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We estimate the effects on workforce and location outcomes of the Kalamazoo Promise, a generous, place-based college scholarship. Drawing upon administrative unemployment insurance wage records merged with individual-level education data, we identify Promise effects by comparing eligible to ineligible graduates before and after the Promise’s initiation. We supplement this quantitative analysis with surveys and interviews. Despite earlier research showing that the Kalamazoo Promise substantially increased degree attainment, we find little evidence that the program affected average earnings within 10 years of high school graduation. However, the Kalamazoo Promise may have increased the likelihood of eligible graduates having earnings, within Michigan, in the middle of the distribution. We discuss the possible role of job availability in understanding these patterns and the implications for free-tuition college programs as a workforce development tool.

We estimate the effects on postsecondary education outcomes of the Kalamazoo Promise, a generous, place-based college scholarship. We identify Promise effects using two forms of difference-in-differences: (i) comparing eligible to ineligible graduates before and after the Promise's initiation and (ii) comparing the treated district to comparison districts before and after the Promise's initiation. According to our estimates, the Promise increases college enrollment and credential attainment. Stronger effects occur for women. The results also provide suggestive but less precise evidence that Promise effects extend to disadvantaged groups. [End Page 269] [ABSTRACT FROM AUTHOR]

In this paper, we shed light on the impacts of the COVID-19 pandemic on the labor market, and how they have evolved over most of the year 2020. Relying primarily on microdata from the CPS and state-level data on virus caseloads, mortality, and policy restrictions, we consider a range of employment outcomes—including permanent layoffs, which generate large and lasting costs—and how these outcomes vary across demographic groups, occupations, and industries over time. We also examine how these employment patterns vary across different states, according to the timing and severity of virus caseloads, deaths, and closure measures. We find that the labor market recovery of the summer and early fall stagnated in late fall and early winter. As noted by others, we find low-wage and minority workers are hardest hit initially, but that recoveries have varied, and not always consistently, between Blacks and Hispanics. Statewide business closures and other restrictions on economic activity reduce employment rates concurrently, but do not seem to have lingering effects once relaxed. In contrast, virus deaths—but not caseloads—not only depress current employment, but produce accumulating harm. We conclude with policy options for states to repair their labor markets.

In this paper, we shed light on the impacts of the COVID-19 pandemic on the labor market, and how they have evolved over most of the year 2020. Relying primarily on microdata from the CPS and state-level data on virus caseloads, mortality, and policy restrictions, we consider a range of employment outcomes—including permanent layoffs, which generate large and lasting costs—and how these outcomes vary across demographic groups, occupations, and industries over time. We also examine how these employment patterns vary across different states, according to the timing and severity of virus caseloads, deaths, and closure measures. We find that the labor market recovery of the summer and early fall stagnated in late fall and early winter. As noted by others, we find low-wage and minority workers are hardest hit initially, but that recoveries have varied, and not always consistently, between Blacks and Hispanics. Statewide business closures and other restrictions on economic activity reduce employment rates concurrently, but do not seem to have lingering effects once relaxed. In contrast, virus deaths—but not caseloads—not only depress current employment, but produce accumulating harm. We conclude with policy options for states to repair their labor markets.

This paper studies the effects of each U.S. recession since 1973 on local labor markets. We find that recession-induced declines in employment are permanent, suggesting that local areas experience permanent declines in labor demand relative to less-affected areas. Population also falls, primarily due to reduced in-migration, but by less than employment. As a result, recessions generate long-lasting hysteresis: persistent decreases in the employment-to-population ratio and earnings per capita. Changes in the composition of workers explain less than half of local hysteresis. We further show that finite sample bias in vector auto-regressions leads to artificial convergence, which can explain why some previous work finds no evidence of hysteresis in employment rates.

