Published or Accepted Papers:
“Childcare Over the Business Cycle” with Chris M. Herbst Journal of Labor Economics, Vol. 40(S1): S429-S468, 2022. (Ungated)
Abstract: We estimate the impact of macroeconomic conditions on the childcare market. We find that the industry is substantially more exposed to the business cycle than other low-wage industries and responds more strongly to negative shocks than positive ones. Indeed, childcare employment requires more time to recover than the rest of the economy. Although the reduction in supply may pose difficulties for parents, we find evidence that center quality is countercyclical. When unemployment rates are higher, childcare workers have on average higher levels of education and experience, turnover rates are lower, and consumer reviews on Yelp.com are higher.
“The Tradeoff Between Knowledge of Mandated Benefits and Moral Hazard” Southern Economic Journal. Vol. 88(3): 1037-1064, 2022. (Ungated)
Abstract: When workers are not aware of a mandated benefit, they cannot take it into account in their employment decision, leading to deadweight loss. On the other hand, lack of awareness of a benefit reduces moral hazard, decreasing deadweight loss. I incorporate these trade-offs into a model of mandated benefits and apply the model to Temporary Disability Insurance, an employment benefit mandated in five states. First, using data collected through an original survey, I provide evidence that there is low awareness of this benefit. Second, I use the updated mandated benefits model to show that over a broad range of reasonable assumptions, the additional employee valuation of the benefit outweighs the additional program cost from moral hazard, and thus a public information campaign would increase employment.
(with David A. Jaeger, Jaime Arellano-Bover, Krzysztof Karbownik, Marta Martínez-Matute, John Nunley, R. Alan Seals, Miguel Almunia, Mackenzie Alston, Sascha O. Becker, Pilar Beneito, René Böheim, José E. Boscá, Simon Chang, Deborah Cobb-Clark, Shooshan Danagoulian, Sandra Donnally, Marissa Eckrote-Nordland, Lídía Farré, Javier Ferri, Margherita Fort, Jane Cooley Fruewirth, Rebecca Gelding, Allen C. Goodman, Melanie Guldi, Simone Häckl, Janet Hankin, Scott Imberman, Joanna Lahey, Joan Llull, Hani Mansour, Isaac McFarlin, Jaakko Meriläinen, Tove Mortlund, Martin Nybom, Stephen D. O’Connell, Rupert Sausgruber, Amy Ellen Schwartz, Jan Stuhler, Petra Thiemann, Roel van Veldhuizen, Marianne Wannamaker, and Maria Zhu), Covid Economics: Vetted and Real-time Papers 79:152-217 (May 2021)
“An Equilibrium Model of the Impact of Increased Public Investment in Early Childhood Education” with Jonathan Borowsky, Elizabeth E. Davis, Chloe Gibbs, Chris M. Herbst, Aaron Sojourner, Erdal Tekin, and Matthew J. Wiswall NBER Working Paper No. 30140
Abstract: Recent policy proposals call for significant new investments in early care and education (ECE). These policies are designed to reduce the burden of child care costs, support parental employment, and foster child development by increasing access to high-quality care, especially for children in lower-income families. In this paper, we propose and calibrate a model of supply and demand for different ECE service and teacher types to estimate equilibrium family expenditures, participation in ECE, maternal labor supply, teacher wages, market ECE prices, and program costs under different policy regimes. Under a policy of broadly expanded subsidies that limits family payments for ECE to no more than 7% of income among those up to 250% of national median income, we estimate that mothers’ employment would increase by six percentage points while full-time employment would increase by nearly 10 percentage points, with substantially larger increases among lower-income families. The policy would also induce a shift from informal care and parent-only care to center- and home-based providers, which are higher-quality on average, with larger shifts for lower-income families. Despite the increased use of formal care, family expenditures on ECE services would decrease throughout most of the income distribution. For example, families in the bottom three income quintiles would experience expenditure reductions of 76%, 68%, and 55%, respectively. Finally, teacher wages and market prices would increase to attract workers with higher levels of education. We also estimate the impact of a narrower subsidy expansion for families with an income up to 85% of national median income.
Abstract: I estimate the impact of public pre-kindergarten for 4-year-olds on the provision of private child care for younger children by considering New York City’s 2014 Universal Pre-K expansion. Private child care facilities often care for children from infancy or toddlerhood through pre-K. A public option for older children could therefore affect availability, prices, or quality of care for younger children. This effect could be positive or negative depending on the structure of the child care market, the design of the public pre-K program, and parent preferences. I use a panel dataset covering all licensed child care facilities in New York City and a difference-in-differences strategy that compares changes over time for neighborhoods with more versus fewer new public pre-K sites. I estimate that the public pre-K program reduced the capacity for children younger than 2 years old at private child care centers by 2,700 seats, and this decline was not offset by an increase in provision in the home day care market. The entire decrease in capacity occurs in areas with high poverty. In complementary analysis, I find a within-center increase in public complaints and inspection violations for day care centers that are closer to new public pre-K sites, suggesting a potential decrease in quality due to the increased competition from public pre-K. A back-of-the-envelope calculation indicates that for every seven 4-year-olds who shifted from day care centers to public pre-K, there was a reduction of one day care center seat for children under the age of 2.
“The Impact of a Long-Term Care Information Campaign on Long-Term Care Insurance Purchase” (R&R, Journal of Health Economics)
Abstract: This paper estimates the effect of an information campaign urging individuals to plan ahead for their long-term care needs on the purchase of long-term care insurance. Long-term care expenses represent a large, mostly uninsured risk for the elderly, and Medicaid payments for long-term care expenses total more than $150 billion annually. In an effort to curtail these expenses, the federal government partnered with 25 states over the course of 5 years to run the “Own Your Future” campaign. Using a difference-in-differences strategy that takes advantage of the staggered timing of the rollout and restricted data from the Health and Retirement Study, I find that the campaign increased long-term care insurance coverage by one percentage point, an increase of about ten percent. Although the increase is concentrated among high-asset individuals, a back-of-the-envelope calculation indicates modest Medicaid savings of $300 million in present value. This estimate represents a lower bound for the total savings from the program since individuals may have made adjustments on other margins.