Publications

2017
Miller C, Katz LF, Azurdia G, Isen A, Schultz C. Expanding the Earned Income Tax Credit for Workers Without Dependent Children: Interim Findings from the Paycheck Plus Demonstration in New York City. MDRC Report. 2017. Publisher's VersionAbstract

In recent decades, wage inequality in the United States has increased and real wages for less-skilled workers have declined. As a result, many American workers are unable to adequately support their families through work, even working full time. The Earned Income Tax Credit (EITC) has helped to counter this trend and has become one of the nation’s most effective antipoverty policies. But most of its benefits have gone to workers with children. The maximum credit available to workers without dependent children is just over $500, and workers lose eligibility entirely once their annual earnings reach $15,000.

There has been bipartisan support for expanding the EITC for this group of workers. Paycheck Plus is a test of that idea. The program, which provides a bonus of up to $2,000 at tax time, is being evaluated using a randomized controlled trial in two major American cities: New York City and Atlanta, Georgia. This report presents interim findings from the test of Paycheck Plus in New York City. Between September 2013 and February 2014, the project in New York recruited just over 6,000 low-income, single adults without dependent children to take part in the study. Half of them were selected at random to be offered a Paycheck Plus bonus for three years, starting with the 2015 tax season.

Findings

The program sought to mirror the process by which filers apply for the federal EITC, even though the bonus was not administered by the Internal Revenue Service. Participants needed to apply for each bonus, and receipt of it was not automatic with tax filing.

  • About 64 percent of individuals in the program group who had earnings in the eligible range received bonuses in the first year (2015), and 57 percent received bonuses in the second year (2016). Among those who received bonuses, the average amount received was $1,400.

  • Paycheck Plus increased after-bonus income (earnings plus bonuses) in both years, and increased employment in 2015.

  • Paycheck Plus increased tax filing in both tax filing seasons.

  • Paycheck Plus increased the payment of child support in 2015.

  • Paycheck Plus increased employment in 2015 for most types of participants, although its effects were larger among women than among men.

These findings are consistent with research on the federal EITC showing that an expanded credit can increase after-transfer income and encourage employment without creating work disincentives. Later reports will examine effects after three years on income, work, and other measures of well-being, in both New York City and Atlanta.

pp_final_report_2017_fr.pdf
Katz LF, Kreuger AB. Documenting Decline in U.S. Economic Mobility. Science. 2017;356 (6336) :382-83. Publisher's Version
Autor D, Dorn D, Katz LF, Patterson C, Reenen JV. Concentrating on the Fall of the Labor Share. American Economic Review Papers and Proceedings. 2017;107 (5) :180-85. Publisher's VersionAbstract

 

The recent fall of labor’s share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a “superstar firm” model where industries are increasingly characterized by “winner take most” competition, leading a small number of highly profitable (and low labor share) firms to command growing market share. Building on Autor et al. (2017), we evaluate and confirm two core claims of the superstar firm hypothesis: the concentration of sales among firms within industries has risen across much of the private sector; and industries with larger increases in concentration exhibit a larger decline in labor’s share.

 

aer.p20171102.pdf
Katz LF, Krueger AB. The Role of Unemployment in the Rise in Alternative Work Arrangements. American Economic Review Papers and Proceedings. 2017;107 (5) :388-92. Publisher's VersionAbstract

The share of U.S. workers in alternative work arrangements has increased substantially in recent decades.  Micro longitudinal analyses show that unemployed workers are much more likely to transition into alternative work arrangements than other workers.  Macro time-series evidence shows that weak labor market conditions lead to an increase in non-traditional work.  But the estimated magnitudes imply that Great Recession and high unemployment in the 2000s can account for only a modest part of the rise in alternative work.  Secular factors associated with rising inequality and technological changes making it easier to contract out work appear to be the driving forces.

katz_krueger_unemp_alt_work_aer_2017.pdf
2016
Chetty R, Hendren N, Katz LF. The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment. American Economic Review. 2016;106 (4) :855-902. Publisher's VersionAbstract

