Poor Condition
Paid family leave and the fight against hunger: Evidence from New York
Jiyoon Kim & Otto Lenhart
Health Economics, forthcoming
Abstract:
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.
Effects of Income on Infant Health: Evidence from the Expanded Child Tax Credit and Pandemic Stimulus Checks
Wei Lyu, George Wehby & Robert Kaestner
NBER Working Paper, April 2024
Abstract:
During the COVID-19 pandemic, the federal government issued stimulus checks and expanded the child tax credit. These pandemic payments varied by marital status and the number of children in the household and were substantial with some families receiving several thousand dollars. We exploit this plausibly exogenous variation in income to obtain estimates of the effect income on infant health. We measure the total amount of pandemic payments received during pregnancy, or the year before birth, and examine how this additional income affects birthweight, the incidence of low birth weight, gestational age and fetal growth. Data are from birth certificates and analyses are conducted separately by maternal marital status and education (less than high school or high school) to isolate only the variation in pandemic payments due to differences in the number of children (parity). Estimates indicate that these pandemic cash payments had no statistically significant, or clinically or economically meaningful effects on infant health. Overall, the findings suggest that income transfers during pregnancy will have little effect on socioeconomic disparities in infant health.
The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments
Raymond Kluender et al.
NBER Working Paper, April 2024
Abstract:
Two in five Americans have medical debt, nearly half of whom owe at least $2,500. Concerned by this burden, governments and private donors have undertaken large, high-profile efforts to relieve medical debt. We partnered with RIP Medical Debt to conduct two randomized experiments that relieved medical debt with a face value of $169 million for 83,401 people between 2018 and 2020. We track outcomes using credit reports, collections account data, and a multimodal survey. There are three sets of results. First, we find no impact of debt relief on credit access, utilization, and financial distress on average. Second, we estimate that debt relief causes a moderate but statistically significant reduction in payment of existing medical bills. Third, we find no effect of medical debt relief on mental health on average, with detrimental effects for some groups in pre-registered heterogeneity analysis.
Discrimination During Eviction Moratoria
Alina Arefeva et al.
NBER Working Paper, March 2024
Abstract:
We provide evidence of intensified discriminatory behavior by landlords in the rental housing market during the eviction moratoria instituted during the COVID-19 pandemic. Using data collected from an experiment that involved more than 25,000 inquiries of landlords in the 50 largest cities in the United States in the spring and summer of 2020, our analysis shows that the implementation of an eviction moratorium significantly disadvantaged African Americans in the housing search process. A housing search model explains this result, showing that discrimination is worsened when landlords cannot evict tenants for the duration of the eviction moratorium.
Family cash transfers in childhood and birthing persons and birth outcomes later in life
Brenda Bustos et al.
SSM - Population Health, March 2024
Abstract:
Much literature in the US documents an intergenerational transmission of birthing person and perinatal morbidity in socioeconomically disadvantaged groups. A separate line of work indicates that family cash transfers may improve life chances of low-income families well into adulthood. By exploiting a quasi-random natural experiment of a large family cash transfer among a southeastern American Indian (AI) tribe in rural North Carolina, we examine whether a “perturbation” in socioeconomic status during childhood improves birthing person/perinatal outcomes when they become parents themselves. We acquired birth records on 6805 AI and non-AI infants born from 1995 to 2018. Regression methods to examine effect modification tested whether the birthing person's American Indian (AI) status and exposure to the family cash transfer during their childhood years corresponds with improvements in birthing person and perinatal outcomes. Findings show an increase in age at childbearing (coef: 0.15 years, 95% confidence interval [CI]: 0.05, 0.25) and a decrease in pre-pregnancy body mass index (BMI; coef: −0.42, 95% CI: −0.76, −0.09) with increased duration of cash transfer exposure during childhood. The odds of large-for-gestational age at delivery, as well as mean infant birthweight, is also reduced among AI births whose birthing person had relatively longer duration of exposure to the cash transfer. We, however, observe no relation with other birthing person/perinatal outcomes (e.g., tobacco use during pregnancy, preterm birth). In this rural AI population, cash transfers in one generation correspond with improved birthing person and infant health in the next generation.
