Search Results
Working Paper
Moving to a job: The role of home equity, debt, and access to credit
Using credit report data from two of the three major credit bureaus in the United States, we infer with high certainty whether households move to other labor markets defined by metropolitan areas. We estimate how moving patterns relate to labor market conditions, personal credit, and homeownership using panel regressions with fixed effects which control for all constant individual-specific traits. We interpret the patterns through simulations of a dynamic model of consumption, housing, and location choice. We find that homeowners with negative home equity move more than other homeowners, in ...
Working Paper
The Rise and Fall of Consumption in the 2000s
U.S. consumption has gone through steep ups and downs since the turn of the millennium, but the causes of these fluctuations are still imperfectly identified. We quantify the relative impact on consumption growth of income, unemployment, house prices, credit scores, debt, expectations, foreclosures, inequality, and refinancings for four subperiods: the ?dot-com recession? (2001-2003), the ?subprime boom? (2004-2006), the Great Recession (2007-2009), and the ?tepid recovery? (2010-2012). We document that the explanatory power of different factors varies by subperiods, implying that a ...
Working Paper
Consumption, credit, and the missing young
There are more young adults today with either no credit history or insufficient credit history to be scored by one of the major credit bureaus than there were before the Great Recession ? a reality that is likely an unintended outcome of the CARD Act of 2009. In regressions that include a rich set of controls, this paper shows that measures of young adults missing from credit bureau data act as a drag on state-level consumption growth. This finding seems to be driven by young individuals from more disadvantaged backgrounds having less access to credit since the act went into effect.
Working Paper
Household formation over time: evidence from two cohorts of young adults
This paper analyzes household formation in the United States using data from two cohorts of the national Longitudinal Survey of Youth (NLSY)?the 1979 cohort and the 1997 cohort. The analysis focuses on how various demographic and economic factors impact household formation both within cohorts and over time across cohorts. The results show that there are substantial differences over time in the share of young adults living with their parents. Differences in housing costs and business-cycle conditions can explain up to 70 percent of the difference in household-formation rates across cohorts. ...
Working Paper
A concise test of rational consumer search
A simple model of time allocation between work and price-search predicts that consumers spend relatively more time searching for better prices for goods of which they consume relatively more. Using scanner data, we confirm empirically that consumers pay lower (higher) prices for goods that they buy more (less) of than other consumers. Our results are conservative, because we compare goods that are defined as narrowly as possible by UPC codes, and provide a lower bound for the savings obtained from bargain hunting.
Working Paper
The Tail That Wagged the Dog: What Explains the Persistent Employment Effect of the 10-Day PPP Funding Delay?
This study explores the mechanisms explaining the large, persistent effect of the 10-day funding delay in the 2020 Paycheck Protection Program (PPP) on employment recovery during the COVID-19 pandemic, as estimated by Doniger and Kay (2021). We find that the top 1 percent of urban counties by population fully account for the significant effect of the delay on county-level employment. The strong correlation between worse loan delay and slower employment growth in these counties is due to a factor commonly omitted from analyses: The nature of business and the high rate of human interactions in ...
Journal Article
Keeping the house or moving for a job
Some reports have suggested that employers can?t fill job openings in some places because they can?t entice workers to move. Workers won?t move, so the story goes, when doing so will mean losing money on their homes, and this is the case for many homeowners since the housing crash. But new research shows that homeowners will move when they have a better job offer, even if they will lose money on their home when they sell it.
Report
Labor market exit and re-entry: is the United States poised for a rebound in the labor force participation rate?
The U.S. labor force participation rate has declined sharply since 2007?far faster than can be explained by demographic shifts in the population. This brief analyzes the re-entry probability for individuals who exit the labor force as well as the financial demographic, and employment characteristics of these individuals. The vast majority of individuals under 45 years of age re-enter the labor market within four years of exiting; however, the re-entry rate drops substantially for 50?54 year-olds and 55?59 year-olds. Those individuals who exit the labor market appear more marginally attached ...
Report
COVID-19 and the Labor Market Outcomes for Prime-Aged Women
This paper documents labor market outcomes for prime-aged women relative to those for prime-aged men since the COVID-19 pandemic officially started. The pandemic-induced recession has played out very differently compared with previous recessions, with women initially losing jobs at higher rates than men. While the pandemic has been hard for everybody, it has resulted in a widening of the gender gaps in employment and labor force participation of roughly 2 percentage points. The gaps grew initially due to occupation distribution differences across genders as well as school closings. Women ...
Working Paper
The Mortgage Cash Flow Channel of Monetary Policy Transmission: A Tale of Two Countries
We study the mortgage cash flow channel of monetary policy transmission under fixed-rate mortgage (FRM) versus adjustable-rate mortgage (ARM) regimes by comparing the United States with primarily long-term FRMs and Spain with primarily ARMs that automatically reset annually. We find a robust transmission of mortgage rate changes to spending in both countries but surprisingly a larger effect in the United States—and provide two explanations for this finding. First, there are channels of transmission other than the mortgage cash flow effect since other interest rates co-move with the mortgage ...