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Full-Text Articles in Social and Behavioral Sciences

Isolated States Of America: The Impact Of State Borders On Mobility And Regional Labor Market Adjustments, Riley Wilson Dec 2021

Isolated States Of America: The Impact Of State Borders On Mobility And Regional Labor Market Adjustments, Riley Wilson

Upjohn Institute Working Papers

I document a new empirical pattern of internal mobility in the United States. Namely, county-to-county migration and commuting drop off discretely at state borders. People are three times as likely to move to a county 15 miles away, but in the same state, than to move to an equally distant county in a different state. These gaps remain even among neighboring counties or counties in the same commuting zone. This pattern is not explained by differences in county characteristics, is not driven by any particular demographic group, and is not explained by pecuniary costs such as differences in state occupational …


General Equilibrium Effects Of Insurance Expansions: Evidence From Long-Term Care Labor Markets, Martin Hackmann, Joerg Heining, Roman Klimke, Maria Polyakova, Holger Seibert Nov 2021

General Equilibrium Effects Of Insurance Expansions: Evidence From Long-Term Care Labor Markets, Martin Hackmann, Joerg Heining, Roman Klimke, Maria Polyakova, Holger Seibert

Upjohn Institute Working Papers

Arrow (1963) hypothesized that demand-side moral hazard induced by health insurance leads to supply-side expansions in healthcare markets. Capturing these effects empirically has been challenging, as non-marginal insurance expansions are rare and detailed data on healthcare labor and capital is sparse. We combine administrative labor market data with the geographic variation in the rollout of a universal insurance program—the introduction of long-term care (LTC) insurance in Germany in 1995—to document a substantial expansion of the inpatient LTC labor market in response to insurance expansion. A 10 percentage point expansion in the share of insured elderly leads to 0.05 (7%) more …


How Does The Elimination Of State Aid To For-Profit Colleges Affect Enrollment? Evidence From California’S Reforms, Oded Gurantz, Ryan Sakoda, Shayak Sarkar Nov 2021

How Does The Elimination Of State Aid To For-Profit Colleges Affect Enrollment? Evidence From California’S Reforms, Oded Gurantz, Ryan Sakoda, Shayak Sarkar

Upjohn Institute Working Papers

This paper examines how financial aid reform based on postsecondary institutional performance impacts student choice. Federal and state regulations often reflect concerns about the private, for-profit sector’s poor employment outcomes and high loan defaults, despite the sector’s possible theoretical advantages. We use student-level data to examine how eliminating public subsidies to attend low-performing for-profit institutions impacts students’ college enrollment and completion behavior. Beginning in 2011, California tightened eligibility standards for their state aid program, effectively eliminating most for-profit eligibility. Linking data on aid application to administrative payment and postsecondary enrollment records, this paper utilizes a difference-in differences strategy to investigate …


Black Suburbanization: Causes And Consequences Of A Transformation Of American Cities, Alexander W. Bartik, Evan Mast Nov 2021

Black Suburbanization: Causes And Consequences Of A Transformation Of American Cities, Alexander W. Bartik, Evan Mast

Upjohn Institute Working Papers

Since 1970, the share of Black individuals living in suburbs of large cities has risen from 16 to 36 percent. This shift is as large as the post-World War II wave of the Great Migration. We first show that Black suburbanization has led to major changes in neighborhoods, accounting for a large share of recent increases in both the average Black individual’s neighborhood quality and within-Black income segregation. We then show that changes in relative suburban amenities and housing prices explain about 60 and 30 percent, respectively, of Black suburbanization, while regional reallocation, changing educational attainment, and gentrification play only …


Labor Market Consequences Of Antitax Avoidance Policies, Katarzyna Bilicka Oct 2021

Labor Market Consequences Of Antitax Avoidance Policies, Katarzyna Bilicka

Upjohn Institute Working Papers

In this paper, I analyze the local labor market consequences of multinational firms reallocating employees across their affiliates in response to antitax avoidance policies. I leverage the introduction of a worldwide debt cap in 2010 in the United Kingdom as a quasi-natural experiment that limited one of the forms of profit shifting—debt shifting—for a group of multinational corporations (MNCs). Multinationals affected by the reform reallocated their employees from the United Kingdom to foreign locations. This affected London-based service sector firms the most. I show that this led to a reduction in the number of jobs available in regions exposed to …


