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This paper calculates the change in optimal labor supply and total family welfare resulting from the Tax Cuts and Jobs Act of 2017 (TCJA). We estimate labor supply elasticities for married families in the Current Population Survey from 2015 to 2017, using a joint family utility model. These elasticities are then used to simulate changes in optimal labor supply and resulting change in welfare among families with different characteristics under the new TCJA tax code. We find that optimal hours are lower post-TCJA, relative to before. However, there are differences across family members and family types. Both men's and women's optimal hours decline with income starting in the second quintile, but the decline is more dramatic for men. Overall, all families' welfare increased post-TCJA, with the gains in welfare disproportionately benefiting the wealthy; families with any self-employment income; families with children; and families renting, versus owning, their home.

Supplemental Material, sj-pdf-1-irx-10.1177_0160017621994630 for In-migration and Dilution of Community Social Capital by Julie L. Hotchkiss, Anil Rupasingha and Thor Watson in International Regional Science Review

This paper investigates differences in outcomes between historically black colleges and universities (HBCU) and traditional college and universities (non-HBCUs) using a standard Oaxaca/Blinder decomposition. This method decomposes differences in observed educational and labor market outcomes between HBCU and non-HBCU students into differences in characteristics (both student and institutional) and differences in how those characteristics translate into differential outcomes. Efforts to control for differences in unobservables between the two types of students are undertaken through inverse-probability weighting and propensity score matching methodologies. We find that differences in student characteristics make the largest contributions to each outcome difference. However, some hope in identifying policy levers comes in the form of how characteristics translate into outcomes. For example, whereas HBCUs appear to be doing a better job helping female graduates parlay their education into higher earnings, non-HBCUs are doing a better job in helping graduates in science, technology, engineering, and mathematics translate their training into higher earnings. Patterns and importance of regressors are similar at different points of the distributions of outcomes.

Cigarette smokers earn significantly less than nonsmokers, but the magnitude of the smoking wage gap and the pathways by which it originates are unclear. Proposed mechanisms often focus on spot differences in employee productivity or employer preferences, neglecting the dynamic nature of human capital development and addiction. In this paper, we formulate a dynamic model of young workers as they transition from schooling to the labor market, a period in which the lifetime trajectory of wages is being developed. We estimate the model with data from the National Longitudinal Survey of Youth, 1997 Cohort, and we simulate the model under counterfactual scenarios that isolate the contemporaneous effects of smoking from dynamic differences in human capital accumulation and occupational selection. Results from our preferred model, which accounts for unobserved heterogeneity in the joint determination of smoking, human capital, labor supply, and wages, suggest that continued heavy smoking in young adulthood results in a wage penalty at age 30 of 14.8 percent and 9.3 percent for women and men, respectively. These differences are less than half of the raw mean difference in wages at age 30. We show that the contemporaneous effect of heavy smoking net of any life-cycle effects explains roughly 67 percent of the female smoking wage gap but only 11 percent of the male smoking wage gap.

Using the Current Population Survey between 1996 and 2018, this paper investigates the role constraints to migration might play in explaining racial/ethnic disparities in the labor market. The Delta Index of dissimilarity is used to illustrate a greater distributional mismatch between race/education specific workers and jobs among minorities relative to white non-Hispanics. Regression analysis then shows that this mismatch is consistent with minorities being less responsive to changes in the distribution of job opportunities. However, minorities are more responsive when the growing job opportunities are located in areas with greater same-racial/ethnic representation, suggesting that social constraints might play a role in the observed distributional mismatch. The analysis focuses on 25-54 year old men.

Consistent with predictions from the literature, we find that higher levels of in-migration dilute multiple dimensions of a community's level of social capital. The analysis employs a 2SLS methodology to account for potential endogeneity of migration.

This paper determines how individual, relative to community, social capital affects individual migration decisions. We make use of nonpublic data from the Social Capital Community Benchmark Survey to predict multidimensional social capital for observations in the Current Population Survey. We find evidence that individuals are much less likely to have moved to a community with average social capital levels lower than their own and that higher levels of community social capital act as positive pull-factor amenities. The importance of that amenity differs across urban/rural locations. We also confirm that higher individual social capital is a negative predictor of migration.

