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Who Benefits from Tax-Advantaged Employee Benefits?: Evidence from University Parking

26 Pages Posted: 9 Jun 2008  

Michael D. Grubb

Boston College

Paul Oyer

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: June 2008

Abstract

We use university parking permits to study how firms and employees split the value of employee benefit tax subsidies. Starting in 1998, the IRS allowed employees to pay for parking passes with pre-tax income. This subsidized the parking pass purchases of faculty and staff, but did not affect students. We show that the typical university raised its parking rates by 8-10% extra when it implemented a pre-tax payment system, but that this increase was the same for those affected by the tax change and those that were not affected. We conclude that university employees captured much of the new tax benefit, that faculty and staff that purchase permits benefited relative to those that do not purchase permits, and that students that purchase permits were made worse off relative to those that do not buy permits. We discuss what these results suggest about universities' objectives in setting their parking prices and about the demand for university parking.

Suggested Citation

Grubb, Michael D. and Oyer, Paul, Who Benefits from Tax-Advantaged Employee Benefits?: Evidence from University Parking (June 2008). NBER Working Paper No. w14062. Available at SSRN: https://ssrn.com/abstract=1142234

Michael D. Grubb

Boston College ( email )

United States
617-552-1569 (Phone)

HOME PAGE: http://https://www2.bc.edu/michael-grubb/

Paul Oyer (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-736-1047 (Phone)
650-725-0468 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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