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Effects of Peer Groups on the Gender-Wage Gap and Life After the MBA: Evidence from the Random Assignment of MBA Peers
Get PDFUsing the historical random assignment of MBA students to peer groups at a top business school in the United States, I study the effect of the gender composition of a student’s peers on the gender pay gap at graduation and long-term labor market outcomes. I find that a 10 percentage point increase in the share of male peers leads to a 2.1 percent increase in the relative earnings of female students at graduation, closing the gender gap in earnings at graduation by two-thirds. The effects on women’s long-term earnings grow even larger with time. Using novel data on job offers, I find that two different mechanisms drive the effects on short- and long-term earnings. Women with a greater share of male peers take more quantitative coursework in business school and receive job offers at graduation in occupations, industries, and firms associated with higher wages, longer hours, and greater earnings growth. However, the effect of male peers on women’s earnings at graduation is primarily driven by female students’ increased willingness to accept the maximum salary offered within their offer set. In contrast, peer-induced effects on human capital alone place female students on dramatically different long-term expected earnings paths due to changes in the initial occupation, initial industry, and initial firm accepted at graduation. This change in the characteristics of the first job at graduation largely explains the effect of peer gender composition on long-term outcomes
Birth Dearth and Local Population Decline
Get PDFLocal population decline has spread rapidly since 1970, with half of counties losing population between 2010 and 2020. The workhorse economic models point to net out-migration, likely driven by changing local economies and amenities, as the cause of this trend. However, we show that the share of counties with high net out-migration has not increased. Instead, falling fertility has caused migration rates that used to generate growth to instead result in decline. When we simulate county populations from 1970 to the present holding fertility at its initial level, only 10 percent of counties decline during the 2010s
DACA, Mobility Investments, and Economic Outcomes of Immigrants and Natives
Get PDFExploiting variation created by Deferred Action for Childhood Arrivals (DACA), we document the effects of immigrant legalization on immigrant mobility investments and economic outcomes. We provide new evidence that DACA increased both geographic and job mobility of young immigrants, often leading them to high-paying labor markets and licensed occupations. We then examine whether these gains to immigrants spill over and affect labor market outcomes of U.S.-born workers. Exploiting immigrant enclaves and source-country flows of DACA-eligible immigrants to isolate plausibly exogenous variation in the concentration of DACA recipients, we show that in labor markets where more of the working-age population can access legal protection through DACA, U.S.-born workers see little-to-no change in employment rates and actually observe increases in wage earnings after DACA’s implementation. These gains are concentrated among older and more educated workers, suggesting immigrant workers complement U.S.-born workers and immigrant legalization generates broader local labor market benefits
Pension Caregiver Credits and the Gender Gap in Old-Age Income
No full textTo understand how caregiver credits can affect the gender gap in pension income, we exploit a 2001 pension insurance reform in Germany that introduced additional caregiver credits for mothers with young children. If the mother is working while the child is between the ages of 3 and 10, the mother’s pension entitlement for this period is increased by 50 percent. This is a sizable increase in pension value; mothers can receive up to a 12% increase, equivalent to a maximum of e 928, in their annual pension benefits.
Using administrative social security data from Germany, we estimate the causal effect of the policy on pre-retirement labor supply and pension contributions of eligible women in a difference in-differences design. Specifically, we compare the outcomes of eligible mothers with children aged 3 to 10 to ineligble mothers with children aged 15 to 25, before and after the introduction of the reform.