This paper explores the evidence for positive hysteresis in the labor market. Using data from the National Longitudinal Surveys of Youth, we find that negative labor market outcomes during high-unemployment periods are mitigated by exposure to a high-pressure economy during the preceding expansion. Breaking total exposure into average intensity and duration suggests that these two dimensions have differing impacts depending on the outcome. Additionally, benefits are typically only statistically significantly different from no exposure for only a relatively few demographic groups.

This paper calculates the cost of an unemployment shock in terms of family welfare for married and single families separately and by education level. We find that, overall, families face an average annualized expected dollar equivalent welfare loss of $1,156 when the unemployment rate rises by 1 percentage point. The average welfare loss for married families is greater than the average loss for single families and increases in education. We then estimate that a price level increase of 1.8 percent generates the same amount of welfare loss. We also find that the average welfare loss from a shock to prices versus a shock to unemployment rises with income.

We make use of predicted social and civic activities (social capital) to account for selection into "social" occupations. Individual selection accounts for more than the total difference in wages observed between social and nonsocial occupations. The role that individual social capital plays in selecting into these occupations and the importance of selection in explaining wage differences across occupations is similar for both men and women. We make use of restricted data from the 2000 decennial census and the 2000 Social Capital Community Benchmark Survey. Individual social capital is instrumented by distance-weighted surrounding census tract characteristics.

This paper uses the differential timing across counties of the removal of restrictions on Sunday alcohol sales in the state of Georgia to determine whether the change had an impact on employment and hours in the beer, wine, and liquor retail sales industry. A triple-difference analysis finds significant increases in average weekly hours in the treated industry in counties removing sales restrictions versus those that did not relative to other industries during the period of time the law took effect. Since there is no significant employment increase, it appears that employers adjusted to remaining open one additional day per week by increasing hours of existing employees rather than hiring additional workers.

The female/male average wage ratio has steadily risen from 1983 to 2012. In earlier work, we found that the falling wage gap from 1983 to 1993 was materially detrimental to the average dual-earner family. The female/male wage ratio continued to rise over the following two decades, accompanied by a growing share of households in which the wife is the principal household income generator. This paper investigates how these two developments affected family welfare. Although family welfare rose during the 1990s, the story of the 2000s is quite different.

How do inflows of unauthorized immigrants shape elections? Political economy theories often yield competing predictions and mixed empirical results. The main hurdle of empirically evaluating the impact of unauthorized immigrants on election outcomes is finding reliable data that can measure unauthorized immigration flows over time. Using a unique methodology for identifying undocumented workers across counties in the state of Georgia in the United States, we find a positive relationship between the share of the county's workforce that is unauthorized and the share of votes going to Republicans in elections. Furthermore, we show that this effect is more pronounced for the presence of unauthorized immigrants than Hispanics; is stronger in counties with higher median household income; and is substantively larger in U.S. Congressional elections than Gubernatorial or Senatorial elections. We discuss which political economy theories are most consistent with this set of findings.

This paper uses unique administrative data to expand the understanding of the role women's intermittency decisions play in the determination of their wages. We demonstrate that treating intermittency as exogenous significantly overstates its impact. The intermittency penalty also increases in the education level of the woman. The penalty for a woman with a high school degree with an average amount of intermittency during six years after giving birth to her first child is roughly half the penalty for a college graduate. We also demonstrate the value of using an index to capture multiple dimensions of the intermittency experience, and we illustrate the importance of firm dynamics in the determination of a woman's wage.

As a measure of labor market strength, the raw employment-to-population ratio (EPOP) confounds employment outcomes with labor supply behavior. Movement in the EPOP depends on the relative movements of the employment rate (one minus the unemployment rate) and the labor force participation rate. This paper proposes an adjustment to the calculation of the EPOP using individual microdata to account for both individual characteristics and the probability of labor force participation, which can used to assess the strength of the labor market.

The analysis in this paper provides estimates of family welfare losses generated by wage and nonlabor income declines experienced across the Great Recession and by labor market constraints existing postrecession. Welfare losses are greater as families (both married and single) move up the income distribution. Total static welfare losses are estimated to amount to roughly $190 billion, comparing family welfare between 2007 and 2011.

