Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
The incidence of tax and other policy changes depends on their impact on equilibrium wages. In a standard model of labor supply, the impact of wage changes on a worker’s welfare equals current labor supply times the induced wage change. Worker heterogeneity implies that wage changes vary across workers. In this context, in order to identify welfare effects one needs to identify the causal effect of policy changes on wages conditional on baseline labor supply and wages.