Pass-through businesses—businesses whose owners pay tax on profits on their individual returns and which are not subject to the corporate income tax—have grown rapidly in importance over the past two decades. Yet even as little is known with confidence about who pays the corporate income tax, even less is known about who pays taxes on the income of pass-through businesses. Risch will explore the incidence of taxes on the income of pass-through businesses by investigating whether and to what extent the compensation of employees of certain pass-through businesses changes in response to changes in the tax rates on the businesses’ owners. To do this, he will use a linked owner-firm-employee dataset created from administrative tax records.

This project will look at what alternative approaches could allow those in low-income communities—the majority of which are communities of color—to negotiate an exit from poverty. As the middle of the jobs market has hollowed out and the college wage premium has increased, much of the conversation around policy solutions has focused on upskilling or encouraging more people to pursue higher education. Two-thirds of Americans, however, still lack a bachelor’s degree, a proportion that hasn’t changed much over the decades. This raises the question of what alternative policies could encourage mobility. Hill will explore how economic inequality shapes the perceptions and knowledge of opportunities and options among those in low-income communities of color. In light of deeply racialized American inequality, this project aims to shed light on mechanisms creating and prohibiting social mobility among "low-skilled" or noncollege-educated workers of color.

This project will research how effective basic and universal labor standards are at reducing group inequality by looking at a major amendment to the Fair Labor Standards Act in 1966, which extended federal minimum wage coverage to several new industries. The expansion occurred at a time when the federal minimum wage was 40 percent higher in real terms than it is today. The newly covered industries were concentrated in services, retail, and agriculture, sectors with disproportionately high shares of women and black workers. The project proposes to take advantage of the scale of the reform and the racial and gender composition of treated industries to test the effects of high minimum wages and their ability to close the gender and racial wage gaps. This research promises to increase our understanding of the effects of introducing a high wage floor and whether universal federal labor standards can effectively reduce the racial and gender wage gaps.

This project looks at how the political enfranchisement of a group affects economic outcomes of those within that group. There are several mechanisms through which this could occur: Politicians might favor a newly enfranchised group in policymaking to earn their votes; the newly enfranchised group might find public-sector employment; or members of the group might run for and win a seat in office. Aneja and Avenancio will examine how African American enfranchisement through the Voting Rights Act affected a variety of economic outcomes for blacks in southern states. They will use a differences-in-differences approach, looking at bordering counties in states that were and were not subject to Section 5 of the Voting Rights Act. Although this study focuses on Civil Rights-era outcomes, the results will be relevant today, as states pass laws that could depress voter turnout among minority groups.

This project proposes to utilize administrative data from Washington state to study the impact of Seattle’s paid sick time ordinance on three specific research questions. First, how has the ordinance impacted earnings, hours, employment levels, and earnings volatility of workers covered by the new paid sick time law? Second, what share of worker volatility is due to within-job volatility (volatility due to changes in hours) versus between-job volatility (volatility from job turnover) as a result of the paid sick time ordinance? Third, do the above effects vary for workers in different firms, industries, firm sizes, and wage-rate employment subgroups? This work will add to what we know about the impacts of mandated employer-provided paid sick leave, including illuminating whether employer-mandated paid sick leave has employment effects and on whom. Wething’s study of earnings volatility has the potential to provide important evidence on the mechanism through which paid sick leave is impacting employment outcomes, including whether and how this might impact worker well-being and firm productivity.

This study will look at a key statistic for understanding wage rigidity: the rigidity of the wages of new hires. Theoretically, the wage level of new hires is important for making sense of variations in hiring across the business cycle. But there isn’t much empirical research on this statistic. Hazell is using data from online job vacancy postings to build a statistic that accounts for the changing composition of posted jobs as the labor market slackens and tightens.