March Current Population Survey Research Articles

Does a Higher Income Have Positive Health Effects? Using the Earned Income Tax Credit to Explore the Income-Health Gradient

The existence of a positive relationship between income and morbidity has been well documented in the literature. But it is unclear whether the relationship is positive because increased income allows individuals to purchase more health inputs that improve their health, because healthy individuals are more productive and thus can earn higher wages in the labor market, or because a third factor is improving health and increasing income. This article explores whether increases in income improve the health of the low-income population. Because health status may affect income, this article uses an "instrumental variable" strategy that considers income variations over seventeen years of changes in the generosity of state and federal Earned Income Tax Credits (EITC, a measure that should be exogenous to health status). I measured health status using both the self-reported health status and the functional limitations indicated on the Survey of Income and Program Participation (SIPP), as well as the self-reported health status indicated on the March Current Population Survey (CPS). I found only limited support for the theory that the relationship between income and morbidity is derived from shifts in income. Although I did observe a correlation between income and self-reported health, I found no evidence that increases in income significantly improve self-reported health statuses. In addition, while increases in income appear to reduce the prevalence of hearing limitations when using corrective measures, these increases did not have a significant effect on most of the other functional limitations considered here. These findings suggest that the ability to improve short-term health outcomes through public transfer payments may be limited. However, the lifetime effects on the health of people with higher incomes would still be a valuable avenue for future research.

The Effects of California's Paid Family Leave Program on Mothers' Leave-Taking and Subsequent Labor Market Outcomes

This analysis uses March Current Population Survey data from 1999-2010 and a differences-in-differences approach to examine how California's first in the nation paid family leave (PFL) program affected leave-taking by mothers following childbirth, as well as subsequent labor market outcomes. We obtain robust evidence that the California program more than doubled the overall use of maternity leave, increasing it from around three to six or seven weeks for the typical new mother – with particularly large growth for less advantaged groups. We also provide suggestive evidence that PFL increased the usual weekly work hours of employed mothers of one-to-three year-old children by 6 to 9% and that their wage incomes may have risen by a similar amount.

Immigration and the health of U.S. black adults: Does country of origin matter?

Previous work suggests that regional variation in pre-migration exposure to racism and discrimination, measured by a region's racial composition, predicts differences in individual-level health among black immigrants to the United States. We exploit data on both region and country of birth for black immigrants in the United States and methodology that allows for the identification of arrival cohorts to test whether there are sending country differences in the health of black adults in the United States that support this proposition. While testing this hypothesis, we also document heterogeneity in health across arrival cohorts and by duration of U.S. residence among black immigrants. Using data on working-age immigrant and U.S.-born blacks taken from the 1996–2010 waves of the March Current Population Survey, we show that relative to U.S.-born black adults, black immigrants report significantly lower odds of fair/poor health. After controlling for relevant social and demographic characteristics, immigrants’ cohort of arrival, and immigrants’ duration in the United States, our models show only modest differences in health between African immigrants and black immigrants who migrate from the other major sending countries or regions. Results also show that African immigrants maintain their health advantage over U.S.-born black adults after more than 20 years in the United States. In contrast, black immigrants from the Caribbean who have been in the United States for more than 20 years appear to experience some downward health assimilation. In conclusion, after accounting for relevant factors, we find that there are only modest differences in black immigrant health across countries of origin. Black immigrants appear to be very highly selected in terms of good health, although there are some indications of negative health assimilation for black immigrants from the Caribbean.

The Feasibility and Importance of Adding Measures of Actual Experience to Cross-Sectional Data Collection

We use Michigan Panel Study of Income Dynamics data and data from a 2008 telephone survey of adults conducted by Westat for the Princeton Data Improvement Initiative (PDII) to explore the importance and feasibility of adding retrospective questions about actual work experience to cross-sectional data sets. We demonstrate that having such actual experience data is important for analyzing women’s postschool human capital accumulation, residual wage inequality, and the gender pay gap. Further, our PDII survey results show that it is feasible to collect actual experience data in cross-sectional telephone surveys like the March Current Population Survey’s annual supplement.

