Factsheet: What the research says about the economics of early care and education

Posted on by Emilie Openchowski
""

Despite the important role that child care plays in the lives of many U.S. families, the private child care market is not meeting their needs. This is not just an issue for families with young children in the United States—accessible, affordable, and high-quality care also has the potential to generate substantial economic activity and growth that benefits the entire economy.1

Public investments in child care can help eliminate the drag on growth that the lack of child care options creates. These investments, in turn, facilitate economic gains for families, businesses, and the U.S. economy as a whole.

Factsheet: What the research says about the economics of early care and educationDownload

This factsheet will review the research on the short- and long-term economic growth potential of a high-quality, accessible, and affordable early care and education system as well as the evidence supporting greater public investment in this market. For more information, see Equitable Growth’s companion report on the child care economy.

The current child care market doesn’t meet U.S. families’ needs

  • Licensed child care is hard to find. Roughly half of U.S. families live in “child care deserts,” or U.S. Census Bureau tracts where there are three young children for every licensed child care slot.2
  • In recent years, it has gotten even harder to find licensed child care options. Overall, the number of licensed child care facilities shrunk by nearly 32 percent in recent decades, primarily due to small in-home providers exiting the market. From 2005 through 2017, nearly half of these providers left the market.3 The coronavirus pandemic has only worsened these supply challenges.
  • Insufficient child care options can prevent parents who wish to work from doing so, with mothers often bearing the brunt of this challenge. Among parents who wish to work, child-rearing tends to interfere with women’s labor supply and employment outcomes more than men’s. 6 This leaves potential economic growth unrealized, as women’s labor force participation is significantly associated with Gross Domestic Product growth.7

Accessible and affordable early care and education options can help parents who wish to work do so, promoting economic growth in the short term

  • When more child care options are available, labor force participation increases. A 2007 study using data from Maryland finds that when there are more child care options nearby, women’s labor supply increases. For every 100 additional child care slots, the women’s labor force participation rate goes up by 0.3 percentage points.8
  • When the price of child care decreases, maternal employment increases. Studies generally find that a 10 percent reduction in child care costs increases maternal employment between 0.25 percent and 11 percent, with more precise estimates suggesting a 0.5 percent to 2.5 percent increase.9 This leads to greater household economic security and higher consumer spending, a larger labor pool from which employers can find workers, and, ultimately, short- and long-term economic growth.
  • Dependable and affordable child care options keep parents in the workforce, which benefits employers who count on dependable workers. A 2008 study of mothers in low-wage jobs found that 19 percent stopped working entirely in the same quarter in which they experienced a disruption to their child care arrangements, compared to only 9 percent who did not experience such a disruption.10

High-quality early care and education promotes long-term economic growth because the workers of tomorrow develop their skills early

  • High-quality early care and education provides critical socialization and learning opportunities when the brain is developing rapidly and is particularly responsive to the outside environment.11 Young children in pre-Kindergarten programs experience positive developmental outcomes and are better prepared for school, scoring higher than their peers on standardized measures of reading, spelling, math, and problem-solving skills.12
  • The positive human capital development effects persist long past childhood.13 One study shows that 40-year-olds who participated in the High/Scope Perry Preschool program as children were significantly more likely to be employed, uninvolved with the criminal justice system, and become high school graduates and high earners than their peers who did not complete the program.14 (See Figure 1.)

Figure 1

Long-term education, employment, and criminal justice outcomes for High/Scope Perry Preschool participants, compared to peers who did not attend the program
  • Similarly, enrollment in Boston’s universal preschools increases the likelihood of high school graduation by 6 percentage points, SAT completion by 9 percentage points, and on-time college enrollment by 8 percentage points, as well as decreases the likelihood of juvenile justice system involvement and school suspensions by 1 percentage point and 2 percentage points, respectively.15

Greater public investment is needed to unlock the full economic potential of high-quality early care and education

  • Child care subsidies can increase employment among mothers. In one 2020 study, a 10 percent increase in child care subsidies was associated with a 2 percent increase in employment among married mothers. Prior research also indicates that a $100 increase in child care subsidies could increase employment among single mothers by 2 percentage points.16
  • Adequate funding is necessary for human capital development. Subsidy dollar amounts are generally low and primarily cover staffing costs, leaving insufficient funds to invest meaningfully in the activities and materials that promote quality care and education for young children.17 Fully funding the subsidy programs and devoting resources for state-level agencies to assist providers in qualifying for subsidies are two ways in which greater public investment could increase child care availability and quality.
  • Supporting child care workers is crucial for promoting quality care and human capital development. Child care workers have a median hourly wage of $12.88, or $26,970 per year.18 Low pay leads to high turnover and high stress in the profession, which can undermine the quality of care that children receive. Using public funds to support higher compensation would help stabilize the child care workforce, ensuring that these workers can afford to stay in their jobs.19
  • Investing in the nation’s children is one of the safest bets policymakers can make. Research on early care and education programs finds that $1 in spending generates $8.60 in economic activity. The work of Nobel Prize-winning macroeconomist Paul Romer and others suggests that spending on human capital is one of the most effective ways to use government dollars to strengthen the economy and should be a priority for policymakers who seek to spur economic growth.20

By neglecting the child care market for decades, policymakers have shifted the burden of child care onto the shoulders of U.S. families already bearing the weight of childrearing, employment, and other responsibilities at home—despite research showing that the U.S. economy has much to gain from a functional and equitable child care system.

Addressing the child care crisis has the potential to improve families’ economic security and well-being in the United States, all while accelerating economic growth in the short- and long-term. To do so, policymakers must unburden families with meaningful, targeted, and evidence-based investments in the nation’s early care and education system.

 For more information, see Equitable Growth’s report on the child care economy.

Posted in Uncategorized

Expert Focus: Presenting evidence for a stronger economic future at Equitable Growth’s 2021 policy conference

Posted on by Emilie Openchowski
""

Equitable Growth is committed to building a community of scholars working to understand how inequality affects broadly shared growth and stability. To that end, we have created the monthly series, “Expert Focus.” This series highlights scholars in the Equitable Growth network and beyond who are at the frontier of social science research. We encourage you to learn more about both the researchers featured below and our broader network of experts.

The United States currently has a unique opportunity to enact structural changes that will have long-lasting and wide-ranging effects for workers and their families. Next week, Equitable Growth will host its biennial policy conference, virtually gathering experts from the academic, policymaking, and advocacy communities to discuss ways to capitalize on this moment and ensure strong and stable economic growth for all. Participants and speakers will discuss and debate the most pressing challenges facing the U.S. economy and society, from containing the spread of the coronavirus to mitigating the effects of climate change and addressing the roots and effects of structural and institutional racism.

The event, “Equitable Growth 2021: Evidence for a Stronger Economic Future,” will take place on September 20 and 21, featuring concurring sessions on a range of topics, among them Big Tech and competition, social infrastructure and policy, debt and consumer spending, and structural economic reforms. There will also be several fireside chats, opening remarks from our new President and CEO Michelle Holder, and a keynote address by U.S. Secretary of Labor Marty Walsh. This month’s installment of Expert Focus showcases the remarkable diversity and breadth of experience of just some of the many confirmed speakers and panelists at our conference next week. Many other featured speakers—including Michelle Holder, Carlos Fernando Avenancio-León, Lisa Cook, Dania V. Francis, and Hilary Hoynes—have been highlighted in previous Expert Focus entries.

