Researchers and policymakers are increasingly discovering the important role of firms when it comes to earnings. Shocks to the productivity of firms or industry—for example, a firm closing, or an industry shrinking—appear to be an important contributor to workers’ earnings and employment volatility. This project will investigate how different shocks to firms and the market are passed onto employees of that firm and, importantly, the effectiveness of U.S. social insurance programs—for example, unemployment insurance, Social Security programs, etc.—in buffering households against shocks to their incomes. Whereas most of the work on these issues to date is limited to either looking at workers independently from firms or industries, or at shocks that result in substantial displacement, the researchers will utilize IRS data that allow them to link individuals to the firms that employ them, opening a rich field of research questions that it has not previously been possible to answer. Research findings will likely provide details to help us understand where problems may be greatest, or provide new evidence on places where institutions are more successful in mitigating negative shocks.
Archives: Grant
How local barriers to migration shape relocation and earnings in the wake of china trade shocks
In the past, migration was an important way Americans reacted to economic shocks. When one area was hit by a decline in labor demand, residents of the area could respond by moving to an area where demand for their labor was higher. But internal migration has been falling and may be a reason why incomes for most Americans have stagnated. In an era of low labor mobility, what determines who responds to the shock via migration? This research seeks to extend recent work that has studied the impact of the well-documented shock from increased Chinese imports on the mobility of affected workers across firms, industries, and local labor markets. The authors have access to rich census data that allows them to trace individuals over time and space, and to observe many variables that may affect the likelihood of an individual’s mobility response to the trade shock—for example, demographics, historical migration flows between locations, and presence of higher education opportunities. This project will look at the net mobility of each region, and also dig into the gross inflows and outflows to better understand the underlying mechanisms.
The color of wealth in Boston
This project is an extension of the National Asset Scorecard for Communities of Color, or NASCC, a city-level analysis of wealth inequality. Previously, the research team surveyed five cities with large non-white populations with the aim of measuring household wealth at the level of detailed racial and ethnic categories. Specifically, this grant will support the second wave of the NASCC in Boston, which will be representative of subgroups of Asian households as well as the originally sampled groups from the previous wave. Findings will make an important contribution to the wealth inequality literature, going beyond the broad categories of “black” and “Hispanic” to provide more granular data on the economic situation of racial and ethnic groups in the Boston metropolitan area.
Wealth inequality and wealth returns heterogeneity
Recent research has clearly shown that the inequality of labor earnings, by itself, is not enough to explain the inequality of wealth. Utilizing a series of remarkable administrative records on the population of Norway from 1995 to 2015, where individuals are subject to both income and wealth taxation, this research seeks to fill a gap in our knowledge by addressing both our theoretical understanding of how wealth is accumulated and our empirical understanding of the distribution of wealth across individuals and households.
Bias and labour market inequality
This research asks how gender inequality influences the number of chances that individuals receive to succeed in the workplace and whether this affects skill development and/ or contributes to wage and promotion gaps. Specifically, the research seeks to add to our understanding of how gender differences may affect whether an employee’s successes and failures are attributed to luck or ability, and if that has implications for career trajectory. The project uses a unique data set of primary care physicians’ referrals to surgeons.
Sources of displaced workers’ long-term earnings losses
Pervasive earnings losses are a well-documented feature of job displacement, yet the understanding of the sources of these earnings losses is limited. The decline could be due to a lower wage at a new job, a lower likelihood of finding a new job, working fewer hours, or the loss of firm-specific rents. This project proposes to take advantage of employer-employee matched administrative data from Washington state’s unemployment insurance program to better understand the sources of earnings losses and to analyze the role of employer characteristics in job losses. Obtaining a better diagnosis of the root causes behind the long-term earnings decline can lead to better-designed policy responses.
Schedule stability study
Through an intervention with a major U.S. retailer (The Gap), the project tests whether shifting hourly workers to more stable schedules results in cost savings and increased productivity for businesses. In the second year of work, Williams and her team continued to make progress, including broadening the intervention in three important ways: an increase in hours, which research shows can improve sales by adding staffing at peak hours; agreeing to consider sources of instability stemming from the supply chain; and adding a worker survey and focus groups to gather information on scheduling impacts, pre and post intervention, on workers’ and their families’ well-being.
Estimating the impacts of patents on U.S. firms and workers
Innovation studies often use patents as an outcome of interest or a proxy for innovation. This project, however, focuses on the consequences of patents. By creating a new, restricted-access dataset that links patent applications to business tax records, the authors will use two quasi-experimental designs to estimate the relative effects of patent-generated monopoly rents on firm returns and worker wages. Much recent research has focused on inter-firm profitability and its relationship with inequality, and this project engages with that research to provide insights into the effects of patent rents on firm outcomes and earnings inequality. This work has the potential to help fill in our understanding of how innovation in an age of inequality may not be translating into broadly shared growth. Moreover, it provides a window into how governance and institutions (in this case, the patent and tax systems) impact innovation.
The effect of government cash assistance on household credit access and use
This team of young, promising applied economists seeks to quantify how public assistance affects households’ financial well-being through increasing access to credit. We know little about the interactions between social safety net programs and the financial well-being of families. This paper uses a credible and proven research design to provide new evidence to better our understanding of the role of credit markets in the lives of the poor. By matching individual credit data to administrative data, the authors will estimate the effects of removing low-income youth with disabilities from Supplemental Security Income on credit access, secured borrowing, and payday loan borrowing for the youth and their families. There is great interest in this broad subject, and precious few ways to tease out causal impacts. Yet with cutting-edge methods and use of administrative data, the authors will attempt to do so.
Understanding employer provision of paid parental leave in NY, CT, and PA
This project will quantify the level of and inequality in employer-provided paid parental leave by fielding a survey of small and medium-sized employers in three relatively low-wage industries (including retail) in New York, New Jersey, and Pennsylvania. The work is likely to make a significant contribution to our understanding of a currently hazy empirical picture of the social insurance system in the United States. Poor federal data collection on leave policy means that studies such as this one are a valuable addition. The authors will assess the availability, quality, and employee take-up of leave offered. One main advantage of funding this survey is that it will provide pre-treatment data collection for New York before the recently passed paid family leave law goes into effect in January, 2018. The investigators’ previous Rhode Island study is widely cited and useful to policymakers working on these issues, and we expect this to be similarly impactful.