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  5. Public Policy & Labor Market Outcomes
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Public Policy & Labor Market Outcomes

Paper Session

Sunday, Jan. 3, 2021 10:00 AM - 12:00 PM (EST)

Hosted By: American Economic Association
  • Chair: Melissa S. Kearney, University of Maryland

The Long-Term Effects of the COVID-19 Crisis on Workers: Predictions and Policy Options

Till Von Wachter
,
University of California-Los Angeles

Abstract

Evidence from past recessions indicates that the costs of job loss and unemployment can reduce workers’ earnings and raise their mortality for several decades. To assist workers, the U.S. has rolled out a range of policy options, including more generous Unemployment Insurance (UI), Pandemic Unemployment Assistance for the self-employed, subsidized Short-Time Compensation (STC), and short-term business loans, among others. This paper reviews the available evidence on the take up and impact of these programs in light of the evolution of the crisis in the labor market through 2020, and discusses this in light on the evidence on long-term effects of labor market shocks. The paper then presents ex post cost-benefit estimates for these various approaches, and discusses policy options going forward.

Access to Disability Insurance and the Pace of Economic Recovery

Melissa S. Kearney
,
University of Maryland
Brendan Price
,
Federal Reserve Board
Riley Wilson
,
Brigham Young University

Abstract

It is well-documented that during economic downturns, applications to Social Security Disability Insurance (SSDI) increase. This paper investigates whether easier access to SSDI benefits results in lower employment growth after the economy recovers. We compare neighboring zip codes that straddle SSA hearing office catchment borders and find that places with more burdensome appeal processes saw a smaller increase in SSDI enrollment following the Great Recession, resulting in lower SSDI participation and more rapid employment recovery. This finding highlights the interaction of supply and demand side factors in determining employment outcomes and aggregate recovery rates.

Wage Insurance and Labor Market Trajectories

Ben Hyman
,
Federal Reserve Bank of New York
Brian Kovak
,
Carnegie Mellon University
Adam Leive
,
University of Virginia
Theodore Naff
,
NBER

Abstract

Wage insurance provides income support to displaced workers who find reemployment at a lower wage. We study the effects of the wage insurance provisions of the U.S. Trade Adjustment Assistance (TAA) program using administrative data from the state of Virginia. The program includes an age-based eligibility cutoff, allowing us to compare earnings and employment trajectories for workers whose ages at the time of displacement make them eligible or ineligible for the program. Our findings suggest that wage insurance eligibility increases short-run employment probabilities and that wage insurance and TAA training may yield similar long-run effects on employment and earnings.

Working for Your Bread: The Labor Supply Effects of Food Assistance Programs

Marianne Bitler
,
University of California-Davis
Jason Cook
,
University of Utah
Jonathan L. Rothbaum
,
U.S. Census Bureau

Abstract

SNAP is the largest universal safety program in the US, providing electronic benefits that can be redeemed for food. The SNAP Programs is designed to alleviate hunger and malnutrition while not discouraging work activities. We add to a growing literature exploring the consequences of in kind programs for labor supply by providing the first evidence on whether SNAP eligibility and benefits formulas distort labor supply along the intensive margin. Specifically, we test whether SNAP recipients adjust labor supply to maximize SNAP benefits or to pass SNAP maximum income tests. To do so, we combine novel administrative SNAP records for 24 states matched with the Detailed Earnings Records from the Social Security Administration.
Discussant(s)
Katharine Abraham
,
University of Maryland
Hilary Hoynes
,
University of California-Berkeley
JEL Classifications
  • J2 - Demand and Supply of Labor