Panel Study Of Income Dynamics Research Articles

Will Self-Employment Set You Free from Poverty? Evidence from Two National Surveys from Economically Developed Countries

ABSTRACT In this study, we test whether self-employment is associated with lower poverty and whether poor self-employed individuals alleviate the distance from the poverty line more so than individuals who are not self-employed. We examine both the Panel Study of Income Dynamics (PSID; 1980–2019) from the US and Household, Income, and the Labor Dynamics in Australia (HILDA; Panel Study of Income Dynamics (2001–2018). We find that the odds of being self-employed in poor households are about 5.2% to 12% higher, and the distance below the poverty line is farther for self-employed in the PSID ($861.30) and not significant in the HILDA.

Financial literacy and mortgage stress

This paper examines the effect of financial literacy on mortgage stress. Using data from the Panel Study of Income Dynamics (PSID), we find that borrowers with high levels of financial literacy are over 60 percent less likely to suffer from mortgage stress than borrowers with low levels of financial literacy after controlling for observables. Our findings remain robust to various potential issues, including sample selection bias and functional misspecifications. Moreover, we find that the effect of financial literacy varies across different age groups of borrowers. Further analysis reveals strong cross effects of financial literacy and quantitative reasoning on mortgage stress.

Emerging health disparities among college graduates: Understanding the health consequences of education-occupation mismatch

This study examines the health consequences and underlying pathways of education-occupation mismatch. Using a longitudinal sample of college graduates from the Panel Studies of Income Dynamics (1984–2019) and employing longitudinal hybrid models, we found that contemporary vertical mismatch (between education level and educational requirements of occupation) was associated with poorer psychological well-being and bio-behaviors (obesity and smoking), but not physical health. In contrast, horizontal mismatch (between field of study and field required for occupation) did not show clear health consequences. Sequence analysis was employed to uncover the mismatch trajectories and revealed that persistent vertical mismatch over one's career had a greater impact on psychological distress and smoking than episodic mismatch experiences. Furthermore, the linkage between vertical mismatch and health outcomes was likely shaped by psychosocial processes rather than reduced material well-being. These findings imply that education-occupation vertical (mis)match produces health disparities between occupationally matched and mismatched college graduates.

Becoming a parent: Trajectories of family division of labor in Germany and the United States

The transition to parenthood represents a turning point shaping couples’ arrangements for paid work and housework. Previous studies often examined these changes in isolation, rather than as interrelated trajectories reflecting diverse models of family division of labor. Drawing on data from different-sex couples from the 1984–2019 Panel Study of Income Dynamics and the 1984–2020 German Socio-Economic Panel, this study uses multichannel sequence analysis to identify four and three patterned constellations of family division of labor in the United States and Germany, respectively. These constellations differ in women’s and men’s respective contributions to household earnings and their relative participation in housework, spanning from one year before to ten years after the birth of a first child. National differences are found in the identified constellations, their prevalence, and the role of couples’ conjoint education in shaping these constellations. In both countries, couples in which the husband has an educational advantage are most likely to transition to a traditional arrangement. However, only in the U.S. do couples with both partners holding a college degree also tend to enter a traditional arrangement. Furthermore, among U.S. couples in which the wife has an educational advantage, they are most likely to adopt a partly egalitarian arrangement (equal earnings but not housework) upon becoming parents.

Assortative mating, marital stability and the role of business cycles in the United States from 1968 to 2011

ABSTRACT The strong negative correlation between divorce and a wide range of outcomes in terms of well-being, health, education and labour market performance has been well documented in the literature. Economic conditions have been found to affect marital stability. Shared gains from marriage also depend on spouses’ characteristics such as age, education, ethnicity and religious beliefs. This paper examines the relationship between these spousal characteristics and the probability of dissolution while taking into account business cycle fluctuations. Using data from the Panel Study of Income Dynamics 1968–2011 for the United States and employing a duration modelling strategy, findings reveal that differences in educational attainment and ethnicity between spouses increase the hazard of marital dissolution. However similarity in religious beliefs and ethnicity reduce the risk of divorce. A period of economic growth improves marital stability. However, ethnic differences are a significant predictor of marital division, even in times of economic prosperity.

