“The evolution of wealth distribution and social mobility in the United States”

Jess Benhabib, Professor of Economics, New York University, Alberto Bisin, Professor of Economics, New York University, Mi Luo, Ph.D. candidate in Economics, New York University
Total over one year: $86,290

This is a cutting-edge project that will simulate the evolution of wealth inequality in a macroeconomic model. Specifically, the authors will assess the causes and consequences of wealth inequality, exploring how three channels—the distribution of earned income, the rate of return for various assets, and the nature of bequests—determine wealth inequality, and how U.S. wealth inequality might change via policies that affect these channels. One important academic contribution is the idea of treating intergenerational mobility in wealth as non-stationary. In terms of policy relevance, the research will inform debates over the role of inheritance in wealth inequality, and will have direct relevance in discussions over estate taxes and other capital taxation, an area where Equitable Growth has been and will continue to be active.

“Secular stagnation and inequality”

Gauti Eggertsson, Associate Professor in Economics, Brown University, Neil Mehrotra, Assistant Professor in Economics, Brown University
Total over 18 months: $59,700

Motivated by the broad trends of rising inequality and falling interest rates since the 1980s, the authors will build a macroeconomic model to show how much higher income inequality has reduced the natural rate of interest through increased overall saving. The potential consequences of rising inequality for the level of aggregate economic activity is an active research area and one that we have funded in the past. This project will complement previous grants and push the research frontier by uncovering key insights about the link between inequality and the natural interest rate. The research is highly relevant to the active debates over secular stagnation and puts the researchers’ bargaining-power framework (as opposed to more technological changes such as declining investment costs) at the center of their evaluation of the increase in U.S. income inequality.

“Effect of unemployment insurance benefits on match quality and job mobility”

Adriana Kugler, Professor and Vice-Provost for Faculty, Georgetown University McCourt School of Public Policy, Ammar Farooq, Ph.D. candidate in Economics, Georgetown University
Total over one year: $57,490

The authors will examine whether unemployment insurance benefit extensions improve job match quality. A longstanding question regarding unemployment insurance is whether recipients make use of funds to finance longer job searches, therefore finding better jobs. Most studies to date have examined wages and have found no effect, but if this project is able to find effects on match quality then it will make an important contribution. It could also be important to understanding the role that unemployment insurance plays in improving worker outcomes and overall macroeconomic performance. Unemployment insurance is typically understood by policymakers as a social insurance program. The idea that it might improve productivity by facilitating better match quality is poorly understood, and key to better understanding policy levers for macro performance.

“Distributional consequences of changes in local labor demand and amenities: Evidence from linked census data”

Alexander Bartik, Ph.D. candidate in Economics, Massachusetts Institute of Technology
One year doctoral grant: $15,000

This project will explore the distributional implications of fracking and mass transit expansions, two important recent developments in U.S. cities and regions. Using newly available, restricted access, longitudinal U.S. Census Bureau microdata, the researcher seeks to answer: If fracking or urban rail expansions have heterogenous effects? How much do local housing costs rise? And do fracking or rail expansions lead to displacement of original residents? Policymakers are searching for policies to encourage growth in American cities, and we see this project as providing insightful and generalizable findings in that area.

“Cyclical underemployment: Causes and consequences for inequality”

John Coglianese, Ph.D. candidate in Political Economy and Government, Harvard University
One year doctoral grant: $15,000

This project links traditional macroeconomic models with labor models, specifically through the incorporation of the job ladder. The goal is lofty: to construct a comprehensive measure of underemployment and integrate it into commonly-used economic models, thereby providing evidence about the effects of underemployment on labor market functionality over the business cycle and on inequality more broadly. We view this project as a significant academic contribution with immediate policy relevance given the emerging debates over appropriate responses to the next recession.

“Balancing stability and growth in mid-century banking”

Andrew Elrod, Ph.D. student in History, University of California-Santa Barbara
One year doctoral grant: $15,000

How did the reorganization of the U.S. banking sector after World War II alter the relationship between profitable investment and macroeconomic stability? The researcher will address that question through archival research and by drawing on a substantial body of secondary historical and economic literature. As political debates on financial regulation and trade agreements show no sign of abating, this work will provide useful context and framing for those debates.

Human capital and the labor market

“The effects of income inequality on health disparities in the United States”

Christopher Jencks, Malcolm Wiener Professor of Social Policy, Harvard University Kennedy School of Government, Beth Truesdale Ph.D. candidate in Sociology, Harvard University
Total over one year: $35,000
This grant is co-funded with the Russell Sage Foundation

This research will examine the relationship between inequality and health outcomes using a variety of measures of health and income inequality taken from several independent data sets. The authors hypothesize that some of the correlation is causal, running from inequality to health, and will seek to identify the causal mechanisms. Uncovering the causal channels between inequality and health would be an important contribution, particularly in light of recent research examining the relationship between income and life expectancy.

