Scholarly Publications

Peer-reviewed articles and books from affiliated faculty and IRLE Center staff.


2021
Are Minimum Wage Effects Greater in Low-Wage Areas?
and   –  Scholarly Publications

Industrial Relations, January 2021.

Abstract

Empirical work on the minimum wage typically estimates effects averaged across high- and low-wage areas. Low-wage labor markets could potentially be less able to absorb minimum wage increases, in turn leading to more negative employment effects. In this article, we examine minimum wage effects in low-wage counties, where relative minimum wage ratios reach as high as 0.82, well beyond the state-based ratios in extant studies. Using data from the American Community Survey, the Quarterly Workforce Indicators, and the Quarterly Census on Employment and Wages, we implement event study and difference-in-differences methods, estimating average causal effects for all events in our sample and separately for areas with lower and higher impacts. We find positive wage effects, especially in high-impact counties, but do not detect adverse effects on employment, weekly hours, or annual weeks worked. We do not find negative employment effects among women, Blacks, and/or Hispanics. In high-impact counties, we find substantial declines in household and child poverty. These results inform policy debates about providing exemptions to a $15 federal minimum wage in low-wage areas.

2020
Can Labor Market Policies Reduce Deaths of Despair?
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Journal of Health Economics, October 2020.

Abstract

Do minimum wages and the earned income tax credit (EITC) mitigate rising “deaths of despair?” We leverage state variation in these policies over time to estimate event study and difference-in-differences models of deaths due to drug overdose, suicide, and alcohol-related causes. Our causal models find no significant effects on drug or alcohol-related mortality, but do find significant reductions in non-drug suicides. A 10 percent minimum wage increase reduces non-drug suicides among low-educated adults by 2.7 percent, and the comparable EITC figure is 3.0 percent. Placebo tests and event-study models support our causal research design. Increasing both policies by 10 percent would likely prevent a combined total of more than 700 suicides each year.

Democratic Policing and Officer Well-Being
  –  Student Publication

Frontiers in Psychology, May 2020.

Abstract

Efforts to improve police–community relationships have increased initiatives that aim to build trust and mutual respect between officers and the communities they serve. Existing literature examines the impact of internal departmental dynamics and individual-level characteristics on officers’ endorsement of community-oriented policing strategies. Research has indicated that when officers feel fairly treated within their agencies and when they are less psychologically and emotionally distressed, they report stronger support for policing tactics that increase fairness in police processes and decision making. This mixed-method study is the first to examine the reciprocal relationship by asking: How do procedurally just and community-oriented policing strategies impact officer well-being and occupational stress? Sworn officers in a medium-sized California department completed a survey assessing their views on their agency, various police tactics, the communities they serve, and their physical and mental health. Results showed that officers’ increased support for community-oriented and procedurally just police strategies are significantly associated with decreased job stress, depression, anxiety, and negative affect, controlling for race, gender, perceived job dangerousness, cynicism, and how many years they had served as a police officer. In-depth interviews with officers in the department revealed three explanatory mechanisms for these statistical relationships. First, the tenets of procedural justice provided officers with tactics that reduce the threat and stress of intergroup interactions. Second, community-oriented policing activities increased opportunities for officers to have positive interactions with the communities they work in, mitigating the distrust, cynicism, and detachment fostered by enforcement activities. Last, procedural justice and community-oriented police strategies empowered officers to counter negative stereotypes about police and reaffirm their self-image. Taken together, these survey and interview findings highlight the mutuality of democratic policing and officer wellness.

2019
Universal Basic Income in the United States and Advanced Countries
and   –  Scholarly Publications

Annual Review of Economics, 11:929-58. August 2019.

