ASSA Round-up: Day 2

Today was the second day of the three-day annual meeting of the Allied Social Science Associations, which is organized by the American Economic Association. The conference, held virtually this year, features hundreds of sessions covering a wide variety of economics and other social science research. Below are some of the papers and presentations that caught the attention of Equitable Growth staff during the second day (as well as more from yesterday). Included below are the abstracts from those papers as well as links to the sessions at which they were presented. Check out the highlights from yesterday as well, and come back after tomorrow’s program for more highlights.

“Assessing the Impacts of Paid Family and Medical Leave Laws on Employers: Insights from Surveys of Employers”

Ann P. Bartel, Columbia University, Maya Rossin-Slater, Stanford University, Christopher Ruhm, University of Virginia, Meredith Slopen, Columbia University, and Jane Waldfogel, Columbia University

Abstract: We study the impacts of New York’s 2018 Paid Family and Medical Leave law using data we collected from representative samples of small and medium sized employers in New York, New Jersey, and Pennsylvania in fall 2016 and 2017 (pre-law) and fall 2018 and 2019 (post-law). Our survey covered four domains: Employee Characteristics and Performance; Company Benefits and Policies; Employee Life Events and Work-Flow; and Public Policies (Coverage of the federal Family and Medical Leave Act and Views on State Law). Utilizing a difference -in-difference methodology, we measure the impact of the New York law on productivity, employee turnover, absenteeism and morale, and also consider the impact on employers’ own provision of a variety of employee benefits.

“The Role of Paid Family Leave in Spousal Labor Supply Responses to a Disability or Health Shock”

Priyanka Anand, George Mason University, Laura Dague, Texas A&M University, and Kathryn Wagner, Marquette University

Abstract: The onset of a disability or major health shock has the potential to affect the labor supply decisions not only of those who experience the event but also of their family members. People who experience a disability or health shock often experience difficulty working, incur large medical expenses, and also may also require additional help with daily activities. Thus, spouses face a tradeoff between time spent earning income for the family and providing care for their partner. However, these conflicting incentives may be mitigated by the existence of paid leave. Our paper explores the role of paid leave laws implemented in California and New Jersey in the spousal labor supply response to a work-limiting disability or health shock. The data come from the Survey of Income and Program Participation (SIPP) 1996, 2001, 2004, and 2008 panels. We find that paid leave causes women whose spouse experiences the onset of a disability or health shock to strengthen their labor force attachment. Specifically, women with paid leave are more likely to report having a job for all weeks following the event, have higher earnings, are less likely to report not having a job due to caregiving, and more likely to report reducing their hours to provide caregiving. Overall, these results suggest that paid leave allows women to remain in the labor force after a spouse experiences a disability or health shock while increasing their provision of informal caregiving for a spouse who experiences a health shock.

“The Productivity and Turnover Costs of Unstable Schedules and Who Bears Them: An Examination of Work Hours in Warehousing”

Alex Kowalski, Massachusetts Institute of Technology, and Erin Kelly, Massachusetts Institute of Technology

Abstract: The rise of e-commerce and growth in demand for rapid delivery are making scheduling instability an increasing part of the employment experience inside warehouses. Workers in these settings frequently face mandatory overtime, late hours, and long hours, often with short notice that their workday is being extended. This instability can heighten worker fatigue and harm worker wellbeing, which consequently impacts business-level outcomes. Using data from a large retailer’s network of U.S. warehouses, we quantify the costs of unstable schedules. Specifically, we show how various dimensions of scheduling instability, including extended and volatile hours, affect worker productivity and turnover. An important consideration is that the downsides of unstable schedules are not felt alike by all workers who experience them. We thus study the person-level moderators of the relationship between scheduling instability and productivity and turnover, focusing on differences in gender, age, parental status, and job role. Our study provides evidence that the push to rapidly satisfy customer demand may have unacknowledged costs to business performance that operate through unstable schedules’ impact on workers.

