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on Labour Economics |
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Issue of 2024‒07‒22
24 papers chosen by |
| By: | Marios Michaelides (Actus Policy Research; University of Cyprus); Peter Mueser (University of Missouri) |
| Abstract: | We examine the effects of a job-counseling program targeting Unemployment Insurance (UI) recipients in Nevada during both the Great Recession and a period characterized by a strong economy. The program reduced UI duration and improved participant employment and earnings in both periods. Effects can be partially attributed to participant exits before receiving any services (moral hazard effects) and partly to exits after receiving services (service effects). Notably, moral hazard effects appear more important during a strong economy, while the value of services is more evident during a recession. We find no evidence that the positive effects of job counseling for participants can be attributed to negative spillover effects for nonparticipants. |
| Keywords: | Job counseling, reemployment assistance, active labor market policies, unemployment, Unemployment Insurance, policy evaluation. |
| JEL: | J6 H4 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:umc:wpaper:2406&r= |
| By: | Connolly, Laura E.; Jolly, Nicholas A. |
| Abstract: | This paper utilizes the 1968-2019 survey waves of the Panel Study of Income Dynamics to analyze the added worker effect for wives of husbands who lose their job through no fault of their own. Specifically, we focus on the potential changes to the added worker effect over time. For wives who were non-employed prior to their husbands' job loss, our results show that the added worker effect has declined over time; the effect is U-shaped for wives working part-time pre-displacement. Further, heterogeneity exists across age groups. The added worker effect is largest and more persistent across decades for women who are relatively younger at the time of their husbands' job loss, ages 20-39. Although the magnitude of the added worker effect declined from the 1970s to the 2000s, it is still a mechanism through which households adjust to spousal job loss, particularly part-time working wives shifting to full-time employment. Finally, displaced husbands are increasingly more likely to be employed part-time following their own displacement. |
| Keywords: | Added worker effect, job displacement, women’s labor supply |
| JEL: | J22 J63 J65 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1454&r= |
| By: | Liam D'hert; Stijn Baert; Louis Lippens (-) |
| Abstract: | Policymakers’ push for higher employment rates requires the activation of long-term unemployed jobseekers and inactive persons. However, stigma related to unemployment or inactivity can hinder their hiring chances when applying for a job. This systematic literature review investigates whether, when, and why periods of not working are penalised in hiring. Our review confirms that employers generally treat the unemployed and inactive less favourably than their employed counterparts. A meta-regression analysis of transnational experimental data points to heterogeneity by the duration of being out of work: short-term unemployment of up to six months positively affects hiring prospects, while the adverse effects of unemployment scarring become noticeable after about twelve months. We highlight evidence for signalling mechanisms underlying this pattern: immediate availability offsets the negative signals in short spells, whereas expectations about reduced productivity primarily drive the negative impact of longer spells. The latter negative signal is more pronounced when unemployment rates are low. |
| Keywords: | unemployment, inactivity, hiring chances, systematic review, meta-analysis |
| JEL: | E24 J24 J64 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:24/1089&r= |
| By: | Mallika Thomas (Federal Reserve Bank of Minneapolis) |
| Abstract: | Using the historical random assignment of MBA students to peer groups at a top business school in the United States, I study the effect of the gender composition of a student’s peers on the gender pay gap at graduation and long-term labor market outcomes. I find that a 10 percentage point increase in the share of male peers leads to a 2.1 percent increase in the relative earnings of female students at graduation, closing the gender gap in earnings at graduation by two-thirds. The effects on women’s long-term earnings grow even larger with time. Using novel data on job offers, I find that two different mechanisms drive the effects on short- and long-term earnings. Women with a greater share of male peers take more quantitative coursework in business school and receive job offers at graduation in occupations, industries, and firms associated with higher wages, longer hours, and greater earnings growth. However, the effect of male peers on women’s earnings at graduation is primarily driven by female students’ increased willingness to accept the maximum salary offered within their offer set. In contrast, peer-induced effects on human capital alone place female students on dramatically different long-term expected earnings paths due to changes in the initial occupation, initial industry, and initial firm accepted at graduation. This change in the characteristics of the first job at graduation largely explains the effect of peer gender composition on long-term outcomes. |