When Labor Enforcement And Immigration Enforcement Collide: Deterring Worker Complaints Worsens Workplace Safety, Amanda M. Grittner, Matthew S. Johnson Oct 2021

When Labor Enforcement And Immigration Enforcement Collide: Deterring Worker Complaints Worsens Workplace Safety, Amanda M. Grittner, Matthew S. Johnson

Upjohn Institute Working Papers

Regulatory agencies overseeing the labor market often rely on worker complaints to direct their enforcement. However, if workers face differential barriers to complain, this system could result in ineffective targeting and create disparities in working conditions. To investigate these implications, we examine how the onset of Secure Communities—a localized immigration enforcement program—affected occupational safety and health. Counties’ participation in Secure Communities substantially reduced complaints to government safety regulators, but increased injuries, at workplaces with Hispanic workers. We show that these effects are most consistent with employers reducing safety inputs in response to workers’ decreased willingness to complain.


The Dynamics Of Referral Hiring And Racial Inequality: Evidence From Brazil, Conrad Miller, Ian Schmutte Oct 2021

The Dynamics Of Referral Hiring And Racial Inequality: Evidence From Brazil, Conrad Miller, Ian Schmutte

Upjohn Institute Working Papers

We study how referral hiring contributes to racial inequality in firm-level labor demand over the firm’s life cycle using data from Brazil. We consider a search model where referral networks are segregated, firms are more informed about the match quality of referred candidates, and some referrals are made by nonreferred employees. Consistent with the model, we find that firms are more likely to hire candidates and less likely to dismiss employees of the same race as the founder, but these differences diminish as firms’ cumulative hires increase. Referral hiring helps to explain racial differences in dismissals, seniority, and employer size.


A Model Of Occupational Licensing And Statistical Discrimination, Peter Q. Blair, Bobby W. Chung Aug 2021

A Model Of Occupational Licensing And Statistical Discrimination, Peter Q. Blair, Bobby W. Chung

Upjohn Institute Working Papers

We develop a model of statistical discrimination in occupational licensing. In the model, there is endogenous occupation selection and wage determination that depends on how costly it is to obtain the license and the productivity of the human capital that is bundled with the license. Under these assumptions, we find a unique equilibrium with sharp comparative statics for the licensing premiums. The key theoretical result in this paper is that the licensing premium is higher for workers who are members of demographic groups that face a higher cost of licensing. The intuition for this result is that the higher cost …


Beyond Degrees: Longer Term Outcomes Of The Kalamazoo Promise, Brad J. Hershbein, Isabel Mcmullen, Brian Pittelko, Bridget F. Timmeney Jul 2021

Beyond Degrees: Longer Term Outcomes Of The Kalamazoo Promise, Brad J. Hershbein, Isabel Mcmullen, Brian Pittelko, Bridget F. Timmeney

Upjohn Institute Working Papers

We estimate the effects on workforce and location outcomes of the Kalamazoo Promise, a generous, place-based college scholarship. Drawing upon administrative unemployment insurance wage records merged with individual-level education data, we identify Promise effects by comparing eligible to ineligible graduates before and after the Promise’s initiation. We supplement this quantitative analysis with surveys and interviews. Despite earlier research showing that the Kalamazoo Promise substantially increased degree attainment, we find little evidence that the program affected average earnings within 10 years of high school graduation. However, the Kalamazoo Promise may have increased the likelihood of eligible graduates having earnings, within Michigan, …


Trade Policy As An Exogenous Shock: Focusing On The Specifics, Andrew Greenland, John W. Lopresti Jun 2021

Trade Policy As An Exogenous Shock: Focusing On The Specifics, Andrew Greenland, John W. Lopresti

Upjohn Institute Working Papers

This paper proposes a novel strategy for identifying the effects of import competition on economic outcomes that avoids standard concerns related to the endogeneity of trade policy and provides a consistent measure of exposure to trade over time. Conditioning on the level of import tariffs, our approach exploits cross-industry differences in the relative importance of specific rather than ad valorem tariffs. As they are expressed in per unit terms rather than as a share of value, the effective protection provided by a given specific tariff varies with price levels. Using digitized tariff line data between 1900 and 1940, we relate …