The share of workers who are self-employed rises markedly with age. Given policy concerns about inadequate retirement savings, especially among those with lower education, and the resulting interest in encouraging employment at older ages, it is important to understand the role that self-employment arrangements play in facilitating work among seniors. New data from a survey module fielded on a Gallup telephone survey distinguish independent contractor work from other self-employment and provide information on informal and online platform work. The Gallup data show that, especially after accounting for individuals who are miscoded as employees, self-employment is even more prevalent at older ages than suggested by existing data. Work as an independent contractor is the most common type of self-employment. Roughly one-quarter of independent contractors aged 50 and older work for a former employer. At older ages, self-employment generally – and work as an independent contractor specifically – is more common among the highly educated, accounting for much of the difference in employment rates across education groups. We provide suggestive evidence that differences in opportunities for independent contractor work play an important role in the lower employment rates of less-educated older adults.

We conduct an empirical simulation exercise that gauges the plausible impact of increased rates of college attainment on a variety of measures of income inequality and economic insecurity. Using two different methodological approaches—a distributional approach and a causal parameter approach—we find that increased rates of bachelor’s and associate degree attainment would meaningfully increase economic security for lower-income individuals, reduce poverty and near-poverty, and shrink gaps between the 90th and lower percentiles of the earnings distribution. However, increases in college attainment would not significantly reduce inequality at the very top of the distribution.

We conduct an empirical simulation exercise that gauges the plausible impact of increased rates of college attainment on a variety of measures of income inequality and economic insecurity. Using two different methodological approaches—a distributional approach and a causal parameter approach—we find that increased rates of bachelor’s and associate degree attainment would meaningfully increase economic security for lower-income individuals, reduce poverty and near-poverty, and shrink gaps between the 90th and lower percentiles of the earnings distribution. However, increases in college attainment would not significantly reduce inequality at the very top of the distribution. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

We show that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas. These increases persist through at least the end of 2015 and are correlated with increases in capital investments, both at the MSA and firm levels. We also find that effects are most pronounced in routine-cognitive occupations, which exhibit relative wage growth as well. We argue that this evidence is consistent with the restructuring of production toward routine-biased technologies and the more-skilled workers that complement them, and that the Great Recession accelerated this process. (JEL E24, E32, J24, J31, J63, L23, O33)

As higher education costs rise, many communities have begun to adopt their own financial aid strategy: place-based scholarships for students graduating from the local school district. In this paper, we examine the benefits and costs of the Kalamazoo Promise, one of the more universal and more generous place-based scholarships. Building upon estimates of the program’s heterogeneous effects on degree attainment, scholarship cost data, and projections of future earnings by education, we examine the Promise’s benefit-cost ratios for students differentiated by income, race, and gender. Although the average rate of return of the program is 11%, rates of return vary greatly by group. The Promise has high returns for both low-income and non-low-income groups, for non-Whites, and for women, while benefit assumptions matter more for Whites and men. Our results show that universal scholarships can reach many students and have a high rate of return, particularly for places with a high percentage of African American students. They also highlight the importance of disaggregating benefits and costs by subgroup when performing benefit-cost analysis when the treatment is heterogeneous.

Drawing on the Panel Study of Income Dynamics, we document a startling empirical pattern: the career earnings premium from a four-year college degree (relative to a high school diploma) for persons from low-income backgrounds is considerably less than it is for those from higher-income backgrounds. For individuals whose family income in high school was above 1.85 times the poverty level, we estimate that career earnings for bachelor’s graduates are 136 percent higher than earnings for those whose education stopped at high school. However, for individuals whose family income during high school was below 1.85 times the poverty level, the career earnings of bachelor’s graduates are only 71 percent higher than those of high school graduates. This lower premium amounts to $300,000 less in career earnings in present discounted value. We establish the prevalence and robustness of these differential returns to education across race and gender, finding that they are driven by whites and men and by differential access to the right tail of the earnings distribution.

Drawing on the Panel Study of Income Dynamics, we document a startling empirical pattern: the career earnings premium from a four-year college degree (relative to a high school diploma) for persons from low-income backgrounds is considerably less than it is for those from higher-income backgrounds. For individuals whose family income in high school was above 1.85 times the poverty level, we estimate that career earnings for bachelor’s graduates are 136 percent higher than earnings for those whose education stopped at high school. However, for individuals whose family income during high school was below 1.85 times the poverty level, the career earnings of bachelor’s graduates are only 71 percent higher than those of high school graduates. This lower premium amounts to $300,000 less in career earnings in present discounted value. We establish the prevalence and robustness of these differential returns to education across race and gender, finding that they are driven by whites and men and by differential access to the right tail of the earnings distribution.

