Research

CERP Discussion Paper 14346 / IZA Discussion Paper 12923 / Banco de España Working Paper 2113

In the US, the likelihood of a married woman entering the labor force in a given month increases by 60% if her husband loses his job, known as the added worker effect. However, only 1.5% to 3.5% of married women entering the labor force in a given month can be added workers. This raises the question of whether the added worker effect can significantly impact aggregate labor market outcomes. Building on Shimer (2012), we introduce a new methodology to evaluate how joint transitions of married couples across labor market states affect aggregate participation, employment, and unemployment rates. Our results show that the added worker effect significantly impacts aggregate outcomes, increasing married women's participation and employment by 0.72 and 0.65 percentage points each month. Additionally, the added worker effect reduces the cyclicality of married women's participation and unemployment, lowering the correlation between GDP's cyclical components and participation by 4.5 percentage points and unemployment by 8 percentage points.

Keywords: Added worker effect; Household labor supply; Intra-household insurance; Female employment; Cyclicality

JEL Codes: D1, E32, J21, J22

A previous version of this paper was circulated under the title "Labor Market Dynamics of Married Couples"

Replication Package

Vaccination is the most effective tool to control infectious diseases. However, the evolution of vaccine resistance, exemplified by vaccine-resistance in SARS-CoV-2, remains a concern. Here, we model complex vaccination strategies against a pathogen with multiple epitopes - molecules targeted by the vaccine. We found that a vaccine targeting one epitope was ineffective in preventing vaccine escape. Vaccine resistance in highly infectious pathogens was prevented by the full-epitope vaccine, that is, one targeting all available epitopes, but only when the rate of pathogen evolution was low. Strikingly, a bet-hedging strategy of random administration of vaccines targeting different epitopes was the most effective in preventing vaccine resistance in pathogens with low rate of infection and high rate of evolution. Thus, complex vaccination strategies, when biologically feasible, may be preferable to the currently used single-vaccine approaches for long-term control of disease outbreaks, especially when applied to livestock with near 100% vaccination rates.

Code

Vaccines are thought to be the best available solution for controlling the ongoing SARS-CoV-2 pandemic. However, the emergence of vaccine-resistant strains may come too rapidly for current vaccine developments to alleviate the health, economic and social consequences of the pandemic. To quantify and characterize the risk of such a scenario, we created a SIR-derived model with initial stochastic dynamics of the vaccine-resistant strain to study the probability of its emergence and establishment. Using parameters realistically resembling SARS-CoV-2 transmission, we model a wave-like pattern of the pandemic and consider the impact of the rate of vaccination and the strength of non-pharmaceutical intervention measures on the probability of emergence of a resistant strain. We found a counterintuitive result that the highest probability for the establishment of the resistant strain comes at a time of reduced non-pharmaceutical intervention measures when most individuals of the population have been vaccinated. Consequently, we show that a period of transmission reduction close to the end of the vaccination campaign can substantially reduce the probability of resistant strain establishment. Our results suggest that policymakers and individuals should consider maintaining non-pharmaceutical interventions throughout the entire vaccination period. 

Medrxiv preprint 

Paper in the news: CNN,  Scientific opinions on the paper, National Geographic España, The Courier,  Austria Presse Agentur, Agencia EFE , elDiario, Scimex 

Code

Previously circulated under the title"Does Marriage Make You Healthier?"

CEPR Discussion Paper 10245 / IZA Discussion Paper 8633 / Barcelona GSE Working Paper 795

           Post about this paper and a podcast in The Economist

           Post in VOXeu about this paper

           Post in "Nada es gratis" blog (in Spanish)

Code and data 

We use the Panel Study of Income Dynamics (PSID) and the Medical Expenditure Panel Survey (MEPS) to study the relationship between marriage and health for working-age (20 to 64) individuals. In both data sets married agents are healthier than unmarried ones, and the health gap between married and unmarried agents widens by age. After controlling for observables, a gap of about 12 percentage points in self-reported health persists for ages 55-59. We estimate the marriage health gap non-parametrically as a function of age. If we allow for unobserved heterogeneity in innate permanent health, potentially correlated with timing and likelihood of marriage, we find that the effect of marriage on health disappears at younger (20-39) ages, while about 6 percentage points difference between married and unmarried individuals, about half of the total gap, remains at older (55-59) ages. These results indicate that association between marriage and health is mainly driven by selection into marriage at younger ages, while there might be a protective effect of marriage at older ages. We analyze how selection and protective effects of marriage show up in the data.

