-
Childhood Housing and Adult Earnings: A Between-Siblings Analysis of Housing Vouchers and Public Housing
January 2013
Working Paper Number:
CES-13-48RR
To date, research on the long-term effects of childhood participation in voucher-assisted and public housing has been limited by the lack of data and suitable identification strategies. We create a national level longitudinal data set that enables us to analyze how children's housing experiences affect adult earnings and incarceration rates. While naive estimates suggest there are substantial negative consequences to childhood participation in voucher assisted and public housing, this result appears to be driven largely by selection of households into housing assistance programs. To mitigate this source of bias, we employ household fixed-effects specifications that use only within-household (across-sibling) variation for identification. Compared to naive specifications, household fixed-effects estimates for earnings are universally more positive, and they suggest that there are positive and statistically significant benefits from childhood residence in assisted housing on young adult earnings for nearly all demographic groups. Childhood participation in assisted housing also reduces the likelihood of incarceration across all household race/ethnicity groups. Time spent in voucher-assisted or public housing is especially beneficial for females from non-Hispanic Black households, who experience substantial increases in expected earnings and lower incarceration rates.
View Full
Paper PDF
-
Dynamically Consistent Noise Infusion and Partially Synthetic Data as Confidentiality Protection Measures for Related Time Series
July 2012
Working Paper Number:
CES-12-13
The Census Bureau's Quarterly Workforce Indicators (QWI) provide detailed quarterly statistics on employment measures such as worker and job flows, tabulated by worker characteristics in various combinations. The data are released for several levels of NAICS industries and geography, the lowest aggregation of the latter being counties. Disclosure avoidance methods are required to protect the information about individuals and businesses that contribute to the underlying data. The QWI disclosure avoidance mechanism we describe here relies heavily on the use of noise infusion through a permanent multiplicative noise distortion factor, used for magnitudes, counts, differences and ratios. There is minimal suppression and no complementary suppressions. To our knowledge, the release in 2003 of the QWI was the first large-scale use of noise infusion in any official statistical product. We show that the released statistics are analytically valid along several critical dimensions { measures are unbiased and time series properties are preserved. We provide an analysis of the degree to which confidentiality is protected. Furthermore, we show how the judicious use of synthetic data, injected into the tabulation process, can completely eliminate suppressions, maintain analytical validity, and increase the protection of the underlying confidential data.
View Full
Paper PDF
-
The Transitional Costs of Sectoral Reallocation: Evidence from the Clean Air Act and the Workforce
January 2012
Working Paper Number:
CES-12-02
New environmental regulations lead to a rearrangement of production away from polluting industries, and workers in those industries are adversely affected. This paper uses linked worker-firm data in the United States to estimate the transitional costs associated with reallocating workers from newly regulated industries to other sectors of the economy. The focus on workers rather than industries as the unit of analysis allows me to examine previously unobserved economic outcomes such as non-employment and long run earnings losses from job transitions, both of which are critical to understanding the reallocative costs associated with these policies. Using panel variation induced by the 1990 Clean Air Act Amendments (CAAA), I find that the reallocative costs of environmental policy are significant. Workers in newly regulated plants experienced, in aggregate, more than $9 billion inforegone earnings for the years after the change in policy. Most of these costs are driven by non-employment and lower earnings in future employment, while earnings of workers who remain with their firm change little. Relative to the estimated benefits of the 1990 CAAA, these one-time transitional costs are small. However, the estimated costs far exceed the workforce compensation policies designed to mitigate some of these earnings losses.
View Full
Paper PDF
-
LEHD Data Documentation LEHD-OVERVIEW-S2008-rev1
December 2011
Working Paper Number:
CES-11-43
View Full
Paper PDF
-
Firm Market Power and the Earnings Distribution
December 2011
Working Paper Number:
CES-11-41
Using the Longitudinal Employer Household Dynamics (LEHD) data from the United States Census Bureau, I compute firm-level measures of labor market (monopsony) power. To generate these measures, I extend the dynamic model proposed by Manning (2003) and estimate the labor supply elasticity facing each private non-farm firm in the US. While a link between monopsony power and earnings has traditionally been assumed, I provide the first direct evidence of the positive relationship between a firm\'s labor supply elasticity and the earnings of its workers. I also contrast the semistructural method with the more traditional use of concentration ratios to measure a firm\'s labor market power. In addition, I provide several alternative measures of labor market power which account for potential threats to identification such as endogenous mobility. Finally, I construct a counterfactual earnings distribution which allows the effects of firm market power to vary across the earnings distribution. I estimate the average firm\'s labor supply elasticity to be 1.08, however my findings suggest there to be significant variability in the distribution of firm market power across US firms, and that dynamic monopsony models are superior to the use of concentration ratios in evaluating a firm\'s labor market power. I find that a one-unit increase in the labor supply elasticity to the firm is associated with wage gains of between 5 and 18 percent. While nontrivial, these estimates imply that firms do not fully exercise their labor market power over their workers. Furthermore, I find that the negative earnings impact of a firm\'s market power is strongest in the lower half of the earnings distribution, and that a one standard deviation increase in firms\' labor supply elasticities reduces the variance of the earnings distribution by 9 percent.
