Effective Policy for Reducing Poverty and Inequality? The Earned Income Tax Credit and the Distribution of Income

The United States stands out among industrialized nations as one with high poverty and income inequality. In 2016, the supplemental poverty measure shows that 13.9% of all persons, and 15.1% of children, lived in families with incomes below the poverty level. Since the mid-1970s earnings for less skilled workers have stagnated, and real family income for the bottom 20% of the population has made no gains. At the same time, there is the related problem of declines in employment rates among prime-aged men, and more recently, women. In a recent study, Hilary Hoynes and Ankur Patel examined whether one strategy to fight poverty—the earned income tax credit (EITC)—is working.
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H-1B Visas and the Career Choices of U.S. International Students

Proponents of more open immigration policy often cite the ability of immigrants to address shortages of workers in specific fields, so it is important that we understand the role of policy in shaping international students’ career choices. In a recent study, Catalina Amuedo-Dorantes and Delia Furtado used several years of data from the National Survey of College Graduates to examine how students responded to a major change in the relative availability of post-graduation H-1B work visas in certain fields.
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Too many low-income college students don’t graduate, but a program that aims to address all challenges can help

One decade after high school completion, only 14 percent of low-income students in the United States have attained a bachelor’s degree, compared to 60 percent or more of their higher income peers. This stark difference is driven by gaps in both college access and college success, and it’s not explained away by differences in academic readiness for college. Recent research by Lindsay C. Page, Stacy S. Kehoe, Benjamin L. Castleman, and Gumilang Sahadewo examines how one “comprehensive support” program aims to make a difference.
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Higher quality interactions between caregivers and children in daycare improve child development

Although there is a rich body of evidence on the effects of preschool or daycare attendance, especially for the United States, substantially less is known about critical dimensions of the quality of these services, in particular for very young children. M. Caridad Araujo, Marta Dormal, and Norbert Schady (Inter-American Development Bank) developed a research project with the goal of understanding how the quality of caregiver–child interactions in daycare affects child development.
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The 1980 Mariel Boatlift—Did the arrival of low-skilled Cuban immigrants harm the labor market for locals in Miami?

Mariel Boatlift

In a unique historical episode, between April and September of 1980, 120,000 low-skilled Cubans arrived in Miami. The sudden nature and random timing and location of the flow make this an ideal “quasi-experiment” for testing whether labor markets experienced depressed wages and employment opportunities due to the refugee wave. A simplistic concept of labor supply and demand might suggest that “yes” local workers were hurt by the wave, but what is the truth in the data? Economists have been fascinated with this question, and Giovanni Peri and Vasil Yasenov wanted their own look at it.
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For-Profit Colleges—Students Pay More, Get Less

Public institution certificate holders earn more.

As the U.S. Department of Education proposes rolling back the Gainful Employment rules regulating for-profit and vocational education programs, accurate estimates of the earnings outcomes and debt incurred by students in these programs are essential for judging the merits of various policy options. Researchers Stephanie Riegg Cellini and Nicholas Turner generated comprehensive new estimates of the labor market outcomes and debt incurred by students in vocational certificate programs in the for-profit sector.
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How Can We Extend the Working Lifetime? Compressing Time Spent in School Might Not Be the Answer

commuters

In response to demographic change—an aging population means fewer workers—policy makers in many industrialized countries are looking for ways to extend individuals’ working life. Shortening the time spent in school is one idea, but simple reductions result in students learning less. Germany tried a different reform: it kept the number of hours that children spend in school the same, but compressed it into one less year. Thus, students have the same amount of schooling, just over a shorter period of time. Jan Marcus (University of Hamburg and DIW Berlin) and Vaishali Zambre (DIW Berlin) evaluated this reform and examined how higher education enrollment was affected.
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Wealth Perceptions and Remittances within Family Networks—Recipients Hold More Power Than You Think

Are people who receive transfers of money from family members passively waiting for a handout from their altruistic kin? If not, how can they influence what they receive? In a recent study, Joachim De Weerdt, Garance Genicot, and Alice Mesnard used robust empirical methods to disentangle these family exchanges. They interviewed all members within 718 kinship networks in Tanzania, which allowed them to compare what people think about each other’s living conditions with reality.
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Drug Violence in Mexico Increased Migration Flows to the United States

Mexican passport

In 2006 the Mexican government launched an aggressive military campaign against drug trafficking organizations that sparked competition, fragmentation, and alliances among criminal organizations. The move led to instability and a staggering amount of violence. In a new study, Sandra Orozco-Aleman and Heriberto Gonzalez-Lozano analyze the effect of this increase in violence on the inflows of migrants from Mexico into the United States.
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The Dynamics of Families’ Long-Term Care Arrangements—Who Takes Care of Our Elderly in the Long Run?

hands

As the population ages, many families face decisions about how to care for elderly relatives. In a recent publication, Bridget Hiedemann (Seattle University), Michelle Sovinsky (University of Mannheim and CEPR), and Steven Stern (Stony Brook University) consider the dynamics of this decision-making process. Who will provide care for the aging family member—a spouse, an adult child, a formal home health worker, or a nursing home? Will this arrangement change over time?
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