We estimate the effects on postsecondary education outcomes of the Kalamazoo Promise, a generous place-based college scholarship. We identify Promise effects using difference-in-differences, comparing eligible to ineligible graduates before and after the Promise’s initiation. According to our estimates, the Promise significantly increases college enrollment, college credits attempted, and credential attainment. Stronger effects occur for minorities and women. Predicted lifetime earnings effects of the Promise’s credential gains, compared to the Promise’s scholarship costs, represent an internal rate of return of 11.3 percent. Based on our results, simple and generous scholarships can significantly increase educational attainment and provide net economic benefits.

Abortion policy has been a hot issue since the U.S. Supreme Court decided Roe v. Wade in 1973. In the last decade the controversy surrounding abortion has widened to include contraception. Many anti-abortion groups have broadened their challenge of this historic ruling the earlier 1965 Griswold v. Connecticut decision which declared states’ regulation of private matters (such as the use of contraception) unconstitutional. Proposals to reduce funding or remove regulations that ensure women’s access to contraception have become increasingly explicit in policy discussions. In 2011 and 2012 a caucus of conservative House Republicans proposed defunding of Title X of the Public Health Service Act which supports family planning providers that serve close to 5 million women. Highlighting the recent controversy the 2010 Affordable Care Act’s requirement that contraception be covered free of charge by employer-provided health insurance has spurred over 40 lawsuits nationwide. What are the broader implications of increasing the regulation of abortion or contraception or decreasing funding for these services? What would happen if Roe v. Wade were repealed or Title X funding was cut? This article reviews empirical evidence from the economics literature to shed light on these questions. [excerpt]

While previous research has documented how the Kalamazoo Promise, the most prominent and generous place-based college scholarship program, increased enrollment in Kalamazoo Public Schools, this paper qualifies and quantifies the characteristics of students who were induced to enter—or stay—in the district. In particular, it analyzes the origins and destinations, socioeconomic composition, and school-level sorting behavior associated with student flows around the time of the Promise announcement. These dimensions are more subtle than changes in the volume of students or measures of their individual success, but they are equally important to understand for communities exploring the feasibility of place-based scholarships as a local economic development tool. The findings suggest considerable economic benefits not just for the school district but for the broader metropolitan area. JEL Classification Codes: I21, I25, J61, O18, R10

Routine-biased technological change (RBTC), whereby routine-task jobs are replaced by machines and overseas labor, shifts demand towards high- and low-skill jobs, resulting in job polarization of the U.S. labor market. We test whether recessions accelerate this process. In doing so we establish a new fact about the demand for skill over the business cycle. Using a new database containing the near-universe of electronic job vacancies that span the Great Recession, we find evidence of upskilling — firms demanding more-skilled workers when local employment growth is slower. We find that upskilling is sizable in magnitude and largely due to changes in skill requirements within firm-occupation cells. We argue that upskilling is driven primarily by firm restructuring of production towards more-skilled workers. We show that 1) skill demand remains elevated after local economies recover from the Great Recession, driven primarily by the same firms that upskilled early in the recovery; 2) among publicly traded firms in our data, those that upskill more also increase capital stock by more over the same time period; and 3) upskilling is concentrated within routine-task occupations — those most vulnerable to RBTC. Our result is unlikely to be driven by firms opportunistically seeking to hire more-skilled workers in a slack labor market, and we rule out other cyclical explanations. We thus present the first direct evidence that the Great Recession precipitated new technological adoption.

