Recent research finds that most, if not all, of the growth in earnings inequality in the United States may be explained by the growth in inequality across firms or establishments. This finding is consistent with research showing that workers in outsourced establishments—such as call centers, janitorial service companies, or security services—receive lower pay and benefits than those workers doing the same jobs but who are employed by lead or primary firms. But our knowledge of the extent and impact of outsourcing on a broader set of workers is limited, in large part because of data constraints.
This study will provide evidence based on rigorous, quantitative analysis of the extent to which outsourcing has contributed to inequality in the United States. The study will rely on Longitudinal Employer-Household Dynamics data linked with American Community Suvey data and will use the methodology established in a previous paper based on German data. A key shortcoming of the LEHD data is that it does not have information on occupation. By linking to ACS data, the authors will be able to observe occupation for a subset of those in the LEHD dataset and to assess the effects of outsourcing on outcomes besides earnings—most critically, health insurance.
Previous research indicates that wealth inequality in the United States has increased since the mid-20th century and is much higher than income inequality. Wealth inequality is particularly worrisome since wealth provides many advantages, including securing against shocks and transferability to the next generation. Yet despite the relevance of wealth for our understanding of inequality and mobility, available data on wealth inequality is limited.
This project will make an important contribution by drawing on tax data linked to external data on housing equity to overcome the limitations of survey data and by linking these data across generations within families and by generating geographic aggregates at small-scale geographical levels. This will allow the author to answer pressing questions, such as how concentrated wealth is locally and the stickiness of the wealth distribution across generations.
Research shows how important college is to upward economic mobility. Yet there are many barriers to getting into and completing college, most notably cost. Community colleges are frequently touted as a cost-effective path, whereby students begin at a community college and then transfer to a 4-year university. This research focuses on transfer students and Wisconsin’s Promise Tuition grants, a place-based scholarship which offers debt-free tuition assistance.
Over the past decade, more and more states and postsecondary institutions are offering such grants, yet there is virtually no research that focuses on their impact on transfer students, particularly transfer students’ degree completion. This project explores the intersection between transfer students, their perceptions related to college finances, and the design of Promise Tuition scholarships and grants by using a mixed methods study.
The first part utilizes student-level administrative data from the University of Wisconsin to examine course-taking patterns, credits attempted and completed, Grade Point Average, persistence rates, financial aid eligibility and receipt, and degrees conferred. The second part is a survey of a random sample of transfer students in order to elicit information regarding college experiences and finances. This rich case study promises to inform not only policy debates around college affordability and completion, but also our understanding of how the institutional structures of postsecondary education in the United States are supporting or inhibiting intergenerational mobility.
This historical analysis focuses on whether racial discrimination by firms led to underprovision of content for minorities in the U.S. radio market in the post-war Jim Crow era and whether competition in the market reduced the racial divide. More specifically, the researcher looks at how the entry of television in local markets in the 1950s and 1960s affected programming for Black audiences. Using Federal Communications Commission annual financial reports, directories of radio stations, and the National Opinion Research Center’s 1944 and 1946 racial attitude surveys, the author will analyze how and if discrimination played a role in firms’ programming decisions.
A prominent feature of the post-Great Recession U.S. economy is the lack of adequate wage growth despite a tight labor market. One explanation is that a decline in workers’ bargaining power put downward pressure on wage growth. The declining labor share of income is popularly cited as one reason behind weakened worker bargaining power, and a burgeoning field of research ascribes much of this decline to the increase in monopsony power in the United States. This researcher seeks to estimate workers’ bargaining power over time in the United States. It will make some important extensions on the job search model, and then move onto a model of wage determination that looks at how labor market dynamics, such as vacancies and unemployment, impact wage determination via worker bargaining power.
Capital gains are one of the largest components of income at the top of the wealth distribution and play a key role in measuring wealth inequality. Yet capital gains are rarely included in estimates of the wealth distribution in economics, mainly because measurement requires detailed information on the distribution of wealth at the individual security level.
This project will construct a new dataset to directly measure the holdings of public equities and fixed-income assets for all individuals in the United States using internal IRS data from the 1099-DIV and 1099-INT forms, which have not previously been used by researchers. This improved data will allow for more accurate estimates of wealth inequality, including new estimates of top-end wealth inequality. It will also shed light on savings rates across the income distribution and bring to bear new evidence of whether the rich save more.
Many social insurance programs replace some percentage of prior earnings while a claimant is away from work during a shock, such as unemployment, disability, or the birth of a child. Implementation relies on “base periods” from which prior earnings are measured in order to establish the wage replacement rate. This project will explore the base period and its implications for a large subset of primarily low-income program recipients. Focusing on California’s Unemployment Insurance program and combining three administrative datasets, this researcher seeks to explain how earnings volatility, among other factors, can impact the value of Unemployment Insurance and claimant experience with the program. Other research shows that low-income workers experience significant volatility in earnings, partially due to a lack of control over how many hours of work they are given. Understanding how income volatility in the base period impacts subsequent volatility/income decline while receiving benefits is an important policy question.
Prior research suggests that concentration and firm mark-ups have increased in the United States over the past several decades, potentially resulting in a higher share of income going to capital instead of labor. These previous multi-industry studies have not addressed why concentration and mark-ups may have increased, and how policies, such as greater antitrust enforcement or merger review, could alter these trends.
This project aims to contribute to these unanswered questions by focusing on an industry-specific analysis. Utilizing cement industry data from the United States between 1973 and 2019, the authors will explore how technological change sparked by the introduction of the precalciner kiln altered market structure and the changes in the share of income going to owners’ profits relative to workers’ wages over time.
A clearer picture of U.S. intergenerational mobility is emerging for the latter part of the 20th century, but the same is not true for earlier in the century. This project is a massive data undertaking that will produce a database of mobility rates going back to 1900. Previous work, most notably the American Opportunity Study, links U.S. Census Decennials from 1940–2000.
This project makes some important extensions. It will expand the feasible linkages back to 1900 so that the panel spans the entire 20th century. Perhaps the most important contribution is the use of the Social Security Numerical Identification Files, or SS-5s, which contain information obtained from the application for a Social Security card for more than 40 million individuals who died prior to 2007 and include substantially more information on individuals than U.S. Census records, increasing the number of linkages and the quality of those linkages. In particular, the wealth of information in a single record is vastly superior to a Census-to-Census linking process and will better facilitate linkages within families, including for married women who have changed their names, improving the representation of women and racial and ethnic minorities. This will allow the researchers to study differences across space (states), as well as differences by race and gender.
This project will provide estimates of the impact of prospective merger reviews on antitrust enforcement actions, product prices, input prices, output, investment, and research and development. Using administrative data collected through taxation, employment, and antitrust provision, the project exploits the introduction of a premerger notification policy in Chile to see how it changed the types of mergers being agreed to.
The result will help policymakers understand how much notification systems have a deterrent impact. Prospective merger reviews constitute a large share of antitrust enforcement expenditures, and yet little work has systematically studied its effectiveness. By providing a comprehensive study across industries using detailed data on real economic variables, this project could provide invaluable insights into the effects of mergers in both input and output markets, the impact of notification requirements, and the resource allocation within enforcement agencies.
