ASSA 2025 Round-up: Day 1
Yesterday was the first day of the 2025 annual meeting of the Allied Social Science Associations, which is organized by the American Economic Association. The 3-day conference, held in San Francisco, California, this year, features hundreds of sessions covering a wide variety of economics and other social science research. Equitable Growth’s vast academic network, including grantees and Nonresident Scholars, and our Steering Committee are well-represented throughout this year’s program, featured in at least 62 different sessions of the conference.
Below are lightly edited abstracts from some of the papers and presentations that caught the attention of Equitable Growth staff during the first day of this year’s conference, with links to the sessions in which the papers were presented. Many of these papers are closely related to the research areas we are interested in funding. Equitable Growth also was excited to organize our own session this year, on “Discrimination in Economics and the Labor Market,” which took place on Day 1 of the conference.
Come back tomorrow morning for highlights from Day 2 and Monday morning for highlights from Day 3.
“A Welfare Analysis of Policies Impacting Climate Change”
Robert Hahn, University of Oxford; Nathaniel Hendren, Massachusetts Institute of Technology, Equitable Growth grantee; Robert Metcalfe, University of Southern California; Ben Sprung-Keyser, Harvard University
Abstract: What are the most effective ways to address climate change? This paper extends and applies the marginal value of public funds framework to help answer this question. We examine more than 50 U.S. environmental policy changes studied over the past 25 years. These policies span subsidies (wind, residential solar, electric and hybrid vehicles, vehicle replacement, appliance rebates, weatherization), nudges (marketing and energy conservation), and revenue raisers (fuel taxes, cap and trade). For each policy, we draw upon quasi-experimental or experimental evaluations of causal effects and translate those estimates into an marginal value of public funds. We apply a consistent translation of these behavioral responses into measures of their associated externalities and valuations of those externalities. We also provide a new method for incorporating learning-by-doing spillovers. The analysis yields three main results. First, subsidies for investments that directly displace the dirty production of electricity, such as production tax credits for wind power and subsidies for residential solar panels, have higher marginal values of public funds (generally exceeding 2) than all other subsidies in our sample, with values generally around 1. Second, nudges to reduce energy consumption have large welfare gains (marginal values of public funds of more than 5) when targeted to regions of the United States with a dirty electric grid. By contrast, policies targeting areas with cleaner grids, such as California and the northeast, have substantially smaller marginal values of public funds (often less than 1), despite larger treatment effects in those areas. Third, gas taxes and cap-and-trade policies are highly efficient means of raising revenue (with marginal values of public funds less than 0.7) due to the presence of large environmental externalities. We contrast these conclusions with those derived from more traditional cost-per-ton metrics used in previous literature.
“Reputational Effects of Diversity Scholarships in the Labor Market”
Janet Xu, Stanford University, Equitable Growth grantee
Abstract: Many universities and companies use diversity scholarships and awards for impression management and recruiting purposes. In contrast to race-conscious affirmative action measures, these contemporary diversity initiatives emphasize merit and conceptualize contributions to diversity in a broad, colorblind manner. Diversity initiatives can enhance organizational status and reputation, but less is known about how these signals are perceived when they are associated with individuals. This paper investigates the reputational effects of diversity scholarships for male college graduates seeking entry-level jobs. Using a national audit study (N = 3,456), I compare the rate at which employers call back applicants with diversity merit scholarships, applicants with merit scholarships that do not mention diversity, and applicants without scholarships. I also examine how award signals differ when applicant names have Black racial cues versus White racial cues. I find that diversity and nondiversity merit scholarships both increase call-back likelihood for putatively White applicants, but putatively Black applicants receive no reputational benefits from either type of award. Accompanying survey experiments probe possible mechanisms, such as the perceived selectivity of diversity awards and racial status threat. Overall, results suggest that uneven reputational gains from symbolic awards can exacerbate existing racial discrimination, and that status-based cumulative advantage processes may differ for demographic groups.
Note: This research was funded in part by Equitable Growth.
“Technology and Labor Displacement: Evidence from Linking Patents with Worker-Level Data”
Leonid Kogin, Massachusetts Institute of Technology; Dimitris Papanikolaou, Northwestern University; Larry Schmidt, Massachusetts Institute of Technology; Bryan Seegmiller, Northwestern University, Equitable Growth grantee
Abstract: We develop measures of labor-saving and labor-augmenting technology exposure using textual analysis of patents and job tasks. Using U.S. administrative data, we show that both measures negatively predict earnings growth of individual incumbent workers. While labor-saving technologies predict earnings declines and higher likelihood of job loss for all workers, labor-augmenting technologies primarily predict losses for older or highly paid workers. Yet we find positive effects of labor-augmenting technologies on occupation-level employment and wage bills. A model featuring labor-saving and labor-augmenting technologies with vintage-specific human capital quantitatively matches these patterns. We extend our analysis to predict the effect of AI on earnings.
Nirupama Rao, University of Michigan, Equitable Growth grantee and Nonresident Scholar; Max Risch, Carnegie Mellon University, Equitable Growth grantee
Abstract: A common concern surrounding minimum wage policies is their impact on independent businesses, which are feared to be less able to either bear or pass on cost increases. We examine how independent firms accommodate minimum wage increases along product and labor market margins using a new matched owner-firm-worker panel dataset drawn from the universe of U.S. tax records over a 10-year period. We find that, on average, firms in highly exposed industries do not substantially reduce employment but instead fully finance the added labor costs with new revenues. Among surviving firms, we even observe small average increases in owner profits. We show, however, that these average gains belie significant heterogeneity by industry and productivity. Among restaurants, the most acutely impacted industry, the minimum wage causes firm exits. Exits are concentrated among the least productive small firms, while the observed profit gains stem from the more productive surviving small restaurants. These findings are consistent with a model of Cournot competition with heterogeneous productivity and fixed production costs. The cost shock and resulting exits winnow the productivity distribution of surviving and entrant firms with demand and workers reallocated to more productive survivors. Following low-earning and young workers, we find that their earnings increase on average, they are no less likely to be employed, and their turnover rates decline when minimum wages rise.