The Moving to Opportunity (MTO) experiment offered randomly selected families living in high-poverty housing projects housing vouchers to move to lower-poverty neighborhoods. We present new evidence on the impacts of MTO on children's long-term outcomes using administrative data from tax returns. We find that moving to a lower-poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-poverty area when they are less than 13 years old have an annual income that is $3,477 (31%) higher on average relative to a mean of $11,270 in the control group in their mid-twenties. In contrast, the same moves have, if anything, negative long-term impacts on children who are more than 13 years old when their families move, perhaps because of disruption effects. The gains from moving fall with the age when children move, consistent with recent evidence that the duration of exposure to a better environment during childhood is a key determinant of an individual's long-term outcomes. The findings imply that offering families with young children living in high-poverty housing projects vouchers to move to lower-poverty neighborhoods may reduce the intergenerational persistence of poverty and ultimately generate positive returns for taxpayers.

chk_aer_mto_0416.pdf
Deming DJ, Yuchtman N, Abulafi A, Goldin C, Katz LF. The Value of Postsecondary Credentials in the Labor Market: An Experimental Study. American Economic Review. 2016;106 (3) :778-806. Publisher's VersionAbstract

We study employers’ perceptions of postsecondary degrees using a field experiment. We randomly assign the sector (for-profit vs. public) and selectivity of institution to fictitious resumes and send them to real vacancy postings on a large online job board. We find that a bachelor’s degree in business from a for-profit “online” institution is 22 percent less likely to receive a callback than a similar degree from a non-selective public institution. For health jobs that do not require a certificate, we find that a certificate from a for-profit institution is 57 percent less likely to receive a callback than a similar certificate from a public community college. For reasons that differ by each set of jobs, we find no difference in callback rates by postsecondary sector for business jobs that do not have degree requirements and we also find no difference for health jobs that require a certificate and valid license. Bachelor’s degrees from selective public institutions are relatively more likely to receive callbacks from employers posting higher-salaried jobs, suggesting that employers value both college quality and the likelihood of a successful match when contacting job applicants.

audit_final_2016.pdf
Kroft K, Lange F, Notowidigdo MJ, Katz LF. Long-Term Unemployment and the Great Recession: The Role of Composition, Duration Dependence, and Non-Participation. Journal of Labor Economics. 2016;34 (S1, Part 2) :S7-S54. Publisher's VersionAbstract

We explore the extent to which composition, duration dependence, and labor force non-participation can account for the sharp increase in the incidence of long-term unemployment (LTU) during the Great Recession. We …first show that compositional shifts in demographics, occupation, industry, region, and the reason for unemployment jointly account for very little of the observed increase in LTU. Next, using panel data from the Current Population Survey for 2002-2007, we calibrate a matching model that allows for duration dependence in the exit rate from unemployment and for transitions between employment (E), unemployment (U), and non-participation (N). We model the job-fi…nding rates for the unemployed and non-participants, and we use observed vacancy rates and the transition rates from E-to-U, E-to-N, N-to-U, and U-to-N as the exogenous “forcing variables”of the model. The calibrated model can account for almost all of the increase in the incidence of LTU and much of the observed outward shift in the Beveridge curve between 2008 and 2013. Both negative duration dependence in the job-…finding rate for the unemployed and transitions to and from non-participation contribute significantly to the ability of the model to match the data after 2008.

klkn_jole_2016.pdf
Goldin C, Katz LF. A Most Egalitarian Profession: Pharmacy and the Evolution of a Family-Friendly Occupation. Journal of Labor Economics. 2016;34 (3) :705-45. WebsiteAbstract

Pharmacy has become a highly remunerated female-majority profession with a small gender earnings gap and low earnings dispersion relative to other occupations.  Using extensive surveys of pharmacists for 2000, 2004, and 2009 as well as the U.S. Census of Population, American Community Surveys and the Current Population Surveys, we explore the gender earnings gap, penalty to part-time work, demographics of pharmacists relative to other college graduates and evolution of the profession during the last half century.  We conclude that technological changes increasing the substitutability among pharmacists, the growth of pharmacy employment in retail chains and hospitals, and the related decline of independent pharmacies reduced the penalty to part-time work and have contributed to the narrow gender earnings gap in pharmacy.  Our findings on earnings, hours of work and the part-time work wage penalty are more consistent with a shift in technology than a shift in demand preferences on the part of workers in a model of equalizing differences.  The position of pharmacist is among the most egalitarian of all U.S. professions today.  

jole_gk_pharm_published.pdf
2015
Rickford JR, Duncan GJ, Gennetian L, Gu R, Greene R, Katz LF, Kessler RC, Kling JR, Sanbonmatsu L, Sanchez-Ordanez A, et al. Neighborhood Effects on Use of African-American Vernacular English. PNAS. 2015;(September 8). Publisher's VersionAbstract