“Training and Technical Change”

Andrew Weaver, University of Illinois at Urbana-Champaign, and Suyeon Kang, University of Illinois at Urbana-Champaign

Abstract: Despite the widely acknowledged importance of employer-provided job training in the U.S., we know little about the key predictors of this training (Lerman 2010). Of particular interest is the relationship between the amount of technical change in an industry and the level of job training provided by industry business establishments. Understanding this relationship is key to both preparing workers for future jobs and facilitating economic growth. In theory, greater technical change could lead to either decreased training (via substitution effects) or increased training (via complementarity effects). Early employee-side survey evidence indicated that industries with higher rates of technical change may provide more training (Bartel and Sicherman 1998). However, more recent studies have found varied effects at the individual level (Ahituv and Zeira 2011, Burlon and Vialta-Bufi 2016). None of the recent studies are able to connect technical change to training outcomes at the establishment level as the last nationally representative surveys measuring training from the employer side (as opposed to individual/employee surveys) were conducted in the 1990s. In this research, we use unique, nationally representative survey data on U.S. manufacturing establishments to explore the relationship between technical change and the provision of training at both the extensive and intensive margins. We construct multiple indicators of industry-level technical change in order to test the robustness of the results to various measures. The findings imply heterogeneous effects that provide useful guidance for policy.

“Do Minimum Wage Increases Benefit Low-Income Households? Evidence from the Performance of Residential Leases”

Moussa Diop, University of Southern California, Sumit Agarwal, National University of Singapore, and Brent Ambrose, Pennsylvania State University

Abstract: We extend the debate on the benefits to increasing the minimum wage by examining the impact on expenses associated with shelter, a previously unexplored area. Our analysis uses a unique data set that tracks household rental payments. Increases in state minimum wages significantly reduce the incidence of renters defaulting on their lease contracts by 1.7 percentage points over three months, relative to similar renters who did not experience an increase in the minimum wage. This represents 32% fewer defaults. However, this effect slowly decreases over time as landlords react to wage increases by increasing rents.

“Minimum Wages, Retirement Timing, and Labor Supply”

Matthew Hampton, University of Northern Iowa, and Evan Totty, U.S. Census Bureau

Abstract: The share of the labor force working for a rate of pay near the minimum wage increases for older ages near retirement, yet this population is typically ignored in the minimum wage literature. We use linked survey-administrative data to study the impact of minimum wage increases on Social Security retirement benefit claiming behavior and labor supply for low-wage older individuals. We first verify that we find the expected short-run effects of minimum wage increases on wages, earnings, and employment in the survey data. We then use linked administrative data to estimate hazard models of retirement benefit claiming and panel models of labor supply over ages 62-70. Individuals exposed to minimum wage increases during these ages delay their claiming of retirement benefits and do so by six months on average. The delay appears to be driven by an interaction between the minimum wage and the Social Security earnings test. We also find that exposure to minimum wage increases is associated with increased work during ages 62-70, including full-time and part-time work. We combine the claiming and labor supply outcomes to define partial and full retirement and find that minimum wage increases are associated with less full retirement and more partial retirement. These results suggest that increases in the minimum wage can enhance the financial well-being of low-wage older workers.

“Using Micro Estimates to Quantify the Macro Impact of Climate Change in General Equilibrium”

Gregory Casey, Williams College, and Stephie Fried, Arizona State University

Abstract: In this paper, we develop a dynamic, general-equilibrium model of structural transformation to quantify the aggregate impacts of climate change. The model draws from a long literature dedicated to understanding how changes in income per capita and sector-level productivity affect the composition of the economy, making it well-suited to capture the general-equilibrium consequences of climate change. We discipline the climate-damage parameters using the sector- and input-specific damage estimates from the micro literature. In preliminary results, we compare the findings of our model to a micro literature that computes aggregate damages with a simple weighted-sum of sector-level, partial-equilibrium estimates. Our findings highlight two general-equilibrium forces that increase the impact of climate change relative to the aggregated micro estimates. First, climate damages increase the price of output from vulnerable sectors, like agriculture. Since output from the different sectors is not easily substituted, the share of GDP in vulnerable sectors increases as a result of climate damages. Second, the micro-literature finds that climate change directly affects the investment goods sectors, particularly construction, implying that damages today affect output in the future by reducing available capital. As a result, we find that the macro damages are many times larger than a simple aggregation of the micro-level damage estimates would suggest.

“Wealth Taxation in Developing Countries: Do They and Can They Work?”

Juliana Londono-Velez, University of California, Los Angeles

Abstract: This paper describes the wealth tax experiences in developing countries. Progressive wealth taxes could help developing countries address their extreme inequality and raise tax revenue. However, these countries face specific hurdles in terms of administration and enforcement, including high informality, limited administrative resources, weak enforcement capacity, political capture, and a particular vulnerability to tax havens. Drawing from the specific experience of Colombia, this paper identifies a set of requirements that would be needed to make wealth taxes work in developing countries.

