How effective are subnational fiscal policies at creating jobs? While traditional arguments assign the stabilization function to the central government, states are often involved either through funds provided by the central government (grants) or through their use of their own revenue sources. Following a recent macroeconomic literature that has estimated “regional multipliers” (essentially a Keynesian multiplier for subnational regions) this paper follows and expands on this literature by estimating the impact of grants, rainy-day funds, and state deficits on state employment. The results show a significant multiplier for grants and rainy-day funds that varies according to the source of funds and whether the labor market is in a slack or boom situation. Estimates for the grant variable suggest that during high unemployment times additional grants will stimulate employment at a cost of about $55,000 per job.

Border taxes are a workhorse instrument of fiscal and trade policy, but their effectiveness hinges on compliance at the border. We study where responses to border tax rates concentrate across product–partner lanes, highlighting heterogeneity linked to enforcement information and valuation uncertainty. Using Japanese transaction-level customs microdata and mirror trade statistics, we created HS6 product–partner–year panels for 2014–2021. Our estimation results show that the average semi-elasticity of mirror gaps with respect to border tax rates is statistically insignificant. However, heterogeneous estimates are nearly zero where enforcement is supported by a rich information base (many declarants and dense transaction histories), sizable where information is scarce, and stronger where lagged unit-value dispersion is greater. These “where the effect lives” patterns survive conservative diagnostics separating incentive responses from measurement noise. The results suggest that, even in a high-capacity country, responses to border taxes are shaped by lane-level information and valuation uncertainty confronting enforcement.

This paper develops an integrated framework that combines the EUROMOD microsimulation model with macro-economic models from the Tax Foundation to assess the short- and medium-term effects of tax and benefit reforms. We apply this approach to a Polish personal income tax reform proposal that eliminates the top tax bracket and increases the basic allowance. The reform reduces the effective tax burden on labour, leading to a projected increase in labour supply by 1.3% and a medium-run GDP gain of 1.4%. These macro-economic responses are fed back into the microsimulation framework through dynamic scoring, which reduces the estimated government revenue loss from 6.6% (static) to 5.4% of baseline revenues. The results highlight the value of combining micro-level distributional analysis with macro-level behavioural feedbacks to fully capture the fiscal, employment, and inequality implications of comprehensive tax reforms.