| Keywords: | peer groups, gender gap, MBA students, course work, job offers, long-term earnings |
| JEL: | I24 I26 J16 J24 J31 J44 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:24-402&r= |
| By: | Clark, Andrew E. (Paris School of Economics); Lepinteur, Anthony (University of Luxembourg) |
| Abstract: | It is well-known that unemployment leaves scars after re-employment, but does this scarring effect persist even after retirement? We analyse European data on retirees from the SHARE panel, and show that the well-being of the retired continues to reflect the unemployment that they experienced over their working life. These scarring effects are somewhat smaller for older retirees, but larger for those who arguably had higher expectations regarding the labour market when they were active. Despite the substantial variation in culture and labour-market institutions over the 29 countries in our sample, there are no significant country differences. This long-run scarring for those who have left the labour market underlines that contemporaneous correlations significantly under-estimate the well-being cost of unemployment. |
| Keywords: | unemployment, retirement, scarring, CASP, SHARE |
| JEL: | J21 J63 I31 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17068&r= |
| By: | Cai, Xiqian; Chen, Shuai; Cheng, Zhengquan |
| Abstract: | Gender inequality and discrimination still persist, even though the gender gap in the labor market has been gradually decreasing. This study examines the effect of the #MeToo movement on judges' gender gap in their vital labor market outcome-judicial decisions on randomly assigned legal cases in China. We apply a difference-in-differences approach to unique verdict data including rich textual information on characteristics of cases and judges, and compare changes in sentences of judges of a different gender after the movement. We find that female judges made more severe decisions post-movement, which almost closed the gender gap. Moreover, we explore a potential mechanism of gender norms, documenting evidence for improved awareness of gender equality among women following the movement and stronger effects on judges' gender gap reduction in regions with better awareness of gender equality. This implies that female judges became willing to stand out and speak up, converging to their male counterparts after the #MeToo movement. |
| Keywords: | #MeToo movement, Gender gap, Inequality, Judicial decision, Crime, Machine Learning |
| JEL: | J16 K14 O12 P35 D63 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1453&r= |
| By: | Paule-Paludkiewicz, Hannah |
| Abstract: | This paper studies how the statutory right to work part-time affects mothers' post-birth labor market outcomes. I use a differences-in-differences design to investigate a reform in Germany that granted the right to work part-time to employees of firms with more than 15 employees. I find that the reform increased the probability of eligible mothers working part-time in the short run after childbirth, indicating that the law relaxed a binding constraint. In the longer run, the reform had a positive effect on maternal employment and labor income, but did not change part-time status significantly. |
| Keywords: | Female Employment, Part-Time Work, Fertility, Family and Work Obligations |
| JEL: | J13 J18 J22 J83 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:298853&r= |
| By: | Marina Krauß; Niklas Rott |
| Abstract: | This paper estimates the causal effect of increased availability of early childcare on maternal health. We focus on a substantial expansion of childcare for children under three years in West Germany from 2006 to 2019. By matching county-level childcare attendance rates with individual data from the German Socio-Economic Panel Study (SOEP), we are able to quantify the effects of this expansion on maternal self-assessed health. Using a county-level fixed-effects model, we find that a 10 percentage point increase in the availability of childcare decreases mothers’ self-assessed health by 0.173 points on a one to five scale (19% of a standard deviation). A detailed analysis of various health domains reveals negative effects on both physical and mental health as well as on satisfaction with overall health. One plausible mechanism for these negative effects is the transmission of infections from children to mothers. Consistent with this hypothesis, we observe that increased childcare availability leads to mothers worrying more about their children’s health. While early childcare expansions offer well-known benefits in many dimensions like maternal employment and child development, our results suggest that there are unintended negative effects in the health domain of mothers. |
| Keywords: | Early childcare, maternal health, gender equality |
| JEL: | I10 I14 J13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1208&r= |
