By constraining an individual’s choice during a search, housing discrimination distorts sorting decisions away from true preferences and results in a ceteris paribus reduction in welfare. This study combines a large-scale field experiment with a residential sorting model to derive utility-theoretic measures of renter welfare loss associated with the constraints imposed by discrimination in the rental housing market. Results from experiments conducted in five cities show that key neighborhood amenities are associated with higher levels of discrimination. Counterfactual simulations based on the sorting model suggest that discrimination imposes damages equivalent to 4.4% and 3.5% of the annual incomes for African American and Hispanic/Latinx renters, respectively. Damages are increasing in income for African American renters, such that impacts become stronger for economically mobile households. Renters of color must make substantial investments in additional search to mitigate the costs of these constraints. We find that a naive model ignoring discrimination constraints yields biased estimates of willingness to pay for key neighborhood amenities.
{"title":"The Damages and Distortions from Discrimination in the Rental Housing Market","authors":"Peter Christensen, Christopher Timmins","doi":"10.1093/qje/qjad029","DOIUrl":"https://doi.org/10.1093/qje/qjad029","url":null,"abstract":"By constraining an individual’s choice during a search, housing discrimination distorts sorting decisions away from true preferences and results in a ceteris paribus reduction in welfare. This study combines a large-scale field experiment with a residential sorting model to derive utility-theoretic measures of renter welfare loss associated with the constraints imposed by discrimination in the rental housing market. Results from experiments conducted in five cities show that key neighborhood amenities are associated with higher levels of discrimination. Counterfactual simulations based on the sorting model suggest that discrimination imposes damages equivalent to 4.4% and 3.5% of the annual incomes for African American and Hispanic/Latinx renters, respectively. Damages are increasing in income for African American renters, such that impacts become stronger for economically mobile households. Renters of color must make substantial investments in additional search to mitigate the costs of these constraints. We find that a naive model ignoring discrimination constraints yields biased estimates of willingness to pay for key neighborhood amenities.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"14 11","pages":""},"PeriodicalIF":13.7,"publicationDate":"2023-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167806","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Keith Finlay, Michael Mueller-Smith, Brittany Street
Children’s indirect exposure to the justice system through biological parents or coresident adults is both a marker of their own vulnerability and a measure of the justice system’s expansive reach in society. Estimating the size of this population for the United States has historically been hampered by inadequate data resources, including the inability to (1) observe nonincarceration events, (2) follow children throughout their childhood, and (3) measure adult nonbiological parent cohabitants. To overcome these challenges, we leverage billions of restricted administrative and survey records linked with Criminal Justice Administrative Records System data, and find substantially larger exposure rates than previously reported: prison, 9% of children born between 1999–2005; felony conviction, 18%; and any criminal charge, 39%. Charge exposure rates exceed 60% for Black, American Indian, and low-income children. While broader definitions reach a more expansive population, strong and consistently negative correlations with childhood well-being suggest these remain valuable predictors of vulnerability. Finally, we document substantial geographic variation in exposure, which we leverage in a movers design to estimate the effect of living in a high-exposure county during childhood. We find that children moving into high-exposure counties are more likely to experience postmove exposure events and exhibit significantly worse outcomes by age 26 on multiple dimensions (earnings, criminal activity, teen parenthood, mortality); impacts are strongest for those who moved at earlier ages.
