SNAP as a long-term investment

Proposed changes to the US federal budget could entail drastic cuts to vital elements of the social safety net. Given these latest rounds of threats, it's important to reaffirm the many ways in which these programs benefit families—lifting children out of poverty and, in the long run, paying for themselves.

Below, explore key takeaways from research on SNAP — one of the largest anti-poverty programs in the United States.

Check out this video to hear Hilary Hoynes review the evidence on SNAP, as part of an event hosted with the Berkeley Food Institute + Goldman School of Public Policy. Or, read our research brief to learn more about this paper.

Challenges to Evaluation in Prison Higher Education

Understanding racial disparities in criminal court outcomes

Narratives and destigmatization: the case of criminal record stigma in the labor market

David Harding wins Award for Advancing Institutional Excellence and Equity

Congratulations to Professor David Harding on his receipt of the 2024-2025 Chancellor's Award for Advancing Institutional Excellence and Equity! Harding, who chairs the Department of Sociology, has been instrumental in developing mentorship programs for formerly incarcerated scholars and trains early-career researchers in computational social science methods. Learn more about the award recipients.

Income, wealth, and environmental inequality in the US

A new article in CEPR highlights research from Reed Walker, Suvy Qin, + coauthors that leverages 40 years of administrative data to improve our understanding of the relationship between wealth and exposure to air pollution. The researchers find that, at all income levels, Black individuals are exposed to significantly higher levels of air pollution than white individuals. Learn more.

Evaluating the effects of Chicago's Small Business Improvement Fund

California's $20 fast-food minimum wage improves pay at small cost to consumers

Since its passage nearly a year ago, California’s fast-food minimum wage has increased wages for workers by 8-9%, finds a new analysis from Michael Reich + coauthors at UC Berkeley’s Center for Wage and Employment Dynamics. Check out this article from Axios to learn more about the study’s results.

Is the U.S. Civil Service really broken?

In this Q&A from the Haas School of Business, O-Lab faculty affiliate Guo Xu unpacks what research has to tell us about the US civil service and bureaucratic reform, and explains the implications of recent executive orders from the Trump administration. Read the full article.

Higher housing costs offset higher wages in big cities, says new study

Historically, moving to a city has been seen as a pathway to greater economic mobility – as cities offer more and often higher-paying jobs. Still, migration from low-income to high-income states has slowed in recent years. In Forbes, Adam Millsap unpacks research from Jesse Rothstein, David Card, and Moises Yi investigating why. Read the full article.

Climate change causes conflict: How policy can respond

In a column from CEPR, Marshall Burke, Solomon Hsiang, and Ted Miguel review literature on the relationship between conflict and climate. The authors highlight that, across contexts, studies consistently point to the social safety net as a tool to mitigate increases in violence induced by climate change by protecting household incomes from climate shocks. Read the full article.

From Marcy to Madison Square? The effects of growing up in public housing on early adult outcomes

The incidence and efficiency of land-value taxation

5 Questions for Faculty: Professor Hilary Hoynes

In this installment of the Goldman School of Public Policy’s “Five Questions for Faculty” series, O-Lab Faculty Director Hilary Hoynes, Associate Dean and Chancellor’s Professor of Economics and Public Policy, discusses how the upcoming general election could effect the US social safety net. Read the article here.

The impact of Medicaid expansion on disability benefit take-up

New open-source volume on the effects of the 2021 Expanded Child Tax Credit

Newly released in the Annals of The American Academy of Political and Social Science, “Evaluating the Effects of the 2021 Expansion of the Child Tax Credit” brings together some of the strongest research on the 2021 CTC expansion. Edited by O-Lab Faculty Director Hilary Hoynes, Megan Curran of Center on Poverty and Social Policy at Columbia University, and Zachary Parolin, the volume frames the policy change in historical and international contexts, presents the expansion’s near-term impacts, and explores the potential, long-term effects of a permanently expanded credit, in addition to alternative policy designs. Explore the full volume here.

The long-term effects of entering the workforce during a recession

Economic recessions create an array of immediate and widespread challenges for workers, exerting labor market pressures that lead to layoffs and make it difficult to find a job and earn enough to make ends meet. These conditions can also lead to long-term consequences for those whose first entry into the workforce coincides with a recession or economic downturn. With increasing access to high-quality administrative data spanning decades, there is a growing body of research documenting the scale of these consequences (referred to as “economic scarring”) on one’s long-term life trajectory.