| By: | Ludovica Ciasullo; Martina Uccioli |
| Abstract: | We document how a change to work arrangements reduces the child penalty in labor supply for women, and that the consequent more equal distribution of household income does not translate into a more equal division of home production between mothers and fathers. The Australian 2009 Fair Work Act explicitly entitled parents of young children to request a (reasonable) change in work arrangements. Leveraging variation in the timing of the law, timing of childbirth, and the bite of the law across different occupations and industries, we establish three main results. First, the Fair Work Act was used by new mothers to reduce their weekly working hours without renouncing their permanent contract, hence maintaining a regular schedule. Second, with this work arrangement, working mothers’ child penalty declined from a 47 percent drop in hours worked to a 38 percent drop. Third, while this implies a significant shift towards equality in the female- and male-shares of household income, we do not observe any changes in the female (disproportionate) share of home production. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:not:notnic:2024-03&r= |
| By: | Muriel DEJEMEPPE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Matthieu DELPIERRE (IWEPS); Mathilde POURTOIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | We evaluate the impact of hiring subsidies for unemployed jobseekers in Wallonia, the French-speaking region in the south of Belgium. The special feature of these subsidies is that they are more readily available for low-educated youths, who are eligible from registration as a jobseeker or a few months later. In contrast, others must wait 12 months to be eligible. We exploit this difference in a regression discontinuity design and show that earlier access to subsidies does not enhance the job finding rate of the target group. We attribute the lack of effect to the pre-pandemic tightening of the labor market. |
| Keywords: | Hiring subsidies, Youth unemployment, Low-educated, Regression discontinuity design, Labor market tightness |
| JEL: | C21 J08 J23 J24 J38 |
| Date: | 2024–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2024009&r= |
| By: | Maite Bl\'azquez Cuesta; Marco A. P\'erez Navarro; Roc\'io S\'anchez-Mangas |
| Abstract: | This paper examines the incidence and persistence of overeducation in the early careers of Spanish university graduates. We investigate the role played by the business cycle and field of study and their interaction in shaping both phenomena. We also analyse the relevance of specific types of knowledge and skills as driving factors in reducing overeducation risk. We use data from the Survey on the Labour Insertion of University Graduates (EILU) conducted by the Spanish National Statistics Institute in 2014 and 2019. The survey collects rich information on cohorts that graduated in the 2009/2010 and 2014/2015 academic years during the Great Recession and the subsequent economic recovery, respectively. Our results show, first, the relevance of the economic scenario when graduates enter the labour market. Graduation during a recession increased overeducation risk and persistence. Second, a clear heterogeneous pattern occurs across fields of study, with health sciences graduates displaying better performance in terms of both overeducation incidence and persistence and less impact of the business cycle. Third, we find evidence that some transversal skills (language, IT, management) can help to reduce overeducation risk in the absence of specific knowledge required for the job, thus indicating some kind of compensatory role. Finally, our findings have important policy implications. Overeducation, and more importantly overeducation persistence, imply a non-neglectable misallocation of resources. Therefore, policymakers need to address this issue in the design of education and labour market policies. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.04437&r= |
| By: | Sievertsen, Hans Henrik (University of Bristol); Smith, Sarah (University of Bristol) |
| Abstract: | This paper reports results from a survey experiment comparing the effect of (the same) opinions expressed by male versus female experts. Members of the public were asked for their opinions on topical issues and shown the opinion of either a male or a female economist, all professors at leading US universities. We find, first, that experts can persuade members of the public - the opinions of individual expert economists have an effect on public opinion - and, second, that the opinions expressed by female economists are more persuasive than the same opinions expressed by male economists. |
| Keywords: | economic expertise, persuasion, gender, stereotypes, survey experiments |
| JEL: | A11 D83 J16 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17029&r= |
| By: | Chauvin, Juan Pablo |
