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Working Paper
Easy Bootstrap-Like Estimation of Asymptotic Variances
The bootstrap is a convenient tool for calculating standard errors of the parameter estimates of complicated econometric models. Unfortunately, the bootstrap can be very time-consuming. In a recent paper, Honor and Hu (2017), we propose a ?Poor (Wo)man's Bootstrap? based on one-dimensional estimators. In this paper, we propose a modified, simpler method and illustrate its potential for estimating asymptotic variances.
Working Paper
Poor (Wo)man’s Bootstrap
The bootstrap is a convenient tool for calculating standard errors of the parameters of complicated econometric models. Unfortunately, the fact that these models are complicated often makes the bootstrap extremely slow or even practically infeasible. This paper proposes an alternative to the bootstrap that relies only on the estimation of one-dimensional parameters. The paper contains no new difficult math. But we believe that it can be useful.
Working Paper
Rushing into American Dream? House Prices, Timing of Homeownership, and Adjustment of Consumer Credit
In this paper we use a large panel of individuals from Consumer Credit Panel dataset to study the timing of homeownership as a function of credit constraints and expectations of future house price. Our panel data allows us to track individuals over time and we model the transition probability of their first home purchase. We find that in MSAs with highest quartile house price growth, the median individual become homeowners earlier by 5 years in their lifecycle compared to MSAs with lowest quartile house price growth. The result suggests that the effect of expectation dominates the effect of ...
Working Paper
The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing
We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on consumer, financial outcomes using data from a major credit reporting agency for a large, national sample of adults. We employ the synthetic control method to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low-income, uninsured ...
Working Paper
Selection Without Exclusion
It is well understood that classical sample selection models are not semiparametrically identified without exclusion restrictions. Lee (2009) developed bounds for the parameters in a model that nests the semiparametric sample selection model. These bounds can be wide. In this paper, we investigate bounds that impose the full structure of a sample selection model with errors that are independent of the explanatory variables but have unknown distribution. We find that the additional structure in the classical sample selection model can significantly reduce the identified set for the parameters ...
Newsletter
How Much Did the Minimum Wage Drive Real Wage Growth During the Late 2010s?
For much of the recent expansion, real wage growth was surprisingly sluggish, by some measures never reaching its pace prior to the 2008 financial crisis, despite tight labor markets that drove the unemployment rate to 3.5%. However, on average, the lowest-earning workers fared substantially better, consistently experiencing real wage growth of 6% or more for much of the late 2010s, a pace well above the previous two decades.
Newsletter
Unit Labor Costs and Inflation in the Non-Housing Service Sector
Inflation remains high, and it is critical to understand the components of inflation. Inflation in core goods has declined over much of the past year. Inflation in housing services remains high, but the growth in rental rates of units available for rent has fallen in recent months. This suggests measured inflation in housing services, which includes rents on both occupied and vacant units, is likely to moderate over the coming year as rents on occupied units catch up to those of vacant units.
Newsletter
Explaining the decline in the U.S. labor force participation rate
The authors conclude that just under half of the post-1999 decline in the U.S. labor force participation rate, or LFPR (the proportion of the working-age population that is employed or unemployed and seeking work), can be explained by long-running demographic patterns, such as the retirement of baby boomers. These patterns are expected to continue, offsetting LFPR improvements due to economic recovery.
Newsletter
Changing Labor Force Composition and the Natural Rate of Unemployment
This article discusses why changes in the composition of the labor force may have lowered the natural (or trend) rate of unemployment?the unemployment rate that would prevail in an economy making full use of its productive resources?to 5 percent or less. A lower natural rate may help explain why wage inflation and price inflation remain low despite actual unemployment recently reaching 5.5 percent?a figure only slightly above prominent estimates of the natural rate, such as that of the Congressional Budget Office (CBO). Demographic and other changes should continue to lower the natural rate ...
Newsletter
How Health Insurance Improves Financial Health
Low-income Americans who became eligible to enroll in Medicaid due to the Affordable Care Act saw their medical debt cut in half.