Funded Research

Our funding interests are organized around the following four drivers of economic growth: macroeconomics and inequality, market structure, the labor market, and human capital and wellbeing. We consider proposals that investigate the consequences of economic inequality, as well as group dimensions of inequality; the causes of inequality to the extent that understanding these causal pathways will help us identify and understand key channels through which inequality may affect growth and stability; and the ways in which public policies affect the relationship between inequality and growth.

Explore the Grants We've Awarded

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Extended-Family Wealth, Race, and the Transition to Homeownership

Grant Year: 2021

Grant Amount: $15,000

Grant Type: doctoral

There is a significant racial divide in homeownership, as well as wealth, in the United States. In 2018, 73 percent of White householders owned their homes, compared to only 42 percent of Black householders, and the typical White household owned 20 times as much wealth as the typical Black household. A number of factors may explain this disparity, but one key contributor is the positive association between wealth and the ability of renters to transition to homeownership. This project will consider nonparental family members as potential sources of financial assistance to prospective homeowners. Utilizing the Panel Study of Income Dynamics, Bucknor will measure household wealth, parental wealth, grandparental wealth, and extended-family wealth, including businesses owned, transaction accounts, real estate, stocks, vehicles, home equity, and other assets, minus all debts. This research is poised to add to our understanding of intergenerational transmission of wealth and the far-reaching impacts of structural racism, and give insight into policies that may be effective in addressing persistent racial wealth inequality.

Does Monetary Policy Work Through the Labor Market?

Grant Year: 2021

Grant Amount: $15,000

Grant Type: doctoral

This project examines how increasing labor market polarization affects the transmission of monetary policy. Specifically, Morrison will examine how heterogeneity in worker substitutability with capital affects the role the labor market plays in the transmission of monetary policy. The research will estimate the importance of a heterogeneous worker-capital substitutability channel of monetary policy—investment spurred by monetary policy will have muted effects on aggregate consumption if workers whose labor is complementary with capital tend to have lower marginal propensities to consume. To investigate this phenomenon, she first plans to build and solve a model that captures this effect, then estimate the impulse-response functions of wages of workers in various skill categories to unexpected expansionary monetary shocks.

The Effects of Redlining Maps: a Novel Estimation Strategy

Grant Year: 2021

Grant Amount: $15,000

Grant Type: doctoral

This project investigates the causal effects of discriminatory assessment practices introduced by the New Deal-era federal agency, the Home Owners’ Loan Corporation. Specifically, the two researchers plan to examine HOLC’s systematic evaluation of neighborhoods and the maps it produced based on credit risk. Research has already led to the understanding that HOLC practices were a type of institutional discrimination. Data collected by the two researchers show that in 1930, about 86 percent of Black Americans lived in areas deemed hazardous (denoted in red on the maps, hence the term “redlining”) while almost 98 percent of the population in higher-rated areas was White. This research will measure how grade assignments affected the evolution of home values, income composition, and residential segregation in the short run and the long run. They will tackle the question by exploiting the fact that only cities over a certain population threshold were affected by the program. They will utilize a machine-learning algorithm to compare redlined neighborhoods with those that would have been redlined had the city been large enough to be affected by the program.

Sectoral bargaining and spillovers in monopsonistic labour markets

Grant Year: 2021

Grant Amount: $15,000

Grant Type: doctoral

There is increasing evidence of monopsony power in labor markets, with implications of lower wages and higher inequality. One popular policy recommendation is to constrain such monopsony power through more organized unions of workers, such as in local bargaining councils—collections of trade unions and employers representing specific industry-regions that consultatively bargain over and set minimum wages and working conditions for those industry-regions. This project will study the effect of such “sectoral bargaining” using South African data. Using matched employer-employee tax data from the South African Revenue Service, Bassier will match these agreements to firms as demarcated by industry and location. There are currently 39 legally recognized bargaining councils in South Africa, each covering a specific industry-region. Bargaining councils are estimated to cover 40 percent of workers in the formal sector in South Africa, concentrated mainly in the manufacturing, construction, trade, and transport industries in addition to covering the public sector. This research could give insight into how sectoral bargaining could improve worker power and mitigate the effects of monopsonistic labor markets.

Homeownership Disparities and Access to Family Child Care

Grant Year: 2021

Grant Amount: $15,000

Grant Type: doctoral

This project will use longitudinal data from two states to explore racial disparities in access to family child care centers by looking at rates of homeownership and disparities in homeownership by race. Family child care centers—licensed child care centers located within an operator’s home—make up a declining but still substantial proportion of the supply of formal child care. There are many obstacles to licensing a family child care center in a rental property, so areas with low rates of homeownership may experience a lack of access to this often more affordable child care option. Family child care centers also tend to have more flexible hours, making them especially valuable for parents working irregular or unpredictable schedules. Borowsky will conduct a market-definition analysis intended to approximate regions of common demand and supply. He will then evaluate the extent to which low rates of homeownership in a region are associated with low supply of family child care centers.

Superstar Firms and Regional Disparities

Grant Year: 2021

Grant Amount: $15,000

Grant Type: doctoral

This project investigates the relationship between two trends: the significant rise in regional inequality in the United States, with a small number of highly educated urban cities accounting for a growing share of national income, and the increasing dominance of large, multiregion services firms such as Amazon.com Inc., Walmart Inc., and Starbucks Corp., as reflected in measures of average firm size and market concentration. These “superstar” firms create high-paying, high-skill jobs in large cities and low-paying jobs in nonurban areas across the country, displacing local and regional competitors in the process and leading to increasingly unequal demand for skills across regions. Kleinman will utilize private data from Dun and Bradstreet and Burning Glass Technologies, as well as public data from the American Community Survey and the Panel Database on Incentives and Taxes. He will combine an empirical investigation of the relationship between firms’ spatial expansion and regional inequality with the development and quantification of a novel economic geography model that features expansion of multiregion firms to analyze the labor demand of firms across different markets and occupations.

Funded research

Human Capital and Wellbeing

How does economic inequality affect the development of human capital, and to what extent do aggregate trends in human capital explain inequality dynamics?

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Funded research

Macroeconomics and Inequality

What are the implications of inequality on the long-term stability of our economy and its growth potential?

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Funded research

Market Structure

Are markets becoming less competitive and, if so, why, and what are the larger implications?

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Funded research

The Labor Market

How does the labor market affect equitable growth? How does inequality in turn affect the labor market?

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