Eric Ohrn, Grinnell College

Eric Ohrn

About the speaker

Eric Ohrn is an Associate Professor of Economics at Grinnell College. His research focuses on corporate taxation and its effects on US business activity. In particular, Professor Ohrn has studied the impacts of policies such as Bonus Depreciation, the "Bush Tax Cuts", and the Domestic Production Activities Deduction on corporate investment, financial reporting, and merger behavior. Ohrn's research has been published in American Economics Review: Insights, American Economic Journal: Policy, and the Journal of Public Economics. Ohrn has won grants from the Russell Sage Foundation and the Washington Center for Equitable Growth and in 2019 was awarded an Early Career Research Grant from the W.E. Upjohn Institute for Employment Research. Ohrn received his Ph.D. from the University of Michigan in 2014. 


The Effect of Tax Incentives for Capital Investment on Worker Outcomes 

E. Mark Curtis, Wake Forest University
Daniel G. Garrett, Wharton School, University of Pennsylvania
Eric Ohrn, Grinnell College
Kevin A. Roberts, Duke University
Juan Carlos Suárez Serrato, Duke University and NBER


During the years 2018--2028, the US federal government will spend $285 billion on accelerated depreciation policies that subsidize capital investment.  Advocates of these policies argue the incentives increase capital intensivity and productivity, resulting in higher wages for workers.  Opponents raise concerns that the policies decrease the relative cost of capital, leading to inefficiently high levels of automation that eliminate jobs and decrease wages, especially for low-wage and less educated workers.  These concerns are particularly troubling given the recent rise in income inequality in the US.  
In this paper, we use administrative data from the US Census Bureau and an event study difference-in-differences framework to document the effects of accelerated policies on worker outcomes in the US manufacturing sector.  In accord with previous research, we find accelerated depreciation substantially increases capital investment.  The increased investment is matched with higher levels of employment, but also decreases in average wages.  The tax policies do not raise productivity or alter capital-labor ratios. These findings are hard to reconcile with canonical models describing the interaction between capital and labor and force us to reconsider the design of tax policies to benefit workers in the modern economy.  


If you are an Oxford University student, faculty or staff, and would like to attend any of the seminars, please contact to check availability.