| Abstract: | This paper studies the effects of changes in local public education budgets on individual schooling attainment and migration, as well as on local labor market outcomes. I leverage the introduction of FUNDEF, a large federal program that redistributed public education finance across Brazilian municipalities in the late 1990s, as a source of exogenous variation. Using a cohort-exposure design, I find that, at the individual level, doubling the program-related public education budget led to a 1.4 percentage point increase in the likelihood of completing primary school, and a 0.5 percentage point decrease in the likelihood of staying in the local labor market among exposed cohorts, on average. The mobility effects are concentrated among individuals educated in municipalities that received a positive budget shock as a result of the program, which were also characterized by relatively worse local labor market conditions. At the local labor market level, difference-in-differences estimates suggest that higher public education budgets were associated with lower employment rates and average wages, suggesting that the “brain drain” effect depressed local labor demand in the long run. |
| Keywords: | school spending;schooling attainment;Migration |
| JEL: | I20 O15 R23 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13497&r= |
| By: | Schanzenbach, Diane Whitmore (Northwestern University); Strain, Michael R. (American Enterprise Institute for Public Policy Research) |
| Abstract: | The 2021 Child Tax Credit (CTC) expansion increased government benefits to families, and especially to families with the lowest incomes. Economic theory predicts that this policy intervention would have led to a reduction in labor supply among adults in those families. Our review of available research suggests that employment within broadly defined demographic groups was not reduced by the 2021 CTC changes. However, we present evidence that employment was reduced among mothers with relatively low levels of education - the demographic group that was most affected by the CTC expansion. For the 2021 CTC expansion, theory and evidence were in the strongest alignment when the research design that produced the evidence was most focused on the demographic groups most likely to be affected by the expansion. |
| Keywords: | employment, labor supply, cash transfers, maternal employment, child tax credit |
| JEL: | H31 J08 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17041&r= |
| By: | Malavasi, Chiara (ZEW Mannheim); Ye, Han (University of Mannheim) |
| Abstract: | We estimate the effect of additional pension income on mortality outcomes by exploring the eli- gibility criteria of a German program subsidizing the pensions of low-wage workers. Using novel administrative data, we find that eligibility leads to a 2-month delay in age at death (censored at 75). Survey evidence suggests that additional pension income improves both mental and physical health. In addition, individuals feel less financially constrained and are more optimistic about their future. Heterogeneity analysis indicates that the results are mainly driven by men. |
| Keywords: | mortality, health, income, pension subsidy, retirement |
| JEL: | I10 I12 J14 J26 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17024&r= |
| By: | Lepinteur, Anthony (University of Luxembourg); Clark, Andrew E. (Paris School of Economics); D'Ambrosio, Conchita (University of Luxembourg) |
| Abstract: | We here evaluate the link between job insecurity and one of the most-important decisions that individuals take: homeownership. The 1999 rise in the French Delalande tax on firms that laid off older workers produced an unexpected exogenous rise in job insecurity for younger workers. A difference-in-differences analysis of panel data from the European Community Household Panel shows that this greater job insecurity significantly reduced the probability of becoming a homeowner. This drop seems more attributable to individual preferences rather than greater capital constraints, consistent with individuals reducing their exposure to long-term financial commitments in more-uncertain environments. |
| Keywords: | homeownership, job insecurity, employment protection, difference-in-differences |
| JEL: | I38 J18 R21 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17038&r= |
| By: | Ofori, Pamela E.; Ofori, Isaac K.; Castelnovo, Paolo |
| Abstract: | The Sustainable Development Goal 5 emphasises the need to achieve gender parity in economic participation. Perusing the extant scholarship on female economic inclusion in Africa, we identify two pressing gaps. First, we find that previous studies have not explored how innovation affects female economic inclusion (FEI). Second, we note that prior studies have not examined the interactive effect of innovation and economic freedom on FEI. This study addresses these gaps by using macro data from 1995-2022 for a sample of 51 African countries. Findings from the two-step system GMM estimator reveal the following: (1) innovation reduces FEI, whereas economic freedom increases it, and (2) economic freedom moderates innovation to promote FEI. Further, we find that this positive total effect of innovation on FEI is remarkable at higher thresholds of economic freedom. We conclude that for innovation to promote FEI in Africa, investments in promoting economic freedom are critical. |