View Full
Paper PDF
-
Acquiring Labor
October 2011
Working Paper Number:
CES-11-32
We present evidence that some firms pursue M&A activity with the objective of obtaining a larger workforce. Firms most likely to be acquired for their large labor force, firms with the largest ex ante employment, are associated with more positive post-merger employment outcomes. Moreover, we find this relation is strongest when acquiring labor outside of an M&A is likely to be most difficult, due to tight labor conditions, or most valuable, in high human capital industries. We further find that high employment target firms are associated with relatively greater post-merger wage increases and lower post-merger employee turnover. We find no evidence that the positive relation between target ex ante employment and ex post employment change is driven by target asset size, market capitalization, industry, profitability or acquirer characteristics. Our findings do not exclude the possibility that a different subset of M&A activity may be motivated to penalize managers who have tolerated over-employment. Indeed, we find evidence consistent with this disciplinary motivation when considering acquisitions of targets in declining industries.
View Full
Paper PDF
-
Who Works for Startups? The Relation between Firm Age, Employee Age, and Growth
October 2011
Working Paper Number:
CES-11-31
We present evidence that young employees are an important ingredient in the creation and growth of firms. Our results suggest that young employees possess attributes or skills, such as willingness to take risk or innovativeness, which make them relatively more valuable in young, high growth, firms. Young firms disproportionately hire young employees, controlling for firm size, industry, geography and time. Young employees in young firms command higher wages than young employees in older firms and earn wages that are relatively more equal to older employees within the same firm. Moreover, young employees disproportionately join young firms that subsequently exhibit higher growth and raise venture capital financing. Finally, we show that an increase in the regional supply of young workers increases the rate of new firm creation. Our results are relevant for investors and executives in young, high growth, firms, as well as policymakers interested in fostering entrepreneurship.
View Full
Paper PDF
-
Estimating Measurement Error in SIPP Annual Job Earnings: A Comparison of Census Bureau Survey and SSA Administrative Data
July 2011
Working Paper Number:
CES-11-20
We quantify sources of variation in annual job earnings data collected by the Survey of Income and Program Participation (SIPP) to determine how much of the variation is the result of measurement error. Jobs reported in the SIPP are linked to jobs reported in an administrative database, the Detailed Earnings Records (DER) drawn from the Social Security Administration's Master Earnings File, a universe file of all earnings reported on W-2 tax forms. As a result of the match, each job potentially has two earnings observations per year: survey and administrative. Unlike previous validation studies, both of these earnings measures are viewed as noisy measures of some underlying true amount of annual earnings. While the existence of survey error resulting from respondent mistakes or misinterpretation is widely accepted, the idea that administrative data are also error-prone is new. Possible sources of employer reporting error, employee under-reporting of compensation such as tips, and general differences between how earnings may be reported on tax forms and in surveys, necessitates the discarding of the assumption that administrative data are a true measure of the quantity that the survey was designed to collect. In addition, errors in matching SIPP and DER jobs, a necessary task in any use of administrative data, also contribute to measurement error in both earnings variables. We begin by comparing SIPP and DER earnings for different demographic and education groups of SIPP respondents. We also calculate different measures of changes in earnings for individuals switching jobs. We estimate a standard earnings equation model using SIPP and DER earnings and compare the resulting coefficients. Finally exploiting the presence of individuals with multiple jobs and shared employers over time, we estimate an econometric model that includes random person and firm effects, a common error component shared by SIPP and DER earnings, and two independent error components that represent the variation unique to each earnings measure. We compare the variance components from this model and consider how the DER and SIPP differ across unobservable components.
View Full
Paper PDF
-
LEHD Infrastructure Files in the Census RDC: Overview of S2004 Snapshot
April 2011
Working Paper Number:
CES-11-13
The Longitudinal Employer-Household Dynamics (LEHD) Program at the U.S. Census Bureau, with the support of several national research agencies, has built a set of infrastructure files using administrative data provided by state agencies, enhanced with information from other administrative data sources, demographic and economic (business) surveys and censuses. The LEHD Infrastructure Files provide a detailed and comprehensive picture of workers, employers, and their interaction in the U.S. economy. This document describes the structure and content of the 2004 Snapshot of the LEHD Infrastructure files as they are made available in the Census Bureau's Research Data Center network.
View Full
Paper PDF
-
What Do I Take With Me: The Impact of Transfer and Replication of Resources on Parent and Spin-Out Firm Performance
February 2011
Working Paper Number:
CES-11-06
Focusing on entrepreneurial ventures created by employees leaving a firm, our study examines the differential impact of knowledge transfer and knowledge spillovers on both parent and spin-out performance. While extant research often uses knowledge transfer and spillover interchangeably, our study distinguishes between the two based on the 'rivalness' of the relevant knowledge. We theorize that both knowledge transfer (proxied by the size of the exiting employee team) and knowledge spillovers (proxied by the experience of the exiting employee team) will aid spin-out performance. However, knowledge transfer, being more rival, will have a greater adverse impact than knowledge spillovers on parent firm performance. Using U.S. Census Bureau linked employee-employer data from the legal services industry, we find support for our hypotheses. Our study thus contributes to extant literature by highlighting a key dimension of knowledge ' rivalness ' and the differential competitive dynamics effect of resources with varying degrees of rivalness.
View Full
Paper PDF