African-American Vernacular English (AAVE) is systematic, rooted in history, and important as an identity marker and expressive resource for its speakers. In these respects, it resembles other vernacular or nonstandard varieties, like Cockney or Appalachian English. But like them, AAVE can trigger discrimination in the workplace, housing market, and schools. Understanding what shapes the relative use of AAVE vs. Standard American English (SAE) is important for policy and scientific reasons. This work presents, to our knowledge, the first experimental estimates of the effects of moving into lower-poverty neighborhoods on AAVE use. We use data on non-Hispanic African-American youth (n = 629) from a large-scale, randomized residential mobility experiment called Moving to Opportunity (MTO), which enrolled a sample of mostly minority families originally living in distressed public housing. Audio recordings of the youth were transcribed and coded for the use of five grammatical and five phonological AAVE features to construct a measure of the proportion of possible instances, or tokens, in which speakers use AAVE rather than SAE speech features. Random assignment to receive a housing voucher to move into a lower-poverty area (the intention-to-treat effect) led youth to live in neighborhoods (census tracts) with an 11 percentage point lower poverty rate on average over the next 10–15 y and reduced the share of AAVE tokens by ∼3 percentage points compared with the MTO control group youth. The MTO effect on AAVE use equals approximately half of the difference in AAVE frequency observed between youth whose parents have a high school diploma and those whose parents do not.

Katz LF. Reducing Inequality: Neighborhood and School Interventions. Focus. 2015;31 (2) :12-17. Publisher's Version foc312c.pdf
Deming DJ, Goldin C, Katz LF, Yuchtman N. Can Online Learning Bend the Education Cost Curve?. American Economic Review Papers and Proceedings. 2015;105 (5) :496-501. Publisher's VersionAbstract

We examine whether online learning technologies have led to lower prices in higher education. Using data from the Integrated Postsecondary Education Data System, we show that online education is concentrated in large for-profit chains and less-selective public institutions. Colleges with a higher share of online students charge lower tuition prices. We present evidence that real and relative prices for full-time undergraduate online education declined from 2006 to 2013. Although the pattern of results suggests some hope that online technology can “bend the cost curve” in higher education, the impact of online learning on education quality remains uncertain.

online_cost_2015.pdf
2014
Katz LF. Get a Liberal Arts B.A., Not a Business B.A., for the Coming Artisan Economy. PBS Newshour Making Sen$e. 2014. Publisher's Version
Kessler RC, Duncan GJ, Gennetian LA, Katz LF, Kling JR, Sampson NA, Sanbonmatsu L, Zaslavsky AM, Ludwig J. Associations of Housing Mobility Interventions for Children in High-Poverty Neighborhoods with Subsequent Mental Disorders during Adolescence. JAMA. 2014;311 (9) :937-947. Publisher's VersionAbstract
Importance: Youth in high-poverty neighborhoods have high rates of emotional problems. Understanding neighborhood influences on mental health is crucial for designing neighborhood-level interventions. Objective:To perform an exploratory analysis of associations between housing mobility interventions for children in high-poverty neighborhoods and subsequent mental disorders during adolescence. Design, Setting, and Participants: The Moving to Opportunity Demonstration from 1994 to 1998 randomized 4604 volunteer public housing families with 3689 children in high-poverty neighborhoods into 1 of 2 housing mobility intervention groups (a low-poverty voucher group vs a traditional voucher group) or a control group. The low-poverty voucher group (n=1430) received vouchers to move to low-poverty neighborhoods with enhanced mobility counseling. The traditional voucher group (n=1081) received geographically unrestricted vouchers. Controls (n=1178) received no intervention. Follow-up evaluation was performed 10 to 15 years later (June 2008-April 2010) with participants aged 13 to 19 years (0-8 years at randomization). Response rates were 86.9% to 92.9%. Main Outcomes and Measures: Presence of mental disorders from the Diagnostic and Statistical Manual of Mental Disorders (Fourth Edition) within the past 12 months, including major depressive disorder, panic disorder, posttraumatic stress disorder (PTSD), oppositional-defiant disorder, intermittent explosive disorder, and conduct disorder, as assessed post hoc with a validated diagnostic interview. Results: Of the 3689 adolescents randomized, 2872 were interviewed (1407 boys and 1465 girls). Compared with the control group, boys in the low-poverty voucher group had significantly increased rates of major depression (7.1% vs 3.5%; odds ratio (OR), 2.2 [95% CI, 1.2-3.9]), PTSD (6.2% vs 1.9%; OR, 3.4 [95% CI, 1.6-7.4]), and conduct disorder (6.4% vs 2.1%; OR, 3.1 [95% CI, 1.7-5.8]). Boys in the traditional voucher group had increased rates of PTSD compared with the control group (4.9% vs 1.9%, OR, 2.7 [95% CI, 1.2-5.8]). However, compared with the control group, girls in the traditional voucher group had decreased rates of major depression (6.5% vs 10.9%; OR, 0.6 [95% CI, 0.3-0.9]) and conduct disorder (0.3% vs 2.9%; OR, 0.1 [95% CI, 0.0-0.4]). Conclusions and Relevance: Interventions to encourage moving out of high-poverty neighborhoods were associated with increased rates of depression, PTSD, and conduct disorder among boys and reduced rates of depression and conduct disorder among girls. Better understanding of interactions among individual, family, and neighborhood risk factors is needed to guide future public housing policy changes.
Katz LF. America's Job Challenges and the Continuing Role of the U.S. Department of Labor. ILR Review. 2014;67 (Spring) :578-83. Publisher's Version industrial_labor_relations_review-2014-katz-578-83.pdf
Katz LF, Margo RA. Technical Change and the Relative Demand for Skilled Labor: The United States in Historical Perspective. In: L. Boustan, C. Frydman, and R.A. Margo, eds., Human Capital in History,. University of Chicago Press and NBER ; 2014. pp. 15-57. WebsiteAbstract