Due to the relative recency of the reform, we cannot directly observe the impact on retirement income. To make progress on this question, we build a dynamic lifecycle model to predict future pension benefits of treated mothers and investigate the welfare implications of this reform and its impact on the gender gap in old age income. Importantly, the model enables us to estimate key labor supply elasticities of mothers. This will allow us to compare the welfare implications of caregiver credits to alternative policies, such as tax subsidies for caregivers
Broadly Shared Local Economic Success Since 2000: New Measures and New Lessons for Communities
Get PDFIn recent decades, many local labor markets—especially those in former industrial areas—have experienced lagging employment rates, hourly wages, and annual earnings. Even in places that have thrived, disadvantaged racial and ethnic groups and those with less education have often fared poorly, and long-term growth has bypassed many Americans at the middle and bottom of the income distribution. This report examines the relative economic success over the past two decades (prior to the COVID pandemic) of different local labor markets throughout the United States, both for residents overall and for those of different demographic groups. We construct a new, publicly available database for economic indicators for these labor markets—both commuting zones and core-based statistical areas—for each of 160 demographic cells and three time periods. Our economic indicators account for demographic and cost-of-living differences across areas, facilitating comparisons of economic trends across geographies for different groups of interest. We show that locations that have performed well in terms of employment growth have not always performed well in terms of earnings growth; moreover, areas that have seen broad growth overall for their residents have often seen growth lag for vulnerable groups. To more systematically understand factors associated with economic success for different groups, we examine the relationship with baseline correlates and supplement these descriptive regressions with insights from narrative case studies. Although initial industry mix plays an important role, other factors, including government investment and local leadership, may matter even more
Strengthening Work Requirements? Forecasting Impacts of Reforming Cash Assistance
Get PDFWork requirements are perhaps the most controversial aspect of the Temporary Assistance for Needy Families (TANF) program, America’s sole federal cash assistance program for low-income families with children. In 2025, for the first time in nearly 20 years, the Fiscal Responsibility Act of 2023 (FRA) will implement policy changes intended to strengthen states’ work requirements. However, researcher’ and policymakers’ understanding of how FRA will impact states’ compliance with federal requirements is hampered by a lack of research and publicly available data.
We tie information from reports submitted to the U.S. Department of Health and Human Services that are collected to administrative caseload and expenditure data to document several strategies that states currently use to comply with federal work requirements. We estimate that FRA will increase the stringency of work requirements in 23 states and that 5 states will begin to fall short of requirements. We note that several compliance strategies available to those states do not encourage work. We discuss changes in states’ work requirements that would promote better long-term economic and labor market outcomes for TANF recipients
Essays on Immigration and International Trade
Get PDFThis dissertation studies the welfare and production effects of immigration and international trade, and how the two effects interact in the globalized economy. In Chapter I, Xing Guo and I study how the U.S. restrictions on skilled immigration affect the Canadian economy and the welfare of American workers. In 2017, there was a policy that tightened the eligibility criteria for U.S. visas and was immediately followed by a trend break in the number of skilled immigrant admissions to Canada. We use quasi-experimental variation introduced by this policy over time and across immigrant groups, along with U.S. and Canadian visa application data, to show that Canadian applications in 2018 were 30% larger than without the restrictions. We then study how the restrictions affected Canadian firms using comprehensive Canadian administrative databases containing the universe of employer-employee-linked records, immigration records, and international trade data. We find that the restrictions increased firms’ production, exports, and employment of Canadian workers. Finally, we study the policy’s impact on American workers by incorporating immigration policy into a multi-sector international trade model. With international trade, the increase in immigration to other countries due to the restrictions affects American wages through U.S. exports and consumption prices. We calibrate the model using our novel data and reduced-form estimates. We find that the welfare gains for American workers targeted for protection by the 2017 policy are up to 25% larger in a closed economy than in an open economy with the observed trade levels. In Chapter II, Nicolas Morales and I use a detailed establishment-level dataset from Germany to document that large firms allocate a higher proportion of their wage bill to immigrants compared to small firms. We study both analytically and quantitatively the importance of this heterogeneity across firms in the effects of immigration on the welfare of native-born workers. To achieve this, we set up and estimate a model of international trade and immigration where heterogeneous firms choose their immigrant share. Two new adjustment mechanisms arise when firms have heterogeneous immigrant shares. First, native workers reallocate across firms towards firms that are less immigrant-intensive, which mitigates the competition effect between immigrants and natives in the labor market. Second, the gains are largely concentrated among the largest and most productive employers, which induces an additional aggregate productivity gain. We find that our model with no heterogeneity in immigrant share across firms underestimates the native workers’ welfare gains by 11%. In chapter III, Alberto Cavallo, Javier Cravino, Andres Drenik and I study how the price of remote work is determined in a globalized labor market using data from a large web-based job platform, where workers from around the world compete for remote jobs. Despite the global nature of the platform, we find that remote wages are higher for workers in regions with higher income per capita. This correlation is not accounted for by differences in workers’ observable characteristics, occupations, or differences in the employers’ locations. Instead, data on wage histories indicate that remote wages are partly determined by the conditions that workers face in their local labor markets. We also show that remote wages expressed in local currency move strongly with the dollar exchange rate of the worker’s country and are highly sensitive to foreign competition. Finally, we identify occupations at high risk of being offshored based on the prevalence of cross-border contracts