Earnings volatility in America: Evidence from matched CPS

We offer new evidence on earnings volatility of men and women in the United States over the past four decades by using matched data from the March Current Population Survey. We construct a measure of total volatility that encompasses both permanent and transitory instability, and that admits employment transitions and losses from self employment. We also present a detailed decomposition of earnings volatility to account for changing shares in employment probabilities, conditional variances of continuous workers, and conditional mean variances from employment entry and exit. Our results show that earnings volatility among men increased by 15% from the early 1970s to mid 1980s, while women's volatility fell, and each stabilized thereafter. However, this pooled series masks important heterogeneity in volatility levels and trends across education groups and marital status. We find that men's earnings volatility is increasingly accounted for by employment transitions, especially exits, while the share of women's volatility accounted for by continuous workers rose, each of which highlights the importance of allowing for periods of non-work in volatility studies.

Immigration and Intermarriage Among Hispanics: Crossing Racial and Generational Boundaries1

Rates of Hispanic intermarriage with whites declined for the first time during the 1990s. One hypothesis, which we test here, is that the recent influx of new immigrants has provided an expanding marriage market for Hispanics, reinforced cultural and ethnic identity, and slowed the process of marital assimilation. In this article, we use data from the March Current Population Survey (1995–2008) to identify generational differences in Hispanic‐white intermarriage. The results indicate that second‐generation Hispanics were more likely to marry first‐ rather than third‐generation Hispanics or whites, a pattern that was reinforced over the study period. The results suggest declining rates of intermarriage among second‐generation Hispanics—a pattern that diverges sharply from those observed among third‐plus‐generation Hispanics, where in‐marriage with other Hispanics declined over time. If couched in the language of straight line assimilation theory, third‐plus‐generation Hispanics are assimilating by increasingly marrying other third‐generation co‐ethnics and whites. On the other hand, assimilation among the second‐generation is slowing down as its members increasingly reconnect to their native culture by marrying immigrants.

Recessions, Retirement, and Social Security

This paper examines how labor market fluctuations around the time of retirement affect the labor force status and Social Security receipt of individuals ages 55 to 69 and the income of retirees in their 70s, using data from the March Current Population Survey, Census, and American Community Surveys. We find that workers are more likely to leave the labor force, to collect Social Security earlier, and to have lower Social Security income when they face a recession near retirement. The impact is greatest for the less-educated, who are more susceptible to job loss and rely more heavily on Social Security.

The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement

Abstract Recent dramatic declines in U.S. stock and housing markets have led to widespread speculation that shrinking retirement accounts and falling home equity will lead workers to delay retirement. Yet the weakness in the labor market and its impact on retirement are often overlooked. If older job seekers have difficulty finding work, they may retire earlier than expected. The net effect of the current economic crisis on retirement is thus far from clear. In this paper, we use 30 years of data from the March Current Population Survey to estimate models relating retirement decisions to fluctuations in equity, housing, and labor markets. We find that workers age 62 to 69 are responsive to the unemployment rate and to long-run fluctuations in stock market returns. Less-educated workers are more sensitive to labor market conditions and more-educated workers are more sensitive to stock market conditions. We find no evidence that workers age 55 to 61 respond to these fluctuations or that workers at any age respond to fluctuating housing markets. On net, we predict that the increase in retirement attributable to the rising unemployment rate will be almost 50 percent larger than the decrease in retirement brought about by the stock market crash.

Time for Children: Trends in the Employment Patterns of Parents, 1967-2009

Utilizing data from the 1967-2009 years of the March Current Population Surveys, we examine two important resources for children's well- being: time and money. We document trends in parental employment, from the perspective of children, and show what underlies these trends. We find that increases in family work hours mainly reflect movements into jobs by parents who, in prior decades, would have remained at home. This increase in market work has raised incomes for children in the typical two-parent family but not for those in lone-parent households. Time use data from 1975 and 2003-2008 reveal that working parents spend less time engaged in primary childcare than their counterparts without jobs but more than employed peers in previous cohorts. Analysis of 2004 work schedule data suggests that non-daytime work provides an alternative method of coordinating employment schedules for some dual-earner families.

