Research

Working Papers

The Implications of Family Structure, Education Prices, and Policy Reforms for Inequality and Intergenerational Mobility (Job Market Paper)

Abstract: Parents devote considerable resources towards their children's development, making trade-offs between time and education investments and working, consumption, and leisure. In recent decades, families in the United States experienced rising rates of single parenthood, increasing education prices, and changes to taxes and transfers, altering available resources and trade-offs to investments for their children. This paper explores the implications of these trends for inequality and intergenerational mobility. After documenting changes in family resources and parental investments across families and over time, I develop a dynastic model of human capital investment to quantify the contributions of these trends to increases in inequality and intergenerational persistence. I find that single parenthood is a major contributor through two channels: (1) less available time for single parents limits work hours, income, and investments for their children’s human capital development and (2) lower human capital raises the probability of becoming a single parent as an adult, as single parents are concentrated among lower-income families. Education prices, on the other hand, had only minimal effects as families reduce investments at similar rates in response to price increases. Moreover, changes to taxes and transfers moderately impacted rates of single parenthood, and had heterogeneous effects on parental investments by producing differing income and substitution effects depending on family characteristics. The results highlight the importance of considering parental investments when designing assistance programs. 

Labor Market Anatomy of a Macroeconomic Crisis with Kevin Donovan, Will Jianyu Lu, and Todd Schoellman

Abstract: Labor markets transmit aggregate shocks to idiosyncratic earnings risk experienced by households. This paper uses both aggregate and micro data from quarterly labor force surveys to document four new findings about how they do so. First, the distribution of unemployment responses to recessions includes a long tail. In the most severe decile of recessions, unemployment rates rise by 5–20 percentage points and take 16–33 quarters to begin to recover. Second, there is a close relationship between these severe crises and a small set of shocks, including financial crises, house price busts, and sudden stops. Third, manufacturing and construction play a key role in all recessions, including crises, accounting for more than half of employment losses. Fourth, crises fall most on young and less-educated workers, who are likely to have low income and wealth and hence be less able to self-insure against idiosyncratic earnings risk. Taking into account both the large aggregate shocks and their incidence, the welfare costs of business cycles are likely to be larger than standard calculations imply.

The Effect of Medicaid Expansion on Work Arrangements with Sean Bassler

Abstract: We measure the effect of Medicaid Expansion on the work arrangements of low-income adults. Before the expansion, many of these individuals only had access to subsidized health insurance through a traditional full-time job. After the expansion, they also had access to Medicaid, potentially allowing them to change their labor supply decisions. Using American Community Survey data, we built a sample of low-income adults who only had access to subsidized health plans through a typical full-time job or the Medicaid Expansion. Adults in the sample are childless, spouseless, non-disabled, and reside in states without confounding state-level policies. To identify the effect of newly-found Medicaid access on this sample, we use a difference-in-difference design from Callaway and Sant’Anna (2021) . We find that the expansion had a statistically insignificant effect on the share of our sample in several labor market arrangements: traditional full-time employment, part-time employment, self-employment, unemployment, and not participating in the labor force. These results are robust to including pre-treatment covariates and adjustments to our underlying sample framework. We further decompose treatment effects into short- and long-term effects and find both are statistically insignificant. We conclude that Medicaid Expansion had a negligible impact on both the work arrangements for low-income workers.

Publications

Derailed by the COVID-19 Economy? An Intersectional and Life Course Analysis of Older Adults’ Shifting Work Attachments with Phyllis Moen and Sarah Flood

American Behavioral Scientist, June 2022

Abstract: This paper addresses the uneven employment effects on older Americans (aged 50–75) of the COVID-19 pandemic. Drawing on monthly Current Population Survey data from January through December 2020, we take an intersectional and life course approach to study the labor market effects of COVID-19 on older Americans. First, we chart monthly labor force states throughout 2020 for older adult subgroups defined by age, gender, and race/ethnicity. We then examine transitions out of and into work from one month to the next. We find gendered age-graded declines in employment, increases in unemployment, and increases in the proportions of people in their 50s reporting they are not in the labor force for other reasons (NILF-other), most dramatically for Asian and Hispanic women. There is little change in age-graded retirement from before to during the pandemic, regardless of gender or race/ethnicity, though there are education-level effects, with those without a college degree more likely to retire in the face of COVID-19. White men with a college degree are the most apt to retain their work engagement. 