To learn more about this year’s policy conference and see who else will be participating, visit the event page on our website, and click here to register to attend.

Equitable Growth 2021: Evidence for a Stronger Economic Future

Learn More

Olivier Blanchard

MIT; Peterson Institute for International Economics

Olivier Blanchard is Robert Solow professor emeritus at the Massachusetts Institute of Technology and Fred Bergsten senior fellow at the Peterson Institute for International Economics. He is a macroeconomist and has worked on a wide range of issues, including the role of monetary and fiscal policy, the nature of the labor market and the determinants of unemployment, and forces behind the global financial crisis. Blanchard has recently focused on the economic implications of the coronavirus and major future economic challenges, including climate change, inequality, and demographic change. In 2020, he contributed a column to Equitable Growth’s website on how policymakers can use fiscal policy to fight COVID-19 and counteract the coronavirus recession. At “Equitable Growth 2021,” Blanchard will participate in a session on envisioning a new economic future in the United States and designing structural reforms to achieve that vision.

Quote from Olivier Blanchard on public health and economic activity

Kristen Broady

Dillard University (on leave); The Brookings Institution

Kristen Broady is a fellow at The Brookings Institution’s Metropolitan Policy Program. She is a professor of financial economics on leave at Dillard University in New Orleans, where she was formerly the dean of the college of business. Her areas of research include mortgage foreclosure risk, labor and automation, and racial health disparities. At Brookings she often writes about how Black workers are navigating the economy and the labor force in the United States and, since the onset of the coronavirus pandemic, has focused on why Black Americans have experienced worse outcomes, particularly related to unemployment, education, and coronavirus relief programs. At “Equitable Growth 2021,” Broady will participate in a session on boosting aggregate demand and managing consumer debt burdens in the aftermath of the coronavirus recession.

Quote from Kristen Broady on the Black-White wealth gap

J.W. Mason

John Jay College, City University of New York; Roosevelt Institute

J.W. Mason is an associate professor of economics at John Jay College, City University of New York. His scholarly work centers on macroeconomic policy, finance, and debt. Mason is also a fellow at the Roosevelt Institute and an economist with the Macroeconomic Analysis and Progressive Thought team, where he focuses on public spending and government debt, finance and monetary policy, and the importance of strong demand and full employment. His work seeks to expand the conversation around public management of the economy, pushing for more ambitious targets for macroeconomic policy and a wider set of tools to achieve those goals. In 2015, Mason received an Equitable Growth grant to examine how household debt affects the macroeconomy and has implications for monetary policy, and he has co-authored two working papers for our Working Paper series. At “Equitable Growth 2021,” Mason will participate in a session on boosting aggregate demand and managing consumer debt burdens in the aftermath of the coronavirus recession.

Quote from J.W. Mason on public spending

Atif Mian

Princeton University

Atif Mian is John H. Laporte, Jr. Class of 1967 professor of economics, public policy, and finance at Princeton University and director of the Julis-Rabinowitz Center for Public Policy and Finance at the Princeton School of Public and International Affairs. Mian’s work studies the connections between finance and the macroeconomy. His 2014 book with Amir Sufi, House of Debt, explores how debt precipitated the Great Recession of 2007–2009. Mian is a member of Equitable Growth’s Steering Committee, guiding the organization’s efforts to study economic inequality, and in 2015, received an Equitable Growth grant, with Sufi, to expand their research on household debt as it relates to employment imbalances. He has written for Equitable Growth’s website, most recently on the macroeconomic consequences of rising inequality in the United States. At “Equitable Growth 2021,” Mian will participate in a session on boosting aggregate demand and managing consumer debt burdens in the aftermath of the coronavirus recession.

Quote from Atif Mian on macroeconomics

Fiona Scott Morton

Yale University

Fiona M. Scott Morton is the Theodore Nierenberg professor of economics at the Yale University School of Management. Her area of academic research is industrial organization, with a focus on empirical studies of competition in areas such as pricing, entry, and product differentiation. From 2011 to 2012, Scott Morton served as the deputy assistant attorney general for economics at the Antitrust Division of the U.S. Department of Justice, where she helped enforce the nation’s antitrust laws. Scott Morton is a leading expert on antitrust and market competition, and has written extensively on the topic for Equitable Growth, including co-authoring a 2020 report with proposals for how the Biden administration could improve antitrust enforcement in the United States. She also received an Equitable Growth grant in 2018 to investigate the impact of antitrust enforcement on competition and innovation. At “Equitable Growth 2021,” Scott Morton will participate in a session on rebalancing Big Tech’s grip on the economy in order to boost innovation and spur competition.

Quote from Fiona Scott Morton on the lack of competition as a problem for the economy

William E. Spriggs

Howard University; AFL-CIO

Bill Spriggs is a professor in, and former chair of, the Department of Economics at Howard University. He also currently serves as chief economist to the AFL-CIO, the largest federation of unions in the United States, chairing the Economic Policy Working Group for the Trade Union Advisory Committee to the Organisation for Economic Co-operation and Development. His policy focus is on securing better pay and benefits for workers, and he has extensive experience in economic policy development, having previously served as assistant secretary for the Office of Policy at the U.S. Department of Labor from 2009 to 2012 under President Barack Obama. He frequently discusses the root causes and impacts of the Black-White employment divide in the U.S labor market, as well as how unions ameliorate wage disparities and stagnation and how government investment spurs economic growth. At “Equitable Growth 2021,” Spriggs will participate in a session on expanding U.S. social infrastructure to support workers and increase theirlabor force participation and productivity.

Quote from Bill Spriggs on Black unemployment

Equitable Growth is building a network of experts across disciplines and at various stages in their career who can exchange ideas and ensure that research on inequality and broadly shared growth is relevant, accessible, and informative to both the policymaking process and future research agendas. Explore the ways you can connect with our network or take advantage of the support we offer here. 

Brad DeLong: Worthy reads on equitable growth, August 31-September 13, 2021

Posted on by Emilie Openchowski

Worthy reads from Equitable Growth:

1) Sixty-two very good people were funded for the next year, “Equitable Growth announces a record $1.39 million in research grants for scholars examining economic inequality and growth.” I confess that this program has been even more of a success than I had projected. It turns out a lot of very good people really were budget-constrained in doing the very good work that they wanted to do. And I confess that I had underestimated how much the research-university system as it worked a decade ago was constraining visible economic research away from policy-relevant and equitable growth-relevant topics. :

2. It was the economist Martha Bailey who first hammered home to me how incredibly important fertility control and child spacing has been for women’s economic opportunity in the United States over the past century—how huge a friction it was that you might, any year, find yourself bearing a child. This was the case even after the demographic transition. Before the demographic transition in the time of astronomical child and maternal mortality the biosocial fertility load on women was enormous, but even afterwards the inability to engage in reliable family planning was extraordinarily disruptive for women’s economic activity. Kate Bahn and Maryam Janani-Flores review the evidence, “Economic security and opportunity for women under threat after U.S. Supreme Court takes anti-abortion stance in Texas,” in which they write: “Nearly 1 in 4 women in the United States … will have an abortion by the age of 45, and nearly 1 in 20 … will have an unintended pregnancy. … An intrinsic link between reproductive justice and economic opportunity … contraception … access to abortion. … [b]odily autonomy and a person’s ability to decide when, how, and under what circumstances to plan for a family is critical to … a woman’s job opportunities and financial security”