{"title":"Children’s Indirect Exposure to the U.S. Justice System: Evidence from Longitudinal Links Between Survey and Administrative Data","authors":"Keith Finlay, Michael Mueller-Smith, Brittany Street","doi":"10.1093/qje/qjad021","DOIUrl":"https://doi.org/10.1093/qje/qjad021","url":null,"abstract":"Children’s indirect exposure to the justice system through biological parents or coresident adults is both a marker of their own vulnerability and a measure of the justice system’s expansive reach in society. Estimating the size of this population for the United States has historically been hampered by inadequate data resources, including the inability to (1) observe nonincarceration events, (2) follow children throughout their childhood, and (3) measure adult nonbiological parent cohabitants. To overcome these challenges, we leverage billions of restricted administrative and survey records linked with Criminal Justice Administrative Records System data, and find substantially larger exposure rates than previously reported: prison, 9% of children born between 1999–2005; felony conviction, 18%; and any criminal charge, 39%. Charge exposure rates exceed 60% for Black, American Indian, and low-income children. While broader definitions reach a more expansive population, strong and consistently negative correlations with childhood well-being suggest these remain valuable predictors of vulnerability. Finally, we document substantial geographic variation in exposure, which we leverage in a movers design to estimate the effect of living in a high-exposure county during childhood. We find that children moving into high-exposure counties are more likely to experience postmove exposure events and exhibit significantly worse outcomes by age 26 on multiple dimensions (earnings, criminal activity, teen parenthood, mortality); impacts are strongest for those who moved at earlier ages.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"13 12","pages":""},"PeriodicalIF":13.7,"publicationDate":"2023-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167845","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Robin Greenwood, Samuel Hanson, Jeremy C Stein, Adi Sunderam
We develop a model in which specialized bond investors must absorb shocks to the supply and demand for long-term bonds in two currencies. Since long-term bonds and foreign exchange are both exposed to unexpected movements in short-term interest rates, a shift in the supply of long-term bonds in one currency influences the foreign exchange rate between the two currencies, as well as bond term premia in both currencies. Our model matches several important empirical patterns, including the comovement between exchange rates and term premia, as well as the finding that central banks’ quantitative-easing policies impact exchange rates. An extension of our model links spot exchange rates to the persistent deviations from covered interest rate parity that have emerged since 2008.
{"title":"A Quantity-Driven Theory of Term Premia and Exchange Rates","authors":"Robin Greenwood, Samuel Hanson, Jeremy C Stein, Adi Sunderam","doi":"10.1093/qje/qjad024","DOIUrl":"https://doi.org/10.1093/qje/qjad024","url":null,"abstract":"We develop a model in which specialized bond investors must absorb shocks to the supply and demand for long-term bonds in two currencies. Since long-term bonds and foreign exchange are both exposed to unexpected movements in short-term interest rates, a shift in the supply of long-term bonds in one currency influences the foreign exchange rate between the two currencies, as well as bond term premia in both currencies. Our model matches several important empirical patterns, including the comovement between exchange rates and term premia, as well as the finding that central banks’ quantitative-easing policies impact exchange rates. An extension of our model links spot exchange rates to the persistent deviations from covered interest rate parity that have emerged since 2008.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"40 19","pages":""},"PeriodicalIF":13.7,"publicationDate":"2023-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167991","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide evidence for a bias that we call “representative signal distortion” (RSD) which is particularly relevant to settings of statistical discrimination. Experimental subjects distort their evaluation of new evidence on individual group members and interpret such information to be more representative of the group to which the individual belongs (relative to a reference group) than it really is. This produces a discriminatory gap in the evaluation of members of the two groups. Because it is driven by representativeness, the bias (and the discriminatory gap) disappears when subjects are prevented from contrasting different groups; because it is a bias in the interpretation of information, it disappears when subjects receive information before learning of the individual’s group. We show that this bias can be easily estimated from appropriately constructed datasets and can be distinguished from previously documented inferential biases in the literature. Importantly, we document how removing the bias produces a kind of free lunch in reducing discrimination, making it possible to significantly reduce discrimination without lowering accuracy of inferences.
{"title":"Seeing What is Representative","authors":"Ignacio Esponda, Ryan Oprea, Sevgi Yuksel","doi":"10.1093/qje/qjad020","DOIUrl":"https://doi.org/10.1093/qje/qjad020","url":null,"abstract":"We provide evidence for a bias that we call “representative signal distortion” (RSD) which is particularly relevant to settings of statistical discrimination. Experimental subjects distort their evaluation of new evidence on individual group members and interpret such information to be more representative of the group to which the individual belongs (relative to a reference group) than it really is. This produces a discriminatory gap in the evaluation of members of the two groups. Because it is driven by representativeness, the bias (and the discriminatory gap) disappears when subjects are prevented from contrasting different groups; because it is a bias in the interpretation of information, it disappears when subjects receive information before learning of the individual’s group. We show that this bias can be easily estimated from appropriately constructed datasets and can be distinguished from previously documented inferential biases in the literature. Importantly, we document how removing the bias produces a kind of free lunch in reducing discrimination, making it possible to significantly reduce discrimination without lowering accuracy of inferences.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"40 17","pages":""},"PeriodicalIF":13.7,"publicationDate":"2023-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167993","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Francesco Bianchi, Renato Faccini, Leonardo Melosi
We develop a new class of general-equilibrium models with partially unfunded debt to propose a fiscal theory of persistent inflation. In response to business cycle shocks, the monetary authority controls inflation and the fiscal authority stabilizes debt. However, the central bank accommodates unfunded fiscal shocks, causing persistent movements in inflation, output, and real interest rates. In an estimated quantitative model, fiscal inflation accounts for the bulk of inflation dynamics. In the aftermath of the pandemic, unfunded fiscal shocks sustain the recovery, but also cause a persistent increase in inflation. The model is able to predict the inflationary effects of the American Rescue Plan Act (ARPA) fiscal stimulus out of sample and with real time data.
