The Nature of Household Labor Income Risk
What is the nature of labor income risk facing households? We answer this question using detailed administrative data on household earnings from the U.S. Internal Revenue Service. By analyzing total household labor earnings as well as each member's earnings, we offer several new findings. One, households face substantially less risk than males in isolation. Second, households face roughly half the countercyclical increase in risk that males face. Third, spousal labor income ameliorates household earnings risk through both extensive and intensive margins.
Returning to the Nest: Debt and Parental Co-residence Among Young Adults
This paper examines the relationship between a young adults' debt burden and the decision to co-reside with a parent. Using a quarterly panel of young adults' credit histories, and controlling for age, county, and quarter fixed effects, and local demographic characteristics, unemployment rates, and house prices, we estimate the relationship between current period debt and subsequent decisions to co-reside with a parent. Our results indicate that indebtedness--as measured by average loan balances, declining credit scores and delinquency on accounts--increases flows into parental co-residence. ...
Home Hours in the United States and Europe
Using data from the Multinational Time Use Study, this paper documents the trends and levels of time allocation, with a focus on home hours, for a relatively large set of industrialized countries during the past 50 years. Three patterns emerge. First, home hours have decreased in both the United States and European countries. Second, female time allocation contributes more to the cross-country difference in both the trends and the levels of market hours and home hours per person. Third, time allocations between the United States and Europe are more similar for the prime-age group than for the ...
Why Do Earnings Fall with Job Displacement?
The earnings of workers are reduced for many years after being displaced from their jobs, and those workers and their families face increased risk of other problems as well. The ills suffered by displaced workers motivated several recent expansions of government programs, including the unemployment insurance system, and have spurred calls for wage insurance that would provide longerrun earnings replacement. However, while the magnitude of the losses is relatively clear, the theory of why displacement matters is scattered and somewhat undeveloped. Much of the policy discussion appears to ...
Identifying and evaluating sample selection bias in consumer payment surveys
Making meaningful inferences based on survey data depends on the ability to recognize and adjust for discrepancies between the survey respondents and the target population; this partly involves understanding how survey samples differ with respect to heterogeneous clusters of the population. Ex post adjustments for unbiased population parameter estimates are usually based on easily measured variables with known distributions in the target population, like age, gender, or income. This paper focuses on identifying and assessing the effect of an overlooked source of heterogeneity and potential ...
The influence of gender and income on the household division of financial responsibility
This paper studies how gender and income dynamics influence the division of responsibility in two-adult households for various activities, including those tasks directly related to financial decisionmaking. The data, from the 2012 Survey of Consumer Payment Choice, consist of the respondents? categorical self-assessments of their individual levels of responsibility for various tasks. A data construct, in which some households have both adults participate in the survey, is exploited to develop a penalized latent variable model that accounts for systemic response errors. The data reveal that ...
Accounting for Innovations in Consumer Digital Services: IT still matters
This paper develops a framework for measuring digital services in the face of ongoing innovations in the delivery of content to consumers. We capture what Brynjolfsson and Saunders (2009) call "free goods" as the capital services generated by connected consumers' stocks of IT digital goods; this service flow augments the existing measure of personal consumption in GDP. Its value is determined by the intensity with which households use their IT capital to consume content delivered over networks, and its volume depends on the quality of the IT capital. Consumers pay for delivery services, ...
Negative equity and housing investment
Housing is a depreciating asset. The rate of depreciation depends on the degree to which households engage in housing investments. Housing investment expenditures economy-wide are sizable, averaging 45 percent of the value of new home construction over the past twenty years. The housing bust and recession coincided with a significant decline in housing investment. Using Consumer Expenditure Survey data from 2007 to 2012, we find that negative equity households reduce their housing investments by roughly 75 percent. The large increase in negative equity due to declining housing prices during ...
Revisiting the Role of Home Production in Life-Cycle Labor Supply
This paper examines the role of home production in estimating life-cycle labor supply. I show that, consistent with previous studies, ignoring an individual?s time spent on home production when estimating the Frisch elasticity of labor supply biases its estimate downwards. I also show, however, that ignoring other ways a household can satisfy the demand for home production biases its estimate upwards. Changes in this demand over the life-cycle have an income effect on labor supply, but the effect can be mitigated through purchases in the market and through the home production of other ...
Optimal Taxation, Marriage, Home Production, and Family Labor Supply
An empirical approach to optimal income taxation design is developed within an equilibrium collective marriage market model with imperfectly transferable utility. Taxes distort labour supply and time allocation decisions, as well as marriage market outcomes, and the within household decision process. Using data from the American Community Survey and American Time Use Survey, we structurally estimate our model and explore empirical design problems. We consider the optimal design problem when the planner is able to condition taxes on marital status, as in the U.S. tax code, but we allow the ...