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Guest post:The Romney job record in Massachusetts

by Jon Hammond

Guest post: The Romney job record in Massachusetts

For the period January 2003 – January 2007, the Romney record on state government job growth is compared against the national state employment aggregate. Likewise, private sector job growth in Massachusetts is compared against the national private sector aggregate, thus, benchmarking the Romney record against the national record.

The comparisons make clear that state government employment increased 2.8% in Massachusetts, more than twice the national state government employment aggregate of 1.1%. Private sector employment over the same period in Massachusetts increased 1.4%, less than a quarter of the national aggregate of 5.9%. It should be noted that this comparative performance decrement mirrors economic growth in the state as annual real GDP grew 1.6% over Romney’s tenure, as opposed to an annual increase of 2.7% nationally.

Comparison of the Romney record against the national record:

Here’s the graph:

Here’s the supporting data table:

The Bureau of Labor Statistics compiles data on both private sector and government employment. The data on both state government and private employment is available on a state and national aggregate basis for any specified time-frame via the BLS data servlets, as follows:
Massachusetts State Government: BLS series ID SMS25000009092000001 (click) here.
National Aggregate State Government: BLS series ID CES9092000001 (click)here.
Massachusetts Private Employmwent: BLS series ID SMU25000000500000001 (click) here:
National Private Employment: BLS series ID CES0500000001 (click) here:

from Econographia

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Real information on "contraceptive pills" and health insurance

Jon Hammond from econographia reseached the topic of contraceptive pills on the cost aspects involved with health insurance at my request. Instead of losing real data in the comments sections on previous posts, I am posting his findings here:

Here are some of the empirical findings dealing with the insurance costs and cost-savings of coverage for contraceptive services. The direct costs of providing contraception as part of a health insurance plan are very low and do not add more than approximately 0.5% to the premium costs per adult enrollee (see Daroch, J. E.). In 1998, Buck Consultants estimated that the direct cost of providing contraceptive benefits averaged $21 per enrollee per year (see Daroch, J. E.). The most recent actuarial analysis, completed by the Actuarial Research Corporation in July 2011, using data from 2010, estimated a cost of about $26 per year per enrolled female (see Callahan, C.)

However, with respect to the effect on insurance premiums when medical costs associated with unintended pregnancies are taken into account … including costs of prenatal care, pregnancy complications, and deliveries … the net effect on premiums is close to zero (see Washington Business Group on Health, Sept 2000). And when time away from work and lost productivity are considered (factors salient to employers) . . the total costs to employers are reduced.

PriceWaterhouseCoopers issued a report in 2007 which found that providing contraceptive services yields a net cost-savings (see Campbell, K.P.).

The cost-savings impact of contraceptive services has also been demonstrated via the Medicaid Section 1115 Family Planning Demonstrations conducted in six states in the 1990s. Please refer to Tthe February 2012 U.S. DHHS brief on this subject .. it contains both the content and full citations noted in abbreviated form above .. see here:

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Guest Post: Does a lower Corporate Tax burden increase private investment?

Update: Dan here: I am posting Jon’s reply now to comments in this post. Technical troubles continue for Jon.

It is always a pleasure to find clear and concise posts from a ‘new’ econoblogger. Mike Kimel found Econographia. Hopefully more is on the way.

by Jon Hammond

Guest post: Does a lower corporate tax burden increase private investment

The efficacy of taxation in promoting or discouraging economic growth remains a hotbed of disparate perspectives on the part of economists and policymakers alike. Some politicians insist that more incentives for private investors — lower taxes on corporate profits — will lead to faster and better-balanced growth. According to a New York Times/CBS News poll in May 2011, a majority of Americans believe that increased corporate taxes “would discourage American companies from creating jobs.” The assumed mechanism for spurring economic growth and job creation is new private or business investment, incentivized by lowering the corporate tax burden.

The following graph displays a comparison of net private investment as a percent of GDP against corporate tax receipts as a percent of GDP … for the post-war period 1950 – 2008. The data is sourced from the Department of Commerce, Bureau of Economic Analysis (BEA), as follows:

GDP – NIPA table 1.1.5 here
Corporate tax receipts – NIPA table 3.2 here
Net business investment – NIPA table 5.2.5 here

At this level of analysis, we should expect to see an inverse relationship between the two, specifically: with a decline, over time, in corporate tax receipts as a percent of GDP, there should be an increase in net private investment over the same time period.

 Statistically, one would expect these two series to be negatively correlated.

Change in Corporate Taxes and Business Investment, 1950 – 2008:

As the graph shows, both corporate tax receipts and net business investment as a percent of GDP declined over the period 1950 – 2008. The data does not show an inverse relationship between the two series. Rather, the data shows a substantial positive correlation, i.e., high values in the tax series are associated with high values in the private investment series, and the same association is observed for low values. This counters the idea that business investment increases when the tax burden decreases. Moreover, this decline in business investment suggests that by retaining more and more of their earnings, corporations are failing to make economically productive use of their capital .. and shortchanging growth.

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