Criminal background check laws and labor market inequality in the United States

AbstractResearch summaryA growing literature documents the effect of criminal justice contact on inequalities in the labor market. While ample evidence indicates that a criminal record itself imposes considerable disadvantage, the formal legal mechanisms that may contribute to criminal record‐based exclusion have received less empirical attention. The present study examines how one such mechanism—legal requirements for employers and license boards to perform criminal background checks—shapes labor market outcomes among formerly incarcerated people. The study draws from novel longitudinal data on the extensiveness of background check requirements at the state level, as well as individual‐level data on incarceration, wages, and unemployment from the Panel Study of Income Dynamics. Results show that while the extensiveness of state‐level background check requirements does not significantly affect the likelihood of unemployment, formerly incarcerated people residing in states where background check requirements are extensive are estimated to earn significantly lower wages than their counterparts in states with few screening mandates.Policy implicationsCriminal background check requirements stand as significant policy barriers that diminish the earning potential of formerly incarcerated people. Policy makers seeking to mitigate the collateral consequences of criminal convictions should narrow the scope of these laws to target specific, highly sensitive occupations, as opposed to broader workplace contexts. Reforms should also address persistent data quality issues in state criminal history record systems and shift the burdens imposed by incomplete or erroneous rap sheets. To minimize adverse self‐selection, background check procedures should clarify for applicants the role that a criminal history record may play in clearance decisions. Finally, future research should assess the marginal benefit of criminal background checks compared with other methods of screening prospective hires and licensees.

Paid family leave and the fight against hunger: Evidence from New York.

We examine the effects of New York's paid family leave (PFL) policy, introduced in January 2018, on food security. While researchers evaluating PFL policies in the past have mostly focused on employment and health outcomes, we believe that an improved understanding of potential impacts on food security is pivotal as it is directly related to the health and well-being of mothers and new-borns during the postnatal months. Our analysis uses two primary data sets-Current Population Survey Food Security Supplement (CPS-FSS) and Panel Study of Income Dynamics. Estimating difference-in-differences and triple difference models, we show that New York's PFL reduced the prevalence of low food security by 36% in both datasets. The positive effects are more sizable for households with low-educated heads and families with incomes under 185% of the Federal Poverty Line. These findings highlight that paid leave benefits lead to a larger reduction in food insecurity among disadvantaged families and thus have the potential to reduce existing societal inequalities. When examining potential mechanisms through which New York's PFL law improves food security, we show that the policy increased food expenditures, increased labor force participation, particularly by mothers, and improved parental health.

Mental and physical health among ‘sandwich’ generation working-age adults in the United States: Not all sandwiches are made equal

ObjectiveThis research examined mental and physical health differences by (1) potential upward and downward care recipients and (2) heterogenous time and money transfer arrangements among working-age adults aged 35–64 in the U.S. who are considered to belong to the ‘sandwich generation’. MethodsData for this study came from the Panel Study of Income Dynamics 2013 Family File and Rosters and Transfers module (n = 4609). For the second study objective, we restricted the analytic sample to individuals with at least one living parent/parent-in-law and at least one child (n = 2228). We varied the sandwich generation experience by whether upward (i.e., to parent), downward (i.e., to children), or transfers at both directions occurred. We then fit a series of logistic regression models to study psychological distress and self-rated health status differences among various classifications of sandwich generation, controlling for basic sociodemographic factors and living arrangements. For both samples, we ran separate models for those without underaged coresident children. ResultsCompared to respondents without potential care recipients, sandwiched individuals do not differ concerning severe psychological distress or poor/fair health. Conditional on being sandwiched between parents/parents-in-law and adult children, providers of both upward and downward time transfers have almost twice the odds of having severe psychological distress while money providers to parents/parents-in-law have about 1.6 times higher odds of reporting poor/fair health status. ConclusionThis study dispels the notion that being part of the sandwich generation is automatically deleterious to mental and physical health. Rather, it is the provision of certain transfers whilst being sandwiched that is associated with worse health outcomes.