Abstract
We discuss the potential role of universal basic incomes (UBIs) in advanced countries. A feature of advanced economies that distinguishes them from developing countries is the existence of well-developed, if often incomplete, safety nets. We develop a framework for describing transfer programs that is flexible enough to encompass most existing programs as well as UBIs, and we use this framework to compare various UBIs to the existing constellation of programs in the United States. A UBI would direct much larger shares of transfers to childless, nonelderly, nondisabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive. We review the labor supply literature for evidence on the likely impacts of a UBI. We argue that the ongoing UBI pilot studies will do little to resolve the major outstanding questions.
The teacher weekly wage penalty hit 21.4 percent in 2018, a record high
and   –  Scholarly Publications

Economic Policy Institute, April 2019.

Abstract
Teachers, students, parents, and community supporters protested cutbacks in public education spending and a squeeze on teacher pay that have persisted well into the economic recovery from the Great Recession. Spending reductions affect resources available to schools, which influence numerous decisions such as whether the school has adequate support personnel, reasonable class sizes, and competitive compensation for both teachers and nonteacher staff. Spending cuts over the recovery were not the result of weak state economies. Rather, many state legislatures and governors cut spending in order to finance tax cuts for the wealthy and corporations. This report underscores the crisis in teacher pay by updating our data series on the teacher wage and compensation penalty—the percent by which public school teachers are paid less in wages and compensation than other college-educated workers—and by providing new regression-based estimates of the teacher weekly wage penalty in each state.
Inequality of Educational Opportunity? Schools as Mediators of the Intergenerational Transmission of Income
  –  Scholarly Publications

Journal of Labor Economics, 37:S85-S123. January 2019

Abstract
Intergenerational income transmission varies across commuting zones (CZs). I investigate whether children’s educational outcomes help to explain this variation. Differences among CZs in the relationship between parental income and children’s human capital explain only one-ninth of the variation in income transmission. A similar share is explained by differences in the return to human capital. One-third reflects earnings differences not mediated by human capital, and 40% reflects differences in marriage patterns. Intergenerational mobility appears to reflect job networks and the structure of local labor and marriage markets more than it does the education system.
2018
Spillovers from gatekeeping – Peer effects in absenteeism
and   –  Scholarly Publications

Journal of Public Economics, 167(2018):190-204. November 2018.

Abstract
We study peer effects in absenteeism among workplace colleagues. Gatekeeping is an essential task in many insurance systems. In this study we exploit exogenous shifts of general practitioners (GPs) occurring when physicians quit or retire. We find that these shifts induce changes in absenteeism for affected workers. By utilizing high-quality Norwegian matched employer-employee data with detailed individual information on certified sick leave during the period 2003–2012, we can study how the transfer of workers between GPs affects co-workers’ absenteeism. We identify strong causal positive peer effects in absenteeism: a one day change in focal worker sickness absence transfers to a 0.41?day shift in peer absence.
DIY Detroit: making do in a city without services
  –  Scholarly Publications

Urban Research & Practice, 0(0), 1–2. April 2018. https://doi.org/10.1080/17535069.2018.1462962

Abstract
Detroit is the urban question America has been asking itself for decades. Over the past century, the city has symbolized American prosperity and the power of unions; the stark gap between Black and white urban experience; the fiscal and economic failure of the postindustrial city; and now the dystopia of large-scale urban abandonment. The Detroit that Kimberly Kinder describes in DIY Detroit is a city in which vast spaces are ungoverned by functional property markets and unserved by city workers or infrastructure.
Austerity as the New Normal: The Fiscal Politics of Retrenchment in San Jose, California
  –  Scholarly Publications

In M. Davidson & K. Ward (Eds.), Cities under Austerity: Restructuring the US Metropolis. Albany, NY: SUNY Press. 2018.