Disparate Disruptions: Intersectional COVID-19 Employment Effects by Age, Gender, Education, and Race/Ethnicity with Phyllis Moen and Sarah Flood

Work, Aging, and Retirement, October 2020

Abstract: These are unprecedented times, as the COVID-19 pandemic disrupts public health, social interaction, and employment attachments. Evidence to date has been about broad shifts in unemployment rates as a percent of the labor force. We draw on monthly Current Population Survey data to examine subpopulation changes in employment states across the life course, from January through April 2020. COVID-19 downturns produced disparate life-course impacts. There are increases in unemployment and being out of the workforce at all ages, but especially among young adults, with young women most at risk. Intersectional analyses document conjoint life-course vulnerabilities by gender, educational attainment, and race/ethnicity. For example, Black men aged 20–29 with a college degree experienced a 12.4 percentage point increase in being not in the labor force for other reasons (NILF-other). Individuals with less than a college degree in their 50s and 60s were more likely to become unemployed, regardless of race. And more non-college-educated Asian men in their 60s and 70s reported being retired (6.6 and 8.9 percentage point increases, respectively). Repercussions from the pandemic may well challenge assumptions and possibilities for older adults’ working longer. 

Labor Market Dynamics and Black-White Earnings Gaps with Mary C. Daly and Bart Hobijn

Economics Letters, January 2020

Abstract: Earnings gaps between black and white workers have widened over the past 30–40 years. This increase is not explained by differences in observed demographics or the industry and occupational composition of employment. We suggest that variation in labor market dynamics between black and white workers are important. Disparities in job switching, job loss, and associated wage growth result in flatter career wage profiles for black workers and widening earnings gaps over the work life.

Works in Progress

Public and Private Education Spending the United States

A Theory of Top Income Inequality with Brand Capital and M&A

Short Articles

Historical Patterns around Financial Crises with Pascal Paul

FRBSF Economic Letter, May 2020

Abstract: Long-run historical data for advanced economies provide evidence to help policymakers understand specific conditions that typically lead up to financial crises. Recent research finds that rapid growth in the top income share and prolonged low labor productivity growth are robust predictors of crises. Moreover, if crises are preceded by these developments, then the subsequent recoveries are slower. This recent empirical evidence suggests that financial crises are not simply random events but are typically preceded by a prolonged buildup of macrofinancial imbalances.

Why Aren't U.S. Workers Working? with Mary C. Daly, Nicolas Petrosky-Nadeau, and Annemarie Schweinert

FRBSF Economic Letter, November 2018

Abstract: Labor force participation among U.S. men and women ages 25 to 54 has been declining for nearly 20 years, a stark contrast with rising participation in Canada over this period. Three-fourths of the difference between the two countries can be explained by the growing gap in labor force attachment of women. A key factor is the extensive parental leave policies in Canada. If the United States could reverse the trend in participation of prime-age women to match Canada, it would see 5 million additional prime-age workers join the labor force.

Disappointing Facts about the Black-White Wage Gap with Mary C. Daly and Bart Hobijn

FRBSF Economic Letter, September 2017

Abstract: More than half a century since the Civil Rights Act became law, U.S. workers continue to experience different levels of success depending on their race. Analysis using microdata on earnings shows that black men and women earn persistently lower wages compared with their white counterparts and that these gaps cannot be fully explained by differences in age, education, job type, or location. Especially troubling is the growing unexplained portion of the divergence in earnings for blacks relative to whites.