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Working Paper
Earnings Business Cycles: The Covid Recession, Recovery, and Policy Response
Using a panel of tax data, we follow the earnings of individuals over business cycles. Compared to prior recessions, the Covid policy response and recovery were far more progressive. Among workers starting in the bottom quintile, median real earnings including fiscal relief increased 66 percent in 2020 and earnings increases offset relief decreases in the 2021 recovery. After the prior two recessions, this measure had decreased by 24 percent. Among those starting in the top quintile, median and average real earnings were approximately unchanged. This difference from prior recessions is ...
Working Paper
Rural Affordable Rental Housing : Quantifying Need, Reviewing Recent Federal Support, and Assessing the Use of Low Income Housing Tax Credits in Rural Areas
Recently, there has been significant interest in the high levels of rental cost burden being experienced across the United States. Much of this scholarship has focused on rental cost burdens in larger urban areas, or at the national level, and has not explored differences in the prevalence of rental cost burden in urban versus rural communities. In this paper, I find that rental cost burdens are a challenge facing both urban and rural communities. However, despite the need for affordable rental housing in rural communities identified, I find the amount of resources made available by the ...
Working Paper
Disability Benefit Growth and Disability Reform in the U.S.: Lessons from Other OECD Nations
Unsustainable growth in program costs and beneficiaries, together with a growing recognition that even people with severe impairments can work, led to fundamental disability policy reforms in the Netherlands, Sweden, and Great Britain. In Australia, rapid growth in disability recipiency led to more modest reforms. Here we describe the factors driving unsustainable DI program growth in the U.S., show their similarity to the factors that led to unsustainable growth in these other four OECD countries, and discuss the reforms each country implemented to regain control over their cash transfer ...
Discussion Paper
Developing Inclusive Communities: Challenges and Opportunities for Mixed-Income Housing
Over the past decade, housing costs have risen faster than incomes. The need for affordable rental housing has well outpaced the number of available units as well as funding allocations at the federal level. Local regulation and land use policies that increase the cost of subsidized, mixed-income housing construction and preservation have contributed to the affordability problem. {{p}} To meet the affordable housing needs in U.S. communities, innovation, creativity, and "out of the box" thinking may be required, particularly as it relates to reducing the rapidly increasing costs of ...
Working Paper
How Important Is Health Inequality for Lifetime Earnings Inequality?
Using a dynamic panel approach, we provide empirical evidence that negative health shocks reduce earnings. The effect is primarily driven by the participation margin and is concentrated in less educated individuals and those with poor health. We build a dynamic, general equilibrium, life cycle model that is consistent with these findings. In the model, individuals whose health is risky and heterogeneous choose to either work, or not work and apply for social security disability insurance (SSDI). Health affects individuals’ productivity, SSDI access, disutility from work, mortality, and ...
Working Paper
On the optimal design of transfers and income-tax progressivity
We study the optimal design of means-tested transfers and progressive income taxes. In a simple analytical model, we demonstrate an optimally negative relation between transfers and income-tax progressivity due to efficiency and redistribution concerns. In a rich dynamic model, we quantify the optimal plan with flexible tax-and-transfer functions. Transfers should be larger than currently in the U.S. and financed with moderate income-tax progressivity. Transfers are key to implement higher progressivity in average than in marginal tax-and-transfer rates, achieving redistribution while ...
Working Paper
The Impact of Government Transfer Payment Frequency on Consumption: Evidence from Delayed UI
We study how the frequency of government transfer payments affects spending behavior. Our empirical approach uses transaction-level data on income and spending and exploits quasi-random delays in the receipt of unemployment insurance (UI) benefits. Spending drops by about half of the loss in income that occurs while individuals wait for UI benefits, revealing the value of periodic payments for liquidity-constrained individuals. Once delayed payments are received as lump sums, individuals reallocate spending toward less commonly purchased big-ticket categories that are dominated by durables. ...
Journal Article
Structural and Cyclical Trends in the Supplemental Nutrition Assistance Program
Participation in the Supplemental Nutrition Assistance Program (SNAP) has increased sharply over the past 20 years. Average monthly participation grew from 17.3 million people in 2001 to a peak of 47.6 million people in 2013. Although participation declined somewhat as the economy recovered from the Great Recession, SNAP participation remains well above its pre-recession level. {{p}} Kelly D. Edmiston investigates the forces driving long-term patterns in SNAP participation as well as its cyclical variation. He finds that three structural factors?legislative and programmatic changes, poverty, ...
Working Paper
Marriage, Labor Supply, and the Dynamics of the Social Safety Net
The 1996 U.S. welfare reform introduced time limits on welfare receipt. We use quasi-experimental evidence and a rich life cycle model to understand the impact of time limits on different margins of behavior and well-being. We stress the impact of marital status and marital transitions on mitigating the cost and impact of time limits. Time limits cause women to defer claiming in anticipation of future needs and to work more, effects that depend on the probabilities of marriage and divorce. They also cause an increase in employment among single mothers and reduce divorce, but their ...