“Gender gap or parenthood gaps? The contribution of parenthood to the gender wage gap, 1983-2013”

Marta Murray-Close, Assistant Professor in Economics, University of Massachusetts, Amherst School of Public Policy, Joya Misra, Professor of Sociology and Public Policy, University of Massachusetts, Amherst
Total over one year: $65,355

The authors will construct estimates of how much parenthood contributes to the gender wage gap. Although it is well-known that the gendered returns to parenthood contribute to the gender wage gap, there are few estimates of what proportion of the gap we can attribute to different returns to parenthood for men and women. If successful, this research could provide a more complete analysis of the phenomena contributing to the gender wage gap, including returns to education. The project will provide an empirical foundation for policies that support working parents as a key mechanism for promoting gender equity. The findings will bolster the economic argument for many policies relevant to equitable growth, including child care and parental leave.

“Firms, human capital, and careers”

Sydnee Caldwell, Ph.D. student in Economics, Massachusetts Institute of Technology
One year doctoral grant: $15,000

Building on recent work in labor economics focused on the role of firms, this research seeks to shed light on the importance of firms specifically in the careers of young workers. Using administrative matched employer-employee data, the researcher seeks to document facts regarding access to high-wage firms and movements between high- and low-wage firms over the span of a worker’s career. This has the potential to improve our understanding of cohort inequality as well as potential scarring effects of recessions.

“Those jobs ain’t coming back: The consequences of an industry collapse on two tribal reservations”

Blythe George, Ph.D. student in Sociology and Social Policy, Harvard University
One year doctoral grant: $15,000

This research project uses qualitative data to explore the mechanisms that link the decline of employment options to the rise in drug use, the decline in labor force participation, and other negative socio-economic and behavioral consequences for males. Unlike many studies of industry decline which look at urban communities, this work focuses on the loss of natural resource employment in rural areas. Specifically, the researcher focuses on the lack of employment options and life outcomes on two Native American tribal reservations, The Yurok and Hoopa Valley Reservations, located in California’s northwest. A member of the Yurok tribe herself, the researcher’s data provides a unique contribution. We also see the research as having useful insights on the consequences of declining male labor force participation, particularly in non-urban settings. From a policy engagement perspective, the rich stories that are likely to come from this qualitative work will help provide the narrative and texture that is necessary for capturing policy attention.

“Preschool attendance and child health: Evidence from state-funded Pre-K programs”

Mariana Zerpa, Ph.D. student in Economics, University of Arizona
One year doctoral grant: $15,000

This project seeks to contribute to the literature on the impact of large-scale, publicly-funded preschool education programs on a variety of health and developmental outcomes for children ages 4 to 12. While numerous studies exist on the effects of attending Head Start, there is a dearth of research on state pre-K programs even though they are currently the largest provider of preschool education in the United States. State-funded pre-K programs have been expanding since the 1990s and the calls for universal pre-K continue. This project promises to add useful data to those discussions.


“The impact of consumer credit access on employment, earnings, and entrepreneurship”

Kyle Herkenhoff, Assistant Professor in Economics, University of Minnesota, Gordon Phillips, C.V. Starr Foundation Professor, Dartmouth Tuck School of Business; Academic Director, Center for Private Equity and Entrepreneurship
Total over one year: $47,700

This project studies access to credit, via bankruptcy flag removal, on several key outcomes of interest, including business formation rates, earnings and profitability. The research could provide a valuable contribution to our understanding of how microeconomic outcomes affect macroeconomic performance via the innovation channel. This connection is an important one that researchers have not been able to make in an empirically rigorous way to date. The basis of this project is the data: The authors will merge individual employment records from the U.S. Census Bureau with individual 1040 Schedule C tax returns and individual TransUnion credit reports. In addition to having clear implications for bankruptcy law, the study suggests important connections between credit access and employment. It also has potential implications for policy responses to the next economic downturn, given that credit access and debt forgiveness may impact macroeconomic growth in ways that are not well understood.

“Estimating the impacts of patents on U.S. firms and workers”

Heidi Williams, Assistant Professor in Economics, Massachusetts Institute of Technology, Patrick Kline, Associate Professor of Economics, University of California-Berkeley, Neviana Petkova, Research Economist, U.S. Department of the Treasury, Owen Zidar, Assistant Professor in Economics, University of Chicago Booth School of Business
Total over 18 months: $80,000

Innovation studies often use patents as an outcome of interest or a proxy for innovation. This project, however, focuses on the consequences of patents. By creating a new, restricted-access dataset that links patent applications to business tax records, the authors will use two quasi-experimental designs to estimate the relative effects of patent-generated monopoly rents on firm returns and worker wages. Much recent research has focused on inter-firm profitability and its relationship with inequality, and this project engages with that research to provide insights into the effects of patent rents on firm outcomes and earnings inequality. This work has the potential to help fill in our understanding of how innovation in an age of inequality may not be translating into broadly shared growth. Moreover, it provides a window into how governance and institutions (in this case, the patent and tax systems) impact innovation.