“Tax Withholding on Capital Gains as Pragmatic Wealth Taxation for the United States”

Danny Yagan, University of California, Berkeley, Gabriel Zucman, University of California, Berkeley, Emmanuel Saez, University of California-Berkeley

Abstract: The United States never had a federal wealth tax but has a long experience taxing capital gains, which capture wealth gains over and above savings. Currently, US capital gains taxation suffers from three main drawbacks: (1) the tax can be deferred until realization, (2) it can be avoided entirely if gains are not realized before death, (3) capital gains are taxed at much lower preferential rates. A simple way to resolve all these drawbacks is to impose a recurrent annual withholding tax on the stock of unrealized capital gains above an exemption. This withholding tax is credited back upon realization. This tax would align the taxation of capital gains with the taxation of ordinary income were taxes are withheld as source. It would avoid the enormous cyclicality of mark-to-market capital gains taxation. Among billionaires, unrealized gains constitute the vast majority of wealth and therefore, the withholding tax would restore tax progressivity at the very top, as a wealth tax would. Such a tax would also be valuable for state income tax as taxes on capital gains can be easily avoided by moving temporarily to a zero income tax state before realizing gains. We present revenue and distributional statistics for such a tax and compare it to other proposals such as mark-to-market taxation and direct wealth taxes.

“The Impact of the 1963 Equal Pay Act on the Gender Gap”

Martha Bailey, University of California-Los Angeles, Thomas Helgerman, University of Michigan, and Bryan Stuart, George Washington University

Abstract: The 1963 Equal Pay Act mandated equal pay for equal work for individuals covered by the Fair Labor Standards Act. Drawing on an empirical strategy used in the minimum wage literature, we exploit variation in the “bite” of the Act due to the pre-existing gender pay gap in the same occupation, industry, and Census region. Consistent with the Equal Pay Act binding, the results show that women’s wages increased more sharply in more affected jobs after implementation. However, women in more affected jobs also experienced substantially larger employment reductions by 1970. The resulting reshuffling of women from higher wage (and higher gender gap) jobs to lower paying (and lower gender gap) jobs offset women’s aggregate wage gains entirely. The result was negligible changes in the aggregate gender gap during the 1960s.

“Born to Care (or Not Care): How Gender Role Attitudes Affect Occupation Choice”

Amanda Weinstein, University of Akron, Heather Stephens, West Virginia University, Carlianne Patrick, Georgia State University

Abstract: Differential sorting into occupations explains a substantial portion of the gender wage gap in the US., and many female-dominated occupations and industries pay, on average, less than male-dominated ones. Yet, a person’s occupation is the outcome of many prior decisions including labor force participation, educational attainment, college major, etc. that are conditional on both individual and family characteristics and prevailing local social attitudes. Social norms and role models from childhood and adolescence may first shape girls’ views of their own innate talents and abilities, fundamentally altering the career paths that they view as attainable or acceptable. Yet, the precise mechanism through which gender role attitudes affect women’s wages is not understood.

This paper fills that gap in the literature by empirically investigating how the local gender role attitudes to which women are exposed during childhood and adolescence affect their occupation choice. We combine detailed microdata (the geocoded NLSY79 and 97) that includes sociodemographic information, parental data, aptitude and ability scores, educational attainment, college and major, and a complete labor market history, with information on gender role attitudes from the geocoded General Social Survey and female LFP where they lived at birth and age 14. We then compare women who grew up in places with progressive gender role attitudes and more female role models in particular occupations to women with exposure to more traditional gender norms. While the two NLSY cohorts provide rich detail, sample sizes are small. Thus, we also use Census microdata that includes place of birth to generalize our results from the NLSY samples. Overall, our approach allows us to examine the impact of societal gender role attitudes on the occupation choice of women, a significant portion of the explained gender wage gap, highlighting the contribution of sexism and discrimination to the gender wage gap.

“Coordinated Work Schedules and the Gender Wage Gap”

Chinhui Juhn, University of Houston, German Cubas, University of Houston, and Pedro Silos, Temple University

Abstract: Using U.S. time diary data we construct occupation-level measures of coordinated work schedules based on the concentration of hours worked during peak hours of the day. A higher degree of coordination is associated with higher wages but also a larger gender wage gap. In the data women with children allocate more time to household care and are penalized by missing work during peak hours. An equilibrium model with these key elements generates a gender wage gap of 6.6 percent or approximately 30 percent of the wage gap observed among married men and women with children. If the need for coordination is equalized across occupations and set to a relatively low value (i.e. Health care support), the gender gap would fall by more than half to 2.7 percent.

