WP 2018-390

We study the effects of the size of older cohorts on labor force participation (LFP) and wages of older workers. In the standard relative supply framework usually applied to relative cohort size, we would expect larger older cohorts to experience lower wages and hence lower employment or LFP. However, there are two reasons that we might find a positive effect. First, we might expect the age structure of the population to affect the composition of consumption and hence labor demand; it is possible that the age structure of employment is such that relative labor demand for an age cohort increases when the relative size of that cohort increases. Second, a large older cohort implies that the old cohort is large relative to at least some other narrowly-defined age cohorts. If two age cohorts are substitutable, then a decline in the relative size of one of them can imply an increase in the relative demand for the other. We use panel data on states, treating the age structure of the population as endogenous, owing to migration. We find that when older cohorts are large relative to a young cohort, the evidence fits the relative supply hypothesis. But when older cohorts are large relative to 25-49 year-olds, the evidence points to a relative demand shift. Thus, we need a more nuanced view than simply whether the older cohort is large relative to the population; the cohort they are large relative to matters.U.S. Social Security Administration, RRC08098401-10, R-UM18-08https://deepblue.lib.umich.edu/bitstream/2027.42/148128/1/wp390.pdfDescription of wp390.pdf : Working pape

Essays in Labor and Demographic Economics

My dissertation's primary contribution is identifying factors that affect differences in labor market outcomes among various demographic groups.In the first chapter, I designed an experiment to examine the effects of stereotype threat, a concept from psychology where people conform or feel at risk of conforming to negative stereotypes about their group, under competition. I found that providing information about performance differences as a stereotype threat changed the subjects’ preferences to favor the tasks that their gender is perceived to perform relatively better in but did not affect performance outcomes. The implication is that even if stereotype threat does not affect one’s ability to perform, it may affect education and career choices that could contribute to group differences in the labor market.The second chapter was written jointly with Dr. David Neumark and published in Demography. This paper analyzed the effects of cohort sizes on the labor force participation and wages of older workers in the United States. Older workers increased their labor force participation as their relative size to the working age population increases, which is contrary to the standard labor supply hypothesis. Additionally, when using a richer model that accounts for the size of older workers relative to younger workers, we found the demand for older workers was high when their cohort size is large relative to prime age workers, suggesting that older workers enter in more flexible working arrangements in their later age.Finally, the last chapter analyzed the effects of expanding public transit infrastructure on labor market outcomes in Los Angeles. I use panel data on tracts, treating route placement as endogenous, which is then instrumented by the distance from the centroid of each tract in LA to a hypothetical Metro route. Overall, I find proximity to Metro stations increases labor force participation and employment for residents, which is robust to using both a binary and continuous measure of distance. Additionally, I find evidence that increased job density in neighborhoods near new transit stations is contributing to the employment increase