{"title":"A Fiscal Theory of Persistent Inflation","authors":"Francesco Bianchi, Renato Faccini, Leonardo Melosi","doi":"10.1093/qje/qjad027","DOIUrl":"https://doi.org/10.1093/qje/qjad027","url":null,"abstract":"We develop a new class of general-equilibrium models with partially unfunded debt to propose a fiscal theory of persistent inflation. In response to business cycle shocks, the monetary authority controls inflation and the fiscal authority stabilizes debt. However, the central bank accommodates unfunded fiscal shocks, causing persistent movements in inflation, output, and real interest rates. In an estimated quantitative model, fiscal inflation accounts for the bulk of inflation dynamics. In the aftermath of the pandemic, unfunded fiscal shocks sustain the recovery, but also cause a persistent increase in inflation. The model is able to predict the inflationary effects of the American Rescue Plan Act (ARPA) fiscal stimulus out of sample and with real time data.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"40 18","pages":""},"PeriodicalIF":13.7,"publicationDate":"2023-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Close-kin marriage, by sustaining tightly knit family structures, may impede development. We find support for this hypothesis using U.S. state bans on cousin marriage. Our measure of cousin marriage comes from the excess frequency of same-surname marriages, a method borrowed from population genetics that we apply to millions of marriage records from the eighteenth to the twentieth century. Using census data, we first show that married cousins are more rural and have lower-paying occupations. We then turn to an event study analysis to understand how cousin marriage bans affected outcomes for treated birth cohorts. We find that these bans led individuals from families with high rates of cousin marriage to migrate off farms and into urban areas. They also gradually shift to higher-paying occupations. We also observe increased dispersion, with individuals from these families living in a wider range of locations and adopting more diverse occupations. Our findings suggest that these changes were driven by the social and cultural effects of dispersed family ties rather than genetics. Notably, the bans also caused more people to live in institutional settings for the elderly, infirm, or destitute, suggesting weaker support from kin.
{"title":"Economic Consequences of Kinship: Evidence From U.S. Bans on Cousin Marriage","authors":"Arkadev Ghosh, Sam Il Myoung Hwang, Munir Squires","doi":"10.1093/qje/qjad018","DOIUrl":"https://doi.org/10.1093/qje/qjad018","url":null,"abstract":"Close-kin marriage, by sustaining tightly knit family structures, may impede development. We find support for this hypothesis using U.S. state bans on cousin marriage. Our measure of cousin marriage comes from the excess frequency of same-surname marriages, a method borrowed from population genetics that we apply to millions of marriage records from the eighteenth to the twentieth century. Using census data, we first show that married cousins are more rural and have lower-paying occupations. We then turn to an event study analysis to understand how cousin marriage bans affected outcomes for treated birth cohorts. We find that these bans led individuals from families with high rates of cousin marriage to migrate off farms and into urban areas. They also gradually shift to higher-paying occupations. We also observe increased dispersion, with individuals from these families living in a wider range of locations and adopting more diverse occupations. Our findings suggest that these changes were driven by the social and cultural effects of dispersed family ties rather than genetics. Notably, the bans also caused more people to live in institutional settings for the elderly, infirm, or destitute, suggesting weaker support from kin.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"40 16","pages":""},"PeriodicalIF":13.7,"publicationDate":"2023-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50167994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
During traffic stops, police search black and Hispanic motorists more than twice as often as white motorists, yet those searches are no more likely to yield contraband. We ask whether equalizing search rates by motorist race would reduce contraband yield. We use unique administrative data from Texas to isolate variation in search behavior across and within highway patrol troopers and find that search rates are unrelated to the proportion of searches that yield contraband. We find that troopers can equalize search rates across racial groups, maintain the status quo search rate, and increase contraband yield. Troopers appear to be limited in their ability to discern between motorists that are more or less likely to carry contraband. JEL Codes: J15, K42. ∗We thank the editors, Larry Katz and Stefanie Stantcheva, five anonymous referees, Ian Ayres, Felipe Goncalves, Peter Hull, Patrick Kline, Jonathan Leonard, David Levine, Dan O’Flaherty, Steven Rivkin, Evan Rose, Yotam Shem-Tov, Chris Walters, and seminar participants at USC, University of Illinois, Chicago, the Online Economics of Crime seminar, the Online Economics of Racism seminar, NBER Summer Institute, Yale SOM, Harvard, Stanford, and MIT for helpful comments. We thank researchers at the Stanford Open Policing Project for providing data on Texas Highway Patrol stops. We thank the Fisher Center for Real Estate and Urban Economics at Haas for providing computing resources.