Youth Disconnection During The Covid-19 Pandemic, Mark Borgschulte, Yuci Chen Apr 2021

Youth Disconnection During The Covid-19 Pandemic, Mark Borgschulte, Yuci Chen

Upjohn Institute Working Papers

This paper studies the impact of the COVID-19 pandemic on youth disconnection—i.e., the share of young people who were neither in school nor at work. Youth disconnection offers important advantages, relative to unemployment or participation rates, as a measure of the labor market for the most marginal and disadvantaged youth. Before the pandemic, approximately one out of eight young people between the ages of 18 and 24 were disconnected. The disconnection rate increased dramatically in April 2020 because of the pandemic; however, it has decreased quickly since that time. The increase in the disconnection rate at the beginning of the …


Trade And Informality In The Presence Of Labor Market Frictions And Regulations, Rafael Dix-Carneiro, Pinelopi Koujianou Goldberg, Costas Meghir, Gabriel Ulyssea Apr 2021

Trade And Informality In The Presence Of Labor Market Frictions And Regulations, Rafael Dix-Carneiro, Pinelopi Koujianou Goldberg, Costas Meghir, Gabriel Ulyssea

Upjohn Institute Working Papers

We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects economic outcomes in the presence of informality. We show the following: 1) Trade openness unambiguously decreases informality in the tradable sector but has ambiguous effects on aggregate informality. 2) The productivity gains from trade are understated when the informal sector is omitted. 3) Trade openness results in large welfare gains even when informality is repressed. 4) …


Career Paths With A Two-Body Problem: Occupational Specialization And Geographic Mobility, Valeria Rueda, Guillaume Wilemme Mar 2021

Career Paths With A Two-Body Problem: Occupational Specialization And Geographic Mobility, Valeria Rueda, Guillaume Wilemme

Upjohn Institute Working Papers

We develop a model of joint job search and occupational choice in which job opportunities can be incompatible inside the couple. Typically, incompatibilities may arise because jobs are not in the same location. We show that the existence of incompatible jobs pushes some couples to sacrifice the career of one partner. The model predicts occupational switches throughout the career and at the time of couple formation. Gendered equilibria, whereby all women (or men) choose the accommodating occupation, may arise. Any element of ex-ante unfavorable gender gaps—for instance, due to discrimination or norms—is amplified and can generate large systemic differences in …


Labor Market Trends And Outcomes: What Has Changed Since The Great Recession?, Erica L. Groshen, Harry J. Holzer Mar 2021

Labor Market Trends And Outcomes: What Has Changed Since The Great Recession?, Erica L. Groshen, Harry J. Holzer

Upjohn Institute Working Papers

We describe trends in wages and labor force participation for the “working class”—whom we define as workers with high school or less education—compared to those with college or more. We compare cyclical peaks over the entire period 1979–2019, with particular focus on the Great Recession (2007–2010) and recovery (2010–2019). We also present results by gender and race. We find real wage growth in the latter period for all workers, but not enough to change the long-term trends of growing inequality and stagnant wages for the less-educated; and we also find that labor force participation continued to decline for the less-educated, …


How Would A Permanently Refundable Child And Dependent Care Credit Affect Eligibility, Benefits, And Incentives?, Gabrielle Pepin Mar 2021

How Would A Permanently Refundable Child And Dependent Care Credit Affect Eligibility, Benefits, And Incentives?, Gabrielle Pepin

Upjohn Institute Working Papers

The federal Child and Dependent Care Credit (CDCC) subsidizes child care costs for working families. Before 2021, the CDCC was nonrefundable, so only families with positive tax liability after other deductions benefited. I estimate how CDCC eligibility, benefits, and marginal tax rates would change if the credit were made permanently refundable, relative to 2020 CDCC parameters set to be restored in 2022. Under refundability, some 5 percent of single parents gain eligibility and receive on average over $1,000 annually. Eligibility increases are largest among Black and Hispanic households. Increases in marginal tax rates among moderate-income taxpayers are small.


