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Does Federally-Funded Job Training Work? Nonexperimental Estimates of WIA Training Impacts Using Longitudinal Data on Workers and Firms
January 2018
Working Paper Number:
CES-18-02
We study the job training provided under the US Workforce Investment Act (WIA) to adults and dislocated workers in two states. Our substantive contributions center on impacts estimated non-experimentally using administrative data. These impacts compare WIA participants who do and do not receive training. In addition to the usual impacts on earnings and employment, we link our state data to the Longitudinal Employer-Household Dynamics (LEHD) data at the US Census Bureau, which allows us to estimate impacts on the characteristics of the firms at which participants find employment. We find moderate positive impacts on employment, earnings and desirable firm characteristics for adults, but not for dislocated workers. Our primary methodological contribution consists of assessing the value of the additional conditioning information provided by the LEHD relative to the data available in state Unemployment Insurance (UI) earnings records. We find that value to be zero.
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Hours Off the Clock
January 2017
Working Paper Number:
CES-17-44
To what extent do workers work more hours than they are paid for? The relationship
between hours worked and hours paid, and the conditions under which employers can demand more hours 'off the clock,' is not well understood. The answer to this question impacts worker welfare, as well as wage and hour regulation. In addition, work off the clock has important implications for the measurement and cyclical movement of productivity and wages. In this paper, I construct a unique administrative dataset of hours paid by employers linked to a survey of workers on their reported hours worked to measure work off the clock. Using cross-sectional variation in local labor markets, I find only a small cyclical component to work off the clock. The results point to labor hoarding rather than efficiency wage theory, indicating work off the clock cannot explain the counter-cyclical movement of productivity. I find workers employed by small firms, and in industries with a high rate of wage and hour violations are associated with larger differences in hours worked than hours paid. These findings suggest the importance of tracking hours of work for enforcement of labor regulations.
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Food and Agricultural Industries: Opportunities
for Improving Measurement and Reporting
January 2016
Working Paper Number:
CES-16-58
We measure one component of off-farm food and agricultural industries using establishment
level microdata in the federal statistical system. We focus on services for crop production, and compare measures of firm and employment dynamics in this sector during the period 1992-2012 with county-level publicly available data for the same measures. Based on differences across data sources, we establish new facts regarding the evolution of food and agricultural industries, and demonstrate the value of working with confidential microdata. In addition to the data and results we present, we highlight possibilities for collaboration across universities and federal agencies to improve reporting in other segments of food and agricultural industries.
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Taking the Leap: The Determinants of Entrepreneurs Hiring their First Employee
January 2016
Working Paper Number:
CES-16-48
Job creation is one of the most important aspects of entrepreneurship, but we know relatively little about the hiring patterns and decisions of startups. Longitudinal data from the Integrated Longitudinal Business Database (iLBD), Kauffman Firm Survey (KFS), and the Growing America through Entrepreneurship (GATE) experiment are used to provide some of the first evidence in the literature on the determinants of taking the leap from a non-employer to employer firm among startups. Several interesting patterns emerge regarding the dynamics of non-employer startups hiring their first employee. Hiring rates among the universe of non-employer startups are very low, but increase when the population of non-employers is focused on more growth-oriented businesses such as incorporated and EIN businesses. If non-employer startups hire, the bulk of hiring occurs in the first few years of existence. After this point in time relatively few non-employer startups hire an employee. Focusing on more growth- and employment-oriented startups in the KFS, we find that Asian-owned and Hispanic-owned startups have higher rates of hiring their first employee than white-owned startups. Female-owned startups are roughly 10 percentage points less likely to hire their first employee by the first, second and seventh years after startup. The education level of the owner, however, is not found to be associated with the probability of hiring an employee. Among business characteristics, we find evidence that business assets and intellectual property are associated with hiring the first employee. Using data from the largest random experiment providing entrepreneurship training in the United States ever conducted, we do not find evidence that entrepreneurship training increases the likelihood that non-employers hire their first employee.
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Disconnected Geography: A Spatial Analysis of Disconnected Youth in the United States
January 2016
Working Paper Number:
CES-16-37
Since the Great Recession, US policy and advocacy groups have sought to better understand its effect on a group of especially vulnerable young adults who are not enrolled in school or training programs and not participating in the labor market, so called 'disconnected youth.' This article distinguishes between disconnected youth and unemployed youth and examines the spatial clustering of these two groups across counties in the US. The focus is to ascertain whether there are differences in underlying contextual factors among groups of counties that are mutually exclusive and spatially disparate (non-adjacent), comprising two types of spatial clusters ' high rates of disconnected youth and high rates of unemployed youth. Using restricted, household-level census data inside the Census Research Data Center (RDC) under special permission by the US Census Bureau, we were able to define these two groups using detailed household questionnaires that are not available to researchers outside the RDC. The geospatial patterns in the two types of clusters suggest that places with high concentrations of disconnected youth are distinctly different in terms of underlying characteristics from places with high concentrations of unemployed youth. These differences include, among other things, arrests for synthetic drug production, enclaves of poor in rural areas, persistent poverty in areas, educational attainment in the populace, children in poverty, persons without health insurance, the
social capital index, and elders who receive disability benefits. This article provides some preliminary evidence regarding the social forces underlying the two types of observed geospatial clusters and discusses how they differ.