3. Ever since the days of Alexander Hamilton, investors have regarded the debt of the U.S. government as a very valuable and safe asset. In all but rare and exceptional times, the only return debt purchasers and holders have demanded from the U.S. government is that it maintain the real value of the wealth they have entrusted to it. The U.S. government should invest this wealth wisely and prudently in the highest societal-value projects. But the main consideration and the bottom line is that—except in the 1870s and 1880s, and in the 1980s—the U.S. government has never faced a debt-financing constraint as long as long as its investments yield any possible positive return in the form of additional taxes collected downstream at all. Worried that this may change in the future if interest rates rise sharply? Then issue inflation-adjusted debt, and lock in real debt payments permanently. Read Barry Eichengreen, “The coming public debt scare should not spook U.S. policymakers from investing in physical and social infrastructure,” in which he writes: “In Defense of Public Debt, my co-authors and I show how governments, through the ages, have resorted to issuing public debt to meet emergencies and address pressing social needs … [and that] expenditure restraints that limit the U.S. economy’s capacity to grow would be counterproductive from even the narrow standpoint of debt sustainability. … Do our nation’s infrastructure problems rise to the level of a national emergency? Some answer yes, on the grounds that our physical infrastructure is old, dangerously vulnerable to climate change, and inadequately green and digital. A significant minority in the U.S. Senate insists otherwise. … One way of adjudicating the dispute is to ask whether additional infrastructure investments will pay for themselves. …We really should be comparing apples with apples—real returns with real returns. Currently … any investment that yields a positive real return is effectively self-financing.”

Worthy reads not from Equitable Growth:

1. I take Matthew Yglesias’s point here. But is this the right way to frame the question? The answer to “should local governments commit the additional money to make the bus free?” is almost surely yes. The answer to “should local governments that have a fixed pool of money to spend on buses provide a lower-quality free bus than the current system?” is almost surely no. To fail to distinguish between these two questions leaves Matt, I think, somewhat confused. The real question is: which of the many worthwhile things that bus systems could do with more money can be framed so as to win voter support and enthusiasm? Read his “Should the bus be free?,” in which he writes: “In most cases, the better investment is to make the buses better. … In a very abstract way, free transit makes sense. Cars generate pollution and traffic externalities. Ideally, we would fully price those externalities with a carbon tax and congestion charges. But in the real world, both are politically difficult, so an equivalent way of addressing the issue would be to subsidize the low-externality option—the bus—by making it free. … [but] the question becomes: if you assume your transit agency has a bunch of extra money, is eliminating fares the best way to turn money into ridership? Bus riders want better buses, not cheaper. … Cutting fares is a relatively low priority compared to other things you can straightforwardly achieve with more money, like improving bus frequency and reducing bus crowding.”

2. This is not an existential threat to the pharmaceutical industry. It is an existential threat to a PhRMA CEO who has pushed the line of maximum confrontation vis-a-vis a government seeking to reduce the growth rate of the cost of the pharmaceutical part of the public health care programs. Read Margot Sanger-Katz, “Biden Administration Goes Bigger on Cutting Drug Prices,” in which she writes: “The administration endorses a proposal for the government to negotiate on prices for all U.S. purchasers, not just Medicare. … It amounts to a signal to congressional Democrats… Senators working on the package have released few policy details as they wrestle with their approach. Steve Ubl, the C.E.O. of the industry trade group PhRMA, called the policy “an existential risk to the industry.” Major across-the-board price reductions would result in reduced revenues for drug companies, and could hurt companies’ ability to spend on research as well as cause smaller companies to close if investors leave the sector, he said. His group and the companies it represents have mobilized to fight such a plan.” 

3. This is an extremely good introduction for U.S. policymakers about what the Chinese government is hoping to do with respect to semiconductor independence, and now nearly impossible it will be for the Chinese government to do it Read Jordan Nel, “China, Semiconductors, & the Push for Independence—Part 1,” in which he writes: “China is chasing technological independence. Broadly, they’re doing a remarkable job at it barring perhaps in the field of semiconductors. And what is the crux of all modern tech? Semiconductors. … The 14th 5 year plan is the first to emphasize complete self-reliance and suggest building a near end-to-end chain locally. It is also the first time where China is in a strong enough position nationally to fund this foray and the first time where it is considered a matter of national security. …[But] the only way China can become technologically independent is … foundries. But foundries need equipment, processes, a large talent pool, clients, and an incredible amount of know-how. While money goes a long way to creating these, there are some things money can’t buy. Each equipment manufacturer has built up expertise developing that particular equipment (and maintenance) stack over decades of cycles and consolidation. For real independence, China needs to be self-sufficient not just in producing foundries, but also producing the equipment that foundries rely on. Otherwise, the chokepoint just moves further up the chain.”

Posted in Uncategorized

Economic security and opportunity for women under threat after U.S. Supreme Court takes anti-abortion stance in Texas

Posted on by Emilie Openchowski
""

Nearly 1 in 4 women in the United States—whether single, married, living with a partner, or divorced—will have an abortion by the age of 45, and nearly 1 in 20 women will have an unintended pregnancy, according to research by the sexual and reproductive health organization the Guttmacher Institute. Reproductive healthcare is typically considered outside the realm of U.S. economic policy, but an intrinsic link between reproductive justice and economic opportunity exists, from the importance of contraception to access to abortion care for women’s careers and marriage decisions. Research by economists and other social scientists repeatedly demonstrates how this link between bodily autonomy and a person’s ability to decide when, how, and under what circumstances to plan for a family is critical to economic security and stability.

Specifically, research on the early broad-based dissemination of the birth control pill and on restrictions for abortion services, including gestational limits and targeted restrictions of abortion providers, or TRAP laws, finds that autonomy over family planning choices is directly linked to a woman’s job opportunities and financial security. This is why the U.S. Supreme Court’s stance last week to let stand a Texas law that effectively bans abortions after about 6 weeks of pregnancy—with its provision permitting any private citizen to sue anyone who “aids or abets” an abortion and be awarded at least $10,000 in turn—is an economic security threat to workers and their families in the state and, indeed, across the county.

The 5-4 Supreme Court decision to allow the Texas law, enacted on September 1, to stand despite it being targeted toward limiting abortion rights and access to abortion care in contravention of the constitutional right to access abortion under the landmark 1973 Roe v. Wade decision signals that a majority of the nine justices are willing to allow similar statutes to be enacted in other states. It also sets the stage for the now-widely anticipated overturning of that landmark decision by the Court, in a case out of Mississippi later this year.

U.S. policymakers in Washington and in statehouses around the nation should understand the economic implications of overturning Roe for women and their families, particularly among those struggling to maintain their financial stability and among women of color and their families. And even with Roe still technically allowing for the constitutional right to an abortion, state abortion restrictions have found ways to limit access to abortions for the most marginalized individuals, especially those who are low income and in communities of color.