The Feasibility and Importance of Adding Measures of Actual Experience to Cross-Sectional Data Collection

We use Michigan Panel Study of Income Dynamics data and data from a 2008 telephone survey of adults conducted by Westat for the Princeton Data Improvement Initiative (PDII) to explore the importance and feasibility of adding retrospective questions about actual work experience to cross-sectional data sets. We demonstrate that having such actual experience data is important for analyzing women's post-school human capital accumulation, residual wage inequality, and the gender pay gap. Further, our PDII survey results show that it is feasible to collect actual experience data in cross-sectional telephone surveys like the March Current Population Survey annual supplement.

Working Poverty across the Metro-Nonmetro Divide: A Quarter Century in Perspective, 1979-2003

Researchers are increasingly recognizing space as a key axis of inequality. Scholars concerned with spatial inequality have called for special attention to issues of comparative advantage and disadvantage across space as well as the consideration of the subnational scale. This study draws on these ideas by examining the relationship between work and poverty in the United States with an explicit comparative focus on metropolitan (metro) and non- metropolitan (nonmetro) areas. Moreover, this study joins space with its counterpart time by exploring how this relationship has changed over the last quarter century. Using data from the March Current Population Survey, the results show that working poverty persistently had a disproportionate impact on nonmetro families between 1979 and 2003. However, the results also show a trend of residential convergence, as working poverty in metro areas has climbed toward the levels experienced in nonmetro areas. Logistic-regression models exploring the effects of residence, family labor supply, and period confirm that labor supply has consistently provided nonmetro families with less protection from poverty than their metro counterparts, but also show that this disadvantage has waned in recent years. The findings underscore the need for policies that support those working on the economic margins and recognize the variable opportunity costs of employment across the rural- urban continuum. ruso_20 363..387

Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring

We analyze trends in US size-adjusted household income inequality between 1975 and 2004 using the most commonly used data source—the public use version of the March Current Population Survey. But, unlike most researchers, we also give substantial attention to the problems caused by the topcoding of each income source in the CPS data. Exploiting our access to Census Bureau internal CPS data, we examine estimates from data incorporating imputations for topcoded incomes derived from cell means and estimates from data multiply-imputed from parametric distribution models. Our analysis yields robust conclusions about inequality trends. The upward trend in US income inequality that began in the mid-1970s and increased in the 1980s slowed markedly after 1993.

Earnings Inequality and the Changing Association between Spouses’ Earnings

Increases in the association between spouses' earnings have the potential to increase inequality as marriages increasingly consist of two high-earning or two low-earning partners. This article uses log-linear models and data from the March Current Population Survey to describe trends in the association between spouses' earnings and estimate their contribution to growing earnings inequality among married couples from 1967 to 2005. The results indicate that increases in earnings inequality would have been about 25%-30% lower than observed in the absence of changes in the association, depending on the inequality measure used. Three components of these changes and how they vary across the earnings distribution are explored.

Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?

Using data drawn from the March Current Population Survey, we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates. When we then simulate the effects of a proposed federal minimum wage increase from $7.25 to $9.50 per hour, we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from $5.15 to $7.25 per hour. Assuming no negative employment effects, only 11.3% of workers who will gain live in poor households, compared to 15.8% from the last increase. When we allow for negative employment effects, we find that the working poor face a disproportionate share of the job losses. Our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor.

Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data

Although the vast majority of US research on trends in the inequality of family income is based on public-use March Current Population Survey (CPS) data, a new wave of research based on Internal Revenue Service (IRS) tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates can largely be reconciled once one uses internal CPS data (which better captures the top of the income distribution than public-use CPS data) and defines the income distribution in the same way. Using internal CPS data for 1967-2006, we closely match the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993-2000. Our results imply that, if inequality has increased substantially since 1993, the increase is confined to income changes for those in the top 1 percent of the distribution.

