Household Balance Sheet
Sunday, Jan. 5, 2020 8:00 AM - 10:00 AM (PDT)
- Chair: Martha Bailey, University of Michigan
Maternal Labor Force Dynamics: Participation, Earnings, and Employer Changes
AbstractThis paper describes the labor dynamics of U.S. women after they have had their first and subsequent children. We build on the child penalty literature by showing the heterogeneity of the size and pattern of labor force participation and earnings losses by demographic characteristics of mothers and the characteristics of their employers. The analysis uses longitudinal administrative earnings data from the Longitudinal Employer-Household Dynamics database combined with the Survey of Income and Program Participation survey data to identify women, their fertility timing, and employment. We find that women experience a large and persistent decrease in earnings and labor force participation after having their first child. The penalty grows over time, driven by the birth of subsequent children. Non-white mothers, unmarried mothers, and mothers with more education are more likely to return to work following the birth of their first child. Conditional on returning to the labor force, women who change employers earn more after the birth of their first child than women who return to their pre-birth employers. The probability of returning to the pre-birth employer and industry is heterogeneous over both the demographics of mothers and the characteristics of their employers.
How Do Mortgage Rate Resets Affect Consumer Spending and Debt Repayment? Evidence from Canadian Consumers
AbstractWe study the causal effect of mortgage rate changes on consumer spending, debt repayment, and defaults during an expansionary and a contractionary monetary policy episode in Canada. Our identification takes advantage of the fact that the interest rates of short-term fixed-rate mortgages (the dominant product in Canada's mortgage market) have to be reset according to the prevailing market interest rates at predetermined time intervals. Our empirical strategy exploits this exogenous variation in the timing of mortgage rate resets. We find asymmetric responses of consumer durable spending, deleveraging, and defaults. These results can be rationalized by the cash-flow effect in conjunction with changes in consumers' expectations about future interest rates. Our findings help to understand the responses of the household sector to changes in the interest rate, especially in countries where variable-rate, adjustable-rate, and short-term fixed-rate mortgages are prevalent.
Moving Out? The Increasing Prevalence of Living with Parents
AbstractThe prevalence of young American adults living with parents dropped dramatically in the middle of the century. After increasing relatively gradually in the 1970s, 80s, and 90s, living with parents increased rapidly after 2000. In recent years, adults under 35 have reported living with parents at a higher rate than at any time in the previous five decades. These changes coincide with significant changes in labor market conditions for young and less-educated workers, the Great Recession and its aftermath, and dramatic shifts in housing prices. Using data from the decennial Census, American Community Survey, and Current Population Survey, I establish basic facts about parental coresidence from the beginning of the twentieth century through the present. Disaggregating observed effects by gender, education, race, and ethnicity, I produce a comprehensive picture of these dramatic changes in living with parents among young American adults.
- E0 - General
- J0 - General