{"title":"Would Eliminating Racial Disparities in Motor Vehicle Searches have Efficiency Costs?","authors":"B. Feigenberg, Conrad Miller","doi":"10.1093/QJE/QJAB018","DOIUrl":"https://doi.org/10.1093/QJE/QJAB018","url":null,"abstract":"During traffic stops, police search black and Hispanic motorists more than twice as often as white motorists, yet those searches are no more likely to yield contraband. We ask whether equalizing search rates by motorist race would reduce contraband yield. We use unique administrative data from Texas to isolate variation in search behavior across and within highway patrol troopers and find that search rates are unrelated to the proportion of searches that yield contraband. We find that troopers can equalize search rates across racial groups, maintain the status quo search rate, and increase contraband yield. Troopers appear to be limited in their ability to discern between motorists that are more or less likely to carry contraband. JEL Codes: J15, K42. ∗We thank the editors, Larry Katz and Stefanie Stantcheva, five anonymous referees, Ian Ayres, Felipe Goncalves, Peter Hull, Patrick Kline, Jonathan Leonard, David Levine, Dan O’Flaherty, Steven Rivkin, Evan Rose, Yotam Shem-Tov, Chris Walters, and seminar participants at USC, University of Illinois, Chicago, the Online Economics of Crime seminar, the Online Economics of Racism seminar, NBER Summer Institute, Yale SOM, Harvard, Stanford, and MIT for helpful comments. We thank researchers at the Stanford Open Policing Project for providing data on Texas Highway Patrol stops. We thank the Fisher Center for Real Estate and Urban Economics at Haas for providing computing resources.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"1 1","pages":""},"PeriodicalIF":13.7,"publicationDate":"2021-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/QJE/QJAB018","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45452110","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Unemployment insurance (UI) can affect unemployment duration and re-employment wages, through various dimensions of unemployed workers’ job search behavior. We shed light on the effects of UI on job search behavior using new longitudinal data: we link administrative registers to data from a major online search platform, and track the job applications sent over the unemployment spells of about 500,000 French workers. We identify changes in individual search behavior caused by UI around benefits exhaustion, after accounting for changes in the sample composition—i.e. dynamic selection—and for the effect of the time spent unemployed—i.e. duration dependence. We show that search effort (the count of job applications) increases by at least 50% during the year preceding benefits exhaustion and remains relatively high thereafter. The target monthly wage decreases by at least 2.4% during the year preceding benefits exhaustion, and remains relatively low thereafter. We document particularly large dynamic selection around benefits exhaustion, as some workers increase their search effort more before exhaustion and find a job faster. We also show evidence for duration dependence: workers decrease their target wage by 1.5% over each year of unemployment, irrespective of their UI status. Overall, the effect of UI on individual search behavior is consistent with the predictions of search models and constitutes evidence against search-free models where UI merely subsidizes leisure.
{"title":"Unemployment Insurance and Job Search Behavior*","authors":"I. Marinescu, Daphné Skandalis","doi":"10.1093/qje/qjaa037","DOIUrl":"https://doi.org/10.1093/qje/qjaa037","url":null,"abstract":"Unemployment insurance (UI) can affect unemployment duration and re-employment wages, through various dimensions of unemployed workers’ job search behavior. We shed light on the effects of UI on job search behavior using new longitudinal data: we link administrative registers to data from a major online search platform, and track the job applications sent over the unemployment spells of about 500,000 French workers. We identify changes in individual search behavior caused by UI around benefits exhaustion, after accounting for changes in the sample composition—i.e. dynamic selection—and for the effect of the time spent unemployed—i.e. duration dependence. We show that search effort (the count of job applications) increases by at least 50% during the year preceding benefits exhaustion and remains relatively high thereafter. The target monthly wage decreases by at least 2.4% during the year preceding benefits exhaustion, and remains relatively low thereafter. We document particularly large dynamic selection around benefits exhaustion, as some workers increase their search effort more before exhaustion and find a job faster. We also show evidence for duration dependence: workers decrease their target wage by 1.5% over each year of unemployment, irrespective of their UI status. Overall, the effect of UI on individual search behavior is consistent with the predictions of search models and constitutes evidence against search-free models where UI merely subsidizes leisure.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"136 1","pages":"887-931"},"PeriodicalIF":13.7,"publicationDate":"2021-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/qje/qjaa037","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48569684","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When a Bayesian learns new information and changes her beliefs, she must on average become concomitantly more certain about the state of the world. Consequently, it is rare for a Bayesian to frequently shift beliefs substantially while remaining relatively uncertain, or, conversely, become very confident with relatively little belief movement. We formalize this intuition by developing specific measures of movement and uncertainty reduction given a Bayesian’s changing beliefs over time, showing that these measures are equal in expectation and creating consequent statistical tests for Bayesianess. We then show connections between these two core concepts and four common psychological biases, suggesting that the test might be particularly good at detecting these biases. We provide support for this conclusion by simulating the performance of our test and other martingale tests. Finally, we apply our test to data sets of individual, algorithmic, and market beliefs.