The Impact of Minimum Wage Indexing: Employment and Wage Evidence from Oregon and Washington

Minimum wage increases can be politically challenging to implement. Consequently, many states have introduced minimum wage indexing. With indexing, the minimum wage increases automatically each year based on some measure of inflation. The goal of this research is to evaluate quantitatively the economic effects of minimum wage indexing, with a focus on Oregon and Washington’s experience. Impacts are quantified by how they affect (1) employment, and (2) hourly wages for hourly workers. The project uses wage data from the annual March Current Population Surveys (CPS) covering the period 2003–2008 for Oregon, Washington, and their neighboring states (California, Idaho, and Nevada). This information covers the period in which both Oregon and Washington have indexed their minimum wages. The data provides sufficient detail for individuals in Oregon, Washington, and other states; that thus differences in and changes to the wage and employment distribution can be tested statistically. The model used in this study accounts for the possibility that factors affecting whether an individual is employed also affects the hourly wage earned. Rather than assuming that younger individuals are differentially affected by the minimum wage and minimum wage indexing, this study tests and quantifies minimum wage impacts by age.

Using Internal Current Population Survey Data to Reevaluate Trends in Labor Earnings Gaps by Gender, Race and Education Level

Most empirical studies of trends in labor earnings gaps by gender, race or education level are based on data from the public use March Current Population Survey (CPS). Using the internal March CPS, we show that inconsistent topcoding in the public use data will understate these gaps and inaccurately capture their trends. We create a cell mean series beginning in 1975 that provides the mean of all values above the topcode for each income source in the public use March CPS and better approximate earnings gaps found in the internal March CPS than was previously possible using publically available data.

On hourly wages and weekly earnings in the current population survey

This paper examines hourly wages and weekly earnings in the Outgoing Rotation Group (ORG) and the March Supplement of Current Population Survey (CPS) from 1998 to 2004. The findings suggest that the ORG contains less errors than the March CPS, and that weekly earnings contain less errors than hourly wages. The paper further finds that earnings differ systematically in the ORG and in the March CPS by gender and education levels.

Racial and Ethnic Differences in Women's Retirement Security

Women face a greater risk of poverty than men as they get older, but this risk varies considerably by race and ethnicity. Using data from the Census Bureau's 2002–2005 March Current Population Surveys, this article examines racial and ethnic differences in women's retirement security, with special attention given to differences in their marital status and living arrangements in old age. Findings show that African American and Hispanic women are more likely than white or Asian American women to be unmarried at ages 65 and older. Older minority women are also much more likely than older white women to live in extended family households, regardless of marital status. The poverty rate is lower for those living in extended family households than those living alone, indicating a potential safety net provided by other family members; yet, the degree of economic support received from extended family arrangements tends to vary by race and ethnicity. The examination of personal sources of retirement income—Social Security, pensions, and assets—indicates that an above poverty household income does not necessarily reflect a personal level of financial security. The level of women's retirement security coming from all income sources varies by race and ethnicity, marital status, and living arrangements.

A Contribution to the Theory of Income Inequality

This paper uses the Solow Model of economic growth to model the evolution of inequality over time. In steady state, differences in household saving rates generate differences in household capital income. Households that save more accumulate more capital and have higher steady-state income. Tax policy affects the distribution of income through its influence on household saving rates. Increasing the tax rate on labor income causes a greater percentage decrease in the steady-state saving rates of relatively low savers, thus increasing pre-tax income inequality. Conversely, increasing the tax rate on capital income reduces pre-tax income inequality because it causes a greater percentage decrease in the steady-state saving rates of relatively high savers. Empirical tests of the model using data from the March Current Population Survey and NBER’s TAXSIM model suggest that higher taxes on wage income are associated with higher levels of income inequality. A high degree of correlation among the average marginal tax rates prevents us from drawing inferences about the effect that taxation of capital income has on inequality.