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Introduction of Head Start and Maternal Labor Supply: Evidence from a Regression
Discontinuity Design
January 2016
Working Paper Number:
CES-16-35
I use the non-public decennial censuses in 1970 to investigate the effect of the Head Start program on maternal labor supply and schooling in its early years. I exploit a discontinuity in county-level Head Start funding beginning in the late 1960s to explore differences in countylevel maternal employment and maternal schooling. The results provide suggestive evidence that the more availability of Head Start led to an increase the nursery school enrollment of children and a decrease in maternal labor supply. In addition, the ITT estimates imply a relatively large, negative effect of enrollment on maternal labor supply. However, the estimates are somewhat sensitive to addition of covariates and the standard errors are also large to draw firm inferences.
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Immigrant Diversity and Complex Problem Solving
January 2016
Working Paper Number:
CES-16-04
In the growing literature exploring the links between immigrant diversity and worker productivity, recent evidence strongly suggests that diversity generates productivity improvements. However, even the most careful extant empirical work remains at some remove from the mechanisms that theory says underlie this relationship: interpersonal interaction in the service of complex problem solving. This paper aims to `stress-test' these theoretical foundations, by observing how the relationship between diversity and productivity varies across workers differently engaged in complex problem solving and interaction. Using a uniquely comprehensive matched employer-employee dataset for the United States between 1991 and 2008, this paper shows that growing immigrant diversity inside cities and workplaces offers much stronger benefits for workers intensively engaged in various forms of complex problem solving, including tasks involving high levels of innovation, creativity, and STEM. Moreover, such effects are considerably stronger for those whose work requires high levels of both problem solving and interaction.
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Task Trade and the Wage Effects of Import Competition
January 2016
Working Paper Number:
CES-16-03
Do job characteristics modulate the relationship between import competition and the wages of workers who perform those jobs? This paper tests the claim that workers in occupations featuring highly routine tasks will be more vulnerable to low-wage country import competition. Using data from the US Census Bureau, we construct a pooled cross-section (1990, 2000, and 2007) of more than 1.6 million individuals linked to the establishment in which they work. Occupational measures of vulnerability to trade competition ' routineness, analytic complexity, and interpersonal interaction on the job ' are constructed using O*NET data. The linked employer-employee data allow us to model the effect of low-wage import competition on the wages of workers with different occupational characteristics. Our results show that low-wage country import competition is associated with lower wages for US workers holding jobs that are highly routine and less complex. For workers holding nonroutine and highly complex jobs, increased import competition is associated with higher wages. Finally, workers in occupations with the highest and lowest levels of interpersonal interaction see higher wages, while workers with medium-low levels of interpersonal interaction suffer lower wages with increased low-wage import competition. These findings demonstrate the importance of accounting for occupational characteristics to more fully understand the relationship between trade and wages, and suggest ways in which task trade vulnerable occupations can disadvantage workers even when their jobs remain onshore.
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Changes in EITC Eligibility and Participation, 2005'2009
July 2014
Working Paper Number:
carra-2014-04
The rate of participation in the Earned Income Tax Credit (EITC) has been widely studied, but changes over time in eligibility for the credit have received less attention. One question of importance to policy-makers is whether (or by how much) eligibility might increase during economic downturns. The EITC is fundamentally tied to work. During periods of high unemployment, eligibility may decrease due to a lower number of workers - especially low-skilled workers - filing for a given tax year. On the other hand, family structure and underemployment may lead to increases in eligibility. For example, earners may become eligible when a two-earner family loses one job or when an earner works part of the year or fewer hours. Using IRS tax data linked with the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), I examine changes in EITC eligibility and take-up between tax years 2005 and 2009, during which time the Great Recession began and ended. Employing fixed-effects models, I assess patterns of eligibility among demographic groups based on characteristics that also predict labor market outcomes. Results indicate that, in a period when overall EITC eligibility rates increased, the state unemployment rate had a significant positive effect on eligibility and a significant negative effect on take-up. Meanwhile, although joint filers, those with more children, and men experienced increasing rates of eligibility, those with less education experienced decreasing rates. Results point to the possibility that labor market groups who experienced the highest rates of unemployment in the recession may have become ineligible due to full-year job loss.
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"It's Not You, It's Me": Breakup In U.S.-China Trade Relationships
February 2014
Working Paper Number:
CES-14-08
This paper uses confidential U.S. Customs data on U.S. importers and their Chinese exporters toinvestigate the frictions from changing exporting partners. High costs from switching partners can affect the efficiency of buyer-supplier matches by impeding the movement of importers from high to lower cost exporters. I test the significance of this channel using U.S. import data, which identifies firms on both sides (U.S. and foreign) of an international trade relationship, the location of the foreign supplier, and values and quantities for the universe of U.S. import transactions. Using transactions with China from 2003-2008, I find evidence suggesting that barriers to switching exporters are considerable: 45% of arm's-length importers maintain their partner from one year to the next, and one-third of all switching importers remain in the same city as their original partner. In addition, importers paying the highest prices are the most likely to change their exporting partner. Guided by these empirical regularities, I propose and structurally estimate a dynamic discrete choice model of exporter choice, embedded in a heterogeneous firm model of international trade. In the model, importing firms choose a future partner using information for each choice, but are subject to partner and location-specific costs if they decide to switch their current partner. Structural estimates of switching costs are large, and heterogeneous across industries. For the random sample of 50 industries I use, halving switching costs shrinks the fraction of importers remaining with their partner from 57% to 18%, and this improvement in match efficiency leads to a 12.5% decrease in the U.S.-China Import Price Index.
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