Cesia Sanchez, who received her PhD from UC Berkeley’s Economics Department in May 2024, is making important new contributions to this literature. In part, her interest stems from a desire to understand the experiences that shaped her upbringing, including the impact the subprime mortgage crisis had on her family. During her undergraduate studies at Texas A&M, Sanchez realized, “I need to keep up with econ because it's going to help me understand my life experiences. In my principles of macroeconomics course, I learned what being seasonally employed meant. We studied the bursting of the real estate bubble. That class taught me that all of my life experiences could inform research questions that I’ve studied.” 

Sanchez’s dissertation, The Effect of Early Economic Conditions on Young Adults’ Transition Into Adulthood and their Occupational Characteristics, offers new ways of looking at the long-term impacts of exposure to economic downturns early in life. Specifically, while previous work in this field has largely examined how labor market trends affect college graduates, Sanchez focuses additionally on high school graduates. Her analysis also considers a wider array of variables (in addition to standard outcomes related to earnings and employment) in order to understand how recessions impact the transition into adulthood more broadly, and what consequences economic downturns have for the quality of employment one can access down the road. 

In the first part of her paper, Sanchez uses data from the American Community Survey, covering 19 to 30 year olds between 2006 and 2021, to estimate the effect of economic conditions on a variety of variables indicative of transition to adulthood – including employment rates, earnings, living arrangements, marriage, and educational attainment. As a measure of exposure to recessionary conditions, she takes the unemployment rate at age 18 for each member of her sample, rather than focusing on a labor market entry point of age 22, or post-college graduation. By beginning her analysis at the point of high school graduation, rather than college graduation, Sanchez can estimate how recessions influence the way young people make decisions – about pursuing careers, post-secondary education, and alternatives like trade school – and how these choices impact future job quality.

Corroborating findings from past research, Sanchez finds that those who experience high unemployment rates at age 18 are less likely to be employed up to age 23, and are more likely to have very low earnings throughout their twenties, relative to their counterparts who come of age during a period of low unemployment. In a new contribution to the evidence on scarring effects, Sanchez’s paper also documents that these same individuals are much more likely to live with their parents throughout their twenties. Consequences for marriage and college attendance, however, are a bit more mixed. High unemployment rates at age 18 have a polarizing effect on the decision to marry: those who would’ve otherwise married early do so even earlier, whereas those who would’ve married later delay. Similarly, high unemployment rates accelerate college enrollment, but do not spur enrollment from students who would not have attended college in more favorable economic conditions.

Source: Autor, David H., and David Dorn. 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market." American Economic Review, 103 (5): 1553–97.

If young people’s employment and earnings are negatively affected by recessions, what consequences might economic conditions have for the quality of jobs they access? The second part of Sanchez’s dissertation examines this question, with a focus on what kinds of skills are required of jobseekers. While past research on scarring effects has investigated outcomes for job quality, Sanchez takes a somewhat different approach in her measurements of job quality. “[In past literature] working in a higher quality job was typically defined as working in a job within the top five highest-paying categories of your college major – again, thinking about those people who graduated college,” she said. Rather than follow this definition, Sanchez draws from research on the “job polarization phenomenon,” which describes why economic downturns tend to result in job losses in middle-skilled occupations. Sanchez employs “task intensity measures” from this literature, designating occupations as primarily routine, manual, or abstract.

Sanchez expected to find that graduating from high school in a time of high unemployment would lead to (a) an increased likelihood of working in a primarily manual or abstract occupation, and (b) a decreased likelihood of working in routine occupations. This hypothesis aligns with the job polarization phenomenon, which suggests that recessionary conditions put the most pressure on availability of middle-skilled, or “routine” occupations, as companies can most easily automate these job functions. Sanchez’s analysis confirmed these hypotheses for routine jobs (decreased likelihood) and abstract jobs (increased likelihood), but it also suggested that graduating under recessionary conditions reduced employment in manual jobs as well – a surprising finding to her, given that high school graduates are relatively low-skilled. “That's a puzzle that I'd like to understand – why do those effects not match the job polarization phenomenon?”