“This Time It’s Different: The Role of Women’s Employment in a Pandemic Recession”

Matthias Doepke, Northwestern University, Titan Alon, University of California, San Diego, Jane Olmstead-Rumsey, Northwestern University, and Michèle Tertilt, University of Mannheim

Abstract: In recent US recessions, employment losses have been much larger for men than for women. Yet, in the economic downturn caused by the Covid-19 pandemic the opposite is true: women’s employment declined much more than men’s. Why does a pandemic recession have a disproportionate impact on women’s employment, and what are the wider repercussions of this phenomenon? We argue that more women lost jobs because their employment is concentrated in contact-intensive sectors such as restaurants and because increased childcare needs during school and daycare closures prevented many from working. We analyze the macroeconomic implications of women’s employment losses using a model that features heterogeneity in gender, marital status, childcare needs, and human capital. A pandemic recession is qualitatively different from a regular recession because women’s labor supply behaves differently than men’s. Specifically, our quantitative analysis shows that a pandemic recession features a stronger transmission from employment to aggregate demand and results in a persistent widening of the gender wage gap. Many of the negative repercussions of a pandemic recession can be averted by prioritizing opening schools and daycare centers during the recovery.

“Gender Economics, Race, and Intersectionality”

Reginald Noël, Noël Collective, and Whitney J. Hewlett, Georgetown University

Abstract: This paper explores inequalities through the socioeconomic factors of salary, marital status, consumer expenditures, education, and occupations of adult women and adult men by race and ethnicity. It explores the ranking, or hierarchy, by sex and race when it comes to wages and salaries in the US: women tended to make less than their male counterparts, with White and Asian men amongst those with higher income, and Hispanic women consistently amongst those with lower income. In addition, the paper examines microeconomic and demographic inequalities faced by women of different races and ethnicity as compared to men, and reasons why such disparities exist. The data showed persistent hierarchical trends based on one’s self-identified race category and a binary interpretation of sex.

“The Federal Effort to Desegregate Southern Hospitals and the Black-White Infant Mortality Gap”

D. Mark Anderson, Montana State University, Kerwin Kofi Charles, Yale University, Daniel I. Rees, University of Colorado Denver 

Abstract: In 1966, Southern hospitals were barred from participating in Medicare unless they discontinued their long-standing practice of racial segregation. Using data from five Deep South states and exploiting county-level variation in Medicare certification dates, we find that gaining access to an ostensibly integrated hospital had no effect on the Black-White infant mortality gap, although it may have discouraged small numbers of Black mothers from giving birth at home attended by a midwife. These results are consistent with descriptions of the federal hospital desegregation campaign as producing only cosmetic changes and illustrate the limits of anti-discrimination policies imposed upon reluctant actors.

“Does Policy Committee Diversity Affect Public Trust and Expectations?”

Andreas Fuster, Swiss National Bank, Francesco D’Acunto, Boston College, Michael Weber, University of Chicago

Abstract: Increasing the diversity of policy committees has climbed to the top of the political agenda around the world, but the economic motivations and effects of diversity in policy committees are still elusive. In this paper, we use a randomized control trial within a large-scale survey to test for the effects of making consumers aware of the presence of underrepresented groups in the US Fed’s FOMC on the FOMC’s ability to manage consumers’ expectations. We find that White women and African American men update their unemployment expectations more in line with FOMC forecasts after being made aware of the presence of members of their demographic group in the FOMC. Consumers who face multiple facets of underrepresentation and whose demographic groups are not represented in the FOMC, such as African American women, are the most distrustful of the Fed and their macroeconomic expectations are the farthest away from FOMC forecasts. At the same time, overrepresented groups, such as White men, do not react negatively to awareness of minority representation in the FOMC. We also find evidence that women become more likely to read news articles about the Fed when a female policy maker is featured. Overall, our findings suggest that more diverse policy committee might improve the effectiveness of such committees in managing the expectations of underrepresented consumers without negative effects on other consumers.

