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Estimating the Potential Impact of Combined Race and Ethnicity Reporting on Long-Term Earnings Statistics
September 2024
Working Paper Number:
CES-24-48
We use place of birth information from the Social Security Administration linked to earnings data from the Longitudinal Employer-Household Dynamics Program and detailed race and ethnicity data from the 2010 Census to study how long-term earnings differentials vary by place of birth for different self-identified race and ethnicity categories. We focus on foreign-born persons from countries that are heavily Hispanic and from countries in the Middle East and North Africa (MENA). We find substantial heterogeneity of long-term earnings differentials within country of birth, some of which will be difficult to detect when the reporting format changes from the current two-question version to the new single-question version because they depend on self-identifications that place the individual in two distinct categories within the single-question format, specifically, Hispanic and White or Black, and MENA and White or Black. We also study the USA-born children of these same immigrants. Long-term earnings differences for the 2nd generation also vary as a function of self-identified ethnicity and race in ways that changing to the single-question format could affect.
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Family Resources and Human Capital in Economic Downturns
March 2024
Working Paper Number:
CES-24-15
I study how recessions impact the human capital of young adults and how these effects vary over the parent income gradient. Using a novel confidential linked survey dataset from U.S. Census, I document that the negative effects of worse local unemployment shocks on educational attainment are strongly concentrated among middle-class children, with losses in parental home equity being potentially important mechanisms. To probe the aggregate implications of these findings and assess policy implications, I develop a model of selection into college and life-cycle earnings that comprises endogenous parental transfers for education, multiple schooling options, and uncertainty in post-graduation employment outcomes. Simulating a recession in the model produces a 'hollowing out the middle' in lifecycle earnings in the aggregate, and educational borrowing constraints play a key role in this result. Counterfactual policies to expand college access in response to the recession can mitigate these effects but struggle to be cost effective.
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Maternal and Infant Health Inequality: New Evidence from Linked Administrative Data
November 2022
Working Paper Number:
CES-22-55
We use linked administrative data that combines the universe of California birth records, hospitalizations, and death records with parental income from Internal Revenue Service tax records and the Longitudinal Employer-Household Dynamics file to provide novel evidence on economic inequality in infant and maternal health. We find that birth outcomes vary nonmonotonically with parental income, and that children of parents in the top ventile of the income distribution have higher rates of low birth weight and preterm birth than those in the bottom ventile. However, unlike birth outcomes, infant mortality varies monotonically with income, and infants of parents in the top ventile of the income distribution---who have the worst birth outcomes---have a death rate that is half that of infants of parents in the bottom ventile. When studying maternal health, we find a similar pattern of non-monotonicity between income and severe maternal morbidity, and a monotonic and decreasing relationship between income and maternal mortality. At the same time, these disparities by parental income are small when compared to racial disparities, and we observe virtually no convergence in health outcomes across racial and ethnic groups as income rises. Indeed, infant and maternal health in Black families at the top of the income distribution is markedly worse than that of white families at the bottom of the income distribution. Lastly, we benchmark the health gradients in California to those in Sweden, finding that infant and maternal health is worse in California than in Sweden for most outcomes throughout the entire income distribution.
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Leapfrogging the Melting Pot? European Immigrants' Intergenerational Mobility Across the 20th Century
August 2021
Working Paper Number:
CES-21-20
During the early twentieth century, industrial-era European immigrants entered the United States with lower levels of education than the U.S. average. However, empirical research has yielded unclear and inconsistent evidence about the extent and pace of their integration, leaving openings for arguments that contest the narrative that these groups experienced rapid integration and instead assert that educational deficits among lower-status groups persisted across multiple generations. Here, we advance another argument, that European immigrants may have 'leapfrogged' or exceeded U.S.-born non-Hispanic white attainment by the third generation. To assess these ideas, we reconstituted three-generation families by linking individuals across the 1940 Census, years 1973, 1979, 1981-90 of the Current Population Survey, the 2000 Census, and years 2001-2017 of the American Community Survey. Results show that most European immigrant groups not only caught up with U.S.-born whites by the second generation, but surpassed them, and this advantage further increased in the third generation. This research provides a new understanding of the time to integration for 20th century European immigrant groups by showing that they integrated at a faster pace than previously thought, indicative of a process of accelerated upward mobility.
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The Grandkids Aren't Alright: The Intergenerational Effects of Prenatal Pollution Exposure
November 2020
Working Paper Number:
CES-20-36
Evidence shows that environmental quality shapes human capital at birth with long-run effects on health and welfare. Do these effects, in turn, affect the economic opportunities of future generations? Using newly linked survey and administrative data, providing more than 150 million parent/child links, we show that regulation-induced improvements in air quality that an individual experienced in the womb increase the likelihood that their children, the second generation, attend college 40-50 years later. Intergenerational transmission appears to arise from greater parental resources and investments, rather than heritable, biological channels. Our findings suggest that within-generation estimates of marginal damages substantially underestimate the total welfare effects of improving environmental quality and point to the empirical relevance of environmental quality as a contributor to economic opportunity in the United States.