Let’s review the economic research on family planning, starting with access to reproductive healthcare via contraception and its impact on economic security. Economists Claudia Goldin and Lawrence Katz at Harvard University, in a seminal working paper, find that “the pill had a direct positive effect on women’s career investment by almost eliminating the chance of becoming pregnant and thus the cost of having sex [and] also created a social multiplier effect by encouraging the delay of marriage generally and thus increasing a career woman’s likelihood of finding an appropriate mate after professional school.”

Greater participation in the U.S. labor force also was the result of “contraceptive freedom” for women, finds Martha Bailey, at the time of that research an economist at the University of Michigan and now a professor at the University of California, Los Angeles. The results of her research suggest that “legal access to the pill before age 21 significantly reduced the likelihood of a first birth before age 22, increased the number of women in the paid labor force, and raised the number of annual hours worked.” Additional research by Bailey, along with Brad Hershbein of the W.E. Upjohn Institute and Amalia Miller of the University of Virginia, finds that the increase in labor force participation gave women the opportunity to invest in new career paths and directly led to a reduction in the gender wage gap.

Contraception is one aspect of a person’s ability to engage in family planning. The availability of and access to abortion services is also a critical part of family planning and healthcare. During the same time period—from the mid-1960s to the early 1970s—that the birth control pill was broadly disseminated through the repeal of laws that limited access to it, abortion was legalized at the federal level with the Supreme Court ruling in Roe v. Wade in 1973.

Research by professor of economics Caitlin Knowles Myers at Middlebury College examines the relative impact of abortion access, alongside dissemination of the birth control pill, and finds that liberalized access to abortion had a significant impact on the ability of people to control family planning decisions in order to plan for their future careers and lives. As Myers notes, “even if legal access to the pill did not cause young women to delay marriage and motherhood, they may still have made human capital investments on the basis of incorrect beliefs about the efficacy of the pill, unaware of the wide gap between clinical and actual failure rates,” rendering access to abortion services a complementary and necessary aspect of reproductive autonomy.

post

Understanding the link between bodily autonomy and economic opportunity across the United States

By Kate Bahn,

July 31, 2018

report

Gender wage inequality

By Sarah Jane Glynn,

April 9, 2018

post

Equitable Growth’s history of focusing on women’s role in the economy: A review

By Equitable Growth,

March 19, 2019

These findings and other complementary research about women’s access to family planning as part of their reproductive healthcare highlight why laws in place in 22 states across the country to restrict access to legal abortion—including all-out bans, should the Supreme Court overturn the Roe decision—are dangerous to individuals and their families. These state statutes, if triggered into law by a U.S. Supreme Court decision in the forthcoming Dobbs v. Jackson Women’s Health Organization case out of Mississippi, would harm the economic security of women in these states and would severely limit future economic opportunities for them and their families.

Black women and their families may be particularly harmed by lack of access to abortion, according to evidence from a research paper by economists Joshua D. Angrist at Hebrew University and William N. Evans at the University of Maryland. They find that reforms to restrictive abortion laws following the national legalization of abortion in the early 1970s produced “modest” delays in pregnancies and marriage among White women and did not significantly affect their education or labor market outcomes, but Black women experienced significantly fewer teen pregnancies and nonmarital births, leading to “increased schooling and education rates.”

Women “trapped in bad jobs” is the widespread consequence of so-called TRAP laws, according to research by one of the authors of this column and Georgetown University public policy professor Adriana Kugler and economists Melissa Mahoney of the University of North Carolina, Asheville and Annie McGrew at the University of Massachusetts Amherst. This research finds that “Targeted Restrictions on Abortion Providers (TRAP) laws increased ‘job lock’ [and that] women in states with TRAP laws are less likely to move between occupations and into higher-paying occupations.” In contrast, they find that “public funding for medically necessary abortions increases full-time occupational mobility, and contraceptive insurance coverage increases transitions into paid employment.”

New research by economists Kelly M. Jones at American University and Mayra Pineda-Torres at Texas A&M University finds a similar asymmetrical pattern among White and Black women without access to abortions. Educational attainment and future family income are significantly limited for Black women in states with TRAP laws, compared to White women in these states. Indeed, while White women have the greatest absolute levels of abortion across the country, disproportionately more Black and Hispanic women seek abortion services, according to a recent research paper by economist Marshall H. Medoff at California State University, Long Beach. He also finds that Hispanic women are especially sensitive to whether there is Medicaid funding for abortion—34 states have this funding for low-income women for life endangerment, rape, and incest, and 16 have it for all medically necessary abortions.

All of this economic research demonstrates what’s at stake for individuals and their families in Texas today, likely soon in a handful of other states, and potentially across the country should the Supreme Court overturn Roe v. Wade.

Policymakers at the federal and state levels should recognize that economic security and opportunity are impacted by the ability of individuals to have autonomy over their family planning and on accessibility to comprehensive reproductive healthcare services.

Posted in Uncategorized

JOLTS Day Graphs: July 2021 Edition

Posted on by Raksha Kopparam

Every month the U.S. Bureau of Labor Statistics releases data on hiring, firing, and other labor market flows from the Job Openings and Labor Turnover Survey, better known as JOLTS. Today, the BLS released the latest data for July 2021. This report doesn’t get as much attention as the monthly Employment Situation Report, but it contains useful information about the state of the U.S. labor market. Below are a few key graphs using data from the report.

The quits rate remained relatively steady at 2.7 percent as 4 million workers quit their jobs in July, while the job openings rate increased to 6.9 percent.

Quits as a percent of total U.S. employment, 2001–2021

The vacancy yield declined in July as job openings reached a series high of 10.9 million while hires, at 6.7 million, were little changed.

U.S. total nonfarm hires per total nonfarm job openings, 2001–2021

The quits rate remained elevated in July, and increased in areas such as state and local government education, construction, and wholesale trade.

Quits by selected major U.S. industry, indexed to job openings in February 2020

The ratio of unemployed worker per job opening fell to below 0.8 in July, similar to the low levels previously seen immediately before the coronavirus recession.

U.S. unemployed workers per total nonfarm job opening, 2001–2021.

The Beveridge Curve continues to be in an atypical range, compared to previous business cycles, remaining elevated in July as the unemployment rate fell while the job openings rate increased.

The relationship between the U.S. unemployment rate and the job opening rate, 2001–2021

The coming public debt scare should not spook U.S. policymakers from investing in physical and social infrastructure

Posted on by Emilie Openchowski
""

Public debt scaremongering is back in fashion on Capitol Hill. Republican legislators, from Senate Minority Leader Mitch McConnell (R-KY) on down, are invoking the high level of federal government debt—currently approaching 103 percent of Gross Domestic Product—as reason to oppose President Joe Biden’s proposed $3.5 trillion of new social infrastructure and investments in abating the effects of climate change.

Later this month, with the temporary COVID-related suspension of the federal debt limit lifted, the debate is about to acquire another flashpoint. Republicans are likely to insist that the debt ceiling should remain where it is to prevent the further accumulation of debt. They seem ready to go down this road despite understanding that, at some point, failure to raise the debt limit would prevent the government from paying its bills, with damaging economic consequences.   

