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Labor Markets and Policy Analysis

Paper Session

Saturday, Jan. 4, 2025 8:00 AM - 10:00 AM (PST)

Hilton San Francisco Union Square, Union Square 15 and 16
Hosted By: Society of Government Economists
  • Chair: Jeremy Moulton, University of North Carolina-Chapel Hill

Do Tighter Labor Markets Improve Non-pay Job Quality? Survey Evidence from Job Changers

Brad Hershbein
,
W.E. Upjohn Institute
Katherine Lim
,
United States Department of Agriculture
Mike Zabek
,
Federal Reserve Board

Abstract

The COVID pandemic and its aftermath marked one of the largest periods in worker reallocation in recent memory, but did it lead to improved job quality? Drawing on the Federal Reserve’s SHED survey from 2020 through 2023, we use questions asked of people who changed jobs to investigate the extent to which tighter local labor markets—as captured by changes in job postings, faster employment growth, and lower unemployment rates—improved self-reported job quality across multiple dimensions. In addition to overall job quality, we assess impacts on pay and benefits, work-life balance, interest in the work performed, opportunities for advancement, and physical demands. We use shift-share designs to isolate changes in local labor demand during the pandemic recovery due to aggregate, industry-level changes, and we examine relationships separately for workers of different demographic groups. Preliminary results suggest that tighter local labor markets helped job changers move into jobs they rated as better overall. Jobs improved along several dimensions, although some are sensitive to the specific measure of tightness used, and we explore how much of this variation is due to measurement error versus real heterogeneity.
Our results are important for understanding how stronger labor markets improve overall job quality, including non-pecuniary amenities, and the extent to which compensation can adjust without inflationary pressure.

The Effects of State Paid Sick Leave Mandates on Parental Childcare Time

Johanna C. Maclean
,
George Mason University
Sabrina Wulff Pabilonia
,
Bureau of Labor Statistics

Abstract

Unlike most developed countries, the U.S. lacks a federal paid sick leave policy. As a result, many workers must choose between losing earnings and attending to childcare responsibilities. To date, 14 states and the District of Columbia have adopted paid sick leave mandates that provide up to seven days of paid leave per year that can be used for family responsibilities and healthcare. In this study, we estimate the effects of state paid sick leave mandates on parents’ time spent providing childcare using time diaries from the 2004–2022 American Time Use Survey. Findings from difference-in-differences estimators suggest that post-mandate, parental time spent providing childcare increases by 4.9%. Effects are generally stronger among women and parents with younger children. Overall, our findings suggest that paid sick leave mandates allow parents to better balance work and family responsibilities.

The Efficiency-Equity Tradeoff of the Corporate Income Tax: Evidence from the Tax Cuts and Jobs Act

Patrick Kennedy
,
Joint Committee on Taxation
Christine Dobridge
,
Federal Reserve Board
Paul Landefeld
,
Joint Committee on Taxation
Jake Mortenson
,
Joint Committee on Taxation

Abstract

We study the effects of the largest corporate income tax cut in U.S. history on firms and
workers. To identify causal effects, we use employer-employee matched tax records and event studies comparing similarly sized firms in the same industry that faced divergent tax changes due to their pre-existing legal status. Tax cuts cause increases in sales, profits, investment, employment, and payrolls, with earnings gains concentrated among highly paid workers and executives. Interpreted through a stylized model, reducing corporate taxes by $1 generates $0.44 in additional output, with 80% of gains flowing to the top 10% of the income distribution.

Government Transfers: Smoothing Food Expenditures During Recessions

Eliana Zeballos
,
United States Department of Agriculture
Ergys Islamaj
,
World Bank
Wilson Sinclair
,
United States Department of Agriculture

Abstract

This study investigates the role of government transfers in stabilizing food expenditures before, during, and after economic downturns, particularly the Great Recession and the COVID-19 Recession. Analyzing quarterly State-level food spending data from 1997 to 2022, it employs a structural decomposition framework to assess the impact of transfers on food spending. The results show that total food spending declines across the board during recessions, and that transfers contribute significantly to smoothing food consumption, especially during recessionary periods, albeit with variation across States. The extent to which government transfers help smooth fluctuations in food spending varies across States, reflecting the nuanced economic landscapes as well as policy priorities of each region. Notably, during the COVID-19 Recession, transfers uniquely help smooth food spending in most States. During the Great Recession, however, their impact is more partial, particularly in States located in the middle of the country. These findings underscore the importance of government transfers in potentially alleviating food insecurity during economic crises.

Discussant(s)
Richard Mansfield
,
University of Colorado-Boulder
Joaquin Rubalcaba
,
University of North Carolina-Chapel Hill
Nathan Seegert
,
University of Utah
Rowena Gray
,
University of California-Merced
JEL Classifications
  • J2 - Demand and Supply of Labor
  • H3 - Fiscal Policies and Behavior of Economic Agents