Governments around the world provided substantial support to individuals and firms throughout the COVID-19 pandemic. This project will study the effects of the stimulus payments provided to U.S. individuals through the Coronavirus Aid, Relief, and Economic Security Act, or CARES, Act. Comprising $2.2 trillion in spending, this bill included $300 billion in stimulus payments to individuals at the onset of the pandemic. Using data on the universe of U.S. federal tax returns for individuals and firms, the authors plan to estimate the effects of stimulus payments on labor market outcomes. The data allow the authors to link stimulus payments with labor market outcomes, including salaried employment, contract jobs, unemployment, and entrepreneurship. The authors plan to implement a regression kink design to identify the effects of stimulus payments on labor market outcomes. The project is poised to contribute to our understanding of the effects of fiscal stimulus during the COVID-19 pandemic on the labor market choices of individuals.
Archives: Grant
Employment Effects of the Employee Retention Tax Credit
In contrast to the wide literature on the effects of permanent business wage subsidies on employment and wages, which generally finds small effects, less research has examined the effects of temporary wage subsidies on labor markets. In response to the economic shock induced by the COVID-19 pandemic, the U.S. federal government created the Employee Retention Tax Credit, or ERTC, to aid businesses adversely affected by the pandemic and stay-at-home orders. The tax credit provided businesses a maximum of $26,000 per worker over the 2020–2021 period, depending on firm size and the fiscal quarters in which the worker was furloughed vs. employed. Using matched employer-employee data from a payroll processing company covering one-twelfth of the U.S. private-sector workforce, the author will study the effects of the Employee Retention Tax Credit on employment, payroll, and small business reopening. We know relatively little about how to efficiently and effectively help firms during recessions. This research can inform policy design intended to preserve job matches, both to protect workers from the consequences of a recession and to lead to a strong economic recovery.
Geospatial Heterogeneity in Inflation: A Market Concentration Story
This project will examine whether there are heterogenous inflation rates across the United States. If so, the authors plan to identify which areas face higher rates of inflation and what mechanisms drive the observed differences. More specifically, the authors will use regional Nielsen Retail Scanner data from 2006–2016 to measure food inflation. This project will also analyze the effects of local market concentration on inflation, adding to the evidence base needed to effectively measure the heterogeneous effects of inflation.
Wage and Skills’ Spillover Effects of Million Dollar Projects
This project will explore the effect of large-scale business openings subsidized with tax and related incentives to estimate the effect of these public investments on labor markets—not just on wages, but also on the skills demanded by employers post-opening. The author will use data on government subsidized projects from 2013–2019, including manufacturing, distribution centers, headquarters and data centers, as well as runner-up locations for these projects, to help identify the causal effect of the “million-dollar projects.” This research will provide new insights on the spillover effects of public investments when designing place-based policy.
Novel Measurement of Childcare Customer and Worker Flows Enables Novel Evidence on Recent Supply-Side Subsidies
This project will examine the impact of supply-side child care investments on access to and stability of child care, as well as whether investments in child care vary by neighborhood. Utilizing novel mobile phone data, the authors plan to construct “real-time” measures of customer and worker flow, enabling an in-depth exploration of the dynamics of the child care workforce and consumers at a fine geographic scale with high frequency. They will then use this new data, along with data from a Minnesota grant program from the American Rescue Plan, to answer how funds given directly to providers affect the number and demographics of families served. This project will provide new evidence on the effects of investing in the supply of child care as opposed to supporting the demand side through vouchers or other subsidies.
Tracking Hospital Mergers and Understanding Which Markets are Changing
This project will create a database of hospital mergers over the past 40 years. The database will detail the following: where health systems are merging or divesting to understand which areas/people (including demographic differences) are affected; whether that differs between for-profit and nonprofit hospitals; and whether higher-priced hospitals continue to provide higher-quality care. Beyond the dataset construction, the project will map areas with 2+, 3+, and 4+ hospitals and produce descriptive statistics at various geographic levels. The research team will track the growth in health systems that resulted from acquisitions by analyzing whether for-profit health systems were strategically acquiring hospitals in regions with more affluent, privately insured patients. This project will contribute to our understanding of the impacts of hospital mergers on equity, patient access, and quality of care.
Employee Activism: Mobilizing Workers as Corporate Stakeholders
This project seeks to understand the scale, scope, and spread of employee activism, workplace protest, and its impact on corporate stock prices in the United States. The author builds on an existing longitudinal dataset—the Dynamics of Collective Action by Stanford University—to understand employee activism and understand its use as an alternative to employees leaving the firm. She then will attempt to understand how employee activism spreads by tracking the occurrence of employee protests across industry or social movement networks. Finally, she examines how employee activism affects the share price of a corporation.
Long Term Own and Dynamic Complementarity Effects of the WIC Program
This project will first attempt to find the causal effect of exposure to the Special Supplemental Nutrition Program for Women, Infants, and Children in-utero and in childhood on one’s long-term outcomes. She will utilize a difference-in-difference design to exploit the variation in roll-out of WIC programs by county and evaluate educational attainment and economic self-sufficiency in adulthood. Using a regression discontinuity design, she will also test whether WIC funding was actually distributed to counties in a nonrandom way. In addition, she plans to examine whether and how the effect of WIC exposure is strengthened if one is also exposed to other large-scale public programs such as Head Start or the Supplemental Nutrition Assistance Program, contributing to our understanding of the long-run effects of potentially complementary income support programs.
The Role of Regulations in the Development of Labor Market Power: Evidence from Clean Air Act’s New Source Review Permit Program
This project will examine whether regulations increase firms’ labor market power and how changes in labor market structure vis-à-vis regulation affect worker outcomes. Some laws limit how much existing firms must comply with new regulations, while new firms must comply. One example is the Environmental Protection Agency’s New Source Review permitting requirements. The research team seeks to understand how this regulation affects employers’ labor market power. They will use data from the U.S. Census Bureau to link individual earnings with demographic and geographic information. Further, they will use data on counties and industries from the EPA to conduct a difference-in-difference analysis and a two-stage instrumental strategy to estimate the effect of regulation on local labor concentration and worker outcomes. This research will broadly inform regulatory design with worker outcomes in mind.
The Physics of Reparations: A Quantum Leap in Equity
This project will explore whether reparations can close and have a lasting impact on the racial wealth gap. The research team will examine how parental income, wealth, and education affect offspring’s wealth as adults. Using the Panel Study of Income Dynamics, they estimate an empirical model of the relationship between parents’ and children’s income, wealth, and education. They will then develop a general equilibrium model with endogenous accumulation of physical and human capital by heterogeneous households. Built into the model is an overlapping generations structure, whereby investments in children depend on parents’ income and wealth, and wealth can be inherited across generations. They will then use the model to examine the effect of different reparations policies and their effects on short- and long-run welfare, income, and human capital by race.