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Work Organization and Cumulative Advantage
March 2025
Working Paper Number:
CES-25-18
Over decades of wage stagnation, researchers have argued that reorganizing work can boost pay for disadvantaged workers. But upgrading jobs could inadvertently shift hiring away from those workers, exacerbating their disadvantage. We theorize how work organization affects cumulative advantage in the labor market, or the extent to which high-paying positions are increasingly allocated to already-advantaged workers. Specifically, raising technical skill demands exacerbates cumulative advantage by shifting hiring towards higher-skilled applicants. In contrast, when employers increase autonomy or skills learned on-the-job, they raise wages to buy worker consent or commitment, rather than pre-existing skill. To test this idea, we match administrative earnings to task descriptions from job posts. We compare earnings for workers hired into the same occupation and firm, but under different task allocations. When employers raise complexity and autonomy, new hires' starting earnings increase and grow faster. However, while the earnings boost from complex, technical tasks shifts employment toward workers with higher prior earnings, worker selection changes less for tasks learned on-the-job and very little for high autonomy tasks. These results demonstrate how reorganizing work can interrupt cumulative advantage.
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The Effect of Oil News Shocks on Job Creation and Destruction
January 2025
Working Paper Number:
CES-25-06
Using data from the Annual Survey of Manufactures (ASM) and the Census of Manufacturing (CMF), we construct quarterly measures of job creation and destruction by 3-digit NAICS industries spanning from 1980Q3-2016Q4. These long series allow us to address three questions regarding the effect of oil news shocks. What is the average effect of oil news shocks on sectoral labor reallocation? What characteristics explain the observed heterogeneity in the average responses across industries? Has the response of US manufacturing changed over time? We find evidence that oil news shocks exert only a moderate effect on total manufacturing net employment growth but lead to a significant increase in job reallocation. However, we find a high degree of heterogeneity in responses across industries. We then show that the cross-industry variation in the sensitivity of net employment growth and excess job reallocation to oil news shocks is related to differences in energy costs, the rate of energy to capital expenditures, and the share of mature firms in the industry. Finally, we illustrate how the dynamic response of sectoral job creation and destruction to oil news shocks has declined since the mid-2000s.
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Interpreting Cohort Profiles of Lifecycle Earnings Volatility
April 2024
Working Paper Number:
CES-24-21
We present new estimates of earnings volatility over time and the lifecycle for men and women by race and human capital. Using a long panel of restricted-access administrative Social Security earnings linked to the Current Population Survey, we estimate volatility with both transparent summary measures, as well as decompositions into permanent and transitory components. From the late 1970s to the mid 1990s there is a strong negative trend in earnings volatility for both men and women. We show this is driven by a reduction in transitory variance. Starting in the mid 1990s there is relative stability in trends of male earnings volatility because of an increase in the variance of permanent shocks, especially among workers without a college education, and a more attenuated trend decline among women. Cohort analyses indicate a strong U-shape pattern of volatility over the working life, which comes from large permanent shocks early and later in the lifecycle. However, this U-shape shifted downward and leftward in more recent cohorts, the latter from the fanning out of lifecycle transitory volatility in younger cohorts. These patterns are more pronounced among White men and women compared to Black workers.
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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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Eviction and Poverty in American Cities
July 2023
Working Paper Number:
CES-23-37
More than two million U.S. households have an eviction case filed against them each year.
Policymakers at the federal, state, and local levels are increasingly pursuing policies to reduce the number of evictions, citing harm to tenants and high public expenditures related to homelessness. We study the consequences of eviction for tenants using newly linked administrative data from two major urban areas: Cook County (which includes Chicago) and New York City. We document that prior to housing court, tenants experience declines in earnings and employment and increases in financial distress and hospital visits. These pre-trends pose a challenge for disentangling correlation and causation. To address this problem, we use an instrumental variables approach based on cases randomly assigned to judges of varying leniency. We find that an eviction order increases homelessness and hospital visits and reduces earnings, durable goods consumption, and access to credit in the first two years. Effects on housing and labor market outcomes are driven by impacts for female and Black tenants. In the longer-run, eviction increases indebtedness and reduces credit scores.
