This project considers the interplay between paid and unpaid care work and the relationship between care work penalties and gender, race, and class inequalities. The author makes the novel argument that prior research does not sufficiently understand the combined effects of both paid and unpaid care work penalties and how they interact. To fill this gap, this project will develop a “care-work-systems” framework to determine how pay penalties for care work impact economic inequality. The project identifies that paid and unpaid care work penalties are often viewed as separate even though they impact each other. In addition to bringing these two skeins of research literature in conversation with one another, it will also bridge the research literatures in child care and eldercare, and integrate class, in addition to race and gender, into the analysis. In addition to the theoretical contribution, it proposes an empirical study to test this framework using panel data from three countries with different care infrastructures—the United States, the United Kingdom, and Germany—to help shed light on how policies and social structures play a role in generating paid and unpaid care work penalties.

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.

Central banks across the developed world are reconsidering their monetary policy frameworks and are frequently looking to academic research to inform the question of whether to stick with the dominant paradigm of inflation targeting or to adopt a new monetary policy regime. To address this question, Halperin and Caratelli will build a model where price stickiness is modeled in a substantially more realistic way, compared to other models, in order to explore whether it is optimal for central banks to use nominal income targeting rather than inflation targeting. The two researchers will examine whether nominal income targeting would mean that central banks would not have to tighten policy in response to strong wage growth, which could boost equitable growth.

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.

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.

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.