Harvey S Rosen

Harvey S Rosen
Princeton University | PU · Department of Economics

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138
Publications
16,952
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15,133
Citations
Citations since 2017
1 Research Item
3815 Citations
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20172018201920202021202220230100200300400500600
20172018201920202021202220230100200300400500600

Publications

Publications (138)
Article
Universities’ endowment management practices have come under scrutiny by politicians and commentators who note that universities are tax-exempt, and do not want taxpayers subsidizing institutions only to have them accumulate wealth without advancing the public good. Defenders of university endowment policies argue that, to the contrary, managers do...
Article
This paper examines whether university endowment managers think only in terms of the assets they manage or also take into account background income, that is, the other flows of income to the university. Specifically, we test whether the level and variability of a university’s background income (e.g., from tuition and government grants) affect its e...
Article
Observers have expressed concern about growing inequality in resources across universities. But are universities really becoming more unequal? We argue that the typical approach of examining endowment growth alone is not sensible. In line with the literature on household inequality, we focus instead on a comprehensive income measure. We find that a...
Article
This paper investigates the decisions of universities to issue debt. We test whether the expected value and uncertainty of a university's nonfinancial income (the income generated by sources other than its endowment) affect its leverage (the ratio of the value of an institution's liabilities to the value of its assets). We find that leverage is neg...
Article
We use data from the Displaced Worker Surveys from 1984 to 2012 to investigate the differences in job loss rates between workers in the public and private sectors. Our focus is on how recessions affect the differential between job loss rates in the two sectors. We find that even after accounting for worker characteristics, the probability of job lo...
Article
We use a sample of full-time workers over 50 years of age from the 2004 and 2006 waves of the Health and Retirement Study (HRS) to investigate whether workers in federal, state, and local government receive more generous wage and pension compensation than private sector workers, ceteris paribus. With respect to hourly remuneration (wages plus emplo...
Article
A general finding in the empirical literature on charitable giving is that among older individuals, both the probability of giving and the conditional amount of donations decrease with age, ceteris paribus. In this paper, we use data on giving by alumni at an anonymous university to investigate end-of-life giving patterns. Our main finding is that...
Article
Many employers have implemented dependent verification (DV) programs, which aim to reduce employee benefits costs by ensuring that ineligible persons are not enrolled in their health plan as dependents. We evaluate a DV program using a panel of health plan enrollment data from a large, single-site employer. We find that dependents were 2.7 percenta...
Article
We investigate how undergraduates’ financial aid packages affect their subsequent donative behavior as alumni. The empirical work is based upon micro data on alumni giving at an anonymous research university. We focus on three types of financial aid, scholarships, loans, and campus jobs. A novel aspect of our modeling strategy is that, consistent w...
Article
This paper examines whether altruistic behavior is habit forming. We take advantage of a data set that includes a rich set of information concerning individuals’ donations of cash and time as adults as well as information about whether they were involved with charitable activities when they were young. The basic premise is that if altruistic behavi...
Article
We develop a technique to assess the impact of changes in mortgage markets on households, exploiting an implication of the permanent income hypothesis: The higher a household's expected future income, the higher its desired consumption, ceteris paribus. With perfect credit markets, desired consumption matches actual consumption and current spending...
Article
An ongoing controversy in the literature on the economics of higher education centers on whether the success of a school's athletic program affects alumni donations. This paper uses a unique data set to investigate this issue. The data contain detailed information about donations made by alumni of a selective research university as well as a variet...
Article
We study alumni contributions to an anonymous research university. If alumni believe donations will increase the likelihood of their child's admission, and if this belief helps motivate their giving, then the pattern of giving should vary systematically with the ages of their children, whether the children ultimately apply to the university, and th...
Article
One justification offered for legacy admissions policies at universities is that that they bind entire families to the university. Proponents maintain that these policies have a number of benefits, including increased donations from members of these families. We use a rich set of data from an anonymous selective research institution to investigate...
Article
Full-text available
As economists, we believe that the Second Circuit's ruling, by not allowing the consideration of important information about the relationships between the benefits and costs of alternatives, is economically unsound. In particular, we believe that, as a general principle, regulators cannot make rational decisions unless they are allowed to compare c...
Article
The “iron law of fundraising” says that people do not donate to a charity unless they are asked. We test the iron law using observational data on alumni giving at an anonymous research university, which we refer to as Anon U. At Anon U, volunteers use lists provided by the Devel-opment Office to telephone classmates and solicit them for donations....
Article
The U.S. mortgage market has experienced phenomenal change over the last 35 years. This paper develops and implements a technique for assessing the impact of changes in the mortgage market on households. Our framework, which is based on the permanent income hypothesis, that allows us to gauge the importance of borrowing constraints by estimating th...
