Cyclical patterns and structural changes in the Louisville area economy since 1990

Business cycles ; Regional economics ; Federal Reserve District, 8th

Some Regional Economic Perspectives on Covid-19 Impacts

It has been about eight months since the Covid-19 pandemic began sweeping across America, causing the well-known health care emergency, and major economic and fiscal distortions. Presumably, we are in the last stages of the damage, as activity has picked up in most realms of daily life. However, recovery problems linger in many areas, including air travel, cruises, hotels, conventions, concerts, and schools. While not over, enough information has emerged to start documenting the regional economic impacts around Kentucky. This note examines the latest public data to study the apparent economic and fiscal damage related to Covid responses, public and private, in the state. This includes the sharp reductions in employment and payrolls due to business interruptions, but also the mitigating (and contributing) impacts of the federal relief packages

Tax Limits, Houses, and Schools: Seemingly Unrelated and Offsetting Effects

Property tax limitations, as well as other tax and expenditure restrictions on state and local governments in the United States, date back to the late nineteenth century. A surge in property tax limitation legislation occurred in the late 1970s and early 1980s, and its effects on government revenue, school financing, and educational quality have been studied extensively. However, there is surprisingly little literature on how property tax limits affect housing markets. For the first time, we examine the impacts of property tax limitations on housing growth, in addition to their impacts on housing prices. Using state-level data over twenty-three years, we find that property tax limits increase housing prices (indexes) by approximately 1.6%. These limits appear to have little impact on the growth in the housing stock, as measured by the number of permits. Our evidence suggests that this is because while property tax limits reduce property taxes they also increase the price of housing. These two counteracting effects lead to ambiguous impacts on the gross price of housing.

Measuring the Spread of COVID-19 in Kentucky: Do We Have the Right Data?

We examine various measures of COVID-19 infections, hospitalizations and deaths, with an emphasis on data for Kentucky. We find that: Data on the number of new reported cases of the disease obtained from convenience samples (as opposed to representative random samples) is an inaccurate measure of the spread of the disease in the State. Using CDC data and national studies, it appears that there were ten times the number of infections in March than reported for Kentucky at the time and by September the State is still capturing only one out of two people infected. A better measure of new cases can be obtained from model-based estimates of new daily cases that adjusts for the number of people being tested, the demographic characteristics of who is being tested, hospitalization rates, death rates, data on mobility, as well as the known biases in the reported data

Measuring Underemployment at the County Level

As labor markets tightened in the last half of the nineties, economic development and community leaders sought to identify more locally available workers than were indicated by published statistics. Using results from commissioned surveys, they pointed to large numbers of part-time workers who desired full-time work, and to full-time workers who were qualified for better jobs. These statistics were often used to negate low official unemployment rates that deterred firms, concerned by the ostensible shortage of workers, from locating in their counties. We have conducted a larger, statewide, survey of underemployment and linked it to the detailed demographic and labor force data from the 2000 Census. We used the results to identify variations in the number and type of underemployed persons around the state, with emphasis on the differences between urbanized and rural areas. Over a quarter of full-time workers reported underemployment, including a third of workers in exurban counties. However, forty to fifty percent of underemployment is reportedly by choice, with the highest rates in the small urban and exurban regions. Of those that are not underemployed by choice, over ninety percent of respondents in some regions cited lack of job opportunities. We find that between fourteen and forty percent of part-time workers prefer full-time work, with the highest rates in rural Appalachian counties. We provide some of the reasons underemployed people cite as constraints to better employment. Also, we used the survey results and the recent Census information to predict the number and type of underemployed persons in each county. The model can be used to update predictions as new local demographic and labor force estimates are released annually from the Census Bureau’s forthcoming American Community Surveys

The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates

This paper provides the first detailed empirical evidence of the labor-market returns to community college diplomas and certificates. Using detailed administrative data from Kentucky, we estimate panel-data models that control for differences among students in pre-college earnings and educational aspirations. Associate’s degrees and diplomas have quarterly earnings returns of nearly $2,000 for women, compared to returns of approximately$1,500 for men. Certificates have small positive returns for men and women in most specifications. There is substantial heterogeneity in returns across fields of study. Degrees, diplomas, and certificates all correspond with higher levels of employment

Estimating the Social Value of Higher Education: Willingness to Pay for Community and Technical Colleges

Much is known about private returns to education in the form of higher earnings. Less is known about social value, over and above the private, market value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System directly through a stated-preferences survey and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality. Our work differs from previous research by eliciting values directly in a way that yields a total value including any external benefits and by focusing on education at the community college level. Our preferred estimate indicates the social value of expanding the system substantially exceeds private value by approximately 50 percent.social returns, education externalities, contingent valuation, earnings

The Individual, Regional and State Economic Impacts of Kentucky Community and Technical Colleges

Excerpt from the executive summary: This report presents the results of our nine-month effort to measure the economic value of the Kentucky Community and Technical College System (KCTCS), both directly to its students around the state, and indirectly to all residents of Kentucky. We find wide public support for KCTCS, and a willingness to pay for an expansion of its programs. We also find a large variation in the individual returns to community and technical college education, in terms of expected work-life earnings by gender and by region of the state

Author Correction: Limited capacity of tree growth to mitigate the global greenhouse effect under predicted warming.

An amendment to this paper has been published and can be accessed via a link at the top of the paper

Kentucky Labor Supply and Demand Surveys

Excerpt from the executive summary: The Center for Business and Economic Research at the University of Kentucky (CBER), along with its partners, the Survey Research Center at the University of Kentucky (UK-SRC), the Survey Research Center in the Urban Studies Institute at the University of Louisville (UL-SRC), and the Department of Economics at the University of Louisville, is pleased to present this final report on the findings of the Kentucky labor supply and demand surveys sponsored by the Kentucky Cabinet for Workforce Development. The two universities have put together a consortium including some of the best scholars in the region in the areas of labor economics, local economic development, and survey design and administration