Year in review: Summary of 2022 Institute working papers

The Institute Working Papers series showcases how affiliated scholars conduct research on a wide range of topics around the Institute mission. Befitting a year in which labor market tightness and churn continued to make headlines, half of the nine new papers added in 2022 dealt with features of the labor market and workers experiences.

Health, safety, and employment

Reading about the symptoms of long COVID in the pandemic’s early days, Dasom Ham^* wondered how these health complications might affect whether a person works, how much they work, and how much they earn. To provide a preliminary answer, Ham wrote four survey questions for the May–June 2021 wave of the longitudinal Understanding America Study. In “Long Haulers and Labor Market Outcomes,” Ham shares her finding that there is a group of individuals who suffered from COVID symptoms for 12 weeks or more who were less likely to be employed than individuals who did not experience COVID the same way. This finding, which aligns with subsequent research by others, has ramifications for labor force participation, disability insurance, and workplace accommodations.

Two other new papers also consider how labor markets interact with features of public health and safety. To assess the consequences of violence at work, Abi Adams-Prassl, Kristiina Huttunen, Emily Nix, and Ning Zhang analyzed more than 5,000 violent incidents between co-workers in “Violence Against Women at Work.” They find that workplace violence immediately, seriously, and persistently  harms everyone involved. However, the consequences are not equal for everyone, and women in particular bear most of the burden (Figure 1).

In “Native American ‘Deaths of Despair’ and Economic Conditions,” Randall Akee, D.L. Feir, Marina Mileo Gorzig, and Samuel Myers Jr. study the prevalence of deaths due to drugs, alcohol, and suicide among Native Americans. Their analysis helps to fill an Indian country data void, showing that among people without a college degree, Native Americans were two to four times more likely than White people to have died from these causes. However, while rates of “deaths of despair” decline among White populations when local economic conditions improve, the patterns differ for Native populations. Startlingly, death rates from drug abuse increase when local employment rates increase. This research speaks to the complexity of the causes of deaths of despair and the need for policies that recognize the unique dynamics of different communities.

Employment stability, employer power

Two other new papers in the Institute Working Papers series provide analysis of important features of the labor market: job tenure and minimum wages. Job tenure offers one way to measure employment stability and to judge employee and employer satisfaction. In “Changing Stability in U.S. Employment Relationships: A Tale of Two Tails,” Raven Molloy, Christopher Smith, and Abigail Wozniak study how patterns of employment tenure have changed for different demographic groups since the 1980s. They find the fraction of workers with short tenure at their job has declined, while long tenure (20 years or more) is up for women but down for men, who are now more likely to change jobs midcareer. While job separations have recently received a lot of attention, these results suggest stability and satisfaction were relatively strong over the last 40 years.

David Berger, Kyle Herkenhoff, and Simon Mongey build on their 2021 Institute working paper analysis of monopsony power to investigate the labor market consequences of raising the minimum wage. In “Minimum Wages, Efficiency and Welfare,” the economists find that raising the minimum wage makes only a small dent in firms’ monopsony power because the firms that have to raise their wages have a fairly small market share. However, increasing the minimum wage may improve aggregate welfare via redistribution.

Enduring economic gaps

Two more new papers take historical perspectives to illuminate enduring economic disparities: the racial wealth gap and the urban-rural income gap.

In “Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860–2020,” Ellora Derenoncourt, Chi Hyun Kim, Moritz Kuhn, and Moritz Schularick draw on historical resources to construct a new dataset that fills in around one hundred years of missing wealth data (Figure 2). The economists use this data to show that vastly unequal wealth in 1870 is responsible for about half of today’s wealth gap. Since 1980, the difference in the capital gains rate experienced by Black and White households is the main factor pushing wealth apart.

Another enduring economic gap is the difference in average income of urban versus rural areas. This gap would be even higher, Fabian Eckert and Michael Peters show in “Spatial Structural Change,” if it weren’t for the productivity gains rural labor markets experienced by adopting technologies that were already in use in urban locations.

Information and behavior

The final two papers of 2022 consider ways, in very different settings, that expanding or limiting information can impact behavior.

Michael Glenwood for Minneapolis Fed

A growing number of school districts have adopted school choice, in which families submit a ranked list of preferred schools. This introduces a complex information environment that takes time and resources to navigate well, Sarah Cohodes, Sean Corcoran, Jennifer Jennings, and Carolyn Sattin-Bajaj explain in “When Do Informational Interventions Work? Experimental Evidence from New York City High School Choice.” The economists conduct an experiment that finds that providing students with customized information about schools with high graduation rates succeeded in shifting which schools students applied to and enrolled at. The impact was particularly large for English learners.

In the rental housing market, information plays an entirely different role: Landlords use credit scores, criminal background, and other history to screen potential applicants. To expand rental market access, a 2020 policy in Minneapolis limited the information landlords could use. This provided Marina Mileo Gorzig and Deborah Rho a natural experiment with which to study discrimination in the rental market. For six months before and six months after the policy went into effect, Gorzig and Rho sent fictious emails signed with names associated with White Americans, Black Americans, or Somali Americans to rental listings in Minneapolis and neighboring St. Paul. Their results, described in “The Impact of Limiting Applicant Information on Rental Housing Discrimination,” echo those of “ban the box” policies: When information is limited, landlords resort to group discrimination—in this case, stereotyping based on name.

The full text of all Institute working papers are available online. Our research features offer engaging, accessible discussions of many of them.

Endnotes

* The names of the scholars affiliated with the Opportunity & Inclusive Growth Institute are in bold.