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An Equilibrium Model of the Impact of Increased Public Investment in Early Childhood Education
No full textRecent policy proposals call for significant new investments in early care and education (ECE). These policies are designed to reduce the burden of child care costs, support parental employment, and foster child development by increasing access to high-quality care, especially for children in lower-income families. In this paper, we propose and calibrate a model of supply and demand for different ECE service and teacher types to estimate equilibrium family expenditures, participation in ECE, maternal labor supply, teacher wages, market ECE prices, and program costs under different policy regimes. Under a policy of broadly expanded subsidies that limits family payments for ECE to no more than 7% of income among those up to 250% of national median income, we estimate that mothers’ employment would increase by six percentage points while full-time employment would increase by nearly 10 percentage points, with substantially larger increases among lower-income families. The policy would also induce a shift from informal care and parent-only care to center- and home-based providers, which are higher-quality on average, with larger shifts for lower-income families. Despite the increased use of formal care, family expenditures on ECE services would decrease throughout most of the income distribution. For example, families in the bottom three income quintiles would experience expenditure reductions of 76%, 68%, and 55%, respectively. Finally, teacher wages and market prices would increase to attract workers with higher levels of education. We also estimate the impact of a narrower subsidy expansion for families with an income up to 85% of national median income
How Reliable are Administrative Reports of Paid Work Hours?
Get PDFThis paper examines the quality of quarterly records on work hours collected from employers in the State of Washington to administer the unemployment insurance (UI) system, specifically to determine eligibility for UI. We subject the administrative records to four “trials,” all of which suggest the records reliably measure paid hours of work. First, distributions of hours in the administrative records and Current Population Survey outgoing rotation groups (CPS) both suggest that 52–54% of workers work approximately 40 hours per week. Second, in the administrative records, quarter-to-quarter changes in the log of earnings are highly correlated with quarter-to-quarter changes in the log of paid hours. Third, annual changes in Washington’s minimum wage rate (which is indexed) are clearly reflected in year-to-year changes in the distribution of paid hours in the administrative data. Fourth, Mincer-style wage rate and earnings regressions using the administrative data produce estimates similar to those found elsewhere in the literature
Gender Gaps From Labor Market Shocks: Evidence from Denmark
No full textThis paper asks what are the effects of women’s and men’s job loss on future labor market outcomes. The literature provides several potential explanations for why there may exist substantial gender gaps following job loss. One important factor is the constraint that childcare responsibilities may impose on women’s labor market recovery. Much evidence shows that the arrival of children drives a wedge between men\u27s and women’s labor market trajectories (Harkness and Waldfogel (2003); Angelov, Johansson and Lindahl (2016); Kleven, Landais and Søgaard (2019)). Various studies have documented that mothers are likely to change jobs at the arrival of their first child (Nielsen, Simonsen and Verner (2004); Hotz, Johansson and Karimi (2017)) stated that this likely leads to differences in willingness to commute and search-behavior (Borghorst, Mulalic and Van Ommeren (2021); Le Barbanchon, Rathelot and Roulet (2021); Fluchtmann et al. (2020)). Another important source for overall gender gaps is differences in human capital broadly defined to include education, sectorial occupation and other types of sorting in the labor market (Goldin (2014); Goldin and Katz (2016); Petersen and Morgan (1995); Card, Cardoso and Kline (2015); Gallen, Lesner and Vejlin (2019)). Gender differences in initial sorting might affect labor market recovery. In this paper, we will try to disentangle the roles of these two channels for recovery following job displacement
The Effects of High Skill Immigration on Workers and Firms
No full textThe effects that foreign workers have on the labor market outcomes of domestic workers is of tremendous policy interest and remain unsettled (e.g., Peri and Sparber, 2011; Doranet et al., 2014). The question is difficult to answer as the observed assignment of foreign workers is not random. This research aims to identify causal effects by exploiting randomized lotteries of H-1B visas—the main visa for high skill foreign-born individuals to work in the US—that occurred between 2007 and 2015.To do so, we link data across several sources at both the individual and firm level. These data include confidential data on employment and wages for individuals and firms hosted at the US Census Bureau and visa lottery information obtained via Freedom of Information Action requests made to the Department of Labor and US Immigration and Customs Enforcement (ICE)
Federal Programs and Regional Needs: Insights from the H-2A Program and its Effects on the West Coast, Southeast and Northeast Regions of the United States
No full textThe current proposal that would affect agricultural temporary foreign workers is the Farm Workforce Modernization Act (FWMA). The FWMA makes significant changes to the US federal agricultural temporary foreign workers program (TFWP), also known as the H-2A program. Understanding the current effects, and potential future ones, of this program is important for several reasons. First, the H-2A program bears significant costs to users. Therefore, only employers who have funds enough for paying, transporting and housing H-2A workers can use this TFWP. This exclusivity means that consolidation in agriculture may be occurring at a faster pace, against the backdrop of an ongoing labor shortage. At the same time, H-2A workers are likely to be exposed to monopsony. Second, the undocumented workforce in the US is shrinking (Prassl and Cohen 2019), with an estimated 60% of farmworkers who labor without authorization (Hernandez and Gabbard 2018). Moreover, their average age is rising fast – 42 years of age in 2019, and they tend to be more settled (USDA Economic Research Service 2021). Third, new arrivals from Mexico to the U.S. have reached an all-time low because of decreasing fertility rates and rising educational levels in rural Mexico, improved employment prospects (pre-COVID) in the Mexican non-agricultural sector, and the ongoing militarization of the border (Hanson et al. 2017; Taylor et al. 2012). For all these reasons, the current agricultural labor shortage is real, resulting in high wages and an increased use of the H-2A program (Richards 2018; Hertz and Zahniser 2013; Zahniser et al. 2018; Rutledge and Taylor 2019; Luckstead and Devadoss 2019). Additionally, evidence suggests that H-2A workers are more prone than local undocumented farmworkers to seeing their rights violated (Martin et al 2021; Bacon 2021; Centro de los Derechos del Migrante 2021). Thus, investigating the use and effects of the H-2A program merits prompt attention
Long Social Distancing
Get PDFMany working-age Americans say they will continue some forms of social distancing after the COVID-19 pandemic ends. We uncover this long social distancing phenomenon in our monthly Survey of Working Arrangements and Attitudes. It is stronger among older persons, the less educated, and those who live with or care for persons at high risk from infectious diseases. Regression models fit to individual-level data suggest that social distancing lowered labor force participation by 2.4 percentage points in 2022, 1.2 points on an earnings-weighted basis. Daily interactions with at-risk persons and long COVID experiences lead to larger drags on participation. When combined with simple equilibrium models, our results imply that the social-distancing drag on participation reduced U.S. output by $205 billion in 2022, shrank the college wage premium by 2.1 percentage points, and modestly steepened the cross-sectional age-wage profile. Our data also say that social distancing intentions overlap with, but are broader than, infection worries. Drawing on self-assessed causal effects in a separate analysis, we estimate that infection worries lowered participation by one percentage point as of late 2022
