How can estimates of microlevel causal effects be mapped into general equilibrium counterfactuals? Using a derivation of the central general equilibrium invariance result, this work studies general equilibrium counterfactuals for income tax rebate stimulus. The project develops a theoretically valid approximation of general equilibrium effects of spending and investment shocks in business-cycle models. It then uses estimates of responses to certain types of shocks to develop estimates of the impact of certain types of policies, which include general equilibrium effects. This research will add to our understanding of the effect of stimulus tools on the macroeconomy.
Archives: Grant
Do social norms around pay influence the wage-setting behavior of firms?
This project investigates the impact of wage increases at large employers in the United States. It will study the wages of other similarly skilled workers in the labor market exposed to one of these large employers in order to better understand how actions by firms, the government, and worker advocacy organizations influence wages in their local labor markets more broadly. This topic helps to contribute to our understanding of how to improve economic outcomes at the bottom of the earnings distribution. The research uses a difference-in-difference design and will compare outcomes for similarly skilled workers that are exposed versus not-exposed to one of the major employers when that employer changes its wage policy. They will use Burning Glass data to isolate spillovers from mechanical effects since they will be able to look at posted wages for employers that are not the ones changing their wage policy.
How does capital investment affect workers? Evidence from bonus depreciation and matched employer-employee data
The extent to which capital and labor are substitutes and how this substitutability shapes worker outcomes is a key determinant of economic inequality. This project proposes to study the effect of bonus depreciation on worker outcomes using employer-employee matched Census data in order to understand whether capital investments in the form of new technologies are replacing workers and whether the impact is different for workers of various skill levels.
Market design responses to inequality
Much of the theory of market design operates in two extreme environments: One where monetary transfers are prohibited, and one where there are transfers but each individual values one dollar in the same way. This research seeks to understand how to optimally design goods markets in the presence of wealth inequality and is conducted across three discrete research papers. The first project develops an analytic framework for a middle ground where agents are wealth constrained or have income effects. The second project develops a continuous-time model of dynamic capital taxation, and the third project considers dynamic effects of inequality using formal models.
Work as an option: Effects of unpredictable and unstable schedules on earnings, mobility, and skills
This research asks whether employers compensate workers for the implicit option of unpredictable and unstable schedules. It will use the National Longitudinal Survey of Youth, 1997 cohort, to analyze the labor market effects of unpredictable and unstable schedules. The project will focus on identifying marginal effects while controlling for observed and unobserved heterogeneity using fixed-effects or first-difference specifications.
Workers in the board room: The causal effects of shared governance
Whether and how to involve workers in decision-making at the workplace is a fundamental question of the organization of firms and economies more broadly. This project proposes to use a novel research design to study a 1994 reform in Germany that sharply abolished employee board representation in newly incorporated firms with fewer than 500 workers in order to analyze the effects of shared governance on a variety of firm and worker-level outcomes, including wages, distribution of profits, and inequality of pay within a firm. The authors will use a regression discontinuity design that exploits the 1994 reform, supplemented with a difference-in-difference approach that compares changes among shareholder firms to changes among nonshareholder firms that were never subject to co-determination and thus were not affected by the reform. This will allow them to control for general economic trends that may have impacted firm and worker outcomes around the timing of the reform.
Getting labor markets right: Occupational mobility and outside options
How does the availability of job options outside workers’ own occupations affect their labor market outcomes? This project uses Burning Glass data to define labor markets by the probabilistic occupational transitions that workers make. The research looks at the likelihood that a worker switches occupations based on location and other job determinants. In addition, the researchers will study differences based on the industrial composition of a location, local labor market shocks, and race and gender analyses, thus deepening our understanding of workers’ outside options in regard to the impact of labor market concentration.
Federal financial aid and postsecondary success for low-income students
This research will investigate how low-income and first-generation students respond financially and academically to financial aid austerity by exploiting a 2011 change that the U.S. Congress made to Pell grant eligibility that affected nearly 286,000 students. As a result, an estimated 12,000 students were eliminated from eligibility for a Pell grant, and 274,000 students received fewer grant dollars. The project will estimate the impact of this sudden unexpected loss in financial aid on college attendance, financial aid, and labor supply outcomes for low-income college students using a combination of restricted-use data from the Beginning Postsecondary Students survey and the National Postsecondary Student Aid Study. The researcher will use the panel nature of the data to track changes in outcomes for students from one academic year to the next. A regression discontinuity design will be employed to estimate the causal effect of the loss on various educational and labor market outcomes.
Disentangling gender gaps: New evidence from personnel records
This research aims to empirically analyze potential explanations for gender wage gaps, glass ceilings, and differential labor market returns for women by looking at how gender gaps may be perpetuated within a firm. Using a dataset from a multinational firm employing 300,000 people that includes applications for promotions, as well as observed promotions, the project seeks to understand internal firm promotion processes that affect the gender wage gap over the career cycle.
Do higher wages improve health outcomes? Evidence from nursing homes and minimum wage reforms
This project consists of an empirical analysis using a county-pair design to examine the relationship between minimum wages and the quality of services provided by low-wage workers by examining safety inspections and patient health outcomes in nursing homes following minimum wage reforms.