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Youth Disconnection During the COVID-19 Pandemic
Get PDFThis 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 pandemic was mostly driven by a reduction in full-time work, but toward the end of 2020, the school enrollment rate also fell. Within-individual transition analysis reveals that the pandemic drove some individuals to disconnection, regardless of whether those persons were in school, at work, or already disconnected. Full-time workers saw the largest increase in transition to disconnection. Compared to the 2007 recession, the full-time-work to full-time-work transition decreased more and the full-time-work to disconnection transition increased more during this pandemic
Long-Run Effects on Employment Rates of Local Demand Shocks, Across and Within Local Labor Markets
Get PDFThis 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 has greater effects on county employment rates. Reallocating CZ jobs or job shocks toward more distressed counties within a CZ results in greater effects on the CZ’s average employment rate. In addition, a CZ shock’s effects on a county’s employment rate tend to be higher if the CZ’s baseline demand-driven growth trend is below average. This is particularly true in CZs whose baseline distress was average or low
Revisiting U.S. Wage Inequality at the Bottom 50%
No full textWhile inequality at the top half of the wage distribution has been rising steadily since 1980, inequality at the bottom of the distribution has been unstable: it increased in the early 1980s, decreased in the 1990s, and then moderately increased since the 2000s. Several papers have argued that these trends are the result of a routine-biased-technological-change (RBTC). Models of RBTC predict a decline in middle-wages (“Wage Polarization”) which generates a decline in bottom-half inequality as occurred during the 1990s. However, these models cannot explain why inequality at the bottom 50% resumed growing. They also do not explain why specifically middle-wages declined when routine workers are dispersed across the entire bottom half of the wage distribution. Earlier decomposition exercises argued that RBTC cannot explain these wage trends in full. I show that a small-yet-important refinement to the RBTC model can resolve all these puzzles. Instead of assuming technology replaces workers, I assume it replaces their skill. At first, skill-replacing RBTC (SR-RBTC) lowers wages for middle-wage workers since they have the highest skill among routine workers. Middle-wage workers then leave routine occupations. When SR-RBTC continues it reduces wages for the remaining routine-workers who are mostly low-wage, and inequality at the bottom 50% resumes growing. I test the model predictions using an interactive-fixed-effect-model. I find that the return to skill sharply declined in routine occupations and the composition of routine workers became less skilled. Finally, I develop a new decomposition method, “Skewness Decomposition”, to show that the drop in inequality at routine occupations is the main driver of wage polarization. This was not captured with other decomposition methods as it violates the ignorability assumption that underlies them
Impact Estimates for Fort Custer Multi-Tenant Industrial Space
Get PDFIn support of a grant application to be submitted to the U.S. Economic Development Administration (EDA), Battle Creek Unlimited (BCU) asked the Regional and Economic Planning Services Team at the W. E. Upjohn Institute for Employment Research (Upjohn) to estimate the economic impact of the building and operations of a multi-tenant industrial incubator in Battle Creek, Michigan
Intergenerational Mobility: How Gender, Race, and Family Structure Affect Adult Outcomes
Get PDFThis volume presents a complex portrait of the interrelationships among parents’ marital status and education, child gender, and the nature and success of children’s transitions into adulthood. The first three chapters focus on differences in parents’ investments in their children, while the final three chapters focus directly on intergenerational income mobility.https://research.upjohn.org/up_press/1286/thumbnail.jp
Job Creation Policies Can Raise Local Employment Rates, Especially for Distressed Communities
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Why Working From Home Will Stick
No full textWe survey over 20,000 of U.S. workers over several waves to investigate whether, how, and why working from home will stick after COVID-19. The pandemic drove a mass social experiment in which half of all paid hours were provided from home between May and December 2020. We estimate about 20 percent of all full workdays will be supplied from home after the pandemic ends, compared with just 5 percent before. We provide evidence on five mechanisms behind this persistent shift to working from home: better-than-expected experiences working from home, diminished stigma, investments in physical and human capital enabling working from home, reluctance to return to pre-pandemic activities, and innovation supporting working from home. We also examine some implications of a persistent shift in working arrangements: First, high-income workers, especially, will enjoy the perks of working from home. Second, we forecast that the post-pandemic shift to working from home will lower worker spending in major city centers by 5 to 10 percent. Third, many workers report being more productive at home than on business premises, so post-pandemic work from home plans may raise productivity as much as 2.7 percent