The female/male average wage ratio has steadily risen from 1983 to 2012. In earlier work, we found that the falling wage gap from 1983 to 1993 was materially detrimental to the average dual-earner family. The female/male wage ratio continued to rise over the following two decades, accompanied by a growing share of households in which the wife is the principal household income generator. This paper investigates how these two developments affected family welfare. Although family welfare rose during the 1990s, the story of the 2000s is quite different.

The analysis in this paper provides estimates of family welfare losses generated by wage and nonlabor income declines experienced across the Great Recession and by labor market constraints existing postrecession. Welfare losses are greater as families (both married and single) move up the income distribution. Total static welfare losses are estimated to amount to roughly $190 billion, comparing family welfare between 2007 and 2011.

As a measure of labor market strength, the raw employment-to-population ratio (EPOP) confounds employment outcomes with labor supply behavior. Movement in the EPOP depends on the relative movements of the employment rate (one minus the unemployment rate) and the labor force participation rate. This paper proposes an adjustment to the calculation of the EPOP using individual microdata to account for both individual characteristics and the probability of labor force participation, which can used to assess the strength of the labor market.

It is well known that smoking leads to lower wages. However, the mechanism of this negative relationship is not well understood. This analysis includes a decomposition of the wage gap between smokers and nonsmokers, with a variety of definitions of smoking status designed to reflect differences in smoking intensity. This paper finds that nearly two-thirds of the 24 percent selectivity-corrected smoking/nonsmoking wage differential derives from differences in characteristics between smokers and nonsmokers. These results suggest that it is not differences in productivity that drive the smoking wage gap. Rather, it is differences in the endowments smokers bring to the market along with unmeasured factors, such as baseline employer tolerance. In addition, we also determine that even one cigarette per day is enough to trigger the smoking wage gap and that this gap does not vary by smoking intensity.

It is well known that smoking leads to lower wages. However, the mechanism of this negative relationship is not well understood. This analysis includes a decomposition of the wage gap between smokers and nonsmokers, with a variety of definitions of smoking status designed to reflect differences in smoking intensity. This paper finds that nearly two-thirds of the 24 percent selectivity-corrected smoking/nonsmoking wage differential derives from differences in characteristics between smokers and nonsmokers. These results suggest that it is not differences in productivity that drive the smoking wage gap. Rather, it is differences in the endowments smokers bring to the market along with unmeasured factors, such as baseline employer tolerance. In addition, we also determine that even one cigarette per day is enough to trigger the smoking wage gap and that this gap does not vary by smoking intensity.

Using matched employer-employee data from the state of Georgia, this paper investigates how differences in wage responsiveness contribute to the determination of observed wage differentials between documented and undocumented workers. Facing fewer employment opportunities, undocumented workers are found to be about 22 percent less sensitive than documented workers to employers' wage adjustments. In addition, this difference in wage responsiveness accounts for 27 percent of the observed within-firm wage differential between documented and undocumented workers. Implications of the results for recent state immigration legislation are discussed.

This paper uses matched individual-level data from the Current Population Survey to determine that around the 2008 recession, there was a significant upward shift in trend of the share of labor force leavers giving Schooling and Other as the reason for absence from the labor market. This trend shift is observed primarily among workers between the ages of 25 and 54 and is widespread across all educational groups with at least a high school degree. In addition, the upward shift in the trend of the schooling reason share occurred among workers previously employed in occupations and industries with varying degrees of job losses during the recession. This shift suggests it was a widespread phenomenon and not isolated among sectors or occupations that suffered the most during the recession. The implication is that the upward shift in the schooling reason share has more likely been a response to lower opportunity costs of schooling during economic downturns rather than the result of workers trying to overcome skill mismatch in the labor market. In addition, since transition rates to the labor force are highest among those giving Schooling and Other as reasons for absence, the decline in labor force participation since 2008 is likely more transitory than permanent.

