Many researchers and policymakers have expressed concerns that new technologies will lower the effective cost of capital and lead firms to replace workers with machines, especially those with limited skills. Will increasing capital accumulation increase inequality between skilled and unskilled workers? Does capital investment increase employment or leads firms to substitute between capital and labor? Suárez Serrato, Curtis and Ohrn will study the effects of capital investments on worker outcomes.
In recent decades, U.S. manufacturing employment has declined sharply, leading to a reduction in middle-income jobs and resulting in earnings losses for many displaced workers.
Economists Sari Kerr and Kristin Butcher will examine the effects of paid family leave on firm and worker outcomes. They will utilize employer-household panel data from the Longitudinal Employer-Household Dynamics (LEHD) database and analyze the extent to which paid leave policy alters the earnings gap between men and women, and if there is a net cost or benefit to the firm from providing such policies.
Co-funded with the W. K.
Behavioral economist Linda Babcock and a team of three psychologists will investigate the impact of stereotype threat on college students’ decision making that can lead to educational disparities across categories such as race, gender, and socioeconomic status. They will examine how stereotype threat impacts students’ attitudes toward risk (risk aversion), how students weigh losses versus gains in evaluating risky situations (loss aversion), and how they spend their time on activities where the benefits will accrue now versus in the future (present bias).
The Affordable Care Act (ACA) included provisions to support breastfeeding, including requiring employers to provide "reasonable break time" and "a place, other than a bathroom," for employees to express breast milk for up to a year after giving birth. Another provision, established in 2012, required health insurance plans to cover breastfeeding supplies and support services.
While the topic of labor income inequality has been at the center of recent economic and political debates, researchers have focused mainly on wage data. However, nonwage benefits now account for about one-third of workers’ total compensation. Economists Grace Gu and Eswar Prasad will document and analyze the evolution of compensation inequality over the period from 1982 to 2018 and examine the extent to which different components of nonwage benefits exacerbate or mitigate wage inequality.
Every recession since 1973 has led to a persistent decrease in earnings per capita in local areas where the recession was particularly severe. The consequences of this finding depend on why recessions lead to persistent declines in local economic activity. Local economic activity could decline because high-income workers are more likely to migrate away from places experiencing large negative economic shocks, or because employers change their production process or shut down.
Books
Credit Where It’s Due
Rethinking Financial Citizenship
About This Book
“Working hard and playing by the rules still casts aside millions. Credit Where It’s Due tells the inspiring story of the Mission Asset Fund’s pathway to belonging and financial citizenship. Inspired and well crafted, this book builds the case for making and illuminates how to make citizenship, immigrant integration, and democracy work for organizations, advocates, and anybody committed to building a better society.”
—THOMAS M. SHAPIRO, director and David R. Pokross Professor of Law and Social Policy, Institute on Assets and Social Policy, The Heller School, Brandeis University
“Credit Where It’s Due is an original and masterful examination that goes well beyond the crowded scholarly field of finance and economic exploitation to document the ways in which systems of finance stratify society in areas as basic as human decency, belonging, and recognition. But, far from simply a doom and gloom story, the book presents financial alternatives grounded in the depth of contemporary personal narratives of how finance can be dignity affirming and structured to empower rather than socially degrading and exploitive. This book will advance the field in profound ways.”
—DARRICK HAMILTON, executive director, Kirwan Institute for the Study of Race and Ethnicity, The Ohio State University
An estimated 45 million adults in the U.S. lack a credit score at time when credit invisibility can reduce one’s ability to rent a home, find employment, or secure a mortgage or loan. As a result, individuals without credit—who are disproportionately African American and Latino—often lead separate and unequal financial lives. Yet, as sociologists and public policy experts Frederick Wherry, Kristin Seefeldt, and Anthony Alvarez argue, many people who are not recognized within the financial system engage in behaviors that indicate their credit worthiness. How might institutions acknowledge these practices and help these people emerge from the financial shadows? In Credit Where It’s Due, the authors evaluate an innovative model of credit-building and advocate for a new understanding of financial citizenship, or participation in a financial system that fosters social belonging, dignity, and respect.
Wherry, Seefeldt, and Alvarez tell the story of the Mission Asset Fund, a San Francisco-based organization that assists mostly low and moderate-income people of color with building credit. The Mission Asset Fund facilitates zero-interest lending circles, which have been practiced by generations of immigrants, but have gone largely unrecognized by mainstream financial institutions. Participants decide how the circles are run and how they will use their loans, and the organization reports their clients’ lending activity to credit bureaus. As the authors show, this system not only helps clients build credit, but also allows them to manage debt with dignity, have some say in the creation of financial products, and reaffirm their sense of social membership. The authors delve into the history of racial wealth inequality in the U.S. to show that for many black and Latino households, credit invisibility is not simply a matter of individual choices or inadequate financial education. Rather, financial marginalization is the result of historical policies that enabled predatory lending, discriminatory banking and housing practices, and the rollback of regulatory protections for first-time homeowners.
To rectify these inequalities, the authors propose common sense regulations to protect consumers from abuse alongside new initiatives that provide seed capital for every child, create affordable short-term loans, and ensure that financial institutions treat low- and moderate income clients with equal respect. By situating the successes of the Mission Asset Fund in the larger history of credit and debt, Credit Where It’s Due shows how to prioritize financial citizenship for all.
FREDERICK F. WHERRY is professor of sociology at Princeton University.
KRISTIN S. SEEFELDT is associate professor of social work and associate professor of public policy at the University of Michigan.
ANTHONY S. ALVAREZ is assistant professor of sociology at California State University, Fullerton.