Grant Category

The Labor Market

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

The labor market is one of the most important institutions determining economic growth and its distribution, as labor income is more than two-thirds of national income. Skill levels and the efficient matching of skills to jobs are key for economic growth. Yet the labor market is not a perfectly competitive market, but rather one that is regulated by a wide array of institutions that affect labor income and its distribution.

We need a better understanding of the two-way link between equitable growth and the labor market. How does the labor market affect equitable growth? How does inequality, in turn, affect the labor market?

  • The effect of the labor market on equitable growth
  • The effects of inequality on the labor market
  • The effects of productivity on the labor market

Explore the Grants We've Awarded

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COVID-19 Relief Funding and the Child Care Workforce

Grant Year: 2024

Grant Amount: $80,000

Grant Type: academic

Policymakers are grappling with how to support the child care sector after the COVID-19 public health crisis. Problems with the child care sector were apparent well before the onset of the pandemic: Parents paid high care costs, care workers were underpaid and left the field in high numbers, child care programs experienced unsustainable operating costs and closed their doors, and child care quality suffered. Without access to safe and affordable care, parents work less and have less income, and businesses struggle to retain qualified workers. This project will study a new initiative to increase public funding for U.S. child care workers via a wage supplement program with funding from the American Rescue Plan Act. In 2022, the state of Wisconsin and the city of Milwaukee, Wisconsin substantially expanded the statewide REWARD program, which provides financial support to early childhood educators, and the City of Milwaukee Early Childhood Workforce Stipend Program. The expanded programs dramatically increased stipends available to eligible caregivers. The authors will examine the extent to which increased wage supplements keep qualified workers in the field and reduce turnover in the childcare workforce. Evidence from similar programs in other states finds a significant reduction in teacher turnover, indicating that wage subsidies could be effective. Given the dearth of research on the effectiveness of stipends, this research could provide more evidence to shape policy solutions.

The Distributional Effects of Firm Productivity Changes: Evidence from U.S. Linked Worker-Owner Data

Grant Year: 2024

Grant Amount: $30,000

Grant Type: academic

This project will estimate exactly which individuals benefit when firms become more  productive and whether these are the same individuals who bear the costs when firms do poorly. The author will use novel linked worker-owner administrative data from the United States. Specifically, he will use data covering the universe of pass-through firms in the United States to identify each firm’s workers and owners, and measure their total compensation from the firm. He will link these data to quasi-experimental, firm-specific productivity shocks to estimate the distributional effects of productivity changes. This will allow for an understanding of how productivity shocks affect workers and owners in various ways.

Skill and spatial mismatch in the energy transition

Grant Year: 2024

Grant Amount: $15,000

Grant Type: doctoral

This project seeks to answer the question of which labor market frictions prevent workers and communities from smoothly adjusting to local employment shocks and the extent to which investments in human capital address existing frictions. The author looks at this in the context of the transition to clean energy, focusing on the coal industry. She will merge worker-level administrative data with institution-level data on enrollment and completions from 2- and 4-year colleges to explore whether spatial proximity to postsecondary institutions serves to mollify longer-term earnings and employment outcomes.

The Distributional Consequences of Private Equity

Grant Year: 2024

Grant Amount: $15,000

Grant Type: doctoral

This project will use administrative tax data to better understand the distributional consequences of the tax subsidy for private equity. The study includes three analyses: First, the co-authors will quantify the preferential tax treatment of private equity profits in several stages and then calculate the change in tax liability if carried interest was taxed as ordinary income. Second, they will compare tax on private equity income and loss flows to the counterfactual tax liability to understand how private equity firms make strategic decisions to distribute profits to nontaxable investors. Third, they will examine the consequences of private equity acquisitions for workers across the income distribution by tracking the long-run labor market outcomes of workers employed at firms acquired by private equity.  

Causes and Consequences of Incomplete Unemployment Insurance Take-Up

Grant Year: 2024

Grant Amount: $15,000

Grant Type: academic

This research proposal seeks to answer three related questions regarding the barriers to accessing Unemployment Insurance benefits. First, what are the underlying causes of incomplete UI take-up for individual workers? Second, do the barriers to take-up disproportionately impact low-income, marginalized workers in a way that creates inequities in the UI program? Third, in what ways can outreach from workforce agencies boost UI take-up to better support workers and reduce inequities? To answer these questions, the author will utilize administrative data from the Washington State Employment Security Department. He will then field a survey of unemployed workers and combine findings with an analysis of administrative records. Together, this will inform the implementation of a field experiment, administered in partnership with the Employment Security Department, to explore how UI receipt can be increased, particularly for vulnerable populations.

Worker Led Lawsuits: The Effects of California’s Private Attorney Generals Act

Grant Year: 2024

Grant Amount: $15,000

Grant Type: doctoral

This research explores how worker-led lawsuits under California’s Private Attorneys General Act, or PAGA, impact firm size, survival, relocation decision, employment, and wages. The author will rely on two main data sources. First, she will leverage publicly available administrative data on PAGA claims and settlements from California’s Department of Industrial Relations. While PAGA claims data are publicly available online through PAGA Case Search tool, they have yet to be compiled and published in a way that facilitates research. Compilation, cleaning, and creation of this dataset to be made publicly available is an important contribution of this project. It is also critical to understand whether the Private Attorneys General Act is an effective tool for supporting worker rights.   

Experts

Grantee

Thomas Wollmann

University of Chicago

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Grantee

Daniel Valderrama

World Bank

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Steering Committee

Karen Dynan

Harvard University

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Grantee

Andres Drenik

University of Texas, Austin

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Grantee

Vivek Bhattacharya

Northwestern University

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