Food Sales Taxes and Employment

14 Pages Posted: 9 Nov 2018

See all articles by Nadia Greenhalgh-Stanley

Nadia Greenhalgh-Stanley

Kent State University

Shawn Rohlin

Kent State University - Department of Economics

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston; Federal Reserve Board of Governors

Date Written: November 2018

Abstract

We use panel fixed effects estimation with a border approach creating cross‐border county pairs to identify changes in food sales tax rates on employment, payroll, and hiring. Results suggest food sales taxes have a negligible effect on overall employment but adverse effects in the food and beverage stores industry. We find younger workers, who are more likely to work in the food and beverage industry, are more adversely affected when a neighboring state has preferential tax treatment for food. We also determine that omitting food sales tax rates when studying general sales tax effects on employment does not bias estimates.

Suggested Citation

Greenhalgh-Stanley, Nadia and Rohlin, Shawn and Thompson, Jeffrey P., Food Sales Taxes and Employment (November 2018). Journal of Regional Science, Vol. 58, Issue 5, pp. 1003-1016, 2018, Available at SSRN: https://ssrn.com/abstract=3281867 or http://dx.doi.org/10.1111/jors.12406

Nadia Greenhalgh-Stanley

Kent State University ( email )

466 College of Business
Kent State University
Kent, OH 44242
United States
(330)672-1087 (Phone)

Shawn Rohlin (Contact Author)

Kent State University - Department of Economics ( email )

Kent, OH 44242
United States

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Federal Reserve Board of Governors ( email )

Washington, DC 20551
United States

HOME PAGE: http://https://www.federalreserve.gov/econres/jeffrey-p-thompson.htm

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