We estimate the effects on postsecondary education outcomes of the Kalamazoo Promise, a generous place-based college scholarship. We identify Promise effects using difference-in-differences, comparing eligible to ineligible graduates before and after the Promise’s initiation. According to our estimates, the Promise significantly increases college enrollment, college credits attempted, and credential attainment. Stronger effects occur for minorities and women. Predicted lifetime earnings effects of the Promise’s credential gains, compared to the Promise’s scholarship costs, represent an internal rate of return of 11.3 percent. Based on our results, simple and generous scholarships can significantly increase educational attainment and provide net economic benefits.

Despite tremendous recent interest in the subject of student debt by both researchers and policy makers, little is known about how the distribution of college graduate debt has been evolving and what factors can explain it. We use National Postsecondary Student Aid Study data from 1990 through 2008 to document the evolution of college graduate debt profiles. We find that growth in debt over the 1990s was rapid and occurred throughout the distribution; during the 2000s, in contrast, debt grew appreciably only for the top quartile. Employing several decomposition techniques, we exploit the richness of the data to explain these shifts. Over the entire horizon, observable characteristics of students and institutions explain about one-third of the debt increase, though this share tends to be higher around the extensive margin and the median and lower in the right tail. While observables — largely costs — explain a majority of the increase between 1990 and 1996 and again from 2000 to 2008, they explain nothing over the late 1990s. We offer suggestive evidence that this “unobservable” share was supply-side driven, owing to the advent of both federal unsubsidized Stafford loans and private loans.

Dramatic fertility swings over the last 100 years have been the subject of large literatures in demography and economics. Recent research has claimed that the post-1960 fertility decline is exceptional enough to constitute a "Second Demographic Transition." The empirical case for a Second Demographic Transition, however, rests largely on comparisons of the post-1960 period with the baby boom era, which was itself exceptional in many ways. Our analysis of the U.S. instead compares the fertility decline in the 1960s and 1970s to the earlier 20th century fertility decline, especially the 1920s and 1930s. Our findings affirm that both periods experienced similar declines in fertility rates and that the affected cohorts averaged the same number of children born over their lifetimes. In contrast to conventional wisdom, the mean age of household formation (by marriage or non-marital cohabitation) and first birth are almost identical for women reaching childbearing age in the 1920s and 1930s and today. Three features, however, distinguish the post-1960 period: (1) the convergence in the distribution of completed childbearing around a two-child mode and a decrease in childlessness; (2) the decoupling of marriage and motherhood; and (3) a transformation in the relationship between the educational attainment of mothers and childbearing outcomes. These three features of the 20th century fertility decline have implications for children's opportunities, children's educational achievement, and widening inequality in U.S. labor markets.

Dramatic fertility swings over the last 100 years have been the subject of large literatures in demography and economics. Recent research has claimed that the post-1960 fertility decline is exceptional enough to constitute a "Second Demographic Transition." The empirical case for a Second Demographic Transition, however, rests largely on comparisons of the post-1960 period with the baby boom era, which was itself exceptional in many ways. Our analysis of the U.S. instead compares the fertility decline in the 1960s and 1970s to the earlier 20th century fertility decline, especially the 1920s and 1930s. Our findings affirm that both periods experienced similar declines in fertility rates and that the affected cohorts averaged the same number of children born over their lifetimes. In contrast to conventional wisdom, the mean age of household formation (by marriage or non-marital cohabitation) and first birth are almost identical for women reaching childbearing age in the 1920s and 1930s and today. Three features, however, distinguish the post-1960 period: (1) the convergence in the distribution of completed childbearing around a two-child mode and a decrease in childlessness; (2) the decoupling of marriage and motherhood; and (3) a transformation in the relationship between the educational attainment of mothers and childbearing outcomes. These three features of the 20th century fertility decline have implications for children's opportunities, children's educational achievement, and widening inequality in U.S. labor markets.

Despite tremendous recent interest in the subject of student debt by both researchers and policymakers, little is known about how the distribution of college graduate debt has been evolving and what factors can explain it. We use National Postsecondary Student Aid Study data from 1990 through 2008 to document the evolution of college graduate debt profiles. We find that growth in debt over the 1990s was rapid and occurred throughout the distribution; during the 2000s, in contrast, debt grew appreciably only for the top quartile. Employing several decomposition techniques, we exploit the richness of the data to explain these shifts. Over the entire horizon, observable characteristics of students and institutions explain about one-third of the debt increase, though this share tends to be higher around the extensive margin and the median and lower in the right tail. While observables -- largely costs -- explain a majority of the increase between 1990 and 1996 and again from 2000 to 2008, they explain nothing over the late 1990s. We offer suggestive evidence that this "unobservable" share was supply-side driven, owing to the advent of both federal unsubsidized Stafford loans and private loans.