The Class Ceiling in the United States: Class-Origin Pay Penalties in Higher Professional and Managerial Occupations

Abstract Gender and racial pay penalties are well-known: women (of all races) and people of color (of all genders) earn less, on average, even when they gain access to occupations historically reserved for White men. Studies of social mobility show that people from working-class backgrounds in the US have also been excluded from top professional and managerial occupations. But do working-class-origin people who attain top US jobs face a class-origin pay penalty? Despite evidence of class-origin pay gaps in higher professional and managerial occupations elsewhere, we might expect that the central role of race and racism in US stratification processes, along with the relatively low salience of class identities, would render class origins irrelevant to earnings in exclusive occupations, at least within racial groups. Using the Panel Study of Income Dynamics to link childhood class position to adult occupation and earnings, we describe the racial and class-origin composition of different high-status occupations and the earnings of people within them. We show that when people who are from working-class backgrounds are upwardly mobile into high-status occupations, they earn almost $20,000 per year less, on average, than individuals who are themselves from privileged backgrounds. The difference is partly explained by the upwardly mobile being less likely to have college degrees, but it remains substantial (around $11,700) even after accounting for education, race and other important predictors of earnings. The gap is largest among White people; there is a class-origin penalty in top US occupations that is distinct from the racial pay gap.

Disability and the widening gap in mid-life wealth accumulation: A longitudinal examination

Research suggests that persons living with a disability are disadvantaged in terms of employment outcomes and experience greater economic vulnerability. Despite our understanding of wealth inequality in later life as the result of an accumulative process of resource acquisition that occurs across the life course, conclusions about economic inequality associated with disability are mainly based on cross-sectional research or very short-term panel studies. In this paper, we examine the extent to which work disability in mid-life creates a cumulative disadvantage in wealth accumulation that grows with age. Using long-term longitudinal data from the Panel Study of Income Dynamics (PSID), we follow respondents from their 40 s into their 60 s to understand the relationship between work disability and wealth accumulation over time. Growth curve models include two specifications of trajectories of household wealth accumulation; as a function of time-varying work disability and also as a function of cumulative exposure to work disability in mid-life. Although both specifications indicate a disability penalty to wealth accumulation, the cumulative exposure model shows that initial wealth disparities associated with disability grow substantially with age, resulting in a widening gap in household wealth at the threshold of traditional retirement age for those with histories of temporary or persistent work disability in midlife.

Conscientiousness and entrepreneurship

PurposeThe purpose of this study is to examine the influence of conscientiousness on entrepreneurship over and above the impact of other factors that are associated with entrepreneurship in the literature.Design/methodology/approachThe design uses household responses from the Panel Study of Income Dynamics (PSID) biennial survey that follows the same heads of households over time to measure their conscientiousness, businesses owned and other demographic and financial characteristics. Ordinary least squares (OLS), Probit and Poisson regression techniques are applied at the head of household and state level to examine the relationship.FindingsThe results show heads of households’ conscientiousness positively relating to the average number of businesses owned, beyond other Big Five traits and the impact of other characteristics. A one-standard deviation increase in conscientiousness is significantly associated with a 0.012 increase in the number of businesses owned. This association is robust to alternative regression specifications and variable measurements.Originality/valueThe results are original to the finance literature, complementing studies by linking intrinsic head of household-level traits to entrepreneurship while controlling for external financial and demographic factors. The study also attempts to externally validate previous findings using aggregate-level outcomes. The data and setting used to measure personality traits as well as entrepreneurial outcomes are original to the entrepreneurship literature, validating previous findings.

Gender Equality for Whom? The Changing College Education Gradients of the Division of Paid Work and Housework Among US Couples, 1968–2019

