies around parental death to investigate impacts on adult children. Our results indicate that the death of a last parent causes sizable gains in investment income'our main proxy for inheritances'and proportionate reductions in labor supply. On average, annual per-adult investment income at the tax unit level increases by about $300 (45 percent) and annual per-adult wage earnings decrease by $600 (2 percent). These earnings responses are large relative to the implied wealth transfer. Income effects are the dominant channel through which parental death reduces earnings, with children of wealthier parents exhibiting larger earnings reductions. Over six years, inheritances slightly equalize the distribution of investment income.View Full Paper PDF
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Working PaperDouble-Pane Glass Ceiling: Commercial Engagement and the Female-Male Earnings Gap for Faculty
September 2025
Working Paper Number:
CES-25-68
I use administrative data from universities (UMETRICS) linked to the universe of confidential W-2 and 1040-C tax records to measure faculty commercial engagement and its role in female-male earnings gaps. Female faculty are 20 percentage points less likely to engage commercially, with the entire gap driven by self-employment. The raw earnings gap is $63,000 on a base of $162,000 and non-university earnings account for $18,000 (29 percent) of this total. Thus, while university pay explains most of the gap, commercial engagement substantially amplifies it. Earnings gaps appear in all components of non-university pay ' self-employment, and work for incumbent, young/startup, high-tech, and non-high-tech firms ' and remain large, though attenuated, after controlling publications, patents, field, university, scientific resources, age, marital status, childbearing, and demographics. Gaps widen as faculty move up the earnings distribution, and commercial engagement becomes a larger contributor. Men and women engage with similar industries, but men earn more in all shared industries.View Full Paper PDF
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Working PaperManufacturing Dispersion: How Data Cleaning Choices Affect Measured Misallocation and Productivity Growth in the Annual Survey of Manufactures
September 2025
Working Paper Number:
CES-25-67
Measurement of dispersion of productivity levels and productivity growth rates across businesses is a key input for answering a variety of important economic questions, such as understanding the allocation of economic inputs across businesses and over time. While item nonresponse is a readily quantifiable issue, we show there is also misreporting by respondents in the Annual Survey of Manufactures (ASM). Aware of these measurement issues, the Census Bureau edits and imputes survey responses before tabulation and dissemination. However, edit and imputation methods that are suitable for publishing aggregate totals may not be suitable for estimating other measures from the microdata. We show that the methods used dramatically affect estimates of productivity dispersion, allocative efficiency, and aggregate productivity growth. Using a Bayesian approach for editing and imputation, we model the joint distributions of all variables needed to estimate these measures, and we quantify the degree of uncertainty in the estimates due to imputations for faulty or missing data.View Full Paper PDF
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Working PaperMatching Compustat Data to the Longitudinal Business Database, 1976-2020
September 2025
Working Paper Number:
CES-25-65
This paper details the methodology for creating an updated Compustat-Longitudinal Business Database (LBD) bridge, facilitating linkage between company identifiers in Compustat and firm identifiers in the LBD. In addition to data from Compustat, we incorporate historical data on public companies from various public and private sources, including information on executive names. Our methodology involves a series of stages using fuzzy name and address matching, including EIN, telephone number, and industry code matching. Qualified researchers with approved proposals can access this bridge though the Federal Statistical Research Data Centers. The Compustat-SSL bridge serves as a crucial resource for longitudinal studies on U.S. businesses, corporate governance, and executive compensation.View Full Paper PDF
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Working PaperBusiness Owners and the Self-Employed: 33 Million (and Counting!)