Article
This paper uses a unique data set to assess whether donors' contributions to a nonprofit institution are affected by the perception that the institution might confer a reciprocal benefit. We study alumni contributions to an anonymous research university. Inter alia, the data include information on the ages of the alumni's children, whether they app...
Article
We study the effects of a change in financial aid policy introduced by an anonymous university in 1998. Prior to that time, the university's financial aid packages for low-income students consisted of grants, loans, and campus jobs. After the change, the entire loan portion of the package for low-income students was replaced with grants. We find th...
Article
In this paper we analyze microdata to explore differences in the rates at which American and German workers leave their salaried jobs to become self-employed. We document that the rate of self-employment is lower in Germany than in the United States, and the rate of transition from wage-earning to self-employment is lower as well. Our results sugge...
Article
In this paper we analyze microdata to explore differences in the rates at which American and German workers leave their salaried jobs to become self-employed. We document that the rate of self-employment is lower in Germany than in the United States, and the rate of transition from wage-earning to self-employment is lower as well. Our results sugge...
Article
Most data sets indicate a positive correlation between having health insurance and utilizing health care services. Yet the direction of causality is not at all clear. If we observe a positive correlation between the utilization of health care services and insurance status, we do not know if this is because people who anticipate poor health buy more...
Article
The effects of entrepreneurship on a nationaleconomy are assumed to be widespread, influencing new products, prices,innovation, and productivity. Thus, a nation's policies toward the promotionof, or inhibition of, entrepreneurship are significant. This book is acompilation of papers from an April 2001 Syracuse University conference ofeconomists and...
Article
The causal links between health and economic resources have long concerned social scientists. We use four waves of data from the Panel Study of Income Dynamics (PSID) to analyze the impact of wealth upon an individual's health status. The difficulty in approaching this task that has bedeviled previous studies is that wealth may be endogenous; a pri...
Article
This paper analyzes the role health status plays in household portfolio decisions using data from the Health and Retirement Study. The results indicate that health is a significant predictor of both the probability of owning different types of financial assets and the share of financial wealth held in each asset category. Households in poor health...
Chapter
Public Finance is the branch of economics that studies the taxing and spending activities of government. The term is something of a misnomer, because the fundamental issues are not financial (that is, relating to money). Rather, the key problems relate to the use of real resources. For this reason, some practitioners prefer the label public sector...
Article
We study the effects of a change in financial aid policy introduced by a Northeastern university in 1998. Prior to that time, the universitys financial aid packages for lowincome students consisted of grants, loans, and campus jobs. After the change, the entire loan portion of the package for low-income students was replaced with grants. We find th...
Article
Public Finance is the branch of economics that studies the taxing and spending activities of government. The term is something of a misnomer, because the fundamental issues are not financial (that is, relating to money). Rather, the key problems relate to the use of real resources. For this reason, some practitioners prefer the label public sector...
Article
There is considerable public policy concern over the relatively low rates of health insurance coverage among the self-employed in the United States. Presumably, the reason for the concern is that their low rates of insurance lead to worse health outcomes. We use data from the Medical Expenditure Panel Survey conducted in 1996 to analyze how the sel...
Article
Critics argue that the estate tax prevents the owners of family businesses from passing their enterprises to heirs because it is difficult to pay estate taxes without liquidating the business. Why don't owners purchase enough life insurance to meet their estate tax liabilities? We examine whether and how people use life insurance to deal with the e...
Article
There has been substantial public policy concern over the relatively low rates of health insurance coverage among the self-employed in the United States. We use data from the Medical Expenditure Panel Survey conducted in 1996 to analyze how the self-employed and wage-earners differ both with respect to insurance coverage and utilization of a variet...
Article
Full-text available
This paper analyzes the role that health status plays in household portfolio decisions using data from the first wave of the Health and Retirement Study. The results indicate that health is a significant predictor of both the probability of owning different types of financial assets and the share of financial wealth held in each asset category. Hou...
Article
This paper investigates the effect of entrepreneurs' personal income tax situations on the growth rates of their enterprises. We analyze the personal income tax returns of a large number of sole proprietors before and after the Tax Reform Act of 1986 and determine how the substantial reductions in marginal tax rates associated with that law affecte...
Article
The offspring of self-employed fathers are more likely than others to become self-employed. Thus the historically low rates of self-employment among African-Americans and Latinos may contribute to their low contemporary rates. National data show that African-Americans and Latinos whose fathers were self-employed have lower rates of self-employment...
