The gender pay gap is driven in large part by the "child penalty" faced by mothers, in terms of both reduced employment and lower earnings. But how does it differ by race? In a new paper comparing Black and white women, Jiaqi Li finds the long-run earnings penalty is twice as high for white women (44%) as for Black women (22%). Using data from the Panel Study of Income Dynamics, the author shows that penalties are driven by a combination of employment rates, hours worked and wages. Li finds that this Black-white difference is driven by women with wages above the female median and are married. As Li writes: "the racial gap is primarily driven by married white women having significantly larger child penalties than the other women." Accounting for the earnings of husbands narrows the racial gap in the child penalty, but only by 24%. Li’s paper is the first to rule out explanations for the racial gap based on single parenthood, family structure, homeownership rates, or the attitude of husbands towards their wives working. Rather, the difference seems to be driven by some combination of discrimination and/or preferences.
The rise in "deaths of despair," from drug use, suicide, or alcohol, has received a great deal of attention in recent years. A new paper from Tyler Giles, Daniel Hungerman and Tamar Oostrom finds that a decline in religious participation led to an increase in these deaths of despair. Most scholars have focused on the last two decades, especially given the rise in opioid use during that period. But the authors show that there’s a striking rise in deaths of despair in the 1990s. This trend is preceded by a decline in religious participation, especially among white middle-aged Americans without a college degree. States that had the largest declines in attendance had the largest increases in deaths of despair. Importantly, the effect is driven by drops in formal attendance and participation, rather than by any changes in personal beliefs or practices, such as prayer.
Each year over two million households face an eviction order. In a recent working paper, Robert Collinson and co-authors find that eviction orders are both preceded and followed by adverse economic events. In the year leading up to the eviction filing, evicted tenants’ quarterly earnings drop by $337. In the year after the filing, evicted tenants’ earnings drop by $323. Those with deeper economic problems are most likely to be evicted. The eviction itself can then cause economic problems. But to what extent are these the result of the eviction itself, rather than a continuation of existing difficulties? Exploiting the random assignment of cases to judges of differing leniency, the authors attempt to show the causal impact of eviction. They find that evictions contribute to a cycle of poverty, where losing a home exacerbates the economic problems households were already facing. Evictions worsen access to credit due to increases in debt and lower credit scores, and cause an increase in hospital visits, including mental health related visits. The impact is especially sharp for Black and female tenants. These costs need to be included in any assessment of the costs and benefits of housing policy.
Children are quite likely to study the same subject in college as their parents, everything else equal. The figure shows that this is especially true in fields such as technology, engineering, humanities, and medicine. (The author uses a regression discontinuity design to estimate the casual influence of parental degree choice on children).
"Extra instructional time — whether tutoring, additional school days, extended school days or summer school — is key to helping students catch up. Congress has allocated $190 billion to schools to deal with the pandemic; those funds should be spent with extra teaching time in mind...Now would also be a good time for schools to jettison an outdated school calendar built around giving children summers off to work on the family farm and replace that with year-round schooling," writes the Washington Post Editorial Board.
Inflation and weak government support for parents has made raising children much more expensive. Total expenditures on a child born in 2015 come out to be $310,605. Due to higher inflation, a middle-income married family with two kids is now spending $26,011 on raising kids to 17. These higher costs come at a time when attempts to provide additional support for parents through legislation such as Build Back Better have failed, and abortion restrictions are restricting choice, leaving women and parents to foot a bill they may not be prepared for.
For your calendar: Virtual events on men and work in the post-pandemic era, COVID and willingness to work, and an aging workforce