This might be an acceptable price for politicians seeking to highlight their arguments that excessive debts damage the U.S. economy and burden future generations with high debt-service obligations. But these arguments are partial and incomplete.

In a new book, In Defense of Public Debt, my co-authors and I show how governments, through the ages, have resorted to issuing public debt to meet emergencies and address pressing social needs. The critics of higher public spending are right, of course, that additional debt requires higher taxes to fund interest payments, and that higher taxes are distortionary, meaning that they can be a drag on economic growth. But that doesn’t negate the need for higher public spending when conditions demand it. As my co-authors and I argue, expenditure restraints that limit the U.S. economy’s capacity to grow would be counterproductive from even the narrow standpoint of debt sustainability.

Sovereign debt had its origins in the recourse of sovereigns to debt issuance when it was necessary to raise armies and defend their kingdoms. That the U.S. ratio of debt-to-GDP reached its all-time high in World War II is a modern instance of the same phenomenon. But governments also resort to debt issuance to meet other emergencies, such as financial crises and pandemics, as we know from the experience of the past 15 years.

Sometimes there is disagreement about whether circumstances rise to the level of an emergency, as happened amid the twin housing and financial crises in 2008 and 2009, and whether the interventions made possible by debt issuance justify the costs. At other times, as in 2020, when the coronavirus pandemic threw the U.S. economy into a recession and public health emergency, the question answers itself.

Do our nation’s infrastructure problems rise to the level of a national emergency? Some answer yes, on the grounds that our physical infrastructure is old, dangerously vulnerable to climate change, and inadequately green and digital. A significant minority in the U.S. Senate insists otherwise, arguing that all additional infrastructure spending should be fully financed with new taxes and other savings. More infrastructure investment is desirable, they acknowledge, but it is insufficiently urgent to justify costly debt finance. That’s why we have these so-called pay-fors in the bipartisan Senate bill.

One way of adjudicating the dispute is to ask whether additional infrastructure investments will pay for themselves. At current interest rates, the U.S. Department of the Treasury will have to pay somewhat less than 2 percent on the roughly $250 billion the Congressional Budget Office says will be added to the national debt by the bipartisan physical infrastructure bill that passed the U.S. Senate in early August. (In other words, the CBO disputes that the pay-fors are actually all paid for.) For the investment to pay for itself, that infrastructure will have to yield an overall return of 8 percent, meaning a yield of 2 percent to the government, since federal revenues are roughly a quarter of GDP. 

Given that our infrastructure is old, outmoded, and dangerously vulnerable to climate change, the returns on investment are surely a multiple of this. The nonpartisan Congressional Budget Office doesn’t disagree.

And it gets better. We really should be comparing apples with apples—real returns with real returns. Currently, the real (inflation-adjusted) interest rate on new government debt is negative: Whereas the yield on 10-year Treasury bonds is less than 2 percent, inflation is more than 3 percent. In this situation, any investment that yields a positive real return is effectively self-financing.

What about the objection that the additional public investments will crowd out productive private investments? The way private investments get crowded out is through higher interest rates that render financing them prohibitively expensive. And there is no evidence yet of higher interest rates.

Which brings us to the proposed $3.5 trillion of additional spending on social infrastructure and abating the effects of climate change that is now under debate in Congress. Although supporters of the package insist that it will be fully financed by additional taxes on corporations and the wealthy, anyone who understands how U.S. politics works can safely assume that, just like the bipartisan infrastructure bill, only some of those taxes will survive congressional negotiation, and some fraction of the spending will be debt-financed.

Should we worry? No. The $3.5 trillion package contains some of the highest return on investments on the planet—much higher even than those on physical infrastructure. Such is the evidence on investments in care infrastructure such as early childhood education, day care, pediatric care, and child nutrition, which make for more productive, not to mention healthier and happier, adults. Similarly of access to community college: A year of community college pays for itself in as little as 7 or 8 years.

The same is again true of climate change abatement, where investments today will avert the need for much more expensive investments tomorrow. And because these are investments where social returns exceed private returns—where the benefits don’t accrue exclusively to individuals undertaking them—there’s a role for government in providing the finance.

Others, among them economist Larry Summers, worry that $500 billion of new infrastructure spending (the headline figure may be $1 trillion, but only half is new spending), together with $3.5 trillion of additional social infrastructure and climate-abatement spending, will overheat an economy that is only $500 billion smaller than it would have been absent the coronavirus pandemic and resulting recession. 

But this spending will be spread over 10 years, and maybe half will be financed with new taxes. So, we’re talking about $200 billion of additional deficit spending annually in an economy with $500 billion of spare capacity, assuming that the prewar growth trend is an accurate guide to the latter.

And even if the U.S. economy overheats, causing inflation to shoot up, this will actually be good for debt sustainability, not bad. Inflation will raise the denominator of the debt-to-GDP ratio. Higher nominal incomes were, of course, one of the ways our nation brought down its high debt-to-GDP ratio after World War II.

Equitable Recovery

The latest economic research demonstrates why concerns about federal budget deficits and U.S. debt levels are overblown

By Shaun Harrison,

April 1, 2021

Equitable Recovery

Factsheet: What does the research say about care infrastructure?

By Equitable Growth,

April 15, 2021

Equitable Recovery

A temporary increase in inflation is not a long-run threat to U.S. economic growth and prosperity

By Francesco D’Acunto, Michael Weber,

July 9, 2021

In fact, the worrisome scenario is that in which inflation remains low, not high, but in which interest rates rise. Higher real (inflation-adjusted) interest rates will make servicing the debt correspondingly more costly, requiring the application of additional distortionary taxes, thereby hampering growth. This would be an argument for going slow on even relatively high-return, debt-financed public investments.

But as noted, there is no sign of higher real interest rates yet. Indeed, real rates have been trending downward, not upward, for the better part of four decades—some would say not just for four decades, but also for four centuries. Real interest rates adjust to equalize savings and investment—not U.S. saving and investment, but global saving and investment.

Some economists point to the high savings of Germany, Saudi Arabia, and fast-growing emerging markets such as China to explain recent trends. Others suggest that real interest rates have fallen because the need for physical investment has declined with the shift from manufacturing to services and from physical platforms to digital platforms, and due also to the falling relative price of capital goods. Whatever the cause, the result has been to confront more saving supply with less investment demand and to depress the real interest rate.

Might this now change? The savings of oil-exporting economies could fall as demand for their petroleum dries up. Consumption in China could rise to levels more customary for a middle-income country as its government builds out its own social infrastructure to cope with an aging population. Such changes are coming. But history tells us that developments such as these are slow-moving. It’s implausible that they will cause real interest rates to shoot up between today and tomorrow or between this year and the next.

Ultimately, the day will come when the United States will need to take proactive steps to stabilize the debt-to-GDP ratio and prevent rising debt-service costs from launching the debt ratio on an explosive path. At this point, fiscal consolidation will require a combination of higher taxes and expenditure restraint. 

As noted above, expenditure restraints that limit the U.S. economy’s capacity to grow would be counterproductive from even the narrow standpoint of debt sustainability, since these would depress the denominator of the debt-to-GDP ratio. In other words, expenditure restraint, when the time comes, should not fall on the high-return investment projects discussed above.