Article
Full-text available
This paper investigates the effect of entrepreneurs' personal income tax situations on their use of labor. We analyze the income tax returns of a large number of sole proprietors before and after the Tax Reform Act of 1986 and determine how the substantial reductions in marginal tax rates associated with that law affected their decisions to hire la...
Article
Full-text available
The question of how entrepreneurship relates to income mobility is cogent given the current public debate about the sources of income inequality and mobility in United States society. We examine how experience with entrepreneurship has affected an individual's place in the earnings distribution. Our basic tack is to follow individuals' positions in...
Article
We focus on the intergenerational transmission of the propensity to be self-employed. Our emphasis is on the role of family background, and in particular, on what we call the intergenerational pick-up rate with respect to self-employment, the probability that a person with a self-employed parent will become self-employed him or herself. We use the...
Article
Full-text available
Abstract One of the most important issues in the debate over Social Security is how various changes in the system would change retirement behavior. A critical parameter in this context is the income effect on retirement—how a change in income affects retirement behavior, ceteris paribus. To estimate the income effect, we examine tax-return generate...
Article
The Netherlands introduced a new health insurance system in January 2006, a system based on managed competition. Such a system critically hinges on consumers that search. It is for this reason we think it is important to investigate the extend to which consumers search, how they search and why they search ´or don’t search. The price dispersion obse...
Article
Research and development at the nanoscale requires a large degree of integration, from convergence of research disciplines in new fields of enquiry to new linkages between start-ups, regional actors and research facilities. Based on the analysis of two clusters in nanotechnologies (MESA+ (Twente) and other centres in The Netherlands and Minatec in...
Article
One of the most fundamental questions in public finance is who bears the burden of taxes -- the incidence of taxation.' Our understanding of incidence from an empirical standpoint is quite meager. Indeed, there seems to be little evidence even in the case that is theoretically the easiest -- partial equilibrium commodity taxes. Are taxes levied on...
Article
A common feature of federal systems is that tax bases are joint property. Consequently, state and federal tax setting decisions are interdependent. Our aim here is to put forward a rudimentary theoretical analysis of this phenomenon, and to use the theory as a framework for econometrically estimating the magnitude of the responses. We find that whe...
Article
Full-text available
This paper investigates the effect of entrepreneurs' personal income tax situations on their capital investment decisions. We examine the income tax returns of a sample of sole proprietors before and after the Tax Reform Act of 1986 and determine how the substantial reductions in marginal tax rates for the relatively affluent associated with that l...
Article
Research and development at the nanoscale requires a large degree of integration, from convergence of research disciplines in new fields of enquiry to new linkages between start-ups, regional actors and research facilities. Based on the analysis of two clusters in nanotechnologies (MESA+ (Twente) and other centres in The Netherlands and Minatec in...
Article
This paper uses a comparison of a contemporary Public Finance textbook with one written in the 1940s as a vehicle for assessing the changes in the field since the beginning of the National Tax Journal 50 years ago. The comparison indicates that there have been major changes in the field. From a methodological point of view, the most important chang...
Article
We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 fi...
Article
Full-text available
In early 1862, the United States government began issuing Greenbacks, a legal tender currency that was not convertible into gold. The government promised to redeem the Greenbacks in gold eventually, but speculators understood that the probability of redemption depended on Union Army military fortunes and political developments that affected the tot...
Article
The new tax law increases tax rates of high income individuals, and expands the earned income tax credit for low income individuals. We use a sample of actual tax returns to compute estimates of the 'marriage tax' - the change in couples joint tax upon marriage - under this new law. We predict that in 1994 52 percent of American couples will pay a...
Article
Although it is widely supposed that a college's female undergraduate enrollment in the sciences and engineering can be increased by raising female representation on the faculties in those fields, that proposition has not been subjected to serious statistical analysis. The authors of this paper analyze panel data from three quite different education...
Article
Timothy W. Guinnane is assistant professor of economics at Yale University. He writes on the economic history of nineteenth-century Ireland and Germany. Harvey S. Rosen is professor of economics at Princeton University. Most of his writing centers on the field of public economics. Kristen L. Willard is assistant professor of finance and economics a...
Article
Full-text available
Do state and local governments smooth their consumption spending across years, or is their spending driven mainly by contemporaneous changes in resources? We design a test to determine which view of state and local spending is more consistent with the data. We find that state and local spending is determined primarily by current (as opposed to perm...
Article
Full-text available
This paper analyzes the role of liquidity constraints in the formation of new entrepreneurial enterprices. The basic empirical strategy is to determine whether an individual's wealth affects the probability of becoming an entrepreneur, and the conditional amounts of depreciable assets and interest deductions, ceteris paribus. If so, liquidity...
