Institutional Affiliation: Brookings Institution
|Is Employment Polarization Informative About Wage Inequality and Is Employment Really Polarizing?|
with Jennifer Hunt: w26064
Equating a job with an individual rather than an occupation, we re-examine whether U.S. workers are increasingly concentrated in low and high-wage jobs relative to middle-wage jobs, a phenomenon known as employment polarization. By assigning workers in the CPS to real hourly wage bins with time-invariant thresholds and tracking over time the shares of workers in each, we do find a decline since 1973 in the share of workers earning middle wages. However, we find that a strong increase in the share of workers in the top bin is accompanied by a slight decline in the share in the bottom bin, inconsistent with employment polarization. Turning to occupation-based analysis, we show that the share of employment in low-wage occupations is trending up only from 2002-2012, and that the apparent earli...
|Accounting for Adaptation in the Economics of Happiness|
with Miles Kimball, Dan Silverman: w21365
Reported happiness provides a potentially useful way to evaluate unpriced goods and events; but measures of subjective well-being (SWB) often revert to the mean after responding to events, and this hedonic adaptation creates challenges for interpretation. Previous work tends to estimate time-invariant effects of events on happiness. In the presence of hedonic adaptation, this restriction can lead to biases, especially when comparing events to which people adapt at different rates. Our paper provides a flexible, extensible econometric framework that accommodates adaptation and permits the comparison of happiness-relevant life events with dissimilar hedonic adaptation paths. We present a method that is robust to individual fixed effects, imprecisely-dated data, and permanent consequences. Th...