International experience with the structural adjustment programs of the International Monetary Fund tells us that governments, when compelled to cut spending, find it easier politically to cut public investment than public consumption. That experience, in places as diverse as Latin America and Greece, also indicates that spending cuts that disproportionately impact the poor are likely to be unsustainable politically—they provoke a political backlash that defeats the adjustment effort. 

This is one reason why the IMF, having seen earlier adjustment programs fail, now talks about the importance of pro-poor adjustment and equitable, inclusive growth. Eventually, the time will come for U.S. policymakers to take this same lesson to heart.

—Barry Eichengreen is the George C. Pardee and Helen N. Pardee professor of economics and political science at the University of California, Berkeley, and the co-author, along with Asmaa El-Ganainy at the International Monetary Fund, Rui Esteves at the Graduate Institute of International and Development Studies, and Kris James Mitchener at Santa Clara University, of In Defense of Public Debt (September 2021: Oxford University Press).

Posted in Uncategorized

Weekend reading: Announcing Equitable Growth’s 2021 research grants edition

Posted on by Emilie Openchowski

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

Earlier this week, Equitable Growth announced a record $1,392,795 in research grants for scholars examining the various channels through which inequality impacts economic growth and stability. The 62 researchers, including faculty members, postdoctoral students, and Ph.D. candidates at U.S. colleges and universities, make up the largest-ever cohort of Equitable Growth annual academic and doctoral grantees. Equitable Growth grants fall into four overarching categories, and this year’s awards emphasize our commitment to funding cutting-edge research that addresses pressing policy concerns, including studying the roots and effects of systemic racism, mitigating the impact of climate change, and making child care more accessible in the United States. The findings from these projects will likely inform the policy debate in the months and years to come. Learn more about all the research we funded through the 2021 grant cycle.

This Labor Day, Equitable Growth’s Kate Bahn and Carmen Sanchez Cumming look at the impact of unions on interracial solidarity. Unions promote labor standards enforcement, increase wages for all workers (unionized or not), and reduce inequality. And a new paper finds that union also temper racial resentment and boost support for public policies that benefit Black workers, families, and communities more broadly. Bahn and Sanchez Cumming detail the research paper’s findings that White union member attitudes become more favorable toward policies such as affirmative action or programs designed to improve social and economic circumstances of Black communities, compared to White nonunion members. They also explain how unions influence political views and attitudes toward race, and the complicated history of unions and racism.

There are many inequities in access to adequate transportation in the United States, constraining the economy, harming the well-being of individuals, and perpetuating racial disparities. In order to properly measure and track the prevalence of transportation insecurity—a term coined by Alix Gould-Werth, Alexandra Murphy, and Jamie Griffin of the University of Michigan to describe the condition of being unable to regularly move from place to place in a safe or timely manner—the co-authors developed a Transportation Security Index. This index also can help measure the racial inequities in transportation insecurity, allowing policymakers and government agencies to target and deliver services more efficiently to ameliorate these inequities. In a column, Gould-Werth and Murphy explain how the index is calculated and why it is more accurate than most current tools used to measure transportation equity.

Congress is currently debating how to proceed with President Joe Biden’s Build Back Better agenda, two infrastructure packages designed to bolster U.S. physical and social infrastructure. David Mitchell dives into comparisons between President Biden’s plans and President Franklin D. Roosevelt’s New Deal agenda from the 1930s. Mitchell details the shortcomings of the New Deal—namely its carve-outs that denied benefits for domestic service workers, who were mostly women and people of color—and reviews how President Biden is attempting to right these wrongs, as well as center climate change mitigation, in his 2021 agenda.

The U.S. Bureau of Labor Statistics released data on employment and the U.S. labor force in August today, revealing a telling slowdown in the job market recovery as COVID-19 infections rise. Carmen Sanchez Cumming, Kate Bahn, and Kathryn Zickuhr detail the implications, particularly for public school teachers. While public education employment has been strong in recent months, many school districts face a teacher shortage as educators are struggling against coronavirus outbreaks, shifting public health guidelines, and contentious debates over mask mandates for school children. These newer challenges, the co-authors explain, have arisen in addition to longstanding issues in the sector such as low pay, lack of administrative support, and high stress at work—all of which have widespread consequences and costs, which are higher for women and people of color.

Links from around the web

Emergency unemployment benefits are set to expire at the beginning of next week. But, writes NPR’s Scott Horsley, this doesn’t mean the millions of U.S. workers who have accessed this vital income support will immediately return to work. The data from states that ended the extended Unemployment Insurance program early show that cutting off these benefits did not lead to a surge in employment. And with the delta variant of the coronavirus wreaking havoc on the recovery, allowing this program to expire will likely increase poverty rates and reduce spending across the economy. Horsley interviews two workers who will experience cuts about how they expect the change in policy to affect their well-being.

The staggeringly high levels of wealth inequality in the United States have disproportionately negative effects on children of color, and in particular on Black and Hispanic children, reports The Guardian’s Ed Pilkington. In fact, he continues, new research shows that Black families with children have access to barely 1 cent for every dollar their White counterparts have. These findings have implications for the recently expanded Child Tax Credit, which would go a long way to lifting many U.S. children out of poverty but which is temporary and will expire at the end of this year. Pilkington then details how racial wealth inequality perpetuates a cycle in which the divides in wealth and income between White households and households of color increasingly grow wider and are passed on to future generations.

U.S. workers are increasingly taking gig economy jobs, with 1 in 3 employees accepting positions that don’t come with employer-provided benefits such as health care or paid time off. Recode’s Rani Molla dives into the implications of this finding, particularly as relates to inequality. Gig work tends to exacerbate unequal outcomes because it shifts the risks from employers to employees and can lead to financial instability for workers, alongside higher levels of stress. Gig economy employees also tend to not have workplace protections such as minimum wages or overtime pay, or access to income support programs or paid parental leave. Even so, Molla writes, growth in gig employment has outpaced growth in wage employment and has risen particularly high since the coronavirus pandemic began, probably because workers compensate for or buffer income shocks as a result of being laid off or working fewer hours. Molla goes into further detail about why workers are turning to gig work now, as well as how these workers can be better protected.

Friday figure

U.S. unemployment rate by race, 2019–2021

Figure is from Equitable Growth’s “August Jobs Report: Uncertainty and teacher shortages loom over the new school year” by Kate Bahn, Carmen Sanchez Cumming, and Kathryn Zickuhr.

August Jobs Report: Uncertainty and teacher shortages loom over the new school year

Posted on by Emilie Openchowski
""

There was a telling slowdown in the recovery of U.S. jobs in August, according to the most recent Employment Situation Release by the U.S. Bureau of Labor Statistics today. Amid climbing COVID-19 infections in many states, the U.S. economy added only 235,000 jobs between mid-July and mid-August—significantly less than expected and well below the 876,000 average job gains over the previous 3 months.

The overall U.S. labor force participation rate was unchanged from July to August, remaining at 61.7 percent after little improvement over the past year. The prime-age employment-to-population ratio—a measure that captures the share of adults ages 25 to 54 who are employed—did show an increase, rising from 77.8 percent in July to 78 percent in August, though it is still 2.4 percentage points below its pre-pandemic level in February 2020.