Abstract
Across the world’s most industrialized economies, the financial crisis of 2007 caused a contraction of state budgets and stimulated attempts to reform debt-burdened governments. In the United States, a system of fiscal federalism meant this turn towards austerity took a uniquely fragmented and geographically diverse form. Drawing on case studies of recent urban restructuring, Cities under Austerity challenges dominant understandings of austerity as a distinctly national condition and develops a conceptualization of the new US urban condition that reveals its emerging political and social fault lines. The contributors empirically detail the restructuring that is taking place across the United States, its underlying logics, its local impacts and the ongoing processes of challenge and resistance that influences how it is shaping the lives of citizens. The new American political economy, it is argued, needs to be understood as composed of a mosaic of urban experiences that both build upon a differentiated foundation and creates new divergences. As state reforms continue to interact with this diverse urban political economy of the United States, this collection provides a state-of-the-art survey on how postcrisis convergences and divergences in urban economies and urban politics have laid the foundations for the new political geography of the United States.
Are Local Minimum Wages Absorbed by Price Increases? Estimates from Internet-based Restaurant Menus
and   –  Scholarly Publications

ILR Review, 71(1):35-63. January 2018.

Abstract
The authors analyze 884 Internet-based restaurant menus from inside and outside San Jose, California, which they collected before and after the city implemented a 25% minimum wage increase in 2013. Their findings suggest that nearly all of the cost increase was passed through to consumers, as prices rose 1.45% on average. Minimum wage price elasticities averaged 0.058 for all restaurants and ranged from 0.044 to 0.109, depending on the type of restaurant. The authors’ estimate of payroll cost increases net of turnover savings is consistent with these findings. Equally important, border effects for restaurants are smaller than is often conjectured. Price differences among restaurants that are one-half mile from either side of the policy border are not competed away, indicating that restaurant demand is spatially inelastic. These results imply that city-wide minimum wage policies need not result in substantive negative employment effects nor shifts of economic activity to nearby areas.
2017
Scraping By: Income and Program Participation After the Loss of Extended Unemployment Benefits
and   –  Scholarly Publications

Journal of Policy Analysis and Management, 36 (4):880-908. Fall 2017.

Abstract
Many Unemployment Insurance (UI) recipients do not find new jobs before exhausting their benefits, even when benefits are extended during recessions. Using Survey of Income and Program Participation (SIPP) panel data covering the 2001 and 2007 to 2009 recessions and their aftermaths, we identify individuals whose jobless spells outlasted their UI benefits (exhaustees) and examine household income, program participation, and health-related outcomes during the six months following UI exhaustion. For the average exhaustee, the loss of UI benefits is only slightly offset by increased participation in other safety net programs (e.g., food stamps), and family poverty rates rise substantially. Self-reported disability also rises following UI exhaustion. These patterns do not vary dramatically across household demographic groups, broad income level prior to job loss, or the two business cycles. The results highlight the unique, important role of UI in the U.S. social safety net.
Making Work Pay Better Through an Expanded Earned Income Tax Credit
, and   –  Scholarly Publications

In The 51%: Driving Growth through Women’s Economic Participation, Diane Whitmore Schanzenbach & Ryan Nunn, eds., The Hamilton Project/Brookings Institution. October 2017.

Abstract
The Earned Income Tax Credit (EITC) is a refundable tax credit that promotes work. Research has shown that it also reduces poverty and improves health and education outcomes. The maximum credit for families with two or fewer children has remained flat in inflation-adjusted terms since 1996. Over the same period, earnings prospects have stagnated or diminished for many Americans, and prime-age employment rates have fallen. This paper proposes to build on the successes of the EITC with a ten percent acrossthe-board increase in the federal credit. This expansion would provide a meaningful offset to stagnating real wages, encourage more people to enter employment, lift approximately 600,000 individuals out of poverty, and improve health and education outcomes for millions of children.
Structurally adjusting: Narratives of fiscal crisis in four US cities
  –  Scholarly Publications

Urban Studies, 54(9): 2123-2138. July 2017.