{"title":"Belief Movement, Uncertainty Reduction, and Rational Updating*","authors":"Ned Augenblick, M. Rabin","doi":"10.1093/QJE/QJAA043","DOIUrl":"https://doi.org/10.1093/QJE/QJAA043","url":null,"abstract":"\u0000 When a Bayesian learns new information and changes her beliefs, she must on average become concomitantly more certain about the state of the world. Consequently, it is rare for a Bayesian to frequently shift beliefs substantially while remaining relatively uncertain, or, conversely, become very confident with relatively little belief movement. We formalize this intuition by developing specific measures of movement and uncertainty reduction given a Bayesian’s changing beliefs over time, showing that these measures are equal in expectation and creating consequent statistical tests for Bayesianess. We then show connections between these two core concepts and four common psychological biases, suggesting that the test might be particularly good at detecting these biases. We provide support for this conclusion by simulating the performance of our test and other martingale tests. Finally, we apply our test to data sets of individual, algorithmic, and market beliefs.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"136 1","pages":"933-985"},"PeriodicalIF":13.7,"publicationDate":"2021-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/QJE/QJAA043","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45803206","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The labor share in U.S. manufacturing declined from 62 percentage points (ppts) in 1967 to 41 ppts in 2012. The labor share of the typical U.S. manufacturing establishment, in contrast, rose by over 3 ppts during the same period. Using micro-level data, we document five salient facts: (1) since the 1980s, there has been a dramatic reallocation of value added toward the lower end of the labor share distribution; (2) this aggregate reallocation is not due to entry/exit, to “superstars” growing faster or to large establishments lowering their labor shares, but is instead due to units whose labor share fell as they grew in size; (3) low labor share (LL) establishments benefit from high revenue labor productivity, not low wages; (4) they also enjoy a product price premium relative to their peers, pointing to a significant role for demand-side forces; and (5) they have only temporarily lower labor shares that rebound after five to eight years. This transient pattern has become more pronounced over time, and the dynamics of value added and employment are increasingly disconnected.
{"title":"The Micro-Level Anatomy of the Labor Share Decline*","authors":"Matthias Kehrig, Nicolas Vincent","doi":"10.1093/QJE/QJAB002","DOIUrl":"https://doi.org/10.1093/QJE/QJAB002","url":null,"abstract":"The labor share in U.S. manufacturing declined from 62 percentage points (ppts) in 1967 to 41 ppts in 2012. The labor share of the typical U.S. manufacturing establishment, in contrast, rose by over 3 ppts during the same period. Using micro-level data, we document five salient facts: (1) since the 1980s, there has been a dramatic reallocation of value added toward the lower end of the labor share distribution; (2) this aggregate reallocation is not due to entry/exit, to “superstars” growing faster or to large establishments lowering their labor shares, but is instead due to units whose labor share fell as they grew in size; (3) low labor share (LL) establishments benefit from high revenue labor productivity, not low wages; (4) they also enjoy a product price premium relative to their peers, pointing to a significant role for demand-side forces; and (5) they have only temporarily lower labor shares that rebound after five to eight years. This transient pattern has become more pronounced over time, and the dynamics of value added and employment are increasingly disconnected.","PeriodicalId":48470,"journal":{"name":"Quarterly Journal of Economics","volume":"136 1","pages":"1031-1087"},"PeriodicalIF":13.7,"publicationDate":"2021-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42342914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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