Despite this slowing pace of jobs recovery this past month, the bounce back in employment remains far speedier after the coronavirus recession than after the Great Recession of 2007–2009. (See Figure 1.)

Figure 1

Percent of employment losses relative to peak employment

Disaggregating the most recent jobs numbers by race and ethnicity provides a more complete picture of the current jobs recovery. The unemployment rate for Black workers—which continues to be higher than for any other major racial or demographic group—rose from 8.2 percent in July to 8.8 percent in August and is 2.8 percentage points above its pre-pandemic level. Latinx workers are experiencing an unemployment rate of 6.4 percent, 2 points above its pre-pandemic level. The unemployment rate for Asian American workers in August fell to 4.6 percent and for White workers fell to 4.5 percent, compared to July rates of 5.3 percent and 4.8 percent, respectively, and pre-pandemic lows of 2.4 percent and 3 percent in February 2020. (See Figure 2.)

Figure 2

U.S. unemployment rate by race, 2019–2021

Recent trends in employment growth reversed in August. Across sectors, the leisure and hospitality industry and the government sector experienced the biggest net increases in employment over the 3 months from May to June, adding 1.1 million jobs and 438,000 jobs, respectively, but leisure and hospitality experienced no growth and government employment actually declined by 8,000 in August. For the government sector, there was a 26,400 decline in state and local education jobs—a decline that was partially offset by local government hiring, excluding education. (See Figure 3.)

Figure 3

Net change in U.S. government employment (in thousands), by subsector, July 2021-August 2021

A snapshot of public education employment patterns before and amid the pandemic

Even before the decline in public education (local and state education are down 406,000 jobs and private education is down 159,000 jobs since February 2020, though private education added 40,000 jobs in August), school districts across the country reported facing a teacher shortage as they head into a new academic year. They also are struggling with COVID-19 outbreaks, shifting public health guidelines, and contentious debates over both mask and vaccine mandates.

For school teachers, the continuing coronavirus makes an already-demanding job even more stressful. A recent survey by the RAND Corporation, for example, finds that in pre-pandemic years, on average, 1 in 6 teachers reported that they were likely to leave their job by the end of the school cycle. But in the 2020–2021 school year, almost 1 in 4 teachers said they were likely to leave their jobs. And another report found that 44 percent of the public school teachers who voluntarily stopped teaching after March 2020 did so because of the pandemic.

Clearly, fears of getting or spreading COVID-19 and the challenges of navigating an unprecedented teaching environment added on to the tough working conditions that teachers were struggling with well before the health and economic crises hit the United States in February of last year. Indeed, over the past 10 years, demand for teachers has been greater than supply, leading to a growing teacher shortage that has only been exacerbated by pandemic-related hiring slowdowns, layoffs, and resignations.

Relatively low pay, stress at work, and lack of administrative support are some of the main reasons why schools have long struggled to hire and retain teachers. Research by Sylvia Allegretto at the University of California, Berkeley and Larry Mishel at the Economic Policy Institute finds, for instance, that in 1996, public school teachers were paid 6 percent less than other workers with similar levels of education and years of work experience, among other characteristics associated with productivity, yet by 2019, this pay penalty had grown to 20 percent.

Insufficient compensation hurts the workers who do the job, their students, and the public school system writ-large. Low pay increases moonlighting, where teachers have to work a second job to make ends meet, which further limits education quality that can be provided by teachers stretched too thin. Similarly, research shows that teacher quality is affected by their low wages in the presence of outside options. Put another way, would-be high-quality teachers may choose other professions if there are better opportunities elsewhere.

The race and gender costs and consequences of inadequate public education pay

As in-person schooling remains contentious and risky, combined with these preexisting trends, the teacher shortage crisis continues to pose a risk to education quality across the United States. One study shows, for example, that the most qualified teachers—those who are fully certified, have more years of experience, and have a background in the subject they are teaching—are less likely to work in high-poverty schools. Labor conditions, teacher preparation, and public funding are all closely intertwined, which is one reason why progressive funding for education has the potential to reduce economic inequality.

Because teaching remains a heavily women-dominated profession and women continue to do the lion’s share of the unpaid work of caring for their families and communities, the added pressure the coronavirus crisis has put on women workers limits potential job gains after women led job growth in recent months following steep losses earlier in the pandemic. The teacher workforce is predominately made up of White women, and the pandemic could exacerbate existing pressures that drive Black teachers out of the profession.

Indeed, according to the RAND report, “nearly half of teachers who identified as Black or African American reported that they were likely to leave their jobs by the end of the school year and were more likely to say that they planned to leave than were teachers of other races.” Across industries, Black and Latinx women have seen the highest job losses during the pandemic and have been most likely to leave the U.S. labor force entirely.

Officially, the economic recession triggered by the coronavirus pandemic only lasted 2 months, between February and April of last year. Yet millions of workers and families continue to struggle. The U.S. economy is currently at a 5.3 million job deficit, compared with February 2020, and more than 8.4 million people looking for a job do not have one.

Moreover, the huge strides in the jobs recovery will be moderated by the degree to which high-quality jobs, especially jobs that do not put workers at risk in a pandemic, are available to workers, and by the number of workers willing and able to return to front-line jobs amid the recent sharp spike in infections. Then, there’s the degree to which families are supported in managing the continued threat of coronavirus through policies such as accessible child care and Unemployment Insurance benefits.

Across all of these jobs market dynamics, one pattern is clear: The pandemic is highlighting the role worker voice can play in keeping students, workers, and communities safe. Even as teacher unions have not uniformly supported vaccine mandates, 90 percent of the National Education Association’s members—the largest teacher union in the country—are vaccinated. A team of researchers studying how unions influence the adoption of public health guidance found that Iowa school districts where a greater share of teachers were unionized were more likely to adopt mask mandates last year. Schools that required teachers and staff to wear masks, the authors note, had 37 percent fewer COVID-19 cases than schools that did not implement the mandates.

Teachers have gone to massive lengths to both teach during the pandemic and ensure schools are safe, yet they are often not supported in the same way if they are exposed to the coronavirus at work. Last year, teachers—along with other eligible workers—could receive up to 2 weeks of emergency paid sick leave through the Families First Coronavirus Response Act. But employers were only required to provide these benefits until the provision expired at the end of 2020, and few school districts made the decision to extend this leave until March 2021 or access the renewed, voluntary round of federally funded leave that is currently set to expire at the end of September. As a result, in some districts, teachers have to use their own sick leave if instructed to quarantine by their schools.

To ensure all primary and secondary schools can eventually reopen and the labor market recovery gets back on track, all public school teachers and other school staff need to be able to access the supports and economic security needed to navigate the ongoing pandemic.

Posted in Uncategorized

Equitable Growth’s Jobs Day Graphs: August 2021 Report Edition

Posted on by Carmen Sanchezcumming

On September 3, the U.S. Bureau of Labor Statistics released new data on the U.S. labor market during the month of August. Below are five graphs compiled by Equitable Growth staff highlighting important trends in the data.