Using administrative, individual-level, longitudinal data from the state of Georgia, this paper finds that a documented worker employed by a firm that hires undocumented workers can expect to earn 0.15 percent less than if employed by a firm that does not hire undocumented workers. However, in sectors where there are opportunities for task specialization and benefits from communication skills, documented workers can expect to earn a wage premium of less than 1 percent from being employed at a firm that also hires undocumented workers.

Using administrative data from the state of Georgia, this paper finds that, on average, across all firms, employing undocumented workers reduces a firm’s hazard of exit by 19 percent. The advantage to firms from employing undocumented workers increases as more firms in the industry do so, decreases with the skill level of the firm’s workers, increases with the breadth of a firm’s market, and increases with the labor intensity of the firm’s production process.

Utilizing linked vital statistics, administrative employer, and state welfare records, the analysis in this paper investigates the determinants of a woman's intermittent labor force decision at the time of a major life event: the birth of a child. The results indicate that both direct and opportunity labor market costs of exiting the workforce figure significantly into that decision. Further, the analysis reveals the importance of including information about the mother's prebirth job when making inferences about the role various demographics play in the intermittent labor force decision.

During the late 1990s, the convergence of women's labor force participation rates to men's rates came to a halt. This paper explores the degree to which the role of education and marriage in women's labor supply decisions also changed over this time period. Specifically, this paper investigates women's decisions to exit the labor market upon the birth of a child. The results indicate that changing exit behavior among married, educated women at this period in their lives was not likely the driving force behind the aggregate changes seen in labor force participation. Rather, changes in exit rates among single women, particularly those less educated, are much more consistent with the changing pattern of aggregate female labor force participation.

This paper contributes to a large literature concerned with identifying the source of the widening wage gap between high school and college graduates by providing a comprehensive, multidimensional decomposition of wages across both time and educational status. Data from a multitude of sources are brought to bear on the question of the relative importance of labor market supply and demand factors in the determination of those wage differences. The results confirm the importance of investments in and use of technology, which has been the focus of most of the previous literature, but are also able to show that demand and supply factors played very different roles in the growing wage gaps of the 1980s and 1990s.

Purpose – The purpose of this paper is to propose a proactive public policy approach to complement relatively reactive existing policies addressing gender-related employment disparities in the USA, and to provide an initial empirical illustration of the proposal. Design/methodology/approach – The paper provides a conceptual application of theories of total quality management (TQM) to the topic of gender-related employment disparities, followed by an empirical illustration using US Current Population Survey data and a gender equal employment opportunity (EEO) scorecard. Findings – Using the TQM framework, company outliers were conceptualized on the EEO scorecard as “special” causes of economy-wide equal employment variation and the industries in which companies are situated as “common” causes. The paper identifies two underperforming industries on gender-related employment outcomes: Mining and Construction, and Transportation, Communication and Utilities. Research limitations/implications – Further conceptual work on the application of TQM to gender disparities in employment is recommended. Also, the study considered broad industry categories; future research should refine these categories further. Practical implications – It is recommended that US enforcement agencies incorporate industry considerations more explicitly into their activities. Employer insights may be beneficial to improving equal employment opportunity performance at the industry level. Originality/value – The application of TQM theory to the topic of gender-related employment disparities is a novel approach that may motivate new public policies.

Human capital is a vital component in the production process, so the size of the labor force can profoundly affect the potential for economic growth. In the United States, the overall labor force participation rate (LFPR)the percent of the population supplying labor to the marketbegan to grow in the mid-1960s, mainly because of the rise in women's LFPR. But since 1997 the aggregate LFPR has been generally declining. Many researchers have linked this decline to demographic factors, chiefly the drop in labor force participation among young people and working-age women. This article presents a simple methodology for decomposing changes in the aggregate LFPR over time into demographic group changes in both labor force participation behavior and population shares. The decomposition reveals that a decline in the population shares of working-age men and women was actually the driving force behind the recent drop in the aggregate LFPR, outweighing the effect of the declining participation rates of women and youth. This simple method demonstrates how little information is needed to evaluate the historical evolution of the aggregate LFPR and to make projections of its future path that are a close match to estimates from more complex structural forecasting models.

