Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Smock says cohabitation does not reduce odds of marriage

Smock cited in story on how low marriage rates may exacerbate marriage-status economic inequality

Shapiro says Americans' seemingly volatile spending pattern linked to 'sensible cash management'

Highlights

Susan Murphy named Distinguished University Professor

Sarah Burgard and former PSC trainee Jennifer Ailshire win ASA award for paper

James Jackson to be appointed to NSF's National Science Board

ISR's program in Society, Population, and Environment (SPE) focuses on social change and social issues worldwide.

Next Brown Bag


PSC Brown Bags will return in the fall

Household Response to the 2008 Tax Rebate: Survey Evidence and Aggregate Implications

Publication Abstract

Sahm, Claudia R., Matthew D. Shapiro, and Joel Slemrod. 2010. "Household Response to the 2008 Tax Rebate: Survey Evidence and Aggregate Implications." In Tax Policy and the Economy. Vol. 24. edited by Jeffery R. Brown. Chicago: University of Chicago Press.

Only about one-fifth of respondents in the Reuters/University of Michigan survey report that the 2008 tax rebates led them to mostly increase spending, while over half said it would lead them to mostly pay off debt. Of those in the mostly-spend category, the response was swift, with over 80 percent reporting increasing their spending within three months of receiving their rebate. Older households, households with higher wealth and higher income, and those expecting future income growth were generally more likely to spend the rebates. A review of other surveys confirms the general pattern of results and suggests that small changes in survey design do not have a major effect on the distribution of responses.

The distribution of survey answers corresponds to an aggregate MPC after one year of about one-third. The paper combines this survey-based estimate of the MPC and the survey-based estimate of the timing of spending to show that the rebates help explain the aggregate movements in saving, spending, and debt in 2008. Because the rebate was large and distributed over a short period, it had a non-trivial effect on total spending in the second and third quarters of 2008. Nonetheless, the results imply that the rebates provided only a modest stimulus to spending per dollar of rebate.

ISBN: 9780226076744

Country of focus: United States.

Browse | Search : All Pubs | Next