| Keywords: | Africa, Innnovation, Economic freedom, Female economic inclusion, GMM |
| JEL: | O31 O55 E24 J16 J21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:298786&r= |
| By: | Hanna M. Schwank (University of Bonn) |
| Abstract: | Natural disasters are growing in frequency globally. Understanding how vulnerable populations respond to these disasters is essential for effective policy response. This paper explores the short- and long-run consequences of the 1906 San Francisco Fire, one of the largest urban fires in American history. Using linked Census records, I follow residents of San Francisco and their children from 1900 to 1940. Historical records suggest that exogenous factors such as wind and the availability of water determined where the fire stopped. I implement a spatial regression discontinuity design across the boundary of the razed area to identify the effect of the fire on those who lost their home to it. I find that in the short run, the fire displaced affected residents, forced them into lower paying occupations and out of entrepreneurship. Experiencing the disaster disrupted children’s school attendance and led to an average loss of six months of education. While most effects attenuated over time, the negative effect on business ownership persists even in 1940, 34 years after the fire. Therefore, my findings reject the hope for a “reversal of fortune” for the victims, in contrast to what is found for more recent natural disasters such as hurricane Katrina. |
| Keywords: | Natural disasters, internal migration, economic history, regional and urban economics |
| JEL: | N91 N31 Q54 O15 J61 J62 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:312&r= |
| By: | René Böheim; Thomas Horvath; Thomas Leoni; Martin Spielauer |
| Abstract: | We develop a dynamic microsimulation model to project the labor force and economic dependency ratios in the United States from 2022 to 2060, taking population projections and the large inequalities between population groups of different race/ethnicity and gender into account. We contrast policy scenarios and show the potential impact that closing the gaps in education, health, and participation rates between population subgroups can have on increasing the U.S. labor force. Our baseline projections indicate an increase of the labor force of about 27 million people by 2060, which is mainly caused by population growth. The downstream effects of removing disparities in population health and educational attainment on labor force participation can add about 10% (+2.6 million people) to our baseline projections. The potential effects of closing gaps between genders and between minority groups and the non-Hispanic White population, however, are much larger if we assume the equalization of participation rates for individuals with similar characteristics. Closing gender gaps within ethno-racial groups, for instance, can add 9.9 to 14.3 million people to the labor force. Overall, reducing disparities in labor force participation rates has the potential to more than compensate the effects of demographic aging on the economic dependency ratio. |
| JEL: | C5 J11 J21 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32590&r= |
| By: | Ofori, Pamela E.; Ofori, Isaac K. |
| Abstract: | The surge in frontier technology adoption (FTR) in education, health, and labour markets cannot be overemphasised. Notwithstanding, rigorous empirical findings concerning their socioeconomic impacts in the Global South are hard to find. Accordingly, this study explores the impact of FTR on gender inequality in low-income, and middle- and high-income African countries. Second, this study investigates the moderating role of electricity access in the FTR-gender inequality nexus. Third, the study examines the threshold effect of electricity access in the FTR-gender inequality relationship. Compelling evidence, based on country-level data for 29 African countries from 2010-2020, reveals that FTR promotes gender equality in both low-income, and middle- and high-income African countries. However, this impact is striking in the middle- and high-income African countries. Further, the contingency analysis establishes that electricity access amplifies the effect of FTR on gender equality but only in middle- and high-income African countries. Additionally, the threshold analysis demonstrates that broadening electricity access coverage conditions FTR to further enhance gender equality. However, this positive impact eludes low-income African countries. We conclude that investments in broadening electricity access and the capacity of African countries in adopting, mastering, and adapting frontier technologies are critical for inclusive human development. |
| Keywords: | Africa, Agenda 2063, Frontier technology adoption, Gender Inequality, Inclusive human development |
| JEL: | J16 O3 O55 Q01 Q43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:298789&r= |
| By: | Chen, Shuai; Powdthavee, Nattavudh; Wiese, Juliane |