“The unequal gains from product innovations”

Xavier Jaravel, Ph.D. candidate in Economics, Harvard University
One year doctoral grant: $15,000

This project explores the relationship between consumption inequality and innovation. It asks whether economic inequality affects the kind of innovation that takes place and who benefits from that innovation. Using scanner data, the researcher’s preliminary findings show that the difference in inflation rates across the income distribution can be accurately measured only with product-level data, not by simply reweighting aggregate price series based on income-specific spending shares, as the U.S. Bureau of Labor Statistics does. The findings could therefore have methodological as well as policy implications.

“The distribution of economic activity across firms and the decline in the firm start up rate”

Hannah Rubinton, Ph.D. student in Economics, Princeton University
One year doctoral grant: $15,000

Over the past several decades, the firm start-up rate has declined substantially while at the same time the number of unique business locations that belong to the largest firms also increased significantly. Using a combination of empirical analysis and modeling, the researcher will explore how these trends affect consumer welfare and productivity growth. We see this as an important contribution to a live question in the innovation space that also has implications for policymakers seeking to increase the firm start-up rate and spur local business activity.

Governance and institutions

“The effect of government cash assistance on household credit access and use”

Manasi Deshpande, Assistant Professor of Economics, University of Chicago, Tal Gross, Assistant Professor, Columbia University Mailman School of Public Health, Jialan Wang, Economist, Consumer Financial Protection Bureau, Office of Research
Total over two years: $100,000

This team of young, promising applied economists seeks to quantify how public assistance affects households’ financial well-being through increasing access to credit. We know little about the interactions between social safety net programs and the financial well-being of families. This paper uses a credible and proven research design to provide new evidence to better our understanding of the role of credit markets in the lives of the poor. By matching individual credit data to administrative data, the authors will estimate the effects of removing low-income youth with disabilities from Supplemental Security Income on credit access, secured borrowing, and payday loan borrowing for the youth and their families. There is great interest in this broad subject, and precious few ways to tease out causal impacts. Yet with cutting-edge methods and use of administrative data, the authors will attempt to do so.

“Understanding employer provision of paid parental leave in New York, Connecticut, and Pennsylvania”

Jane Waldfogel, Compton Foundation Centennial Professor of Social Work and Public Affairs, Columbia University, Ann Bartel, Merrill Lynch Professor of Workforce Transformation, Columbia Business School, Maya Rossin-Slater, Assistant Professor of Economics, University of California-Santa Barbara, Christopher Ruhm, Professor of Public Policy and Economics, University of Virginia Batten School of Leadership and Public Policy
Total over 18 months: $73,000
This grant is co-funded with the Russell Sage Foundation

This project will quantify the level of and inequality in employer-provided paid parental leave by fielding a survey of small and medium-sized employers in three relatively low-wage industries (including retail) in New York, New Jersey, and Pennsylvania. The work is likely to make a significant contribution to our understanding of a currently hazy empirical picture of the social insurance system in the United States. Poor federal data collection on leave policy means that studies such as this one are a valuable addition. The authors will assess the availability, quality, and employee take-up of leave offered. One main advantage of funding this survey is that it will provide pre-treatment data collection for New York before the recently passed paid family leave law goes into effect in January, 2018. The investigators’ previous Rhode Island study is widely cited and useful to policymakers working on these issues, and we expect this to be similarly impactful.

“Schedule stability project”

Joan Williams, Distinguished Professor of Law, University of California Hastings College of the Law; Director, Center for WorkLife Law, Susan Lambert, Associate Professor, University of Chicago School of Social Service Administration, Saravanan Kesavan, Associate Professor of Operations, University of North Carolina Kenan-Flagler Business School
Total over one year: $72,100

Through an intervention with a major U.S. retailer (The Gap), the project tests whether shifting hourly workers to more stable schedules results in cost savings and increased productivity for businesses. In the second year of work, Williams and her team continued to make progress, including broadening the intervention in three important ways: an increase in hours, which research shows can improve sales by adding staffing at peak hours; agreeing to consider sources of instability stemming from the supply chain; and adding a worker survey and focus groups to gather information on scheduling impacts, pre and post intervention, on workers’ and their families’ well-being.

“Social preferences at work: Evidence from online lab experiments and job-to-job mobility in the LEHD dataset”

Ellora Derenoncourt, Ph.D. student in Economics, Harvard University
One year doctoral grant: $15,000

This project is offers a novel twist on intra-firm mobility and job-to-job transitions by using preferences to look at labor market decisions and not simply tax preferences. We have some experience with this researcher (she is contributing to the edited volume on “Capital in the 21st Century”) and this project is an example of her ability to engage with traditional economic literature and push it in interesting and useful new directions. Using a combination of online lab experiments and matched employee-employer data—the Longitudinal Employer-Household-Dynamics Dataset—she will test for individual social preferences over payoff distributions.