Globalization, Trade Imbalances, And Labor Market Adjustment, Rafael Dix-Carneiro, João Paulo Pessoa, Ricardo Reyes-Heroles, Sharon Traiberman Mar 2021

Globalization, Trade Imbalances, And Labor Market Adjustment, Rafael Dix-Carneiro, João Paulo Pessoa, Ricardo Reyes-Heroles, Sharon Traiberman

Upjohn Institute Working Papers

We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build and estimate a general equilibrium, multicountry, multisector model of trade with two key ingredients: 1) consumption-saving decisions in each country commanded by representative households, leading to endogenous trade imbalances, and 2) labor market frictions across and within sectors, leading to unemployment dynamics and sluggish transitions to shocks. We use the estimated model to study the behavior of labor markets in response to globalization shocks, including shocks to technology, trade costs, and intertemporal preferences (savings gluts). We find that modeling trade …


Human Capital And Black-White Earnings Gaps, 1996–2017, Owen Thompson Mar 2021

Human Capital And Black-White Earnings Gaps, 1996–2017, Owen Thompson

Upjohn Institute Working Papers

This paper estimates the contribution of human capital to the Black-white earnings gap in three separate samples of men spanning from 1966 through 2017, using both educational attainment and performance on standardized tests to measure human capital. There are three main findings. First, the magnitude of reductions in the Black-white earnings gap that occur after controlling for human capital has become much larger over time, suggesting a growing contribution of human capital to Black-white earnings disparities. Second, these increases are almost entirely due to growth in the returns to human capital, which magnify the impact of any racial differences in …


The Covid-19 Pandemic's Evolving Impacts On The Labor Market: Who's Been Hurt And What We Should Do, Brad J. Hershbein, Harry J. Holzer Feb 2021

The Covid-19 Pandemic's Evolving Impacts On The Labor Market: Who's Been Hurt And What We Should Do, Brad J. Hershbein, Harry J. Holzer

Upjohn Institute Working Papers

In this paper, we shed light on the impacts of the COVID-19 pandemic on the labor market, and how they have evolved over most of the year 2020. Relying primarily on microdata from the CPS and state-level data on virus caseloads, mortality, and policy restrictions, we consider a range of employment outcomes—including permanent layoffs, which generate large and lasting costs—and how these outcomes vary across demographic groups, occupations, and industries over time. We also examine how these employment patterns vary across different states, according to the timing and severity of virus caseloads, deaths, and closure measures. We find that the …


Informed Choices: Gender Gaps In Career Advice, Yana Gallen, Melanie Wasserman Jan 2021

Informed Choices: Gender Gaps In Career Advice, Yana Gallen, Melanie Wasserman

Upjohn Institute Working Papers

This paper estimates gender differences in access to informal information regarding the labor market. We conduct a large-scale field experiment in which real college students seek information from 10,000 working professionals about various career paths, and we randomize whether a professional receives a message from a male or a female student. We focus the experimental design and analysis on two career attributes that prior research has shown to differentially affect the labor market choices of women: the extent to which a career accommodates work/life balance and has a competitive culture. When students ask broadly for information about a career, we …


Long-Run Effects On Employment Rates Of Local Demand Shocks, Across And Within Local Labor Markets, Timothy J. Bartik Jan 2021

Long-Run Effects On Employment Rates Of Local Demand Shocks, Across And Within Local Labor Markets, Timothy J. Bartik

Upjohn Institute Working Papers

This paper estimates the long-run effects on a county’s prime-age employment rate of labor demand shocks to both the county and its overlying commuting zone (CZ). These effects are allowed to vary with local “distress” (baseline employment rate of the county or CZ), and with the size of the demand shock. In more distressed CZs, a county’s employment rate is more affected by county or CZ shocks. As a result, targeting or reallocating jobs to more distressed CZs will tend to raise employment rates. If a county is relatively distressed compared to its CZ, targeting job shocks at that county …


Measuring Local Job Distress, Timothy J. Bartik Jan 2021

Measuring Local Job Distress, Timothy J. Bartik

Upjohn Institute Working Papers

In this paper, estimates are presented on short-run effects of demand shocks on a local labor market’s employment to population ratio (employment rate). Based on the estimates, commuting zones (CZs) better define a local labor market than counties, because both employment and employment rate effects exhibit large spillovers across counties within a CZ. In addition, the estimates suggest that demand shock effects vary, by an amount that is both statistically and substantively significant, with a CZ’s prior overall employment rate.