Effects of tax shocks on unemployment rate in the us: Trends comparison across states, age and gender groups

Responses to the state tax shocks for the period of 1998 to 2018. The four groups are split into two age groups (16-34 and 35-64), and then into two gender groups, which is an innovative part of this study. The aim of the research is to detect trends, which could be used in future research to assess the effectiveness of the state-tax policy and its impact on unemployment rates and thus improve policy. The Vector Autoregression (VAR) and impulse response functions (IRFs) are used to evaluate specific responses for the nine US states (California, Connecticut, Georgia, Iowa, Louisiana, Massachusetts, Nebraska, New Jersey and Utah). The findings show that young female groups are more resilient to state-tax shocks if compared to young male groups, while this trend reverses for older age groups.