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Economic Projections

Twice a year, CBO publishes 10-year forecasts of economic activity conditioned on the federal spending and taxes that will occur under current law. For the beginning years of that span, each forecast incorporates the effect of the business cycle; for the later years of the span, each forecast relies on long-term trends in the labor force, saving, and productivity. CBO also makes long-term budget projections.

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  • Data Underlying CBO’s Economic Forecasting Record: 2013 Update

related publications


  • An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022

    August 22, 2012

  • CBO's Economic Forecasting Record: 2010 Update

    July 15, 2010

  • What Is a Current-Law Economic Baseline?

    June 02, 2005
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CBO's Economic Forecasting Record: 2013 Update

report

January 17, 2013

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related publications


  • How the Supply of Labor Responds to Changes in Fiscal Policy

    October 25, 2012
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Review of Estimates of the Frisch Elasticity of Labor Supply: Working Paper 2012-13

working paper

October 25, 2012

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Abstract

Felix Reichling and Charles Whalen

Among the models that CBO uses to analyze the economic effects of changes in federal fiscal policy is a life-cycle growth model. That model requires an estimate of the responsiveness of the supply of labor to a one-time temporary change in after-tax compensation, which is described by the so-called Frisch elasticity. CBO incorporates into its analyses an estimate of the Frisch elasticity that ranges from 0.27 to 0.53, with a central estimate of 0.40. This paper describes how CBO derived that range from the research literature.


related publications


  • How the Supply of Labor Responds to Changes in Fiscal Policy

    October 25, 2012
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A Review of Recent Research on Labor Supply Elasticities: Working Paper 2012-12

working paper

October 25, 2012

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Abstract

Robert McClelland and Shannon Mok

This paper updates a review conducted by CBO in 1996 in which the agency evaluated the academic research on the effects of changes in after-tax wages on labor supply in the U.S. economy. That review concluded that substitution elasticities were larger in absolute value than income elasticities and that the decision to work was more responsive to after-tax wages than was the choice of hours. In this update, we find that for men and single women, estimates of substitution elasticities have increased, and income elasticities still appear to be smaller in absolute value than substitution elasticities. We also find that labor supply elasticities of married women have fallen substantially in the last three decades, although they are still higher than the elasticities of men and unmarried women. Based on our review, the elasticities of broad measures of income (total income less capital gains) from tax return data are in most instances consistent with the labor supply elasticities estimated using survey data. We find little compelling evidence that high-income taxpayers have substantially higher elasticities with respect to their labor input than other taxpayers: While some studies have estimated higher elasticities of broad income among high-income taxpayers, those results appear to reflect those taxpayers’ greater ability to time their income. In contrast, we find evidence that low-income workers have higher elasticities of labor supply than other workers, especially in the component of their labor response that reflects movement in and out of the workforce.


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  • Additional Data

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  • Budget Projections
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  • Key Assumptions in Projecting Potential GDP
  • Tax Receipts
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related publications


  • The Budget and Economic Outlook: Fiscal Years 2012 to 2022

    January 31, 2012

  • Updated Budget Projections: Fiscal Years 2012 to 2022

    March 13, 2012

  • Economic Consequences Infographic

    August 22, 2012
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An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022

report

August 22, 2012

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monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
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CBO Releases Its Annual Summer Update of the Budget and Economic Outlook

blog post

August 22, 2012


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Key Assumptions in Projecting Potential GDP—August 2012 Baseline

data or technical information

August 22, 2012

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Baseline Economic Forecast—August 2012

data or technical information

August 22, 2012

read complete document  (xls, 114 kb)

monthly archive

  • May 2013 (2)
  • April 2013 (14)
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  • February 2013 (10)
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CBO To Release Updated Budget and Economic Outlook On August 22

blog post

August 2, 2012


The Budget and Economic Outlook: Fiscal Years 2013 to 2023

Feb 2013 - Under current law, federal debt will stay at historically high levels relative to the economy, CBO projects. Economic growth will be slow in 2013 but pick up thereafter. Even so, the unemployment rate will be above 7.5 percent through 2014.

monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
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Breakfast with Reporters

blog post

June 14, 2012


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