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Declining Migration wihin the US: The Role of the Labor Market
October 2013
Working Paper Number:
CES-13-53
Interstate migration has decreased steadily since the 1980s. We show that this trend is not related to demographic and socioeconomic factors, but that it appears to be connected to a concurrent secular decline in labor market transitions'i.e. the fraction of workers changing employer, industry or occupation. We explore a number of reasons for the dual trends in geographic and labor market transitions, including changes in the distribution of job opportunities across space, polarization in the labor market, concerns of dual-career households, and changes in the net benefit to changing employers. We find little empirical support for all but the last of these hypotheses. Specifically, using data from three cohorts of the National Longitudinal Surveys spanning the 1970s to the 2000s, we find that wage gains associated with employer transitions have fallen, while the returns to staying with the same employer have not changed. We favor the interpretation that, at least from the 1990s to the 2000s, the distribution of outside offers has shifted in a way that has made labor market transitions, and thus geographic transitions, less desirable to workers.
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FALLING HOUSE PRICES AND LABOR MOBILITY: EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA
August 2013
Working Paper Number:
CES-13-43
This study uses worker-level employment data from the U.S. Census Bureau to test whether falling home prices affect a worker's propensity to take a job in a different metropolitan area from where he is currently located. Using a sample of workers from the American Community Survey, I employ a within-MSA-time estimation that compares homeowners to renters in their propensities to relocate for jobs according to data from the Longitudinal Employer Household Dynamics database. This strategy allows me to disentangle the influence of house prices from that of other time-varying, location-specific shocks. Estimates show that homeowners who have experienced declines in the nominal value of their home are approximately 20% less likely to take a new job in a location outside of the metropolitan area that they currently live and work in, relative to an equivalent renter. This evidence is consistent with the hypothesis that housing lock-in has contributed to the decreased labor mobility of homeowners during the recent housing bust.
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Testing for Wage Discrimination in U.S. Manufacturing
September 2012
Working Paper Number:
CES-12-23
In spite of the large literature on labor market discrimination, the quantity of solid evidence on discrimination is relatively limited. This is because evidence of discrimination is difficult to obtain. Two individuals may be treated equally, but this does not prove discrimination unless we can show that the differences in treatment were not justified by differences in productivity. The method most commonly used to identify wage discrimination, the Oaxaca decomposition, is flawed because any omitted variables that are correlated with gender will contribute to the unexplained portion of the wage gap, leading to an over- or under-estimation of wage discrimination. Audit studies provide more direct evidence of differential treatment, but are costly to carry out. Only a small number of studies attempt to measure worker productivity to see if wage differences are justified. This may be because the data needed to measure productivity are difficult to obtain. This paper tests for wage discrimination by gender and race by estimating relative productivity from 2002 Census of Manufacturing data linked to demographic information on workers from Longitudinal Employer-Household Dynamics (LEHD) files. Comparing the estimated productivity ratios to the observed wage ratios, I conclude that females and blacks face wage discrimination in US manufacturing.
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Black-White Differences in Intergenerational Economic Mobility in the U.S.
December 2011
Working Paper Number:
CES-11-40
Traditional measures of intergenerational mobility such as the intergenerational elasticity are not useful for inferences concerning group differences in mobility with respect to the pooled income distribution. This paper uses transition probabilities and measures of 'directional rank mobility' that can identify inter-racial differences in intergenerational mobility. The study uses two data sources including one that contains social security earnings for a large intergenerational sample. I find that recent cohorts of blacks are not only significantly less upwardly mobile but also significantly more downwardly mobile than whites. This implies a steady-state distribution in which there is no racial convergence in income. A descriptive analysis using covariates reveals that test scores in adolescence can explain much of the racial difference in both upward and downward mobility. Family structure can account for some of the racial gap in upward mobility but not downward mobility. Completed schooling and parental wealth also appear to account for some of the racial gaps in intergenerational mobility.
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The Effects of Smoking in Young Adulthood on Smoking and Health Later in Life: Evidence Based on the Vietnam Era Draft Lottery
September 2008
Working Paper Number:
CES-08-35
An important, unresolved question for health policymakers and consumers is whether cigarette smoking in young adulthood has significant lasting effects into later adulthood. The Vietnam era draft lottery offers an opportunity to address this question, because it randomly assigned young men to be more likely to experience conditions favoring cigarette consumption, including highly subsidized prices. Using this natural experiment, we find that military service increased the probability of smoking by 35 percentage points as of 1978-80, when men in the relevant cohorts were aged 25-30, but later in adulthood this effect was substantially attenuated and did not lead to large negative health effects.