Abstract In response to women’s changing roles in labor markets, couples have adopted varied strategies to reconcile career and family needs. Yet, most studies on the gendered division of labor focus almost exclusively on changes either in work or family domain. Doing so neglects the process through which couples negotiate and contest traditional work and family responsibilities. Studies that do examine these tradeoffs have highlighted how work–family strategies range far beyond simple traditional-egalitarian dichotomies but are limited to specific points in time or population subgroups. Using data from the Panel Study of Income Dynamics and latent-class analysis, this article provides the first population-based estimates of the couple-level tradeoffs inherent in work–family strategies in the United States, documents trends in the share of couples who fall into each of these strategies, and considers social stratification by gender and college education in these trends. Specifically, I identify seven distinct work–family strategies (traditional, neotraditional, her-second-shift, egalitarian, his-second-shift, female-breadwinner, and neither-full-time couples). Egalitarian couples experienced the fastest increase in prevalence among college-educated couples, whereas couples that lacked two full-time earners increased among less-educated couples. Still, about a quarter of all couples adopted “her-second-shift” strategies, with no variation across time, making it the modal work–family strategy among dual-earner couples. The long-run, couple-level results support the view that the gender revolution has stalled and suggest that this stall may be caused partly by strong traditional gender preferences, whereas structural resources appear to facilitate gender equality among a selected few.

The dynamics of housing cost burden among renters in the United States

ABSTRACT Housing cost burden—defined as paying more than 30% of household income for housing—has become a central feature of the American stratification system with dire consequences for the health and well-being of adults and children living in burdened households. To date, existing research has largely focused on the overall prevalence and distribution of housing cost burden—that is, the percentage of households that are cost burdened at a given time and differences in exposure to housing cost burden based on race and income using cross-sectional sources of data. To more fully understand the dynamics of housing cost burden among renter households in the United States including the frequency and duration of spells, we use 50 years of longitudinal data from the Panel Study of Income Dynamics (PSID). The analysis reveals that, in contrast to the episodic nature of poverty, housing cost burden is deep, frequent, and persistent for a growing share of American households.

Building blocks for a happy life: Longitudinal associations between early life income, mentorship and later well-being.

Longitudinal data from the Panel Study of Income Dynamics (PSID; N = 2996) were used to test hypotheses about the link between well-being and financial and social developmental resources. Results suggest that higher average family income from birth to age 18, and personal and professional mentoring received between 17 and 30, were positively associated with indicators of positive well-being and negatively related to negative indicators of well-being. Interactions between early life family income and mentoring during emerging adulthood were not significant predictors of any of the well-being outcomes. In all cases, the magnitudes of the coefficients became larger when simultaneously accounting for early life income, emerging adulthood mentoring, and their interactions-suggesting that financial and social resources in earlier life are independently linked to later life well-being. Findings highlight that mentoring received in emerging adulthood benefits downstream hedonic and eudemonic well-being, regardless of financial resources.

Upward Mobility Context and Health Outcomes and Behaviors during Transition to Adulthood: The Intersectionality of Race and Sex.

This study investigates how upward mobility context affects health during transition to adulthood and its variations by race and sex. Using county-level upward mobility measures and data from the Panel Study of Income Dynamics, we apply propensity score weighting techniques to examine these relationships. Results show that low upward mobility context increases the likelihood of poor self-rated health, obesity, and cigarette use but decreases alcohol consumption probability. Conversely, high upward mobility context raises the likelihood of distress, chronic conditions, and alcohol use but reduces cigarette use likelihood. In low-opportunity settings, Black individuals have lower risks of chronic conditions and cigarette use than White men. In high-opportunity settings, Black women are more likely to experience depression and chronic conditions, and Black men are likelier to smoke than White men. Our findings emphasize the complex link between upward mobility context and health for different racial and sex groups.

Parental Expenditures of Time and Money on Children in the U.S.

AbstractHow much do parents spend on children in the U.S.? While the U.S. Department of Agriculture (USDA) regularly addresses this question, it considers only money expenditures, omitting the sizeable monetary value of parental time. The 2017 and 2019 Panel Study of Income Dynamics offers a unique opportunity to provide a more complete picture. Analysis of this data reveals considerable substitutability between unpaid and paid childcare and generates estimates of average total expenditures that include a replacement cost estimate of the value of parental time. These estimates, constructed for comparability with USDA measures, reveal both higher levels of average parental expenditure and different patterns across household structure and income. These findings challenge public policies that use USDA estimates as a reference point for setting the child support obligations of non‐custodial parents and reimbursement rates for foster care. They also undermine many conventional equivalence scales and measures of income/time poverty.