The prime-age employment rate for prime-age workers increased slightly in August from 77.8 percent to 78.0 percent, but remains below pre-recession levels. 

Share of 25-54 year olds who are employed, 2007–2021

The unemployment rate declined for White workers (4.5 percent) but did not change notably for Black workers (8.8 percent), the highest group, or for Latinx workers (6.4 percent) or Asian workers (4.6 percent).

U.S. unemployment rate by race, 2019–2021

The prime-age employment rate for both men and women rose in August, though neither rate has approached its level from immediately before the coronavirus recession. 

Share of the U.S. population that is employed, by gender, 2007–2021

Top-line unemployment, also known as U-3, and a broader measure of labor underutilization, known as U-6, declined in August, as both overall unemployment and underemployment trended downward.  

U-3 and U-6 unemployment rates, 2000–2021

The share of unemployed workers who reentered the labor force continued to rise in August, while the share of those who lost their jobs declined. Employment is still elevated relative to pre-coronavirus recession levels.

Percent of all unemployed workers in the United States by reason for unemployment, 2019–2021

Posted in Uncategorized

The ‘Transportation Security Index’ can help the United States plan for a more equitable transportation future

Posted on by Emilie Openchowski
""

On his first day in office, President Joe Biden signed an executive order titled “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” Recognizing that the federal government can’t determine whether meaningful progress is being achieved if progress is not measured, the order requires agencies to work with the Office of Management and Budget to identify research methods and metrics that will best equip each government agency to assess equity in the issues in their purview. Accordingly, the U.S. Department of Transportation issued a request for information on transportation equity data, to which we responded, encouraging them to adopt our Transportation Security Index in future planning.

Inequities in access to adequate transportation are deep-seated in the United States, and these inequities constrain the U.S. economy from functioning at its full potential, harm the well-being of individuals, and perpetuate racial disparities. In the United States, the car is the dominant form of transit, yet cars are expensive to own and maintain. The adequacy of public transit infrastructure—and even its very presence—varies by geographic location. And the ability to use walking or biking as an effective mode of transportation varies depending on both an individual person’s health condition and their “built environment” (urban planning parlance for the human-made surroundings in which people live, work, and move about).

Together, we have developed the term “transportation insecurity” to describe the condition of being unable to regularly move from place to place in a safe or timely manner because of a lack of resources necessary for transportation, which we advance in an article authored by the two of us and Jamie Griffin at the University of Michigan. Large segments of the U.S. population experience transportation insecurity. This condition cuts people off from the labor market and opportunities to develop their human capital by attending school or accessing social services. When large numbers of people are transportation insecure, it prevents the government from effectively funneling resources to people to increase their consumption and stabilize the macroeconomy during economic downturns.

Despite the importance of this issue, no government agency tracks the prevalence of transportation insecurity or racial inequities in how it is experienced. Furthermore, there is a dearth of rigorous evaluations of how changes to U.S. transportation infrastructure affect the scale and distribution of this condition. This paucity of information is at least partially explained by an absence of adequate measurement tools.

When policymakers and urban planners try to measure transportation equity, which is rare today, they use metrics that measure neighborhood accessibility by examining characteristics of a locality, such as walkability scores, commute times, proportion of the population owning cars, and proximity to public transit. But these infrequently used metrics tell us little about whether individuals experience transportation insecurity. Two neighbors, for example, would be evaluated as experiencing the same level of neighborhood accessibility even if one had access to a reliable car and could use public transit while the other lacked a vehicle and could not use public transit because of a disability.

Currently used individual-level measures also suffer from serious weaknesses. Scholars of poverty and inequality typically rely on a dichotomous measure of car ownership—does the household have a car or not?—to assess the adequacy of a person’s transportation situation. This is an imprecise measure because many people who experience transportation insecurity have access to a vehicle but cannot afford the gas, insurance, or cost of car repairs. And some transportation-secure people do not have access to a vehicle but can meet their transportation needs through public transit or bicycling.

post

The imperative of focusing on racial equity in U.S. economic statistics

By Shaun Harrison,

June 11, 2021

post

Toward a unified measure of U.S. housing insecurity

By Robynn Cox,

July 11, 2017

Boosting Wages

Place-conscious federal policies to reduce regional economic disparities in the United States

By Robert Manduca,

January 14, 2021

To encourage the U.S. Department of Transportation to use an improved individual-level measure of transportation insecurity to gauge the extent of disparities in transportation insecurity and to evaluate attempts to ameliorate these inequities, we submitted a comment to the department that describes the Transportation Security Index. The Transportation Security Index is modeled after the Food Security Index, informed by 187 in-depth interviews with people across the transportation insecurity spectrum, and has now been validated using a nationally representative survey.

The index is composed of items that ask respondents about symptoms of transportation insecurity (for example, taking a long time to plan out everyday trips, feeling stuck at home, or worrying about burdening others with requests for assistance with transportation) and can be used to assign each respondent a transportation insecurity score that ranges from 0 (most secure) to 32 (most insecure).

By focusing on the experiences associated with transportation insecurity, this measure spares researchers from attempting the impossible task of cataloging every possible input—from bus schedules to gas prices to sidewalk presence—that could affect one’s level of transportation security. And by offering simple-to-administer survey questions, this measure allows policymakers, planners, and researchers to document the prevalence of transportation insecurity, measure racial disparities in who experiences it, and assess interventions that attempt to mitigate the condition.

In this way, the Transportation Security Index can be used to measure the extent to which transportation policy is exacerbating or ameliorating existing transportation inequities.

This is an important moment for transportation in the United States. The U.S. Congress is closing in on a bipartisan physical infrastructure deal. While some transportation advocates argue that the deal could do more to invest in alternatives to auto-based transit, it takes the important step of recognizing transportation’s fundamental power to connect people to goods and services and authorizing a pilot program measure of access to essential goods and services. It’s time to get serious and start advancing real equity measures to understand the depth of racial disparities in access to adequate transportation and how to eliminate transportation insecurity across the U.S. population to improve individual well-being and strengthen the broader U.S. economy.

The Transportation Security Index is a useful tool that can be used to determine whether people can get to where they need to go in a safe or timely manner and evaluate interventions that are designed to strengthen our economy by moving people from a state of transportation insecurity to one of security. As a first step, the U.S. Department of Transportation—potentially in collaboration with the research arm of the U.S. Department of Health and Human Services’ Administration for Children and Families, which has expertise in measures of material hardship—should begin collecting the data necessary to measure the prevalence of transportation insecurity and disaggregate the analyses by geographic unit and demographic group.

The Department of Transportation could further consider using transportation insecurity in its criteria for entry into competitive programs or using this information to ensure that programs it funds are in compliance with Title VI of the Civil Rights Act of 1964—the landmark law that prohibits discrimination in the United States due to “race, color, or national origin.”

In short, it is only by measuring the prevalence of transportation insecurity that policymakers can begin to solve the problem of transportation inequity.

—Alix Gould-Werth is the director of family economic security policy at the Washington Center for Equitable Growth. Alexandra K. Murphy is an assistant professor of sociology at the University of Michigan and a faculty affiliate at the university’s Population Studies Center at the Institute for Social Research.

Posted in Uncategorized