In August 2024, Sanchez joined Baylor University’s Department of Economics as a Clinical Assistant Professor, where she’ll continue her research on the long-term consequences of economic and labor market conditions on young people’s lives. In particular, Sanchez hopes to more thoroughly investigate why recessions seem to lead to higher-quality jobs for high school graduates. She takes her findings as suggestive evidence of an acceleration effect that recessions might produce for high school graduates: facing the labor market consequences of a recession, new graduates rapidly pursue education - in particular, trade certificates - that quickly result in employment in abstract-oriented, high-quality jobs. By comparison, jobseekers who graduate from college in a recession may not have anticipated struggling to find a job, and may have therefore chosen career paths that are less well-suited to recessionary conditions. “Experiencing a recession at the age of 21, you hadn't been in the job search at the age of 18 to really think through, ‘What is the economy going to demand by the time that I graduate?’ And I think that's what's happening. It’s something that I want to study more to fully complete this paper.”

Building evidence on new pathways for economic opportunity

What the quality of bureaucracy can tell us about government effectiveness

Guo Xu, Associate Professor at the Haas School of Business, joined the O-Lab Faculty Network in May 2024. Xu joined Haas in 2017, where he researches the organization and development of personnel in both public and private-sector organizations, working at the intersection of political economy, economic development, and economic history. Much of his recent research has examined aspects of bureaucracies, exploring topics including the interplay of political ideology and bureaucrat performance, how large shocks influence norms in the civil service, and the role of bureaucracies in economic development.

We sat down with Guo and discussed key takeaways from his work on bureaucracies and personnel, how he has leveraged data to inform multiple investigations into economic history, and where he’d like to take his research next.

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How did you become interested in economics research? Were there any particular policy problems or phenomena that you witnessed that initially caught your attention?

I'm a trained development economist, so the question I always had was: why are some places rich, and others poor? When you travel around, you notice these huge income differences – what's driving that? During my undergraduate studies, it was all about institutions – there were all these papers on colonial legacy, and the impact stemming from differences in institutions that were set up. I found that really fascinating. At the same time, I wanted to dig deeper, which led me down the rabbit hole of looking at public organizations and their personnel.

Your primary research fields of interest are political economy, economic history, and development economics. Can you describe your specific research interests within these fields, personnel being one of them?

My work is really at the intersection of these fields. The questions I have in mind tend to be development questions. There's no denying that you need some basic set of public goods for a country or society to function. So a natural question is, “How can you improve public service delivery to stimulate economic development and growth?”

The intersection with political economy comes into play when thinking about policy. Sometimes you know what the right policy choices are, and yet they are not implemented for political reasons. And even if policies get implemented, there remains a huge amount of variation in the quality of implementation. You might see the same policy being rolled out within the very same country - and yet there will be differences depending on how effective the local administration is.

The historical part comes in because these studies often rely on natural experiments such as big reforms or large-scale changes in governance that happened in the past. What's very appealing with the study of history is that you can rewind time and study big events after the dust has settled.

Much of your recent research centers on studying bureaucracy, with evidence from the US Federal Government. Can you describe your interest in studying workplaces of the public sector, as compared to the private sector?

A lot of the toolkits that I use are also used in the study of private sector organizations. Instead of studying senior bureaucrats, you study CEOs and managers. There are many similarities, but what I find particularly appealing about the study of public organizations is simply that they're so big and important for the lives of many. In the U.S., for example, the federal government has been the biggest civilian employer for a long time. The public sector is a huge part of the economy.

Could you go over some of the key takeaways or main findings that you've found from looking at the public sector?

There's often this notion that management in the public sector is different from the private sector. But most personnel practices in the private sector also apply in the public sector. For example, some might say that monetary incentives in the public sector don't work, or that paying people more is not necessarily a good thing – you might crowd out highly motivated people. But most of the research seems to suggest that those differences are not really there once you look closely. Many personnel policies that we've seen in the private sector seem to work, to some extent, in the public sector as well.

To give you an example, there’s typically a notion that bureaucracies are very rigid, and can't really motivate people, because you don't have the same type of systems - performance pay or up-or-out promotions - in place as in the private sector. In a study where we looked at the Indian federal bureaucracy, which is particularly rigid, we see that incentives matter quite a bit, and that there are always margins for incentives to kick in. In that particular setting, it turned out it was not about providing monetary incentives, but promotion incentives that allow individuals to reach the most prestigious positions - the “glittering prizes” - before the mandatory retirement age. This implicit retirement incentive governs how people exert effort throughout their career. There are many indirect ways of providing incentives – for example, by transferring employees to more desirable locations or more prestigious postings. Even rotations – you don't have to promote people, you can rotate them across different jobs – can get you quite far.