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The EITC and Intergenerational Mobility
November 2020
Working Paper Number:
CES-20-35
We study how the largest federal tax-based policy intended to promote work and increase incomes among the poor'the Earned Income Tax Credit (EITC)'affects the socioeconomic standing of children who grew up in households affected by the policy. Using the universe of tax filer records for children linked to their parents, matched with demographic and household information from the decennial Census and American Community Survey data, we exploit exogenous differences by children's ages in the births and 'aging out' of siblings to assess the effect of EITC generosity on child outcomes. We focus on assessing mobility in the child income distribution, conditional on the parents' position in the parental income distribution. Our findings suggest significant and mostly positive effects of more generous EITC refunds on the next generation that vary substantially depending on the child's household type (single-mother or married family) and by the child's gender. All children except White children from single-mother households experience increases in cohort-specific income rank, own family income, and the probability of working at ages 25'26 in response to greater EITC generosity. Children from married households show a considerably stronger response on these measures than do children from single-mother households. Because of the concentration of family types within race groups, the more positive response among children from married households suggests the EITC might lead to higher within-generation racial income inequality. Finally, we examine how the impact of EITC generosity varies by the age at which children are exposed to higher benefits. These results suggest that children who first receive the more generous two-child treatment at later ages have a stronger positive response in terms of rank and family income than children exposed at younger ages.
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Race and Economic Opportunity in the United States: An Intergenerational Perspective
September 2018
Working Paper Number:
CES-18-40R
We study the sources of racial and ethnic disparities in income using de-identified longitudinal data covering nearly the entire U.S. population from 1989-2015. We document three sets of results. First, the intergenerational persistence of disparities varies substantially across racial groups. For example, Hispanic Americans are moving up significantly in the income distribution across generations because they have relatively high rates of intergenerational income mobility. In contrast, black Americans have substantially lower rates of upward mobility and higher rates of downward mobility than whites, leading to large income disparities that persist across generations. Conditional on parent income, the black-white income gap is driven entirely by large differences in wages and employment rates between black and white men; there are no such differences between black and white women. Second, differences in family characteristics such as parental marital status, education, and wealth explain very little of the black-white income gap conditional on parent income. Differences in ability also do not explain the patterns of intergenerational mobility we document. Third, the black-white gap persists even among boys who grow up in the same neighborhood. Controlling for parental income, black boys have lower incomes in adulthood than white boys in 99% of Census tracts. Both black and white boys have better outcomes in low-poverty areas, but black-white gaps are larger on average for boys who grow up in such neighborhoods. The few areas in which black-white gaps are relatively small tend to be low-poverty neighborhoods with low levels of racial bias among whites and high rates of father presence among blacks. Black males who move to such neighborhoods earlier in childhood earn more and are less likely to be incarcerated. However, fewer than 5% of black children grow up in such environments. These findings suggest that reducing the black-white income gap will require efforts whose impacts cross neighborhood and class lines and increase upward mobility specifically for black men.
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Using Linked Data to Investigate True Intergenerational Change: Three Generations Over Seven Decades
August 2018
Working Paper Number:
carra-2018-09
It is widely thought that immigrants and their families undergo profound cultural and socioeconomic changes as a consequence of coming into contact with U.S. society, but the way this occurs remains unclear and controversial due in large part to data limitations. In this paper, we provide proof of concept for analyses using linked data that allow us to compare outcomes across more 'exact' family generations. Specifically, we are able to follow immigrant parents and their children and grandchildren across seven decades using census and survey data from 1940 to 2014. We describe the data and linkage methodology, evaluate the representativeness of the linked sample, test a method for adjusting for biases that arise from non-representative linkages, and describe the size, diversity, and socioeconomic characteristics of the linked sample. We demonstrate that large sample sizes of linked data will likely permit us to compare several national origin groups across multiple generations.
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The Impact of College Education on Old-Age Mortality: A Study of Marginal Treatment Effects
January 2017
Working Paper Number:
CES-17-30
Using a newly constructed dataset that links 2000 U.S. Census long-form records to Social Security Administration data files, I evaluate the effect of college education on mortality. In an OLS regression, women and men who have at least some college education have 20% lower mortality rates than those with a high school degree or less. I proceed with an empirical design intended to illuminate the extent to which this relationship is causal, estimating marginal treatment effects (MTEs) using the proximity of the nearest college to individuals' birthplace as an instrument. Results indicate positive selection into college education (in terms of longevity) for both women and men. Selection drives almost all of the mortality gap for women. For men, longevity gains from college attendance are concentrated among individuals with unobserved variables that make them unlikely attend college. This suggests that men who would benefit most from receiving college education in terms of mortality reductions are those who are not attending.
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Industrial Investments in Energy Efficiency: A Good Idea?
January 2017
Working Paper Number:
CES-17-05
Yes, from an energy-saving perspective. No, once we factor in the negative output and productivity adoption effects. These are the main conclusions we reach by conducting the first large-scale study on cogeneration technology adoption ' a prominent form of energy-saving investments ' in the U.S. manufacturing sector, using a sample that runs from 1982 to 2010 and drawing on multiple data sources from the U.S. Census Bureau and the U.S. Energy Information Administration. We first show through a series of event studies that no differential trends exist in energy consumption nor production activities between adopters and never-adopters prior to the adoption event. We then compute a distribution of realized returns to energy savings, using accounting methods and regression methods, based on our difference-in-difference estimator. We find that (1) significant heterogeneity exists in returns; (2) unlike previous studies in the residential sector, the realized and projected returns to energy savings are roughly consistent in the industrial sector, for both private and social returns; (3) however, cogeneration adoption decreases manufacturing output and productivity persistently for at least the next 7-10 years, relative to the control group. Our IV strategies also show sizable decline in TFP post adoption.
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