Lifestyle choices among women with breast cancer in the United States

AbstractIntroductionBreast cancer is a common form of cancer for women. The goal of this research was to estimate how a breast cancer diagnosis affects a woman's decisions about smoking, alcohol use, and exercise.MethodsUsing data from the Panel Study of Income Dynamics on breast cancer diagnosis and lifestyle choices, we estimated how being diagnosed influences smoking, drinking, and exercising habits for more than 8000 women over the period 1999–2011.ResultsControlling for unobserved heterogeneity, persistence in behaviors, and correlation across behaviors, we found that the impact of a diagnosis had a different effect on smoking, drinking, and exercising behaviors. Furthermore, the impact depended upon the recency of the diagnosis. Recently diagnosed women exercised and smoked less—an average woman in our sample reduced exercise by 19% and smoking by 1%. However, women with breast cancer did not change their drinking habits relative to healthy women.ConclusionsA diagnosis of breast cancer impacts lifestyle choices. Women who were diagnosed with breast cancer in the last 5 years exercised and smoked less but did not change their alcohol consumption after a breast cancer diagnosis regardless of when the diagnosis was made. Our approach provides insight into what extent women who are faced with negative information about life expectancy take this into consideration when deciding to engage in risky behaviors that might further affect their survival. Whether to engage in physical activity, drink alcohol, or smoke are choices associated with how to live.

Consumption and Economic Security: A Two-Stage Conceptualization of Sustainable Homeownership in the United States

In the present study, we propose a novel conceptualization of homeownership in the United States as a special commodity, whose consumption involves a two-stage process: homeownership entry wherein the ability to consume is pivotal, and homeownership retention wherein the outcome rests on economic security. Based on the Panel Study of Income Dynamics (PSID), we test this conceptualization with consumption ability being proxied by income and economic security by liquid wealth. Three hypotheses are verified: (1) income predicts first-time renters’ chance of becoming homeowners but has weakened influence on homeownership retention; (2) liquid wealth constitutes the central determinant for first-time homeowners’ ability to avoid going back to renting; and (3) nonliquid wealth fails to exhibit a significant impact on either homeownership stage. By revealing the two separate stages of different homeownership dynamics, this study is the first to systematically explore the built-in contradiction of capitalist housing markets. Policy implications are also discussed.

Are children spending too much time on enrichment activities?

We study the effects of enrichment activities such as reading, homework, and extracurricular lessons on children’s cognitive and non-cognitive skills. We take into consideration the opportunity cost of spending time on enrichment, as it may replace activities such as sleep and socializing. Our study controls for selection on unobservables using a control function approach that leverages the fact that many children spend zero hours per week on enrichment activities. At zero enrichment, confounders vary but enrichment does not, giving us direct information about the effect of confounders on skills. Using time diary data available in the Panel Study of Income Dynamics (PSID), we find that the net effect of the last hour of enrichment is close to zero for cognitive skills and negative for non-cognitive skills. The negative effects for non-cognitive skills are concentrated in high school, consistent with elevated academic pressure related to college admissions.

FAMILIES AND DEMENTIA: ESTIMATES AND EXPOSURES

Abstract Roughly 10 to 20% of older adults in the U.S. have dementia, which could have implications for their families and household members, who are likely to be called upon to provide care. Yet, it is not clear how many families and households include someone with dementia. This study provides national level estimates of families and households with an older adult with possible dementia using the 2017 Panel Study of Income Dynamics (PSID). Consistent with prior work, we find that 21.5% of older adults 65+ have possible dementia. Moreover, more than a quarter (26.3%) of households with an adult aged 65+ include an older adult with dementia, and 37.0% of extended family networks (with at least one adult aged 65+) have at least one older adult with dementia. Individual-level stratification of dementia by racial-ethnic group and socioeconomic status translates directly to household- and family-level patterns. For instance, households and families with an older adult who is either Black or Hispanic or does not hold a college degree are more likely to include at least one person with possible dementia. These findings have implications for the extent to which American families and households include someone with dementia, which comes with a risk of serving as a caregiver as well as possible implications for health and well-being. Our findings also establish important baseline estimates that can be measured against future estimates, for instance those post COVID-19.