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.

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.

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.

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, and 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.

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.

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.