Article
Full-text available
The authors examine survival rates of entrepreneurial enterprises and their growth, conditional on surviving. Their focus is on whether liquidity constraints increase the likelihood of entrepreneurial failure. The empirical strategy is based on the following logic: If entrepreneurs cannot borrow to attain their profit-maximizing levels of capital,...
Article
This paper formalizes and tests the notion that state governments' expenditures depend on the spending of similarly situated states. We find that even after allowing for fixed state effects, year effects, and common random effects between neighbors, as state government's level of per capita expenditure is positively and significantly affected by th...
Article
This paper formalizes and tests the notion that states' expenditures depend on the spending of similarly situated states. We find that even after allowing for fixed state effects, year effects, and common random shocks among neighbors, a state government's level of per capita expenditure is positively and significantly affected by the expenditure l...
Article
Despite widespread concern and discussion, no consensus exists concerning the causes of the "infrastructure crisis." We investigate several models of the determination of local public capital expenditures. Using Euler equation methods, we find that the hypothesis that construction spending is determined by unconstrained, forward looking municipal p...
Article
Full-text available
This paper examines tax-return-generated data on the labor force behavior of people before and after they receive inheritances. The results are consistent with Andrew Carnegie's century-old assertion that large inheritances decrease a person's labor force participation. For example, a single person who receives an inheritance of about $150,000 is r...
Article
The authors specify a model of municipal labor demand when resource flows available to the municipality are uncertain. The model allows them to test the hypothesis that employment decisions are rational in the sense that they incorporate all available information at the time that the decisions are made. The authors find that, for their sample of co...
Article
In current discussions of tax reform in the United States, there is considerable controversy concerning the effects of allowing individuals to deduct state and local taxes when calculating their federal income tax liability. Recent econometric work has suggested that federal deductibility of state and local taxes has raised the proportion of these...
Article
In recent months, the governors of several states have suffered major political embarrassments because actual revenues fell, substantially short of the predictions in their respective budgets. Such episodes focus attention on the question of whether states do a "good" job of forecasting revenues. In modern economics, forecasts are evaluated on the...
Article
The paper discusses five early approaches to the price (and quantity) index number problem. The five approaches are: (1) the fixed basket approach; (ii) the statistical approach; (iii) the test or axiomatic approach; (iv) the Divisia approach and (v) the economic approach. The economic approach makes use of the assumption of optimizing behavior und...
Article
Some analysts interpret movements in capital spending by sub-federal levels of government as rational reactions to changing economic and demographic conditions. Others attribute changes to myopic decision-making by politically motivated government officials. In this paper we present a formal definition of ‘rational’ decision-making that is amenable...
Article
This paper examines the intertemporal linkages between local government expenditures and revenues. The main results that emerge from an analysis of fiscal data from 171 municipal governments over the period 1972-80 are that (1) one or two years are sufficient to summarize the relevant dynamic interrelationships; (2) there are important intertempora...
Article
Full-text available
This paper considers estimation and testing of vector autoregression coefficients in panel data, and applies the techniques to analyze the dynamic properties of revenues, expenditures, and grants in a sample of United States municipalities. The model allows for nonstationary individual effects, and is estimated by applying instrumental variables to...
Article
In this paper we examine the trends in housing conditions among the urban poor over the last decade, relate these trends to the economic environments of the cities, and compare the poor to other income groups. We find that there has been a substantial decrease in "housing independence" -- among the poor, the percentage of family heads who live with...
Article
Most aggregative labor market models contain a marginal productivity expression in which the quantity of labor appears on the left hand side of the equation, and the right hand side includes the real wage and output. Some researchers have cautioned that if the output variable is treated as exogenous, econometric difficulties may result. However, th...
Article
Critics of Governor Michael Dukakis have suggested that this year?s $400 million overestimate of tax revenues in Massachusetts casts doubt on his putative managerial skills. In this paper, we carefully examine the entire Dukakis forecasting record. We find that the 1988 experience was "unusual? in the sense that on average, revenue forecasts produc...
Article
The public debate surrounding the Tax Reform Act of 1986 has paid little attention to the tax consequences of being married. Specifically, there has been virtually no discussion of the possible existence of an implicit "marriage tax"--the increase in the joint income tax liability of a man and woman when they marry. This lack of concern appears to...
Article
This paper considers estimation and testing of vector autoregressio n coefficients in panel data, and applies the techniques to analyze the dynamic relationships between wages an d hours worked in two samples of American males. The model allows for nonstationary individual effects and is estimated by applying instrumental variables to the quasi-dif...