Note: This research was funded in part by Equitable Growth.
“The Macroeconomic Effects of Climate Policy Uncertainty”
Konstantinos Gavriilidis, University of Stirling; Diego Kaenzig, Northwestern University; Ramya Raghavan, Northwestern University; James H. Stock, Harvard University
Abstract: Recent years have seen a lot of uncertainty about the future path of climate policy. How does this uncertainty affect the economy and the environment? In this paper, we construct a new measure of climate policy uncertainty based on newspaper coverage. Our index spikes near important events related to climate policy, such as major developments in emissions legislation, presidents’ statements about climate policy, or global strikes about climate change, among other developments. We find that climate policy uncertainty has significant macroeconomic effects: Increased uncertainty leads to a significant fall in industrial production, and thus emissions, and an increase in unemployment. Importantly, it also causes an increase in commodity and consumer prices. Thus, climate policy uncertainty shocks transmit to the economy as supply shocks. This stands in stark contrast to other uncertainty shocks, which have been found to propagate as aggregate demand shocks.
“Minimum Wages and Worker Safety”
Anna Stansbury, Massachusetts Institute of Technology, Equitable Growth grantee; R. Jisung Park, University of Pennsylvania, Equitable Growth grantee; Michael Davies, Massachusetts Institute of Technology
Abstract: Using the universe of workers’ compensation claims from California between 2001 and 2020, we investigate the impacts of state and local minimum wage increases on injury rates. Using a variety of empirical strategies, we estimate that increased minimum wages increased workplace injury rates for affected low-wage workers. These increases were particularly large in injury types consistent with repetitive motion or repetitive strain, suggestive of work intensification as a mechanism.
“How Disability Benefits in Early Life Affect Adult Outcomes”
Manasi Deshpande, University of Chicago, Equitable Growth grantee; Alessandra Voena, Stanford University; Jason Weitze, Stanford University
Abstract: We use three sources of variation in childhood Supplemental Security Income receipt to identify the effects of receiving these benefits in childhood on adult outcomes and the channels through which these effects operate. We find heterogeneous effects of Supplemental Security Income that vary with the parental earnings response to SSI benefits: Supplemental Security Income has positive effects on children when parents do not adjust their labor supply in response to SSI income but has zero or negative effects on children when parents reduce their earnings in response to SSI income. These results suggest that consumption is important in human capital production, relative to parent time. We estimate a model of maternal labor supply and child human capital formation to decompose the effect of Supplemental Security Income into channels and quantify the relative importance of those channels. Our findings indicate that the income effects of Supplemental Security Income on children’s human capital are substantial, while the perverse incentive effects are relatively small, and that parent work, on net, improves children’s outcomes by increasing household consumption, despite the potential decrease in parental time.
“What Makes Systemic Discrimination, ‘Systemic’ Exposing the Amplifiers of Inequity“
David B. McMillon, Emory University, Equitable Growth grantee
Abstract: Drawing on work spanning economics, public health, education, sociology, and law, I formalize theoretically what makes systemic discrimination “systemic.” Injustices do not occur in isolation but within a complex system of interdependent factors, and their effects may amplify as a consequence. I develop a taxonomy of these amplification mechanisms, connecting them to well-understood concepts in economics that are precise, testable, and policy oriented. This framework reveals that these amplification mechanisms can either be directly disrupted or exploited to amplify the effects of equity-focused interventions instead. In other words, it shows how to use the mechanics of systemic discrimination against itself. Real-world examples discussed include but are not limited to reparations for slavery and Jim Crow, vouchers or place-based neighborhood interventions, police shootings, affirmative action, and COVID-19.
“Do Minimum Wage Increases Change the Non-Wage Value of Work? Evidence from Glassdoor”
Jason Sockin, IZA Institute for Labor Economics; Aaron Sojourner, W.E. Upjohn Institute, Equitable Growth grantee
Abstract: In theory, binding minimum wage increases may lead employers to offset new wage costs by reducing their provision of nonwage job amenities in order to keep the value of the job positive for both parties while retaining employees. Empirically, we have little evidence of adjustment along nonwage margins, in particular nonpecuniary ones. This study harnesses standardized measures of job satisfaction, wage, and nonwage amenities available across millions of workers over the past decade collected by Glassdoor, a job review website. We analyze how workers’ reviews change in response to minimum wage hikes.
“Capital and the Direct Care Sector“
Jessica Forden, The New School; Anastasia Wilson, Hobart and William Smith Colleges
Abstract: Growing demand for home and community-based long-term services and supports has attracted private-sector investments to the direct care sector. Limited literature suggests increased concentration and private equity are key trends to consider. This paper adds to the nascent literature by providing a mapping of the current landscape of the direct care services industry, with a focus on understanding the recompositioning of the sector among private-sector players and current trends in private equity leveraged buyouts, mergers, and acquisitions. Through examination of trade publications, private financial markets data, and individual interviews, we consider the impact of these industry shifts on the flow of public funds to direct care workers and on the impacts to working conditions, worker power, and the labor process.