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Working Paper
Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle
We examine racial disparities in key labor market outcomes for men and women over the past four decades, with a special emphasis on their evolution over the business cycle. Blacks have substantially higher and more cyclical unemployment rates than whites, and observable characteristics can explain very little of this differential, which is importantly driven by a comparatively higher risk of job loss. In contrast, the Hispanic-white unemployment rate gap is comparatively small and is largely explained by lower educational attainment of (mostly foreign-born) Hispanics. Regarding labor force ...
Discussion Paper
Introducing Actuarial Liabilities and Funding Status of Defined-Benefit Pensions in the U.S. Financial Accounts
Last year, in its September 2013 release, the Financial Accounts of the United States (formerly known as Flow of Funds accounts) changed the treatment of defined-benefit (DB) pensions from a cash accounting basis to an accrual accounting basis.
Briefing
Who Values Access to College?
A quantitative model of college enrollment suggests that the value of college access varies greatly across individuals. Forty percent place no value on the option to attend despite large public subsidies, while 25 percent would enroll even without the subsidies. In the model, redirecting public funds from those who attend college irrespective of subsidies to those who don’t attend even with subsidies both preserves college enrollment and improves overall outcomes. While these two groups are clearly visible only in the model, and not in the data, this analysis suggests that more-targeted ...
Discussion Paper
Defined-Contribution Pension Plans for State and Local Government Employees in the Financial Accounts of the United States
This note provides some background information on the DC pension plans available to state and local (S&L) government workers, briefly discusses the methodology used to construct the estimates of assets held by S&L DC pension plans, and presents the estimates currently reported in the Financial Accounts.
Discussion Paper
The Federal Debt-Limit Standoff of 2013 in the Financial Accounts of the United States
When there is a legislative standoff over raising the federal statutory debt limit, the Treasury Department can use its so-called "toolbox of extraordinary measures" to temporarily obtain additional room to borrow and finance the government's operations.
Working Paper
The properties of income risk in privately held businesses
Our paper represents the first attempt in the literature to estimate the properties of business income risk from privately held businesses in the US. Using a new, large, and confidential panel of US income tax returns for the period 1987-2009, we extensively document the empirical stylized facts about the evolution of various business income risk measures over time. We find that business income is much riskier than labor income, not only because of the probability of business exit, but also because of higher income fluctuations, conditional on no exit. We show that business income is less ...
Discussion Paper
Deleveraging and Recent Trends in Household Debt
After falling for almost five years, household debt (measured in dollars) has risen in each of the last seven quarters, as the primary forces exerting downward pressure on household debt in previous years (mortgage charge-offs and negative net mortgage originations) have waned, while consumer credit has been expanding at a robust pace.
Working Paper
Modeling earnings dynamics
In this paper we use indirect inference to estimate a joint model of earnings, employment, job changes, wage rates, and work hours over a career. Our model incorporates duration dependence in several variables, multiple sources of unobserved heterogeneity, job-specific error components in both wages and hours, and measurement error. We use the model to address a number of important questions in labor economics, including the source of the experience profile of wages, the response of job changes to outside wage offers, and the effects of seniority on job changes. We provide estimates of the ...
Working Paper
Fluctuations in individual labor income: a panel VAR analysis
This paper studies variation in individual labor income over time using a panel vector autoregression (PVAR) in income, the wage rate, hours of work, and hours of unemployment. The framework is used to investigate how much of the residual variation in labor income is due to residual variation in the wage rate, work hours, and unemployment hours. I also explore the dynamic effects of unanticipated changes in each of the variables in the system, investigate their interactions, and assess their contribution to short-run and long-run income movements. The model is estimated on a sample of male ...
Briefing
Who Values Access to College?
A quantitative model of college enrollment suggests that the value of college access varies greatly across individuals. Forty percent place no value on the option to attend despite large public subsidies, while 25 percent would enroll even without the subsidies. In the model, redirecting public funds from those who attend college irrespective of subsidies to those who don’t attend even with subsidies both preserves college enrollment and improves overall outcomes. While these two groups are clearly visible only in the model, and not in the data, this analysis suggests that more-targeted ...