This project examines associations between municipality of residence during childhood and upward mobility. Notably, the project creates a new dataset by identifying municipalities across the United States and documenting and categorizing municipal policies for comparison. Research on municipalities is hampered because a single repository or dataset containing all municipalities and their characteristics and policies does not exist. In addition to the potential data contribution, from a policy solution standpoint, understanding municipal policy is critically important. It is neither practical nor reasonable to propose solutions for mobility that operate just at the neighborhood or commuting-zone level, outside of the context of local governance. City and county governments need to know what they can reasonably do within their jurisdictions in order to increase mobility. While the proposed study, like many others in this space, does not attempt to identify causality, the descriptive work has the potential to be telling since it could provide municipalities with evidence of how they are succeeding or failing at supporting upward mobility for their residents.
Archives: Grant
Low-Income Borrowers and Payday Lenders: A Qualitative Study
This project explores how low-income people with immediate needs for cash make borrowing decisions in states where payday lending is heavily restricted versus states where it is not. It takes a qualitative approach to exploring the experiential processes that unfold across varying state policy contexts. As the author notes, there is a burgeoning line of scholarship on payday loans and states’ attempts to restrict them, but with mixed evidence on the effects on low-income borrowers. On one hand, these loans come with predatory lending rates that are often compounded for borrowers who are unable to pay back the loan in the original period and therefore roll it over, incurring more fees and often resulting in the borrower owing many times over what they originally received. On the other hand, credit is highly constrained for low-income individuals, with payday loans filling the gap. Yet there remains neither a consensus on the utility of such loans for low-income borrowers nor an understanding of how low-income individuals make decisions about borrowing. This gap limits policymakers from addressing the dual needs of credit access for low-income borrowers and the need to reduce the deleterious effects of payday lending, a gap this research will shed light on.
Inequality in Health Returns to Local Labor Markets: Extraction Booms and Mortality among Native Americans
This project seeks to extend research on “deaths of despair” to look specifically at the causes of such deaths for Native Americans, and Native American women and girls in particular. Deaths of despair among Native Americans are proportionately higher than among any other group in the United States and have increased at almost twice the rate of non-Hispanic White Americans. Are the predictors of a death of despair for White constituents, especially men (joblessness, high rates of unemployment), different than those for Native American women and girls? The project will study this in the context of fracking. Preliminary analysis provides compelling, suggestive evidence that higher rates of employment and earnings among non-Hispanic White men due to extraction booms, measured by the fracking industry and building on existing literature, in proximity to Native lands and to Native American girls and women likely induces more human trafficking activity that disproportionately affects Native women and girls. In turn, this may also induce behaviors to “cope” with such contexts, such as increased alcohol and substance use and suicides among Native women and girls. The authors convincingly argue that what might reduce deaths of despair (jobs and higher wages) for one group (non-Hispanic White men) might result in higher rates of deaths of despair for another marginalized group, Native women and girls.
The Effects of Tech M&As on Innovation Incentives
This project is looking at the effects of “infant acquisitions,” or firms acquiring startups, on the incentives for startups to innovate, and the amount of overall innovation in the technology sector. It will empirically study the impact of megafirms’ tech acquisitions on venture investment by calculating the number of ventures funded and total dollars raised, and patent activities. The effect of large incumbents’ acquisitions of startups on innovation has been a major concern among policymakers partly because it may have a negative effect on future investment in venture capital and innovation. Restrictions on tech mergers and acquisitions have been proposed in Europe and in the United States, yet there is still no clear evidence on how they affect venture capital investment. The project will combine three data sources: S&P Global Market Intelligence on firm taxonomy; Crunchbase data on investment deals in tech ventures; and PatentViews open-source data on patents. The combined data sources allow the researchers to paint a fuller picture of each firm’s relative position in the business and technology spaces.
Consolidation in Drug Markets: Impact on Prices and Access
This project aims to provide an exhaustive analysis of how pharmaceutical mergers and acquisitions affect market competition and prices of patent-protected branded drugs involved in the deal. So far, little direct evidence exists about the impact of mergers and acquisitions activity on pharmaceutical market outcomes, partly because reliable data on prices and ownership of drugs is very difficult to obtain. The scholars will assemble a comprehensive dataset tracking the ownership of new products. This will be one of the major contributions of this project since there are no data sources that systematically track the marketing rights of each pharmaceutical product. The project examines whether prices, sales, and formulary coverage of acquired products increase after acquisition and, if so, what types of acquisitions are more likely to lead to changes in these market outcomes. This project will be the first to examine the differences in how list and net prices of pharmaceuticals respond to changes in market structure and competition. It also asks why market outcomes change. Economic theory predicts that within-market (substitute products) mergers will lead to higher prices. More recent evidence suggests that cross-market (noncompeting products) mergers also may generate upward pricing pressure in markets. The project tests these theories in the context of the pharmaceutical market. It also explores alternative explanations, such as shifts in marketing strategy, by incorporating advertising data into the analysis. Finally, the project also investigates anticompetitive effects of acquisitions in the patent-protected branded drugs market and what types of deals are more likely to have an anticompetitive effect.