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Access Methods for United States Microdata
August 2007
Working Paper Number:
CES-07-25
Beyond the traditional methods of tabulations and public-use microdata samples, statistical agencies have developed four key alternatives for providing non-government researchers with access to confidential microdata to improve statistical modeling. The first, licensing, allows qualified researchers access to confidential microdata at their own facilities, provided certain security requirements are met. The second, statistical data enclaves, offer qualified researchers restricted access to confidential economic and demographic data at specific agency-controlled locations. Third, statistical agencies can offer remote access, through a computer interface, to the confidential data under automated or manual controls. Fourth, synthetic data developed from the original data but retaining the correlations in the original data have the potential for allowing a wide range of analyses.
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Do Employment Protections Reduce Productivity? Evidence from U.S. States
March 2007
Working Paper Number:
CES-07-04
Theory predicts that mandated employment protections may reduce productivity by distorting production choices. Firms facing (non-Coasean) worker dismissal costs will curtail hiring below efficient levels and retain unproductive workers, both of which should affect productivity. These theoretical predictions have rarely been tested. We use the adoption of wrongful discharge protections by U.S. state courts over the last three decades to evaluate the link between dismissal costs and productivity. Drawing on establishment-level data from the Annual Survey of Manufacturers and the Longitudinal Business Database, our estimates suggest that wrongful discharge protections reduce employment flows and firm entry rates. Moreover, analysis of plant-level data provides evidence of capital deepening and a decline in total factor productivity following the introduction of wrongful discharge protections. This last result is potentially quite important, suggesting that mandated employment protections reduce productive efficiency as theory would suggest. However, our analysis also presents some puzzles including, most significantly, evidence of strong employment growth following adoption of dismissal protections. In light of these puzzles, we read our findings as suggestive but tentative.
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Do Alternative Opportunities Matter? The Role of Female Labor Markets in the Decline of Teacher Quality
July 2006
Working Paper Number:
CES-06-22
This paper documents the widely perceived but little investigated notion that teachers today are less qualified than they once were. Using standardized test scores, undergraduate institution selectivity, and positive assortative mating characteristics as measures of quality, evidence of a marked decline in the quality of young women going into teaching between 1960 and 1990 is presented. In contrast, the quality of young women becoming professionals increased. The Roy model of selfselection is used to highlight how occupation differences in the returns to skill determine average teacher quality. Estimates suggest the significance of increasing professional opportunities for women in affecting the decline in teacher quality.
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Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey
June 2005
Working Paper Number:
CES-05-07
An important finding in the rapidly growing literature on self-employment is that the probability of self-employment is substantially higher among the children of business owners than among the children of non-business owners. Using data from the confidential and restricted-access Characteristics of Business Owners (CBO) Survey, we provide some suggestive evidence on the causes of intergenerational links in business ownership and the related issue of how having a family business background affects small business outcomes. Estimates from the CBO indicate that more than half of all business owners had a self-employed family member prior to starting their business. Conditional on having a self-employed family member, less than 50 percent of small business owners worked in that family member's business suggesting that it is unlikely that intergenerational links in self-employment are solely due to the acquisition of general and specific business capital and that instead similarities across family members in entrepreneurial preferences may explain part of the relationship. In contrast, estimates from regression models conditioning on business ownership indicate that having a self-employed family member plays only a minor role in determining small business outcomes, whereas the business human capital acquired from prior work experience in a family member's business appears to be very important for business success. Estimates from the CBO also indicate that only 1.6 percent of all small businesses are inherited suggesting that the role of business inheritances in determining intergenerational links in self-employment is limited at best.
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Transitions in Welfare Participation and Female Headship
February 2004
Working Paper Number:
CES-04-01
This study uses data from the 1990, 1992, 1993, and 1996 panels of the Survey of Income and Program Participation to examine how welfare policies and local economic conditions contribute to women's transitions into and out of female headship and into and out of welfare participation. It also examines whether welfare participation is directly associated with longer spells of headship. The study employs a simultaneous hazards approach that accounts for unobserved heterogeneity in all of its transition models and for the endogeneity of welfare participation in its headship model. The estimation results indicate that welfare participation significantly reduces the chances of leaving female headship. The estimates also reveal that more generous welfare benefits contribute indirectly to headship by increasing the chances that mothers will enter welfare. More generous Earned Income Tax Credit benefits are associated with longer spells of headship, nonheadship, and welfare participation and nonparticipation. Other measures of welfare policies, including indicators for the adoption of welfare waivers and the implementation of Temporary Assistance for Needy Families programs, are generally not significantly associated with headship or welfare receipt. Better economic opportunities are estimated to increase headship but reduce welfare participation among unmarried mothers.
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