Abstract
The Great Recession unleashed a wave of fiscal stress in the USA, with austerity measures such as spending cuts, service reductions and privatisation predictably taking centre stage. Decades of federal withdrawal from urban policy and funding, combined with state retrenchment, have contributed to a landscape of urban fiscal stress exacerbated by the prolonged effects of the post-2007 recession. This article examines the experience of fiscal crisis in four US cities (Detroit, Dallas, Philadelphia, and San Jose), focusing on the narratives used by city and state government leadership to publicly describe local crises. Shared elements of the framing of urban fiscal crisis in this diverse set of cities provide insight into the unfolding of austerity in local politics. Blame for the crisis has centred less on social spending than in previous crises, and more on local governance failures, public pension commitments, and ongoing global economic precarity. Crisis governance has become widespread, even in fiscally resilient cities, driven by a vision of lean government in a ‘new normal’. While retrenchment effectively shrinks the state through spending cuts and privatisation, the governing power of cities is also being diminished by the narrative of fiscal responsibility reflected in the national move toward public pension restructuring and expanded state interventionism.
Measuring the Impacts of Teachers: Comment
  –  Scholarly Publications

American Economic Review, 107(6):1656-84. June 2017.

Abstract
Chetty, Friedman, and Rockoff (2014a, b) study value-added (VA) measures of teacher effectiveness. CFR (2014a) exploits teacher switching as a quasi-experiment, concluding that student sorting creates negligible bias in VA scores. CFR (2014b) finds VA scores are useful proxies for teachers’ effects on students’ long-run outcomes. I successfully reproduce each in North Carolina data. But I find that the quasi-experiment is invalid, as teacher switching is correlated with changes in student preparedness. Adjusting for this, I find moderate bias in VA scores, perhaps 10-35 percent as large, in variance terms, as teachers’ causal effects. Long-run results are sensitive to controls and cannot support strong conclusions.
Credible Research Designs for Minimum Wage Studies: A Response to Neumark, Salas and Wascher
, , and   –  Scholarly Publications

ILR Review 70(3):559-592. May 2017.

Abstract
The authors assess the critique by Neumark, Salas, and Wascher (2014) of minimum wage studies that found small effects on teen employment. Data from 1979 to 2014 contradict NSW; the authors show that the disemployment suggested by a model assuming parallel trends across U.S. states mostly reflects differential pre-existing trends. A data-driven LASSO procedure that optimally corrects for state trends produces a small employment elasticity (–0.01). Even a highly sparse model rules out substantial disemployment effects, contrary to NSW’s claim that the authors discard too much information. Synthetic controls do place more weight on nearby states—confirming the value of regional controls—and generate an elasticity of ?0.04. A similar elasticity (?0.06) obtains from a design comparing contiguous border counties, which the authors show to be good controls. NSW’s preferred matching estimates mix treatment and control units, obtain poor matches, and find the highest employment declines where the relative minimum wage falls. These findings refute NSW’s key claims.
The Great Recession and its Aftermath: What Role for Structural Changes?
  –  Scholarly Publications

RSF: The Russell Sage Foundation Journal of the Social Sciences, 3(3):22–49. April 2017.

Abstract
The years since the 2009 end of the Great Recession have been disastrous for many workers, particularly those with low human capital or other disadvantages. One explanation attributes this to deficient aggregate labor demand, to which marginal workers are more sensitive. A second attributes it to structural changes. Cyclical explanations imply that if aggregate labor demand is increased then many of the post-2009 patterns will revert to their pre-recession trends. Structural explanations suggest recent experience is the “new normal.” This paper reviews data since 2007 for evidence. I examine wage trends to measure the relative importance of supply and demand. I find little wage pressure before 2015, pointing to demand as the binding constraint. The most recent data show some signs of tightness, but still substantial slack.
2016
The Earned Income Tax Credit
and   –  Scholarly Publications

Economics of Means-Tested Transfer Programs in the United States, Volume I, Robert A. Moffitt, ed. Chicago: University of Chicago Press. 2016.