This paper examines long-term shifts in the relative demand for skilled labor in the United States.  Although de-skilling in the conventional sense did occur overall in nineteenth century manufacturing, a more nuanced picture is that occupations “hollowed out”:  the share of “middle-skill” jobs – artisans – declined while those of “high-skill” – white collar, non-production workers – and “low-skill” – operatives and laborers increased.  De-skilling did not occur in the aggregate economy; rather, the aggregate shares of low skill jobs decreased, middle skill jobs remained steady, and high skill jobs expanded from 1850 to the early twentieth century.   The pattern of monotonic skill upgrading continued through much of the twentieth century until the recent “polarization” of labor demand since the late 1980s.  New archival evidence on wages suggests that the demand for high skill (white collar) workers grew more rapidly than the supply starting well before the Civil War. 

katz_margo_2014.pdf
2013
Sciandra M, Sanbonmatsu L, Duncan G, Gennetian LA, Katz LF, Kessler RC, Kling JR, Ludwig J. Long-Term Effects of the Moving to Opportunity Residential Mobility Experiment on Crime and Delinquency. Journal of Experimental Criminology. 2013;9 (4) :451-89. Publisher's VersionAbstract
Objectives: Using data from a randomized experiment, to examine whether moving youth out of areas of concentrated poverty, where a disproportionate amount of crime occurs, prevents involvement in crime. Methods: We draw on new administrative data from the U.S. Department of Housing and Urban Development’s Moving to Opportunity (MTO) experiment. MTO families were randomized into an experimental group offered a housing voucher that could only be used to move to a low-poverty neighborhood, a Section 8 housing group offered a standard housing voucher, and a control group. This paper focuses on MTO youth ages 15–25 in 2001 (n = 4,643) and analyzes intention to treat effects on neighborhood characteristics and criminal behavior (number of violent- and property crime arrests) through 10 years after randomization. Results: We find the offer of a housing voucher generates large improvements in neighborhood conditions that attenuate over time and initially generates substantial reductions in violent-crime arrests and sizable increases in property-crime arrests for experimental group males. The crime effects attenuate over time along with differences in neighborhood conditions. Conclusions: Our findings suggest that criminal behavior is more strongly related to current neighborhood conditions (situational neighborhood effects) than to past neighborhood conditions (developmental neighborhood effects). The MTO design makes it difficult to determine which specific neighborhood characteristics are most important for criminal behavior. Our administrative data analyses could be affected by differences across areas in the likelihood that a crime results in an arrest.
Fryer RG, Katz LF. Achieving Escape Velocity: Neighborhood and School Interventions to Reduce Persistent Inequality. American Economic Review Papers and Proceedings . 2013;103 (3) :232-37. Publisher's VersionAbstract
This paper reviews the evidence on the efficacy of neighborhood and school interventions in improving the long-run outcomes of children growing up in poor families, focusing on studies exploiting exogenous sources of variation in neighborhoods and schools and that examine at least medium-term outcomes. Higher-quality neighborhoods improve family safety, adult subjective well-being and health, and girls’ mental health, but have no detectable impact on youth human capital, labor market outcomes, or risky behaviors. In contrast, higher-quality schools can improve children’s academic achievement and can have longer-term positive impacts of increasing educational attainment and earnings and reducing incarceration and teen pregnancy.
Paper + Appendix
Deming DJ, Goldin C, Katz LF. For-Profit Colleges. Future of Children. 2013;23 (1) :137-63. WebsiteAbstract