September 2025
Working Paper Number:
CES-25-60
Entrepreneurs are known to be key drivers of economic growth, and the rise of online platforms and the broader 'gig economy' has led self-employment to surge in recent decades. Yet the young and small businesses associated with this activity are often absent from economic data. In this paper, we explore a novel longitudinal dataset that covers the owners of tens of millions of the smallest businesses: those without employees. We produce three new sets of statistics on the rapidly growing set of nonemployer businesses. First, we measure transitions between self-employment and wage and salary jobs. Second, we describe nonemployer business entry and exit, as well as transitions between legal form (e.g., sole proprietorship to S corporation). Finally, we link owners to their nonemployer businesses and examine the dynamics of business ownership.View Full Paper PDF
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Working PaperLODES Design and Methodology Report: Methodology Version 7
August 2025
Working Paper Number:
CES-25-52
The purpose of this report is to document the important features of Version 7 of the LEHD Origin-Destination Employment Statistics (LODES) processing system. This includes data sources, data processing methodology, confidentiality protection methodology, some quality measures, and a high-level description of the published data. The intended audience for this document includes LODES data users, Local Employment Dynamics (LED) Partnership members, U.S. Census Bureau management, program quality auditors, and current and future research and development staff members.View Full Paper PDF
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Working PaperHousing Capital and Intergenerational Mobility in the United States
August 2025
Working Paper Number:
CES-25-55
Housing represents the most important capital asset for most U.S. families. Despite substantial analysis of the intergenerational mobility of income, large gaps in our knowledge of the distribution of housing assets and their transmission over time remain, as housing is generally not reflected by income flows. Using novel linked data that combines survey responses with administrative tax data and information on ownership and valuation from property tax records for over 3.4 million families, we provide new evidence on the intergenerational transmission of housing capital. We find that housing capital is more persistent across generations than labor income. We document important disparities between average housing outcomes for White and Black children. These difference persist even conditional on parent rank in the distribution of housing assets, with the gap growing throughout the parental housing capital distribution. A decomposition shows that average differences in children's labor market outcomes associated with parental assets explain about half of the observed intergenerational persistence (a 'labor income channel'), and that there is also a substantial 'direct channel' ' conditional on children having the same earnings, children of parents with more housing assets have more assets themselves on average. The direct channel is also important for explaining the intergenerational gap in outcomes of Black and White children. Finally, we present quasi-experimental evidence that local housing supply constraints help explain spatial differences in intergenerational persistence across US counties. Our results establish the importance of housing markets, both independently from and jointly with labor markets, in shaping the intergenerational persistence of economic resources.View Full Paper PDF
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Working PaperThe Effect of the Minimum Wage on Childcare Establishments
August 2025
Working Paper Number:
CES-25-53
Childcare is essential for working families, yet it remains increasingly unaffordable and inaccessible for parents and offers poverty-level wages to many employees. While research suggests minimum wage policies may improve the welfare of low-wage workers, there is also evidence they may increase firm exits, especially among smaller, low-profit firms, which could reduce access and harm consumer well-being. This study is the first to examine these trade-offs in the childcare industry, a labor-intensive, highly regulated sector where capital-labor substitution is limited, and to provide evidence on how minimum wage policies affect a dual-sector labor market in the U.S., where self-employed and waged providers serve overlapping markets. Using variation from state-level minimum wage increases between 1995 and 2019 and unique microdata, I implement a cross-state county border discontinuity design to estimate impacts on the stocks, flows, and composition of childcare establishments. I find that while county-level aggregate establishment stocks and employment remained stable, establishment-level turnover increased, and employment decreased. I reconcile these findings by showing that minimum wage increases prompted reallocation, with larger establishments in the waged-sector more likely to enter and less likely to exit, making this one of the first studies to link null aggregate effects to shifts in establishment composition. Finally, I show that minimum wage increases may negatively affect the self-employed sector, resulting in fewer owners with advanced degrees and more with only high school education. These findings suggest that minimum wage policies reshape who provides care in ways that could affect both quality and access.View Full Paper PDF
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Working PaperCredit Access in the United States
July 2025
Working Paper Number:
CES-25-45
We construct new population-level linked administrative data to study households' access to credit in the United States. These data reveal large differences in credit access by race, class, and hometown. By age 25, Black individuals, those who grew up in low-income families, and those who grew up in certain areas (including the Southeast and Appalachia) have significantly lower credit scores than other groups. Consistent with lower scores generating credit constraints, these individuals have smaller balances, more credit inquiries, higher credit card utilization rates, and greater use of alternative higher-cost forms of credit. Tests for alternative definitions of algorithmic bias in credit scores yield results in opposite directions. From a calibration perspective, group-level differences in credit scores understate differences in delinquency: conditional on a given credit score, Black individuals and those from low-income families fall delinquent at relatively higher rates. From a balance perspective, these groups receive lower credit scores even when comparing those with the same future repayment behavior. Addressing both of these biases and expanding credit access to groups with lower credit scores requires addressing group-level differences in delinquency rates. These delinquencies emerge soon after individuals access credit in their early twenties, often due to missed payments on credit cards, student loans, and other bills. Comprehensive measures of individuals' income profiles, income volatility, and observed wealth explain only a small portion of these repayment gaps. In contrast, we find that the large variation in repayment across hometowns mostly reflects the causal effect of childhood exposure to these places. Places that promote upward income mobility also promote repayment and expand credit access even conditional on income, suggesting that common place-level factors may drive behaviors in both credit and labor markets. We discuss suggestive evidence for several mechanisms that drive our results, including the role of social and cultural capital. We conclude that gaps in credit access by race, class, and hometown have roots in childhood environments.View Full Paper PDF