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Managing Employee Retention Concerns: Evidence from U.S. Census Data
February 2023
Working Paper Number:
CES-23-07
Using Census microdata on 14,000 manufacturing plants, we examine how firms man age employee retention concerns in response to local wage pressure. We validate our measure of employee retention concerns by documenting that plants respond with wage increases, and do so more when the employees' human capital is higher. We doc ument substantial use of non-wage levers in response to retention concerns. Plants shift incentives to increase the likelihood that bonuses can be paid: performance target transparency declines, as does the use of localized performance metrics for bonuses. Furthermore, promotions become more meritocratic, ensuring key employees can be promoted and retained. Lastly, decision-making authority at the plant-level increases, offering more agency to local employees. We find evidence consistent with inequity aversion constraining the response to local wage pressure, and document spillovers in both wage and non-wage reactions across same-firm plants.
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Improving Patent Assignee-Firm Bridge with Web Search Results
August 2022
Working Paper Number:
CES-22-31
This paper constructs a patent assignee-firm longitudinal bridge between U.S. patent assignees and firms using firm-level administrative data from the U.S. Census Bureau. We match granted patents applied between 1976 and 2016 to the U.S. firms recorded in the Longitudinal Business Database (LBD) in the Census Bureau. Building on existing algorithms in the literature, we first use the assignee name, address (state and city), and year information to link the two datasets. We then introduce a novel search-aided algorithm that significantly improves the matching results by 7% and 2.9% at the patent and the assignee level, respectively. Overall, we are able to match 88.2% and 80.1% of all U.S. patents and assignees respectively. We contribute to the existing literature by 1) improving the match rates and quality with the web search-aided algorithm, and 2) providing the longest and longitudinally consistent crosswalk between patent assignees and LBD firms.
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Family Formation and the Great Recession
December 2020
Working Paper Number:
CES-20-42R
This paper studies how exposure to recessions as a young adult impacts long-term family formation in the context of the Great Recession. Using confidential linked survey data from U.S. Census, I document that exposure to a 1 pp larger unemployment shock in the Great Recession in one's early 20s is associated with a 0.8 pp decline in likelihood of marriage by their early 30s. These effects are not explained by substitution toward cohabitation with unmarried partners, are concentrated among whites, and are notably absent for individuals from high-income families. The estimated effects on fertility are also negative but imprecisely estimated. A back-of-the-envelope exercise suggests that these reductions in family formation may have increased the long-run impact of the Recession on consumption relative to its impact on individual earnings by a considerable extent.
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Trends in Earnings Volatility using Linked Administrative and Survey Data
August 2020
Working Paper Number:
CES-20-24
We document trends in earnings volatility separately by gender in combination with other characteristics such as race, educational attainment, and employment status using unique linked survey and administrative data for the tax years spanning 1995-2015. We also decompose the variance of trend volatility into within- and between-group contributions, as well as transitory and permanent shocks. Our results for continuously working men suggest that trend earnings volatility was stable over our period in both survey and tax data, though with a substantial countercyclical business-cycle component. Trend earnings volatility among women declined over the period in both survey and administrative data, but unlike for men, there was no change over the Great Recession. The variance decompositions indicate that nonresponders, low-educated, racial minorities, and part-year workers have the greatest group specific earnings volatility, but with the exception of part-year workers, they contribute least to the level and trend of volatility owing to their small share of the population. There is evidence of stable transitory volatility, but rising permanent volatility over the past two decades in male and female earnings.
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The Energy Efficiency Gap and Energy Price Responsiveness in Food Processing
June 2020
Working Paper Number:
CES-20-18
This paper estimates stochastic frontier energy demand functions with non-public, plant-level data from the U.S. Census Bureau to measure the energy efficiency gap and energy price elasticities in the food processing industry. The estimates are for electricity and fuel use in 4 food processing sectors, based on the disaggregation of this industry used by the National Energy Modeling System Industrial Demand Module. The estimated demand functions control for plant inputs and output, energy prices, and other observables including 6-digit NAICS industry designations. Own price elasticities range from 0.6 to -0.9 with little evidence of fuel/electricity substitution. The magnitude of the efficiency estimates is sensitive to the assumptions but consistently reveal that few plants achieve 100% efficiency. Defining a 'practical level of energy efficiency' as the 95th percentile of the efficiency distributions and averaging across all the models result in a ~20% efficiency gap. However, most of the potential reductions in energy use from closing this efficiency gap are from plants that are 'low hanging fruit'; 13% of the 20% potential reduction in the efficiency gap can be obtained by bringing the lower half of the efficiency distribution up to just the median level of observed performance. New plants do exhibit higher energy efficiency than existing plants which is statistically significant, but the difference is small for most of the industry; ranging from a low of 0.4% to a high of 5.7%.
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