Do Frictions Matter in the Labor Market? Accessions, Separations and Minimum Wage Effects

We measure labor market frictions using a strategy that bridges design-based and structural approaches: estimating an equilibrium search model using reduced-form minimum wage elasticities identified from border discontinuities and fitted with Bayesian and LIML methods. We begin by providing the first test of U.S. minimum wage effects on labor market flows and find negative effects on employment flows, but not levels. Separations and accessions fall among restaurants and teens, especially those with low tenure. Our estimated parameters of a search model with wage posting and heterogeneous workers and firms imply that frictions help explain minimum wage effects.minimum wage, labor market flows, monopsony, Bayesian estimation

Post-pandemic travel patterns of remote tech workers

Almost half of all jobs in the San Francisco Bay Area are “remote-eligible” – more than any other metropolitan area in the United States, due to the high concentration of employees in the technology sector who were early to embrace teleworking at the start of the COVID-19 pandemic in early 2020. Any significant share of these tech workers staying remote may have profound long-term impacts on aggregate travel patterns in the region. This research seeks to predict the magnitude of these impacts and derive insights about the newly learned behaviors of tech workers, as indicative of remote-eligible workers in general. A survey of over 660 tech workers ran from November 2021 to March 2022, asking about participants’ employers and remote work policies, commute details and mode preferences, non-work trips, and interest in relocation. Respondents expected employer-driven hybrid arrangements of 2–3 days per week in the office after the pandemic, which in turn dictated the number of predicted future commuting trips and suppressed interest in relocation. Though almost half of respondents expressed interest in moving, they only planned to move a median of 20.93 miles – staying within the region but shifting away from their offices and towards less dense and more automobile-oriented suburban neighborhoods. Additionally, those moving more than ten miles from their office are likely to switch to less sustainable travel modes. On the other hand, robust observed retention of online shopping habits for groceries and food delivery may mitigate the added vehicle trips caused by rebound effects

Striking a Balance: A National Assessment of Economic Development Incentives

The use of incentive packages has intensified as local governments compete for new plants and corporate relocations, and as private firms increasingly demand a deal. While incentives promise jobs and tax revenue, scholars and practitioners criticize their high cost and limited accountability. Through a comparison of matched establishments, this paper explores how governmental incentive-granting strategy impacts incentive performance. We examine the overall impact of incentives and whether incentives granted to smaller firms perform better. Using economic development budget data, we also assess the state’s overall approach to economic development to determine which strategies are prioritized through funding. By showing that incentivized firms fail to create more jobs than matched controls, our analysis casts doubt on claims that “but for” incentives job creation would not occur. Still, our findings suggest that states are smarter in their incentive use when they strike a balance between recruiting industry and supporting “homegrown” businesses and technology

Mediating Incentive Use: A Time-Series Assessment of Economic Development Deals in North Carolina

State incentive granting for the purpose of firm retention or recruitment remains highly controversial and is often portrayed as antithetical to long-range economic development planning. This paper uses quasi-experimental methods to measure the impact of state-level economic development incentives on employment growth at the establishment level in North Carolina. Using North Carolina’s rich history of strategic planning and sector-based economic development as a backdrop, we develop a theory of sectoral “mediation.” This enables us to compare the effectiveness of incentives offered in mediated and nonmediated industries and show that when incentives are coupled with sectoral economic development efforts they generate substantially stronger employment effects than at establishments with limited sector-based institutional support

Planning for Inclusive Prosperity: Lessons from the North Carolina Experience

We present North Carolina as a working laboratory for agency within a new political economy. North Carolina has gone through a significant political transformation in recent years, threatening key institutions and channels for promoting inclusive forms for economic development. But this shift has not meant a wholesale loss or retreat of progressive actors and actions. Progress is still being made by planners and practitioners, though often in new forms and through alternative channels and partnerships. This paper presents three examples of continued efforts by planners to promote living wage standards, extend job-centered training opportunities, and upskill and upgrade legacy industries. It demonstrates the ways that planners can redirect policy goals and collectively articulate a vision of a more equitable form of economic development

Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties

We use policy discontinuities at state borders to identify the effects of minimum wages on earnings and employment in restaurants and other low-wage sectors. Our approach generalizes the case study method by considering all local differences in minimum wage policies between 1990 and 2006. We compare all contiguous county pairs in the U.S. that straddle a state border and find no adverse employment effects. We show that traditional approaches that do not account for local economic conditions tend to produce spurious negative effects due to spatial heterogeneities in employment trends that are unrelated to minimum wage policies. Our findings are robust to allowing for long term effects of minimum wage changes

Assessing the size and growth of the US wetland and stream compensatory mitigation industry

Interest has focused on quantifying the size and scope of environmental markets, particularly those that offset ecosystem impacts or restore natural infrastructure to improve habitat or promote clean air and water. In this paper, we focus on the US wetland and stream compensatory mitigation market, asking: what types of firms make up the mitigation “industry”? What are the economic impacts–i.e., the “size”–of the mitigation industry? How has this industry changed over time? We present the results of a national survey of mitigation firms and construct an input-output model of the industry’s economic impacts and employment. We also develop a comparative, 2014 model of the industry using data from a previous study of the broader, ecological restoration economy. Our findings suggest that the (2019, pre-COVID) mitigation industry collects annual revenues (direct economic impacts) in excess of $3.5 billion, which, along with additional indirect (supply chain) and induced (spillover) economic impacts, combine to over$9.6 billion in total output and support over 53,000 total jobs. We estimate 2014–2019 growth of ~35.2 percent in revenues, ~32.6 percent in total economic impacts, and a compound annual growth rate (CAGR) of 5.25%. This places the mitigation industry within the range of other, well-established industries within the technical services sector. We suggest establishing North American Industry Classification System (NAICS) codes specifically for ecological restoration and mitigation firms, an essential step in generating accurate and consistent employment estimates in the future, particularly at sub-national geographic scales