This paper presents a simple methodology for decomposing changes in the aggregate labor force participation rate (LFPR) over time into demographic group changes in labor force participation behavior and in population share. The purpose is to identify the relative importance of behavioral changes and population changes as driving forces behind changes in the aggregate LFPR.

Do firms employing undocumented workers have a competitive advantage? Using administrative data from the state of Georgia, this paper investigates the incidence of undocumented worker employment across firms and how it affects firm survival. Firms are found to engage in herding behavior, being more likely to employ undocumented workers if competitors do. Rivals' undocumented employment harms firms' ability to survive, while firms' own undocumented employment strongly enhances their survival prospects. This suggests that firms enjoy cost savings from employing lower-paid undocumented workers at wages less than their marginal revenue product. The herding behavior and competitive effects are found to be much weaker in geographically broad product markets, where firms have the option to shift labor-intensive production out of state or abroad.

This article examines the inflow and outflow of workers to different industries in Georgia during the information technology (IT) boom of the 1990s and the subsequent bust. Workers in the software and computer services industry were much more likely to have been absent from the Georgia workforce before the boom but were no more likely than workers from other industries to have exited Georgia’s workforce during the bust. Consequently, Georgia likely experienced a net gain in worker human capital as a result of being an area of concentration of IT-producing activity during the IT boom.

Do firms employing undocumented workers have a competitive advantage? Using administrative data from the state of Georgia, this paper investigates the incidence of undocumented worker employment across firms and how it affects firm survival. Firms are found to engage in herding behavior, being more likely to employ undocumented workers if competitors do. Rivals' undocumented employment harms firms' ability to survive while firms' own undocumented employment strongly enhances their survival prospects. This finding suggests that firms enjoy cost savings from employing lower-paid undocumented at workers wages less than their marginal revenue product. The herding behavior and competitive effects are found to be much weaker in geographically broad product markets, where firms have the option to shift labor-intensive production out of state or abroad.

This paper proposes a novel approach that has the potential to hasten the eradication of gender disparities in employment. This approach relies upon the concept of statistical process control (SPC) to more systematically remedy disparate employment outcomes for women. SPC also serves as a new vehicle for conceptualizing the influence of industry on equal employment opportunity (EEO) outcomes. Using data from U.S. Current Population Surveys, we compare industries on EEO performance as assessed by a recently developed Systemic Gender Disparity Scorecard. The theory and practice of SPC suggest that further improvement, and by far the greater opportunity for gender-related EEO progress, necessitates fundamental changes in each industry's practices and norms that serve as barriers to gender parity. We recommend more resources to support collaboration between employers and EEO enforcement agencies.

Recent trends in the labor force participation of women have brought much public attention to the issue of women opting out. This paper explores the decision of working women to exit the labor market at a time of major transition - the birth of a child - utilizing linked vital statistics, administrative employer, and state welfare records. The results indicate that, consistent with utility maximization theory, women are not just opting out but rather are accurately assessing the potential opportunity and direct labor market costs of their exit decisions and are making workforce exit decisions based on measurable costs and benefits.

Using administrative data from the state of Georgia, the authors find that average wages among documented workers are lower in industries that employ undocumented workers and that a greater share of undocumented workers in those industries further lowers wages. In addition, undocumented workers have significantly lower labor supply elasticity, likely as a result of their limited employment and grievance opportunities. Furthermore, the inflow of undocumented workers does more to displace earlier hired undocumented workers than it does to displace documented workers.

We assess the 2001 income tax reform to determine its welfare impact across families with different characteristics. A household labor supply model is estimated to account for variable behavioral responses by family type. We find that while higher-education families received a larger share of the welfare gain generated from lower marginal tax rates, it was the lower-education families that provided the bulk of the additional labor supply motivated by the tax reform. We also find differing welfare gains across families with different numbers of children, highlighting the importance of allowing responses to vary across family characteristics when assessing the welfare impact of a policy change.

Using the Health and Retirement Survey and standard wage decomposition techniques, this paper finds that the difference in intermittent labor force participation between men and women accounts for 47 percent of the contribution to the wage gap of differences in observed characteristics. Not controlling for intermittent behavior results in too much importance being placed on gender differences in job characteristics.

