The annual meeting of the Allied Social Science Associations started today in San Francisco. The conference features hundreds of sessions covering a wide variety of economics research. Interesting papers are all over the place, so below are some of the papers that caught the eyes of Equitable Growth staffers during the first day. Check back tomorrow and Tuesday evening for further highlights.

Leveling Up: Early Results from a Randomized Evaluation of Post-Secondary Aid

Abstract: Does financial aid increase college attendance and completion? Selection bias and the high implicit tax rates imposed by overlapping aid programs make this question difficult to answer. This paper reports initial findings from a randomized evaluation of a large privately-funded scholarship program for applicants to Nebraska’s public colleges and universities. Our research design answers the challenges of aid evaluation with random assignment of aid offers and a strong first stage for aid received: randomly assigned aid offers increased aid received markedly. This in turn appears to have boosted enrollment and persistence, while also shifting many applicants from two- to four-year schools. Awards offered to nonwhite applicants, to those with relatively low academic achievement, and to applicants who targeted less-selective four-year programs (as measured by admissions rates) generated the largest gains in enrollment and persistence, while effects were much smaller for applicants predicted to have stronger post-secondary outcomes in the absence of treatment. Thus, awards enabled groups with historically-low college attendance to ‘level up,’ largely equalizing enrollment and persistence rates with traditionally college-bound peers, particularly at four-year programs. Awards offered to prospective community college students had little effect on college enrollment or the type of college attended.

Labor Share Decline and Intellectual Property Products Capital

Abstract: We study the behavior of the US labor share over the past 65 years using new data from the post-2013 revision of the national income and product accounts and the fixed assets tables capitalizing intellectual property products (IPP). We find that IPP capital entirely explains the observed decline of the US labor share, which otherwise is secularly constant over the past 65 years for structures and equipment capital. The labor share decline simply reflects the fact that the US economy is undergoing a transition toward a larger IPP sector.

Paid Family Leave, Fathers’ Leave-Taking, and Leave-Sharing in Dual-Earner Households

Abstract: This paper provides quasi-experimental evidence on the impact of paid leave legislation on fathers’ leave-taking, as well as on the division of leave between mothers and fathers in dual-earner households. Using difference-in-difference and difference-in-difference-in-difference designs, we study California’s Paid Family Leave (CA-PFL) program, which is the first source of government-provided paid parental leave available to fathers in the United States. Our results show that fathers in California are 0.9 percentage points—or 46 percent relative to the pre-treatment mean—more likely to take leave in the first year of their children’s lives when CA-PFL is available. We also examine how parents allocate leave in households where both parents work. We find that CA-PFL increases father-only leave-taking (i.e., father on leave while mother is at work) by 50 percent and joint leave-taking (i.e., both parents on leave at the same time) by 28 percent. These effects are much larger for fathers of sons than for fathers of daughters, and almost entirely driven by fathers of first-born children and fathers in occupations with a high share of female workers.

Industry Dynamics and the Minimum Wage: A Putty-Clay Approach

Abstract: We document three new facts about the industry-level response to minimum wage hikes. First, restaurant exit and entry both rise following a hike. Second, the rise in entry is concentrated in chains, which we show to be more capital-intensive. Third, there is no change in employment among continuing restaurants. We develop a model of industry dynamics based on putty-clay technology and show that it is consistent with these facts. In the model, continuing restaurants cannot change employment, and thus industry-level adjustment occurs through exit of labor-intensive restaurants and entry of capital-intensive ones. We show these three facts are inconsistent with other models of industry dynamics.