Article
This monograph estimates both disequilibrium and equilibrium models of the U.S. labor market and compares the results and their implications for policy. Because a great deal of work in the U.S. labor market has followed the equilibrium paradigm, this essay devotes a disproportionate amount of time to discussing the problems that arise in formulatin...
Article
It has been hypothesized that a jurisdiction's tax structure exerts an indipendent effect upon the growth of its public sector. We test this hypothesis by examining the relationship between the growth of state general expenditure and the elasticity of tax revenues with respect to income. The work takes advantage of a very careful set of income elas...
Article
This paper investigates the effects of deductibility of local taxes on communities' budgetary decisions. Our focus is on how changes in the tax price of local spending induced by deductibility affect the mix between deductible and nondeductible revenue sources, and on expenditures. The econometric analysis is based on a rich data set that tracks th...
Article
This paper examines the effect of earnings taxes on wage variability over t ime. The authors estimate a "hedonic wage locus" which indicates ho w the market allows individuals to substitute the mean level of the w age for its variability across jobs. Information from this locus is u sed to estimate the parameters of individuals' indifference curves...
Article
In fiscal year 1981-82, state and local government spending actually exceeded federal nondefense spending. However, past research in public finance has focused on federal spending and policies and paid little attention to the economic problems of state and local governments. Studies in State and Local Public Finance goes far in correcting this omis...
Article
I study a budget-constrained, private-valuation, sealed-bid sequential auction with two incompletely-informed, risk-neutral bidders in which the valuations and income may be non-monotonic functions of a bidder's type. Multiple equilibrium symmetric bidding functions may exist that differ in allocation, efficiency and revenue. The sequence of sale a...
Article
The paper specifies a disequilibrium model for the aggregate labour market consisting of demand and supply functions for labour, an adjustment equation for wages as well as for prices, a transactions equation and, finally, an equation that relates measured unemployment to vacancies and to excess demand. The model has a more sophisticated treatment...
Article
We show that the length of compulsory education has a causal impact on regional labour mobility. The analysis is based on a quasi-exogenous staged Norwegian school reform, and register data on the whole population. Based on the results, we conclude that part of the US-Europe difference, as well as the European North-South difference in labour mobil...
Article
In this paper we analyze taxation using the conjectural variations model of oligopoly. We demonstrate the way in which the incidence of a tax depends upon the pattern of firm interaction. The results obtained have important implications for the controversy surrounding the question of whether a tax oncorporate income can be over-shifted. We also stu...
Article
This paper surveys the effects of two of the most important federal policies toward housing: the "implicit subsidy" for owner-occupied housing in the income tax code, and the provision of housing for low income families at rents below cost. Emphasis is placed on the methodological problems that arise in attempts to assess the efficiency and distrib...
Article
The purpose of this paper is to evaluate the Experimental Housing Allowance Program (EHAP). My focus is on what the experimental data have taught us that could not have been learned from more traditional sources of information. I review the major problems that confronted investigators using non-experimental data, and for each problem discuss whethe...
Article
We devise and implement a statistical test of the hypothesis that the labor market has chronic excess supply. We find that the data reject this hypothesis.
Article
Economists have an instinctively negative reaction to any government program that creates a "notch," that is, a discontinuity in a budget constraint. For example, welfare programs like public housing are structured so that a finite lump of benefits is lost all at once when a household's income crosses a certain threshhold. Such notches deserve thei...
Article
Modern empirical work on the choice between renting and owning focuses on the concept of the "user cost" of housing, which integrates into a single measure the various components of housing costs. The standard approach implicitly assumes that households know the user cost of housing with certainty. However, the ex post user cost measure exhibits su...
Article
In this paper we examine the factors affecting the structure of executives' compensation packages. We focus particularly on the role of various types of delayed compensation as means of “bonding” executives to their firms. The basic problem is to design a compensation package that rewards actions that are in the long-run interest of the stockholder...
Article
A lifetime perspective is appropriate in assessing the welfare implications of government tax policies. Although a number of attempts have been made to ex- amine the excess burden of taxation in life-cycle models, these have tended to ignore the role of human capital accumulation and/or the leisure-income choice. In this paper, we do numerical simu...
Article
Standard theoretical considerations suggest that the quantity and price of a good are jointly determined by supply and demand. In the literature on physical investment, however, attention has been focused almost exclusively on the demand side. This paper considers the theoretical and statistical problems that arise when the demand and supply sides...
Article
In this paper we estimate the price premium associated with organic baby food by applying a hedonic model to price and characteristic data for baby food products collected in two cities: Raleigh/Durham, North Carolina and San Jose, California. We use price per jar of baby food as the dependent variable and control for a number of baby food characte...

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