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Explaining Variation in Real Wage Growth Over the Recent Expansion
In August 2019 the unemployment rate was roughly 1 percentage point below the Congressional Budget Office?s (CBO) estimate of its long-run or natural rate, nearly matching the unemployment rate gap that developed during the historically tight labor market of the late 1990s. Nevertheless, real wage growth remains well below its pace of the late 1990s and even that of the milder 2000s expansion.
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
Did Covid-19 disproportionately affect mothers’ labor market activity?
School and day care center restrictions during the Covid-19 pandemic have presented enormous challenges to parents trying to juggle work with child-care responsibilities. Still, empirical evidence on the impact of pandemic-related child-care constraints on the labor market outcomes of working parents is somewhat mixed. Some studies suggest the pandemic had no additional impact on the labor supply of parents, while other studies show not only that it did but that the negative impact was disproportionately borne by working mothers.
Working Paper
The Effects of the Great Migration on Urban Renewal
The Great Migration significantly increased the number of African Americans moving to northern and western cities beginning in the first half of the twentieth century. We show that their arrival shaped “slum clearance” and urban redevelopment efforts in receiving cities. To estimate the effect of migrants, we instrument for Black population changes using a shift-share instrument that interacts historical migration patterns with local economic shocks that predict Black out-migration from the South. We find that local governments responded by undertaking more urban renewal projects that ...
Working Paper
Heterogeneity in the Marginal Propensity to Consume: Evidence from Covid-19 Stimulus Payments
We identify 22,340 recipients of Covid-19 Economic Impact Payments in anonymized transaction-level debit card data from Facteus. We use an event study framework to show that in the two weeks following a sudden $1,200 payment from the IRS, consumers immediately increased spending by an average of $604, implying a marginal propensity to consume (MPC) of 50%. Consumer spending fell back to normal levels after two weeks. Stimulus recipients who live paycheck-to-paycheck spend 62% of the stimulus payment within two weeks, while recipients who save much of their monthly income spend only 35% of the ...
Working Paper
Heterogeneity in the Marginal Propensity to Consume: Evidence from Covid-19 Stimulus Payments
We identify 16,016 recipients of Covid-19 Economic Impact Payments in anonymized transaction-level debit card data from Facteus. We use an event study framework to show that in the two weeks following a sudden $1,200 payment from the IRS, consumers immediately increased spending by an average of $577, implying a marginal propensity to consume (MPC) of 48%. Consumer spending falls back to normal levels after two weeks. Stimulus recipients who live paycheck-to-paycheck spend 68% of the stimulus payment immediately, while recipients who save much of their monthly income spend 23% of the stimulus ...
Working Paper
The Effects of the Great Migration on Urban Renewal
The Great Migration significantly increased the number of African Americans moving to northern and western cities beginning in the first half of the twentieth century. We show that their arrival shaped slum clearance and urban redevelopment efforts in receiving cities. To estimate the effect of migrants, we instrument for Black population changes using a shift-share instrument that interacts historical migration patterns with local economic shocks that predict Black out-migration from the South. We find that local governments responded by undertaking more urban renewal projects that aimed to ...
Newsletter
How Similar Are Credit Scores Across Generations?
With the rise in economic inequality in the United States in recent decades, there has been growing concern about whether there is a sufficient degree of equality of opportunity in our society. Policymakers and researchers alike often focus on studies of intergenerational mobility as a way of assessing opportunity. These studies typically analyze distinct aspects of socioeconomic status, such as income, education, occupational status, and health, and measure the association in these outcomes between parents and their adult children.1 If the association (level of similarity) is very high, then ...
Working Paper
Heterogeneity in the Marginal Propensity to Consume: Evidence from Covid-19 Stimulus Payments
We identify 16,016 recipients of Covid-19 Economic Impact Payments in anonymized transaction-level debit card data from Facteus. We use an event study framework to show that in the two weeks following a sudden $1,200 payment from the IRS, consumers immediately increased spending by an average of $577, implying a marginal propensity to consume (MPC) of 48%. Consumer spending falls back to normal levels after two weeks. Stimulus recipients who live paycheck-to-paycheck spend 68% of the stimulus payment immediately, while recipients who save much of their monthly income spend 23% of the stimulus ...
Working Paper
Heterogeneity in the Marginal Propensity to Consume: Evidence from Covid-19 Stimulus Payments
We identify 22,461 recipients of Covid-19 Economic Impact Payments in anonymized transaction-levelbank account data from Facteus. We use an event study framework to show that in the two weeks followinga $1,200 stimulus payment in April 2020, consumers increased spending by $546, implying a marginalpropensity to consume of 46%. Consumers used an additional 10% of the stimulus payment to pay offdebt. Consumer spending fell to normal levels after two weeks. Stimulus recipients who live paycheckto-paycheck spent 60% of the stimulus payment within two weeks, while recipients who save much oftheir ...