Recent studies have found a large earnings premium to attending a more selective college, but the mechanisms underlying this premium have received little attention and remain unclear. In order to shed light on this question, I develop a multidimensional signaling model relying on college grades and selectivity that rationalizes students’ choices of effort and firms’ wage-setting behavior. The model is then used to produce predictions of how the interaction of the signals should be related to wages, namely that the return on college GPA should fall the more selective the institution attended. Using five data sets that span the early 1960s through the late 2000s, I show that the data support the predictions of the signaling model, with support growing stronger over time as college sorting by ability has increased. The findings imply that return to college selectivity depends on GPA, something previously not recognized in the literature, and they can rationalize why employers learn more quickly about college graduates’ productivity than less educated workers’.

Recent studies have found a large earnings premium to attending a more selective college, but the mechanisms underlying this premium have received little attention and remain unclear. In order to shed light on this question, I develop a multidimensional signaling model relying on college grades and selectivity that rationalizes students’ choices of effort and firms’ wage-setting behavior. The model is then used to produce predictions of how the interaction of the signals should be related to wages, namely that the return on college GPA should fall the more selective the institution attended. Using five data sets that span the early 1960s through the late 2000s, I show that the data support the predictions of the signaling model, with support growing stronger over time as college sorting by ability has increased. The findings imply that return to college selectivity depends on GPA, something previously not recognized in the literature, and they can rationalize why employers learn more quickly about college graduates’ productivity than less educated workers’.

This paper uses a unique natural experiment to investigate the sensitivity of American college women’s contraceptive choice to the price of oral birth control and the importance of its use on educational and health outcomes. With the passage of the Deficit Reduction Act of 2005, Congress inadvertently and unexpectedly increased the effective price of birth control pills (“the Pill”) at college health centers more than three-fold, from $5 to $10 a month to between $30 to $50 a month. Using quasi-difference-in-difference and fixed effects methodologies and an intention-to-treat (ITT) design with two different data sets, we find that this policy change reduced use of the Pill by at least 1 to 1.8 percentage points, or 2 to 4 percent, among college women, on average. For college women who lacked health insurance or carried large credit card balances, the decline was two to three times as large. Women who lack insurance and have sex infrequently appear to substitute toward emergency contraception; uninsured women who are frequent sex participants appear to substitute toward non-prescription forms of birth control. Additionally, we find small but significant decreases in frequency of intercourse and the number of sex partners, suggesting that some women may be substituting away from sexual behavior in general.

Decades of research on the US gender gap in wages describes its correlates, but little is known about why women changed their career paths in the 1960s and 1970s. This paper explores the role of “the Pill” in altering women's human capital investments and its ultimate implications for life-cycle wages. Using state-by-birth-cohort variation in legal access, we show that younger access to the Pill conferred an 8 percent hourly wage premium by age 50. Our estimates imply that the Pill can account for 10 percent of the convergence of the gender gap in the 1980s and 30 percent in the 1990s. (JEL J13, J16, J31, J71, J24)

This paper explores how high school graduate men and women vary in their behavioral responses to beginning labor market entry during a recession. In contrast with previous related literature that found a substantial negative wage impact but minimal employment impact in samples of highly educated men, the empirical evidence presented here suggests a different outcome for the less well educated, and between the sexes. Women, but not men, who graduate high school in an adverse labor market are less likely to be in the workforce for the next four years, but longer-term effects are minimal. Further, while men increase their enrollment as a short-run response to weak labor demand, women do not; instead, they appear temporarily to substitute into home production. Women's wages are less affected than men's, and both groups' wages are less affected than the college graduates previously studied.