Exposing Pittsburgh Landlords To Asset-Framing Narratives: An Experiment To Increase Housing Voucher Participation
Selena Ortiz, Andrew Fenelon & Yousef Chavehpour
Health Affairs, February 2024, Pages 287-296
Abstract:
Landlords are essential actors within the rental housing market, and there is much to be learned about their willingness to participate in rental assistance programs that improve access to stable housing. Because the success of these programs, such as the Mobility (Location-Based) Voucher program in Pittsburgh, Pennsylvania, can be derailed by landlord opposition, it is important to test strategies that increase landlords’ participation. Using data from a unique survey of Pittsburgh landlords, we found that exposing landlords to an asset-framing narrative that highlighted the social, economic, and health benefits of receiving a mobility voucher increased landlords’ reported willingness to rent to a mobility voucher recipient by 21 percentage points. Reported willingness was also higher among landlords who believed that housing affordability was connected to health. Our findings offer insight into how to increase landlords’ participation in affordable housing programs that require their engagement to succeed.
The EITC in rural and economically distressed areas: More bang per buck?
Jacob Bastian
International Tax and Public Finance, February 2024, Pages 136–159
Abstract:
Numerous papers show that Earned Income Tax Credit (EITC) expansions have increased maternal labor supply, but little is known about how this effect differs by geography or metropolitan status. Using various datasets and exploiting several EITC expansions, I find that the EITC consistently had larger positive effects on the labor supply of unmarried mothers in rural and economically distressed areas. Among married mothers, I find small negative effects in suburban and urban areas and small positive effects in rural areas. I also replicate and extend previous EITC research to show that these effects hold for EITC expansions spanning 1975 to the 2010s.
Buy Now Pay (Pain?) Later
Ed deHaan et al.
Management Science, forthcoming
Abstract:
“Buy-now-pay-later” (BNPL) is a relatively unregulated FinTech innovation that provides consumers with easy access to credit for retail purchases. BNPL spending is projected to reach $1 trillion by 2025, but we know little about its effects. Using banking data for 10.6 million U.S. consumers, we investigate the effects of BNPL on leading indicators of users’ financial health. We find that new BNPL users experience rapid increases in bank overdraft charges and credit card interest and fees compared with nonusers, consistent with BNPL facilitating overborrowing. An instrumental variable exploiting consumers’ pre-BNPL shopping habits bolsters our inferences. Our results inform regulatory investigations into the effects of BNPL on users’ financial health and expand academia’s understanding of an important consumer credit innovation.
A Psychological Account of Co-Holding: Why Some Choose to Simultaneously Save and Borrow
Rafael Batista, Ella Mao & Abigail Sussman
University of Chicago Working Paper, January 2024
Abstract:
This paper investigates the behavior of “co-holding,” whereby individuals simultaneously maintain low-yield liquid assets and high-interest revolving debt. Using data from a large retail bank, we observe over 7% of all customers (23% of credit card customers) co-hold amounts greater than $500. Despite the financial implications, many consumers appear to co-hold deliberately. A large scale field experiment (n=125,328) reveals that informing co-holders about their behavior and its costs does not meaningfully shift the amount of debt repaid. To understand this behavior further, this paper examines how co-holders (n=979; vs. non-co-holders, n=1,328) spend their money. An analysis of over 3 million transactions across 38 months shows co-holders prefer to pay for everyday purchases using debit while reserving their credit for larger, unexpected expenses. This result is robust to various specifications, including adjusting for customer demographics, total spending, access to credit, and utilization, and is consistent with these customers’ stated preferences. Furthermore, an online experiment provides initial causal evidence that inducing a preference for debit spending can lead consumers to retain higher asset balances while paying off less of their debt. This paper offers new insights into how consumers manage their assets and debt, with implications for those designing and marketing financial products.