John Laitner

Contact Information

The University of Michigan
Department of Economics
311 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109-1220
Tel: (734) 763-9620
Tel (Institute for Social Research): (734) 615-4582
Email: jlaitner@umich.edu

Links to Data

TIAA-CREF Survey data now available online.

Vitae

Laitner CV .

Working Papers

Entry Conditions and the Market Value of Capital
This paper presents a model of aggregative investment. In the model, the business sector expands by adding new establishments. Costs of investment are linear but, in the case of net investment, depend upon the risk of entry failure. We can measure the risk, and time-series variation in it, from micro data. We show that average entry-failure rates are sufficiently high that entry risk alone can explain about one-half of the intangible capital stock of the US. Despite linear costs, we show that our model has potentially interesting dynamic implications.

Intergenerational Transfers in Data fromthe Health and Retirement Study
We examine 1992-2008 HRS data on inheritances and inter vivos gifts. We uncover a problem with the data: a household's financial respondent often seems to understate transfers from his/her in-laws. Nevertheless, other aspects of the data seem very useful. In particular, we can shift our emphasis to the distribution of inheritances for couples, conditional on a positive transfer from the respondent's in-laws. About 30-40 percent of households eventually inherit. Our analysis suggests that inheritances reflect a mixture of intentional and accidental bequests, with the latter twice as prevalent.

Derivative Ideas and the Value of Intangible Assets
We build a general equilibrium model in which growth is driven by two invention types: fundamental ideas that cause creative destruction, and derivative ideas that enhance the value of existing inventions. The model provides a new mapping from microeconomic, patent data to aggregate TFP growth and the aggregate value of privately owned knowledge. We show how to measure the frequency of derivative ideas and the rate of creative destruction. We estimate that derivative ideas account for 70-80% of all patents and that their presence more than doubles the value of intangible capital relative to what microeconomic evidence might otherwise suggest.

Consumption, Retirement and Social Security: Evaluating the Efficiency of Reform that Encourages Longer Careers
This paper proposes, and analyzes, a Social Security reform in which individuals no longer face the OASI payroll tax after some specified age or career length, and their subsequent earnings have no bearing on their benefits. We first estimate parameters of a life-cycle model. Our specification includes non-separable preferences and possible disability. It predicts a consumption-expenditure change at retirement. We use the latter's magnitude, together with household retirement-age decisions, to identify key structural parameters. Simulations indicate that reform could increase retirement ages one year or more, equivalent variations could average $4000 per household, and income tax revenues per household could increase $8900.