Augmenting the Human Capital Earnings Equation with Measures of the Place Where You Work

Abstract: Recent work highlights the importance of the establishment where someone works in the pay of workers and in the growth in wage inequality among US workers (Barth, Bryson, Davis, and Freeman 2014). To what extent are differences in earnings linked to the firm to which the establishment belongs and its characteristics, and to the characteristics of the establishment, in addition to the characteristics of the individual that enters the standard earnings equation? To answer this question we combine establishment level data with data on firms (using firm identifiers on the establishment files) and data on employees (using establishment identifiers linked to the Longitudinal Employer Household Dynamics (LEHD)) to estimate earnings equations that include establishment and firm characteristics. We measure establishment-level characteristics by: the value of capital structures from buildings to equipment of different types from the quinquennial Economic Census from 1992 to 2007; and the average of years of schooling, age, gender, race at the establishment level obtained from the characteristics of individual workers in the establishment in the decennial Census long forms for 2000 and 1990, and CPS for 1986-1998. We measure firm-level characteristics by R&D investments from the Business R&D and Innovation Survey (BRDIS) and different forms of capital investments from the Annual Capital Expenditure Survey (ACES). We link these firm-level characteristics to the LEHD, thus adding measures of the knowledge and physical capital of the firm to workers wage regressions. Decomposing the variance of ln earnings of individuals, we find that both firm and establishment substantially affect the variation of earnings of workers, along with their individual characteristics. At the establishment level, the education of co-workers affects individual pay, conditional on own level of education; plant capital equipment is associated with higher wages whereas building structures have little effect. The firm’s level of R&D intensity is associated with higher wages for all workers. These results hold both when workers move to establishments or firms with larger amounts of the specified attributes and when they remain at the same establishment and the establishment or firm increases the attributes.

Waking Up from the American Dream: On the Experience of Young Americans During the Housing Boom of the 2000s

Abstract: We exploit regional variations in house price fluctuations in the United States during the early to mid-2000s to study the impact of the housing boom on young Americans’ choices related to home ownership, household formation, and fertility. We also introduce a novel instrument for changes in house prices based on the predetermined industrial structure of the local economy. We find that in MSAs which experienced large increase in house prices between 2001 and 2006, the youngest households were substantially less likely to purchase residential property, to start a family, and to have a child, both in 2006 and in 2011.

Religious Workers and the Racial Earnings Gap

Abstract: What is the role of religious institutions and the people working in them on the racial earnings gap in the United States? In this paper I explore the relationship between the religious density in the state where a worker was born and the labor market outcomes of the worker thirty years later. I use data from the 1960, 1970, 1980, 1990, 2000 and 2010 Decennial Census to construct a pseudo panel of workers in the United States in 1990, 2000 and 2010, and then I analyze how the number of religious workers in the states they were born in in 1960, 1970 and 1980 predict the differential outcomes between Black and White Non-Hispanic workers. My results suggests that living in a state with a one percentage point larger density of religious workers increase the earnings of black worker by 0.8 percentage points, this estimate increases to 1.7 percentage points once control for the state where the worker is currently residing. Importantly, this estimate of the change in earnings is largest among black workers who live in a state different to the one they were born in, and the estimate among movers suggests a 3.2 percentage point increase in the earnings of black workers for each percentage point increase in the proportion of religious workers.

Skill Demands and Skill Mismatch in Fast-Growing Technical Occupations

Abstract: Despite the recent recovery from the high unemployment rates that followed the Great Recession, anxiety over the future direction of the labor market and the implications for low- and moderate-income workers has remained at heightened levels. While some analysts blame the sluggish recovery on the business cycle and insufficient demand, others have interpreted the anemic performance of the labor market as a sign that some type of fundamental mismatch exists between employer demands and the skills of available workers. Many commentators have declared that the nation faces a severe shortage of science, technology, engineering, and math (STEM) skills. Sorting out the type and degree of skill mismatch is a critical matter for public policy. In this research I use detailed skill surveys to gather data on both skill demands and the prevalence of skill gaps in two fast growing technical occupations in the information technology and healthcare industries: computer helpdesk technicians and clinical laboratory technicians. Following prior research I have conducted on the manufacturing sector (Weaver and Osterman 2014), I rigorously evaluate claims of skill mismatch by going beyond opinion questions and anecdotal reports.