The purpose of this paper is to determine whether any empirical evidence exists for the contribution of employer, or demand-side, determinants of the labor market intermittency penalty. The documented negative relationship between the size of the penalty and labor market strength is interpreted as evidence that labor market intermittency is viewed as an undesirable characteristic that employers penalize more severely when the labor market is weak.

This article uses matched employer-employee data for the State of Georgia to examine workers' earnings experience through the information technology (IT) sector's employment boom of the mid-1990's and bust in the early 2000s. The results show that even after controlling for pre-boom individual characteristics, transitioning out of the IT sector to a non-IT industry generally resulted in a large wage penalty. However, IT service workers who transitioned to a non-IT industry still fared better than workers who took a non-IT employment path. For IT manufacturing workers, there is no benefit to having been touched by technology, likely because of the nontransferability of manufacturing experience to other industries.

This paper examines the inflow and outflow of workers to different industries in Georgia during the information technology (IT) boom of the 1990s and the subsequent bust. Workers in the software and computer services industry were much more likely to have been absent from the Georgia workforce prior to the boom but were no more likely than workers from other industries to have exited the workforce during the bust. Consequently, the Georgia workforce likely experienced a net gain in worker human capital as a result of being an area of concentration of IT-producing activity during the IT boom.

This paper uses a unique personnel data set and state administrative data to follow welfare and nonwelfare hires who separate from similar jobs with the same firm. Welfare hires are more likely to separate from their job and are more likely to be on welfare after separation compared with similarly low-skilled nonwelfare hires. Those not returning to welfare, however, are no more or less likely to have moved on to a lower- or higher-paying job than nonwelfare hires.

The purpose of this paper is to explore the microfoundations of the observed asymmetric movement in aggregate unemployment rates. Using U.S. data, we find that individual labor force participation responds asymmetrically to changes in local labor market conditions, consistent with the pattern of movements in the aggregate unemployment rate. Differences in the asymmetry and sensitivity of labor force participation decisions are found across gender, age, and education groups, and these differences are used to anticipate changes in the aggregate movements as population characteristics change over time.

This paper applies a standard treatment effects model to determine that participation in Freshman Learning Communities (FLCs) improves academic performance and retention. Not controlling for individual self-selection into FLC participation leads one to incorrectly conclude that the impact is the same across race and gender groups. Accurately assessing the impact of any educational program is essential in determining what resources institutions should devote to it.

This paper uses matched employer-employee data for the state of Georgia to examine workers’ earnings experience through the information technology (IT) sector’s employment boom of the mid-1990s and its bust in the early 2000s. The results show that even after controlling for individual characteristics before the sector’s boom, transitioning out of the IT sector to a non-IT industry generally resulted in a large wage penalty. However, IT service workers who transitioned to a non-IT industry still fared better than those who took a non-IT employment path. For IT manufacturing workers, there is no benefit to having worked in tech, likely because of the nontransferability of manufacturing experience to other industries.

This paper determines that the weaker positive pull of education into the labor market and weaker labor market conditions are the observed factors that contributed the most to the decline in the labor force participation rate (LFPR) between 2000 and 2004 among women ages 25–54. As is typical, however, unobserved factors contributed more than any single or combination of observed factors. Furthermore, if the unemployment rate rebounded to its level in 2000, the LFPR would still be 1.4 percentage points lower than it was in 2000.

This paper uses unique employer-employee matched administrative data files to determine that firm and industry employment dynamics play significant roles in the earnings gains of workers who change jobs and in different ways across the business cycle. Among the more notable results is the finding that job-changers who leave a firm that is shutting down experience a greater earnings loss than job-changers who leave a firm that is merely contracting. In addition, the earnings loss from changing industries where firm-specific human capital is likely to be important has the potential of creating a much greater barrier to labor mobility during recessionary times than during an expansion.

The purpose of this paper is to determine whether workers’ commitment to the labor force declined after 9/11, as many popular press accounts at the time suggested it would. The results indicate that any measured decline in hours spent working was the result of economic conditions rather than changes in desired hours of work. Controlling for economic conditions, hours of work after 9/11 actually increased on average compared to before 9/11; no significant change in hours spent working occurred among residents of New York City, however.