I expect that one key advantage of doing research on the US government is the availability of data, but in the case of your paper on federal employment segregation, you undertook an extensive digitization project. Can you describe what this process looks like? It seems like you've been able to use that data to study a couple of different questions.

One major part of doing economic history is trying to unearth old data. At that time, we wanted to study the economic costs of the introduction of racial segregation within the federal government under Woodrow Wilson. We were lucky to find these personnel records that go far back in time. 

Getting historical data into a workable format is a lot of work – back then, we relied on optical character recognition, and then processed the data in a semi-automated way. We did a lot of manual work too – we had teams of people check the data line-by-line. That was only a couple of years ago - I’m curious to see how AI will help speed up these digitization efforts.

Back then, however, it was a pretty big investment in terms of data collection. It took us more than a year to digitize and clean it all. Luckily, we were also able to use the data to analyze other questions. One question that we got from the study of federal employment segregation was: “Why are there so many black civil servants in the first place?” It seemed very unusual because of the ongoing discrimination at that time. That led us to study the introduction of the Pendleton Act a couple of decades earlier.

Before Pendleton, the President could appoint public servants at will - everyone served “at the pleasure of the President.” The Pendleton Act put in controls by introducing rule-based selection, and employees couldn't be fired at will anymore. We studied that rollout, and looked at whether it actually changed the composition of workers and their performance. The idea was that the introduction of rule-based selection would remove potential biases, increasing the entry of individuals from underrepresented groups. One surprising thing we found was that the Act didn't do much to change the demographic makeup of the civil service. So what we thought might be the primary effect of the Pendleton Act turned out to be much less important.

But it turned out that we still saw large performance gains, which we traced to the fact that the Act was reducing disruption in the organization. In the old system of appointments, with every new presidential election, the President would replace existing civil servants with their own political supporters, creating huge layoff cycles every 4 years. With service protections in place, these political cycles began to diminish and ultimately disappear. That, in turn, made the organization more stable, creating a civil service that more closely resembles the stable careers we associate with public sector work today – you can transmit knowledge more, and there's more on-the-job learning. We found that this increased the performance of the public sector, as measured through reductions in postal delivery errors and increased cost efficiency.

We focused on post offices for the study for several reasons: first, the Pendleton Act was gradually rolled out across post offices, allowing us to compare post offices with newly introduced civil service protections to those without. Second, rich administrative data on post offices was plentiful, allowing us to apply modern statistical methods to estimate the effects of the reform. And of course, the post office was a crucial infrastructure through which communication flowed, connecting far-flung areas of the country.

Initially, we expected the reform to have a large impact on getting individuals from underrepresented backgrounds into the government - but it turned out that the question of whether exams would increase the amount of Black employees in the civil service was not that clear, even in the historical record. It was a case where doing empirical analysis yielded some interesting surprises.

How do you see retrospective research as informing future policy?

It's perhaps a little cliché to say, “Oh, you can always learn from the past” - but that’s true. We can’t run experiments all the time, and many policies and events take a long time to fully unfold, making them difficult to study. In that sense, history offers useful episodes and lessons we can look at from a more distant perspective. 

That said, I think economists tend to be wary of extrapolating, unless we fully understand the underlying mechanisms through which certain effects unfold. All empirical research is retrospective and in a sense historical. Historical work is not about the age of the data, but taking a deep dive - a careful study of the context and institutional setting. This also helps to get a sense of how comparable different events in time are and the extent one can extrapolate.

Personally, I get a lot out of studying history, because it's a great way to learn – when I moved to the US, I didn't know much about US administrations. The good thing about this job is that you can choose what you study, and that's very enjoyable.

What kinds of new questions have your research projects raised that you see as important areas for future projects?

The nice thing about studying public organizations is that you can study different functions of the government. One dimension I'm hoping to do more work on is the study of environmental regulation – a big challenge that is tightly linked to implementation. There are federal environmental programs that are implemented in different places, with a lot of heterogeneity. You have that in the US, and there’s a similar structure in India, so there's a lot to be looked at!