Keywords: Health, Marriage, Selection.

JEL Codes: I10, I12, J10

Each year the U.S. government spends about 2% of its GDP on Medicaid, its main means-tested health insurance program. In June 2013, over 28 million children were enrolled in Medicaid. What are the implications of such a large-scale policy intervention for intergenerational mobility and inequality? While the role of education and education policies received a lot of attention in the literature on intergenerational mobility, almost nothing is known on how medical policies affect intergenerational mobility and inequality. This is rather surprising, since health, like education, is highly persistent across generations and health of children have an important impact on how they perform in  school. In this paper, I develop and estimate a human-capital based overlapping generations model of household decisions that take into account multidimensionality and dynamic nature of human capital investments. I distinguish two forms of human capital: health capital and human capital, and model explicitly government policies in education and health. The counterfactual simulations show that health policies is an important determinant of intergenerational mobility of income across generations for agents of the bottom of income distribution and there are important interactions between health and education policies.

Keywords: Health, Intergenerational Mobility, Inequality, Medicaid, Health Insurance, Public Policy. 

JEL Codes: E24, I10, I13, I14, I18, J62

Family-friendly policies aim to help women balance work and family life and to encourage them to enter and stay in the labor market. Implicitly or explicitly, such policies also encourage fertility since having a child makes the balancing act much harder for working women. How effective are such policies in increasing fertility? We answer this question using a search model of the labor market where firms make hiring, promotion, and firing decisions, taking into account how these decisions affect their workers’ fertility incentives. Workers, on the other hand, make labor force participation and fertility decisions, again understanding how these decisions affect their labor market prospects. We calibrate the model using administrative data from Spain, a country with very low fertility and a highly regulated labor market. We use the quantitative model to study family-friendly policies and show that firms’ reactions generate a trade-off: policies that increase fertility reduce women’s participation in the labor market and depress lifetime earnings.

Keywords: Family-Friendly Policies, Fertility, Flexibility, Search and Matching,

Human Capital Accumulation, Gender Gaps, Welfare

JEL Codes: J08, J13, J18

With the ongoing SARS-CoV-2 pandemic the issue of controlling the evolution and spread of novel variants is becoming very important. There are three main factors of particular epidemiological concern: higher infectivity, immunogenic drift (vaccine resistance), and increased virulence. Unless higher virulence comes together with higher infectivity (pleiotropy), higher virulence strains are not expected under natural selection, we thus focus on the interplay of infectivity and vaccine resistance in this paper. So far, we have seen a number of new strains that have emerged, with the most striking epidemiological factor of increased infectivity. Indeed, delta appears more infectious than the original strain, which has further been trumped by omicron. By contrast, vaccine escape of these new strains has not been as drastic, although still present. We build a SIR-derived model (as in our previous work, Rella et al. 2021) with initial stochastic dynamics for the new strains to study the probability of their emergence and establishment. Our setup allows us to quickly assess the dynamics of emerging strains while maintaining the realism of the stochastic nature of population genetic processes that determine the fates of rare alleles in the population. At the same time, our setup allows testing the effect of vaccine hesitancy on the evolution of new strains and the effect of different non-pharmaceutical interventions to control the spread of the pandemic. Which one of the two strains will win in the population? It is not a simple question because an emerging pandemic is not in an equilibrium state, with the number of infections coming in waves, the number of vaccinated and recovered people increasing over time, immunity vanishing over time, and different countries imposing different policies to control the spread of the pandemic. We study how infectivity, vaccine resistance, vaccination rates, and non-pharmaceutical interventions interact in the process, affecting the selective advantage of different strains. Our main result is that until the virus reaches some higher limit of infectivity, vaccine-resistant variants will continue to be eliminated from the population.