This week in Class Notes:
Verbal skills play a much greater role in explaining college enrollment and graduation than math skills
Math and verbal skills in early childhood are key determinants of future outcomes, yet their impact on educational attainment varies. To show this, Esteban Acuejo and Jonathan James use a large administrative dataset that tracks an entire cohort of public-school students in England from ages 5 to 22. They first find that math skill formation is positively impacted by verbal skills, but that math skills have no impact on the production of verbal skills. In turn, a given increase in verbal skills has three times the impact on college enrollment as a similar increase in math skills. Female students have stronger verbal skills than male students, and this gap is reflected in rates of college enrollment. Verbal skills also have a stronger impact on college graduation, for students in both STEM and non-STEM fields. Finally, the authors show that the importance of verbal skills on college attainment similarly applies to the U.S. educational system.
Female-headed rural families have smaller housing cost burdens than urban households, but more difficulty using government assistance for housing challenges
Female-headed households living in urban and rural areas have different housing cost burdens. Using a 2013 cross-sectional study from the American Housing Survey, Ebunoluwa Odeyemi and Kim Skobba find that despite their lower incomes, rural female households spend a smaller percent of their incomes on their housing, compared to those in urban areas. Affordable rural housing often comes in the form of mobile homes and multi-family units rather than rented homes. Children increase the odds of being cost-burdened by 20% among rural families and by 17% among urban families. Finally, receiving any form of government assistance in urban settings reduced housing cost burdens, but rural families needed more than two forms of safety net support to have affordable housing.
Tennessee’s mandatory waiting period for abortions led to more second-trimester abortions but fewer abortions overall
In 2015, Tennessee passed a law requiring women to make an additional trip to see a counselor and wait at least 48 hours before she could obtain an abortion. Some argue that a mandatory waiting period and second visit delays or prevents abortions by increasing associated costs, such as transportation, time off work, and childcare. Jason Lindo and Mayra Pineda-Torres use a difference-in-difference approach to estimate the causal impact of Tennessee’s policy on women’s abortion outcomes. They find that the policy led to a 53-69 percent increase in second-trimester abortions, but a reduction in abortions overall. The individual cost of delaying an abortion is estimated at $500. They also find that the largest increase in second-trimester abortions was in Shelby county, which has the highest poverty rates, lowest median income, and highest share of Black women.
This week’s top chart shows the record number of voluntary quits—up to 4.3 million workers—in the U.S. labor market in August 2021. These were highest in the leisure and hospitality sector. The tight labor market suggests that workers have been using the pandemic to reflect on which jobs they would actually prefer to return, especially in light of the spread of the Delta variant
“Employers over-rely on a bachelor’s degree as a convenient, even though not entirely reliable, signal that a person has some degree of intelligence, perseverance and sociability… [One solution is] less screening out of candidates just because they lack a bachelor’s degree. Then look for other signals of a candidate’s qualities. For example, give the candidate a test of the skills that the job truly requires. Accept a certificate of completion of a training program or an associate degree in lieu of a diploma from a four-year school,” writes Peter Coy on his interview with Bryon Auguste.
Self-promotion: A near universal and unconditional child tax credit should be a part of the U.S. social safety net
Melissa S. Kearney argues that the expanded Child Tax Credit, or a child allowance, should be a permanent feature of social policy to support families. Children who grow up in poverty should have some form of social insurance not only as a basic guarantee of welfare, but also because of the long-term social gains of early childhood investment. A near universal design would limit work disincentives, and fill a gap in the safety net by directing money to children whose parents have very low or no earnings. As Kearney concludes: “an unconditional child tax credit or a child allowance fits into a well-designed social safety net in our country”.
For your calendar: Virtual events related to the FTC’s public policy missions, promoting equity for children and youth, and improving the U.S. social safety net through tax policy.
Federal Trade Commission
November 4-5, 2021
Wednesday, November 10, 2021 3:00 PM to 4:30 PM EDT
National Tax Association
November 17-20, 2021