There is currently a debate in the literature about whether income volatility has increased or decreased over the past decade. To help resolve this, the researchers will link the Current Population Survey to the Social Security Administration’s detailed earnings records data. This unique data is essential for understanding earnings, as previous research demonstrates that earnings in household surveys differ from those measured in administrative data—especially at the top and bottom of the income distribution. Determining whether the recent increase in income volatility (as shown in papers using household survey data) also occurs in the administrative earnings data is important in evaluating the changing well-being of individuals and families. It also impacts the measures of inequality. Decreasing volatility may suggest decreasing inequality, which contradicts many recent estimates of the change in inequality in the United States. This work is critical to understanding the nature of inequality in the United States today and the level of income volatility Americans may be experiencing.
Archives: Grant
Unions, managers and monopolies: how concentration and managerial power contribute to rising wage inequality
The extent to which income inequality can be traced to shifts in the distribution of rents and/or to declines of workers’ share of those rents is an open and important question, one that researchers have had difficulty answering due to data limitations. This research will link multiple administrative datasets to assess how concentration in managerial power contributes to rising wage inequality. The research will make an important contribution to our understanding of the larger forces generating income inequality—specifically, how corporate decision-making that fuels market concentration may also fuel income inequality
The historical shadow of segregation on human capital and upward mobility
This project expands on recent path-breaking work that has documented substantial variation in rates of social mobility across locations in the United States. Where children grow up has a strong influence on the probability that they will earn more than their parents in adulthood, with some regions highly mobile and others lagging far behind. This research suggests that regional differences in opportunity might be explained not only by contemporary characteristics but also by historical disparities. The researchers will merge the Panel Study of Income Dynamics (PSID) with Raj Chetty and others’ Equality of Opportunity dataset, and the Logan-Parman index of inequality, providing a profound advancement in the literature with strong policy implications.
Languages, laws and labor contracts
The decline in bargaining power for large groups of workers is at the core of rising inequality. This research aims to provide some of the first causal evidence that contractual language is not merely cheap talk but rather meaningfully shapes the decisions of contracting parties in the labor market. The grant will support an effort to digitize union contracts stored at the Kheel Center at Cornell University. In addition to digitization, the researchers will use language processing tools to extract norms, commitments, and entitlements from the text. The result will be a tool that can be used to understand the role of unions in the 20th century. The dataset will be uniquely detailed, including features of union contracts based on industry sector, union, firm, and year of the contract. The research questions that might be answered with the data range from the fundamental—How are labor contractual terms determined, and how do contractual terms affect workers and firms?—to the more subtle—How and why do contractual terms begin to reflect legal changes and judicial decisions?
The optimal design of parental leave policies and gender equality: mismatch of skills across genders
The goal of this study is to understand the welfare consequences from long-term skill mismatches due to childbirth and how maternity leave policies can help alleviate such mismatches. This research focuses on job match quality between men and women through joint decision-making, and its contribution to the gender wage gap. While the gender wage gap has been studied in relation to occupation or sector type, the job match paradigm within the context of household decision-making is less understood. Findings will be relevant to discussions of effective federal paid leave policies, among others.
Digital discrimination: a case of Airbnb
This research will test a widely held perception that making ethnic information less prominent—rather than completely eliminating it—will reduce discrimination. The researcher will use a recent Airbnb policy change to empirically test this relationship empirically. Utilizing data from Airbnb, the research effectively builds on the literature using ethnic names on resumes to test for discrimination. This research will be able to focus attention on the continuing problem of racial discrimination for wages, particularly in the “gig,” or “platform,” economy
Manufacturing employment, trade and structural change
The political resonance of the decline in U.S. manufacturing employment has reached a fever pitch in recent years, with calls for a return of manufacturing jobs. But how feasible is such a goal in light of structural changes in the U.S. economy, such as technological growth? This project will try to answer this question by developing a model that will decompose the total decline in manufacturing into decline due to structural change and decline due to increased international trade. It also aims to put the decline of manufacturing in a global perspective. It proposes to study cross-country patterns of structural change by studying 25 Organisation for Economic Co-operation and Development countries, offering a new look at the current controversy of trade versus technology in employment.
From liberty street to main street: firms, monetary policy and labor market outcomes
According to its mandate, the Federal Reserve is required to foster maximum employment. The central bank tries to do this by affecting aggregate demand by loosening or tightening the flow of credit. The distributional impact of these decisions is unclear when it comes to the labor market. This research assesses how changes in monetary policy affect the demand for different kinds of workers and redistribute labor income and represents an exciting extension of recent literature on firm effects.
Concentration of corporate ownership and inequality
This project will look at how the concentration of corporate ownership and mergers and acquisitions affects inequality and workers’ well-being by evaluating the relationship between growing market concentration and the declining labor share of income. The research proposes to distinguish two channels by which greater concentration could matter: reduced product market competition, which would directly increase the profit share of gross domestic product and thereby reduce the labor share, and reduced labor market competition—which would directly reduce the labor share.
Effects of the new wave of minimum wage policies
This project will take advantage of the unusually large changes in the statutory minimum wages in eight states and nine cities to analyze wage and employment impacts. There is intense debate over the efficacy of increased minimum wages to address growing income inequality, and this research will provide useful evidence, directly contributing to discussions of how to improve the design of current and future minimum wage policies.