“Racial and Ethnic Disparities: Essential Workers, Mental Health, and the Coronavirus Pandemic”

Jevay Grooms, Howard University, Alberto Ortega, Indiana University, Joaquin Alfredo-Angel Rubalcaba, University of North Carolina at Chapel Hill, and Edward Vargas, Arizona State University

Abstract: It’s clear that the pandemic is disproportionately impacting communities of color. In this study, we investigate mental health distress among essential workers during the Coronavirus pandemic across race and ethnicity. We evaluate individual responses to the Patient Health Questionnaire and General Anxiety Disorder Questionnaire using unique, nationally representative, data set. Our findings suggest that Black essential healthcare workers disproportionately report symptoms of anxiety; while, Latino essential health-care workers disproportionately report symptoms of depression. Additionally, we find that being a Black or Latino essential non-health care worker is associated with higher levels of distress related to anxiety and depression. These findings highlight the additional dimensions to which Black and Hispanic Americans are disproportionately being affected by the Coronavirus pandemic. Furthermore, it calls into question how essential worker classifications, compounded by US unemployment policies, is potentially amplifying the mental health trauma experienced by workers.

“Age Discrimination, HR Managers, and Eye-Tracking: Evidence from a Lab-in-the-Field Experiment”

Joanna Lahey, Texas A&M University, and Doug Oxley, Texas A&M University

Abstract: Age discrimination can have negative effects on both individuals being discriminated against and on government programs and the economy, as potentially productive workers are unable to find work. This paper explores age discrimination at the hiring level in a lab-in-the-field experiment in which we go to Human Resources (HR) fairs and conferences and ask HR managers to rate resumes for an administrative assistant I position. While they rate the resumes, we track their eyes using a Tobii X2-60. After they have rated resumes, we ask them a series of questions to elicit explicit and implicit discrimination against older workers. We find evidence of quadratic age discrimination against older workers. Similarly, participants spend less time looking at resumes of older workers. Participants who hold stereotypes that older workers are less enterprising, less able to handle physically taxing jobs, and less likely to undergo training are more likely to exhibit these discriminatory behaviors. Although there is suggestive evidence that participants who explicitly prefer working with 45 year olds to 65 year olds using a Bogardus social distance task also rate resumes differently by age, this evidence is not robust to specification choice. Finally, there is no evidence that the Implicit Association Test (IAT) for age has any relation to how HR managers rate resumes by age.

“Intergenerational Mobility Over the 20th Century: Evidence from United States Survey Data”

Suresh Naidu, Columbia University, Elisa Jacome, Princeton University, and Ilyana Kuziemko, Princeton University

Abstract: Much recent work has focused on understanding geographic variation in intergenerational mobility for modern U.S. cohorts, but it is difficult to extrapolate from cross-sectional variation in intergenerational mobility to the relevant cross-cohort variation. Yet, because of data constraints, little if any work has examined variation over time during the 20th century. We take on this task, collecting all survey datasets we can find that ask both own family income and father’s occupation, and use father’s occupation as a proxy for childhood income. We find that IGE is u-shaped over the 20th century, whereas rank-rank coefficients decline from the 1910-1940 cohorts and remain generally flat from the 1940-1970 cohorts. Mechanically, the decline in IGE and rank-rank is driven by the decreasing connection between father’s occupation and own education for those born between 1910 and 1940.

“The Earned Income Tax Credit and Migrating Out of Rural America”

Jacob Bastian, Rutgers University, and Dan Black, University of Chicago

Abstract: The population of rural areas in the United States is older and more male than more urban areas, and this has become even more true in recent decades. In this paper, we investigate whether the Earned Income Tax Credit (EITC) can help explain these trends. Theoretically, the EITC could reduce migration out of rural areas by subsidizing low-paying jobs in rural areas and reducing the incentive to move away for a better job. On the other hand, the EITC could increase migration out of rural areas by relaxing credit constraints that prevent households from migrating. We find that although the EITC reduces overall moving (i.e. housing instability), the EITC also increases migration out of rural areas to more urban areas, with higher wage premiums. These effects are concentrated among younger women, exactly the group that benefits the most from the EITC. If the EITC leads to out-migration among younger women, then the EITC should also affect the composition of rural populations: we test this and find that rural areas in states and years after EITC expansions become relatively more male and older than rural areas with a smaller EITC program. Conversely, we also show that the EITC increases the fraction of younger females in more urban areas.

January 4, 2021

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