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Disability Insurance Screening and Worker Outcomes
Get PDFWe estimate the returns to more targeted disability insurance (DI) programs in terms of labor force participation and worker health. To do so, we analyze male workers after an acute workplace injury that experience differential levels of application screening. We find that when workers face tighter screening requirements, they are less likely to claim disability and are more likely to remain in the labor force. We observe no differences in any physical or mental health outcomes, including reinjury. Our findings imply that imposing stricter DI screening requirements has large fiscal benefits but does not yield any detectable health costs, on the margin
Globalization, Trade Imbalances, and Labor Market Adjustment
Get PDFWe 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 imbalances changes both qualitatively and quantitatively the short- and long-run implications of globalization shocks for labor reallocation and unemployment dynamics. In a series of empirical applications, we study the labor market effects of shocks accrued to the global economy, their implications for the gains from trade, and we revisit the “China Shock” through the lens of our model. We show that the U.S. enjoys a 2.2 percent gain in response to globalization shocks. These gains would have been 73 percent larger in the absence of the global savings glut, but they would have been 40 percent smaller in a balanced-trade world
Labor Market Discrimination
No full textStandard economic methods of testing for labor market discrimination regress wages on race and other correlated observables. However, these methods may severely underestimate the role of discrimination on minority welfare if racial prejudice also affects conditioning variables or labor market policies. To address these concerns, this project comprises two related analyses. First, we analyze the effect of racial prejudice on pre-market factors by constructing state-level estimates of Black-White gaps in labor force participation, hours worked and educational attainment. We then regress the residual race gaps on state-level GSS estimates of racial prejudice. Second, we analyze the role of racial prejudice in social and economic policies by regressing the generosity/progressivity of state-level social insurance benefits and eligibility (SNAP, TANF, Medicaid), minimum wage laws and income taxes on our racial prejudice measures
The Effects of Noncompete Agreements\u27 Enforceability
No full textOver the past few years, academics and policymakers alike have become concerned about the surprising prevalence of the use of noncompete agreements (NCAs) and their effects on workers and firms. The best available data indicates that at least 14% of workers were bound by an NCA in 2014, and their use extends to a wide range of industries, occupations, and skill levels (Starr et al. 2019)
Taxing the Gender Gap: Labor Market Effects of a Payroll Tax Cut for Women in Italy
No full textDoes the government have the power to curb gender inequalities in the labor market? This project studies the labor market impacts of a large payroll tax cut for hiring unemployed women in Italy. The empirical approach combines rich matched employer-employee data with cross-municipality, cross-cohort and cross-profession discontinuities in exposure to the payroll tax cut generated by the 2012 reform. These discontinuities are bound to improve female labor market outcomes in contexts where gender attitudes are still traditional. The empirical analysis will proceed in two steps. First, I will study the effects of the policy on several individual-level labor market outcomes, including wages, labor force participation, job duration and time spent on welfare. Second, I will take a firm-level perspective to analyze the effect of the payroll tax cut on business growth and firm performance
Economic Benefits and Costs of Tuition-Free College in Illinois
Get PDFThis memo estimates the main economic benefits of tuition-free college in Illinois. These economic benefits are compared with the costs of making tuition free. In addition, we consider possible fiscal benefits of tuition-free college and whether these fiscal benefits for Illinois will offset the fiscal costs of making tuition free. This memo is based on cost estimates presented to the State of Illinois in an August 2020 memo entitled “Estimated Cost of Tuition-Free College in Illinois” and should be considered in conjunction with that memo