Abstract
The Earned Income Tax Credit is a federal refundable tax credit designed to encourage work, offset federal payroll and income taxes, and raise living standards for low- and middle-income working families. Introduced in 1975, the EITC has grown to be one of the largest and least controversial elements of the U.S. welfare state, with 26.7 million recipients sharing $63 billion in total federal EITC expenditures in 2013.
Minimum Wage Shocks, Employment Flows and Labor Market Frictions
, and   –  Scholarly Publications

Journal of Labor Economics, 34(3):663-704. April 2016.

Abstract
We provide the first estimates of the effects of minimum wages on employment flows in the US labor market, identifying the impact by using policy discontinuities at state borders. We find that minimum wages have a sizable negative effect on employment flows but not on stocks. Separations and accessions fall among affected workers, especially those with low tenure. We do not find changes in the duration of nonemployment for separations or hires. This evidence is consistent with search models with endogenous separations.
The Measurement of Student Ability in Modern Assessment Systems
and   –  Scholarly Publications

Journal of Economic Perspectives 30(3):85-108. Summer 2016.

Abstract
Economists often use test scores to measure a student’s performance or an adult’s human capital. These scores reflect nontrivial decisions about how to measure and scale student achievement, with important implications for secondary analyses. For example, the scores computed in several major testing regimes, including the National Assessment of Educational Progress (NAEP), depend not only on the examinees’ responses to test items, but also on their background characteristics, including race and gender. As a consequence, if a black and white student respond identically to questions on the NAEP assessment, the reported ability for the black student will be lower than for the white student—reflecting the lower average performance of black students. This can bias many secondary analyses. Other assessments use different measurement models. This paper aims to familiarize applied economists with the construction and properties of common cognitive score measures and the implications for research using these measures.
Tax Policy Toward Low-Income Families
and   –  Scholarly Publications

Forthcoming

Abstract
In this paper, we review the most prominent provision of the federal income tax code that targets low-income tax filers, the Earned Income Tax Credit (EITC), as well as the structurally similar Child Tax Credit (CTC). We frame the paper around what we see as the programs’ goals: distributional, promoting work, and limiting administrative and compliance costs. We review what is known about program impacts and distributional consequences under current law, drawing on simulations from the Tax Policy Center. We conclude that the EITC is quite successful in meeting its three goals. In contrast, most of the benefits of the CTC go to higher income households. In addition to analyzing current law, we assess possible reforms that would reach groups – for the EITC, those without children; for the CTC, those with very low earnings – who are largely missed under current policy.
2015
Unemployment Insurance and Disability Insurance in the Great Recession
, and   –  Scholarly Publications

Journal of Labor Economics 34 (S1, pt. 2):S445-S475. January 2016.

Abstract
Social Security Disability Insurance (SSDI) awards rise during recessions. If marginal applicants are able to work but unable to find jobs, countercyclical Unemployment Insurance (UI) benefit extensions may reduce SSDI uptake. Exploiting UI extensions in the Great Recession as a source of variation, we find no indication that expiration of UI benefits causes SSDI applications and can rule out effects of meaningful magnitude. A supplementary analysis finds little overlap between the two programs’ recipient populations: only 28% of SSDI awardees had any labor force attachment in the prior calendar year, and of those, only 4% received UI.
Tipped Wage Effects on Earnings and Employment in Full-Service Restaurants
and   –  Scholarly Publications

Industrial Relations: A Journal of Economy and Society, 54(4):622–647. October 2015.

Abstract
We exploit more than 20 years of changes in state-level tipped wage policy and estimate earnings and employment effects of the tipped wage using county-level panel data on full-service restaurants (FSR). We extend earlier work by Dube, Lester, and Reich (2010) and compare outcomes between contiguous counties that straddle a state border. We find a 10-percent increase in the tipped wage increases earnings in FSRs about 0.4 percent. Employment elasticities are sensitive to the inclusion of controls for unobserved spatial heterogeneity. In our preferred models, we find small, insignificant effects of the tipped wage on FSR employment.
The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out
, and   –  Scholarly Publications

American Economic Review: Papers & Proceedings, 105(5):171-176. May 2015.

Abstract
Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.
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