| Abstract: | We study whether the model minority stereotype about Asian Americans (e.g., hard-working, intelligent) reduces people's attention to inequality that adversely affects Asians. In a nationally representative US sample (N=3, 257), we find that around 90% of the participants either moderately or strongly believe that Asians work harder and are more economically successful compared to other ethnic minorities. We then demonstrate that an increase in the model minority belief has a dose-response relationship with people's tendency to overestimate incomes for Asians but not for Whites and Blacks. In a basic cognitive task, people are more likely to see an equal distribution of resources between Asians and people of other races when Asians have less than others by design. Although there is little evidence that a marginal increase in the model minority belief significantly reduces people's attention to inequality that adversely affects Asians in a pattern detection hiring task, we find that people who hold a strong model minority stereotype are only more likely to naturalistically point out unfair hiring practices when Whites are discriminated against. Our results offer new insights into the possible mechanisms behind why many Americans are relatively more apathetic toward Asians' unfair treatment and negative experiences compared to those of other races. |
| Keywords: | Asian Americans, model minority, stereotype, inequality, attention, redistribution |
| JEL: | D63 D91 J15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1449&r= |
| By: | Wu, Gerald; Lordan, Grace; Nikita, Nikita |
| Abstract: | Evidence from the lab suggests that women are not inclined to compete more than men, but the majority of this evidence relates to Western countries. Our study explores gender differences in the propensity to compete among Chinese individuals. The study uses an online survey distributed to undergraduate and postgraduate degree students in a university located in Shanghai and measures performance among Chinese men and women under different incentive schemes. The results of this study suggest that there are no differences in performance under competitive conditions between Chinese men and women. However, women perform slightly better than men when the element of risk is added in a competitive environment. This study underscores the importance of examining cultural nuances when evaluating gender dynamics in competition and contributes to a more comprehensive understanding of these dynamics in the Chinese context. |
| Keywords: | competition; China; gender differences; labor market; Global South; performance in competition |
| JEL: | N0 R14 J01 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123930&r= |
| By: | David Baqaee; Ariel Burstein; Yasutaka Koike-Mori |
| Abstract: | We provide a method to measure welfare, in money-metric terms, taking into account expectations about the future. Our two key assumptions are that (1) the expenditure function is separable between the present and the future, and (2) there are some households that do not face idiosyncratic undiversifiable risk. Our sufficient statistics methodology allows for incomplete markets, lifecycle motives, non-rational expectations, non-exponential time discounting, and arbitrary functional forms. To apply our formulas, we require estimates of the elasticity of intertemporal substitution, goods and services’ prices over time, and repeated cross-sectional information on households’ income, balance sheets, and expenditures. We illustrate our method using the PSID from the United States. We find that static measures overstate cost-of-living increases for most households, particularly younger and poorer households. Our estimates can be used to study the welfare consequences of dynamic stochastic shocks that affect households along different margins and time horizons. For example, we find that involuntary job loss is associated with a 20% reduction in money-metric utility for households younger than 60 years old. |
| JEL: | C14 D0 D10 D11 E0 E01 E20 I3 J6 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32567&r= |
| By: | Jiwan Lee; Katherine Michelmore; Natasha Pilkauskas; Christopher Wimer |
| Abstract: | In 2021, the U.S. Congress temporarily expanded the Earned Income Tax Credit for workers without a qualifying child (childless EITC), to help counteract the impact of the COVID-19 pandemic on lower-wage working adults. This expansion roughly tripled the maximum benefits for qualifying filers and lowered the minimum age to claim the credit from 25 to 19, providing new benefits to low-income young adults. Using data from the Census Bureau’s Household Pulse Survey and a difference-in-differences design, this study is among the first to examine the impact of the expanded childless EITC on young adults’ material hardship (food, housing, and expenses). We find that the temporary expansion led to a significant decrease in housing hardship among low-income, childless, young adults, and suggestive evidence that it also reduced food insufficiency and difficulty with expenses. Overall our findings show that the temporary expansion of the childless EITC helped reduce material hardship among young adults. |
| JEL: | H20 I32 J08 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32571&r= |