For-profit, or proprietary, colleges are the fastest-growing postsecondary schools in the nation, enrolling a disproportionately high share of disadvantaged and minority students and those ill-prepared for college. Because these schools, many of them big national chains, derive most of their revenue from taxpayer-funded student financial aid, they are of interest to policy makers not only for the role they play in the higher education spectrum but also for the value they provide their students. In this article, David Deming, Claudia Goldin, and Lawrence Katz look at the students who attend for-profits, the reasons they choose these schools, and student outcomes on a number of broad measures and draw several conclusions. First, the authors write, the evidence shows that public community colleges may provide an equal or better education at lower cost than for-profits. But budget pressures mean that community colleges and other nonselective public institutions may not be able to meet the demand for higher education. Some students unable to get into desired courses and programs at public institutions may face only two alternatives: attendance at a for-profit or no postsecondary education at all. Second, for-profits appear to be at their best with well-defined programs of short duration that prepare students for a specific occupation. But for-profit completion rates, default rates, and labor market outcomes for students seeking associate’s or higher degrees compare unfavorably with those of public postsecondary institutions. In principle, taxpayer investment in student aid should be accompanied by scrutiny concerning whether students complete their course of study and subsequently earn enough to justify the investment and pay back their student loans. Designing appropriate regulations to help students navigate the market for higher education has proven to be a challenge because of the great variation in student goals and types of programs. Ensuring that potential students have complete and objective information about the costs and expected benefits of for-profit programs could improve postsecondary education opportunities for disadvantaged students and counter aggressive and potentially misleading recruitment practices at for-profit colleges, the authors write.
foc_dgk_spring_2013.pdf
Ludwig J, Duncan GJ, Gennetian LA, Katz LF, Kessler RC, Kling JR, Sanbonmatsu L. Long-Term Neighborhood Effects on Low-Income Families: Evidence from Moving to Opportunity. American Economic Review Papers and Proceedings . 2013;103 (3) :226-31. AEA P&P Web LinkAbstract

We examine long-term neighborhood effects on low-income families using data from the Moving to Opportunity (MTO) randomized housing-mobility experiment, which offered some public-housing families but not others the chance to move to less-disadvantaged neighborhoods.  We show that 10-15 years after baseline, MTO improves adult physical and mental health, has no detectable effect on economic outcomes or youth schooling or physical health, and mixed results by gender on other youth outcomes, with girls doing better on some measures and boys doing worse. Despite the somewhat mixed pattern of impacts on traditional behavioral outcomes, MTO moves substantially improve adult subjective well-being.

AEA P&P Main Paper Appendix NBER Working Paper Version
2012
Ludwig J, Duncan GJ, Gennetian LA, Katz LF, Kessler R, Kling JR, Sanbonmatsu L. Neighborhood Effects on the Long-Term Well-Being of Low-Income Adults. Science. 2012;337 (September 21) :1505-10. WebsiteAbstract

Nearly 9 million Americans live in extreme-poverty neighborhoods, places that also tend to be racially segregated and dangerous. Yet, the effects on the well-being of residents of moving out of such communities into less distressed areas remain uncertain. Using data from Moving to Opportunity, a unique randomized housing mobility experiment, we found that moving from a high-poverty to lower-poverty neighborhood leads to long-term (10- to 15-year) improvements in adult physical and mental health and subjective well-being, despite not affecting economic self-sufficiency. A 1–standard deviation decline in neighborhood poverty (13 percentage points) increases subjective well-being by an amount equal to the gap in subjective well-being between people whose annual incomes differ by $13,000—a large amount given that the average control group income is $20,000. Subjective well-being is more strongly affected by changes in neighborhood economic disadvantage than racial segregation, which is important because racial segregation has been declining since 1970, but income segregation has been increasing.

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