The Price Effects of Market Power
This project takes a macroeconomic approach to market power. The authors will use U.S. Bureau of Labor Statistics microdata on monthly prices to study how market power affects prices for the whole U.S. economy, not just one sector. Past work has looked at mark-ups and concentration as a proxy for price, but in principle, this could help address the fundamental question of whether market power or efficiency is driving increased mark-ups. This project would provide new evidence on the linkage between market concentration and margins across industries and within industries. It would also provide evidence on how import cost shocks lead to the pass-through of those shocks to the prices paid by final consumers. The authors plan to infer market power from the degree of pass-through. A main innovation in this study is the use of novel data, which record price for different sectors.
The Effects of the Child Tax Credit on the Economic Wellbeing of Families with Low Incomes
This project examines the effects of the expanded refundable Child Tax Credit on household economic well-being, including material hardship, debt, savings, and employment, with a focus on racial implications. The monthly Child Tax Credit, issued during the COVID-19 pandemic, was novel and represented a departure from how the United States typically provides assistance to low-income families via yearly cash transfers through the tax system or in-kind provisions, such as through the Supplemental Nutrition Assistance Program. The expanded Child Tax Credit also was short-lived, issued only from July 2021 to December 2021. Existing evidence, including some from this proposed study’s investigators, reveals the monthly CTC payments reduced poverty, and especially child poverty, despite high underemployment or unemployment during the COVID-19 pandemic. The contribution of this project is its investigation of nonincome outcomes, such as material hardship and food insecurity rates relative to the monthly CTC payments. The project also will consider racialized effects, which are important since early evidence reveals that Black and Latino families were disproportionately less likely to receive, or were delayed in receipt of, the monthly CTC payments. The study will rely on data from an app from Propel Inc., a financial services firm serving low-income Americans. The app allows low-income families manage their SNAP benefits.
The Role of State Policy in Reducing Disparities in Unemployment Insurance Recipiency
This project will leverage variations in implementation timing of the requirement in the Coronavirus Aid, Relief, and Economic Stimulus, or CARES, Act that employers notify recently separated workers of their eligibility for Unemployment Insurance. It seeks to causally identify whether notification improves the take-up of Unemployment Insurance with an emphasis on Black and Latino workers. The author will compile a database of states’ implementation of required separation notices by employers to employees by state and year. This project is expected to yield credible evidence regarding the efficacy of these employer separation notice requirements on the receipt of Unemployment Insurance. The project will further investigate whether such requirements close the racial divide in receiving Unemployment Insurance. Given known racialized disparities in receiving these benefits, the emphasis on this is critical. The distribution of information on UI eligibility as a mechanism in attenuating (or not) racial disparities would add to policymakers’ understanding of what is driving these disparities. In the case that separation notice requirements increase the take-up of Unemployment Insurance, the project has the potential to identify a relatively low-cost intervention with large payoffs. In the case that separation notice requirements do not improve UI take-up or close racial divides, policymakers may want to reconsider the universal requirements implemented as part of the CARES Act.
The Care Work System as a Fundamental Cause of Economic Inequalities
This project considers the interplay between paid and unpaid care work and the relationship between care work penalties and gender, race, and class inequalities. The author makes the novel argument that prior research does not sufficiently understand the combined effects of both paid and unpaid care work penalties and how they interact. To fill this gap, this project will develop a “care-work-systems” framework to determine how pay penalties for care work impact economic inequality. The project identifies that paid and unpaid care work penalties are often viewed as separate even though they impact each other. In addition to bringing these two skeins of research literature in conversation with one another, it will also bridge the research literatures in child care and eldercare, and integrate class, in addition to race and gender, into the analysis. In addition to the theoretical contribution, it proposes an empirical study to test this framework using panel data from three countries with different care infrastructures—the United States, the United Kingdom, and Germany—to help shed light on how policies and social structures play a role in generating paid and unpaid care work penalties.
Superstar Firms and Regional Disparities
This project investigates the relationship between two trends: the significant rise in regional inequality in the United States, with a small number of highly educated urban cities accounting for a growing share of national income, and the increasing dominance of large, multiregion services firms such as Amazon.com Inc., Walmart Inc., and Starbucks Corp., as reflected in measures of average firm size and market concentration. These “superstar” firms create high-paying, high-skill jobs in large cities and low-paying jobs in nonurban areas across the country, displacing local and regional competitors in the process and leading to increasingly unequal demand for skills across regions. Kleinman will utilize private data from Dun and Bradstreet and Burning Glass Technologies, as well as public data from the American Community Survey and the Panel Database on Incentives and Taxes. He will combine an empirical investigation of the relationship between firms’ spatial expansion and regional inequality with the development and quantification of a novel economic geography model that features expansion of multiregion firms to analyze the labor demand of firms across different markets and occupations.