U.S. Labor Dynamics in the 21st Century
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Date
2016-10-04
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Johns Hopkins University
Abstract
This dissertation is composed of three chapters. In the first chapter, I investigate the trend reversal in the labor supply of single childless women that occurred at the turn of the 21st century and its continued decline over the last decade. I find that while traditional static labor supply theory and demographic transitions fall short in explaining this recent phenomenon, there is strong evidence that increased participation in the Supplemental Nutrition Assistance Program (SNAP) has contributed to the decline. I identify the impact of SNAP on both the extensive and intensive margins of labor supply with an instrumental variables approach that exploits the state-level variation of post-2000 policy reforms affecting SNAP eligibility and enrollment criteria. Adding more structure to the model by framing program participation as a latent variable discrete choice, I test whether or not this choice interacts with individual unobserved heterogeneity -- in other words, if individuals decide to participate in SNAP based on expected idiosyncratic gains -- and estimate the effect of SNAP on labor supply for the marginal participant. Estimation results from a normal selection model and the method of Local Instrumental Variables show that SNAP participation is largely detrimental to the labor market productivity of single childless women, for whom observable gains of participation are small but unobserved gains from participation are large, suggesting they perceive the costs of participation to be low.
In the second chapter, I use administrative wage records from the Longitudinal Employer-Household Dynamics (LEHD) program to explore differences in both levels of and trends in volatility between different quantiles of the male earnings distribution, focusing on employment transitions as a way of capturing short-term volatility. Studies on U.S. male earnings volatility using both survey and administrative data have been prolific, and yet little work has been done on whether this volatility differs across the earnings distribution and how. With an updated time series extended through 2014, I also examine how volatility measures have fared post-Great Recession. I find that while aggregate earnings volatility has declined since peaking in 2009, the earnings of workers at the lower tail of the distribution have been increasingly volatile and are in any given year three times more volatile than the earnings of workers at the upper tail. Descriptive and regression analyses suggest that the volatility experienced by low earners is more persistent and highly correlated with a distinct lack of job stability with respect to both employment and tenure, which is at least in part driven by the shifting composition of low-wage jobs towards the leisure and hospitality sector.
In the last chapter, my coauthors and I use administrative records data to investigate labor mobility and migration within the U.S. Recent evidence has suggested that interstate migration is in decline in the United States, which might imply that the labor market is becoming more rigid. However, the sharp post-2000 decline in the non-imputed interstate migration rate in the Current Population Survey (CPS), which has received considerable attention, is not reflected in other available data. We investigate this discrepancy in recent migration trends in the CPS and migration rates derived from administrative records sources using CPS microdata linked to administrative records on residential location. We find that a substantial fraction of CPS respondents who are cross-state migrants in the administrative records data do not report a cross-state move in the CPS, and that this disagreement has grown over time. Despite this disagreement in recent trends in overall interstate migration, rates and trends are remarkably similar in both data sources.
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Keywords
Labor market, SNAP, earnings, migration