Search Results
Working Paper
Designing Cash Transfers in the Presence of Children’s Human Capital Formation
This paper finds that accounting for the human capital development of children has a quantitatively large effect on the true costs and benefits of providing cash assistance to single mothers in the United States. A dynamic model of work, welfare participation, and parental investment in children introduces a framework for calculating costs and benefits when individuals respond to incentives. The model provides a tractable outcome equation in which a policy’s effect on child skills can be understood through its impact on two economic resources in the household – time and money – and the ...
Discussion Paper
Mixed Impacts of the Federal Tax Reform on Consumer Expectations
The Tax Cuts and Jobs Act of 2017 changed the tax brackets, tax rates, credits and deductions for individuals and similarly altered corporate tax rates, deductions and exclusions. In this post, we examine whether the reform has shifted individuals’ expectations about their financial situation and the macroeconomic outlook. We also ask whether households have already started to adjust their behavior in line with their expectations. In order to answer these questions, we use novel data from a special module of the New York Fed’s Survey of Consumer Expectations (SCE) fielded in February 2018 ...
Report
Identifying and Evaluating Sample Selection Bias in Consumer Payment Surveys
This paper develops a two-stage statistical analysis to identify and assess the effect of a sample selection bias associated with an individual’s household role. The methodology is applied to the 2012 Survey of Consumer Payment Choice. Survey responses to a series of questions about the respondent’s role in household finances are combined and adjusted for response error to estimate a latent variable that represents each individual’s share of household responsibility. The distribution of this variable among survey respondents suggests that the sampling procedure favors household members ...
Working Paper
Time-Consistent Individuals, Time-Inconsistent Households
I present a model of consumption and savings for a multi-person household in which members are imperfectly altruistic, derive utility from both private and shared public goods, and share wealth. I show that, despite having standard exponential time preferences, the household is time-inconsistent: members save too little and overspend on private consumption goods. The household remains time-inconsistent even when members save separately, because the possibility of voluntary transfers or joint contribution to the public good preserves the dynamic commons problem. The household will choose to ...
Report
Expectations and Information Frictions Within Couples: Evidence from a Sequential Survey of Spouses
This paper combines descriptive and experimental evidence to examine how expectations align and information flows within couples. Using an online survey of 2,200 middle-aged U.S. married couples, we focus on expectations about Social Security benefits. We first document substantial misalignment: the correlation between spouses’ expectations about a given partner’s benefits is 0.70, below full agreement, and varies systematically with couple characteristics, reaching as low as 0.45 for couples with belowmedian earnings. To identify causal information spillovers, we implement a randomized ...
Working Paper
Home Production and Leisure During the COVID-19 Recession
Between the months of February and April of 2020, average weekly market hours dropped by 6.25, meanwhile 35% of commuting workers reported switching to remote work arrangements. In this paper, we examine implications of these changes for the time allocation of different households, and on aggregate. We estimate that home production activity increased by 2.1 hours a week, or 34% of lost market hours, whereas leisure activity increased by 3.8 hours a week. The monthly value of home production increased by $30.83 billion – that is 10.5% of the concurrent $292.61 billion drop in monthly GDP. ...
Working Paper
Improving Child Welfare in Middle Income Countries: The Unintended Consequence of a Pro-Homemaker Divorce Law and Wait Time to Divorce
This study identifies the impact of access to and the speed of divorce on the welfare of children in a middle income largely Catholic country. Using difference-in-difference estimation techniques, I compare school enrollment for children of married and cohabiting parent households before and after the legalization of divorce. Implementing pro-homemaker divorce laws increased school enrollment anywhere from 3.4 to 5.5 percentage points, and the effect was particularly salient on secondary school students. I provide evidence that administrative processes influencing the speed of divorce affect ...
Working Paper
Why Do Earnings Fall with Job Displacement?
The earnings of workers are reduced for many years after being displaced from their jobs, and those workers and their families face increased risk of other problems as well. The ills suffered by displaced workers motivated several recent expansions of government programs, including the unemployment insurance system, and have spurred calls for wage insurance that would provide longerrun earnings replacement. However, while the magnitude of the losses is relatively clear, the theory of why displacement matters is scattered and somewhat undeveloped. Much of the policy discussion appears to ...
Working Paper
Home Hours in the United States and Europe
Using data from the Multinational Time Use Study, this paper documents the trends and levels of time allocation, with a focus on home hours, for a relatively large set of industrialized countries during the past 50 years. Three patterns emerge. First, home hours have decreased in both the United States and European countries. Second, female time allocation contributes more to the cross-country difference in both the trends and the levels of market hours and home hours per person. Third, time allocations between the United States and Europe are more similar for the prime-age group than for the ...