Class Notes: Immigrants’ upward mobility, paid family leave, and more

This week in Class Notes:

• • The African American Male Achievement Program significantly reduced drop-out rates among Black male students, particularly those in 9th grade.
  • Children of immigrants have higher rates of upward mobility than children of U.S.-born parents.
  • California’s 2004 Paid Family Leave Act reduced the number of children born and, by decreasing mothers’ time at work, increased time spent with children.
  • Our top chart shows the effect of Alaska’s basic income on labor force participation.
  • Heather Boushey argues for a new approach to measuring economic progress in order to show who is gaining most from growth.
  • Finally, check out Jenny Schuetz and Tiffany Ford’s new piece on workforce housing and middle-income housing subsidies.

My Brother’s Keeper? The impact of targeted educational supports

The My Brother’s Keeper (MBK) Challenge was developed by President Obama to improve the educational and economic opportunities of young men of color. In Oakland, California, MBK features the African American Male Achievement (AAMA) program. AAMA consists of regularly scheduled class for Black, male students taught by Black, male teachers who focus on social-emotional training, African-American history, culturally relevant pedagogy, and academic support. In this study, Dee and Penner present quasi-experimental evidence that AAMA availability led to a significant reduction in drop-out rates for Black males, along with a smaller reduction for Black females, particularly in 9th grade.

Intergeneration mobility of immigrants in the US over two centuries

Using millions of father-son pairs spanning more than 100 years of U.S. history, Abramitzky et al. show that children of immigrants from nearly every country have higher rates of upward mobility than children with parents born in the United States. The mobility gap has remained relatively constant over time, despite dramatic shifts in sending countries and U.S. immigration policy. In the past, this advantage could be explained by immigrants moving to areas with better prospects for their children, along with the “under-placement” of the first generation in the income distribution. These findings are consistent with the “American Dream” and the idea that even poor immigrants can improve their children’s economic prospects.

The long-term effect of California’s 2004 Paid Family Leave Act on women’s careers: Evidence from US tax data

In this paper, Bailey et al. use tax data to evaluate the short-and long-term effects of California’s 2004 Paid Family Leave Act (PFLA) on women’s careers. The authors find that, following the implementation of PFLA, women were 18 percentage points more likely to use paid leave. Little evidence was found that PLFLA increased women’s employment, wage earnings, or attachment to employers. For new mothers, taking up PFLA was found to reduce employment by 7% and lower annual wages by 8% six to ten years after giving birth. Overall, PFLA reduced the number of children born and, by decreasing mothers’ time at work, increased time spent with children.

Top chart

This week’s top chart shows the effect of Alaska’s $5000 annual dividend payment on labor force participation. The Alaskan full-time employment rate has tracked with that of similar states since the dividend began. Indeed, instead of causing labor force participation to lag, extra spending may have promoted commerce that kept individuals in the work force. Additionally, the part-time employment rate rose. Much like the increase in full-time employment, this trend may be driven by an increase in commerce, which drives more people into the work force.

Choice opinion

“While gross domestic product has always had flaws, it used to be a measurement that captured income gains across the economy. Today, when policymakers look to gross domestic product as a measure of their success, they are not seeing the whole picture…in the decades since 1980, the aggregate measure of national income grew at an average of 1.3% annually — but this aggregate income growth went disproportionately to those at the top of the income ladder. For those in the top 10%, income rose by 2% while the top 1% enjoyed a whopping 2.9% rise in annual income. The bottom 90% saw its income rise by 1%…Instead of enacting policies that primarily benefit those at the top and calling it a success every quarter when the aggregate national income rises, we would have a more complete picture of what, if anything, trickles down to the rest of us” writes Heather Boushey in the New York Times.

Self-promotion

As housing affordability increasingly creates stress on middle-income families, local governments, philanthropies, and even employers are debating new strategies to address the problem. In the past year, Facebook, Google, Microsoft, and the Chan-Zuckerburg Initiative have pledged contributions ranging from $500 million to $1 billion to help build more middle-income housing in their respective backyards. In their new piece “Workforce housing and middle-income housing subsidies: A primer,” Jenny Schuetz and Tiffany Ford discuss the rationale for housing subsidies targeted to middle-income families, review past examples of policies referred to as “workforce housing,” and discuss some political and economic implications of these policies.