Youth Labor Market

November 12, 2016
David Card of the University of California, Berkeley, Organizer

Jesse Rothstein, University of California at Berkeley and NBER

Inequality of Educational Opportunity? Schools as Mediators of the Intergenerational Transmission of Income

Chetty et al. (2014) document wide geographic variation in intergenerational income mobility, with children from low-income families achieving much better outcomes, relative to their neighbors from higher-income families, in Salt Lake City and Los Angeles than in Cincinnati. A plausible mechanism is school quality. Rothstein uses data from several national surveys to investigate whether commuting zones (CZs) where parents' incomes are strongly related to children's incomes also exhibit strong relationships of parental income to measures of children's human capital accumulation, such as educational attainment, test scores, and non-cognitive skills. CZs with more income mobility indeed tend to have somewhat higher mobility as measured by children's educational attainment. They also tend to have lower returns to education. By contrast, CZ income mobility does not appear correlated with non-cognitive returns to parental income, and the correlation with children's achievement is small and roughly the same when achievement is measured in Kindergarten as when it is measured in high school. There is thus little evidence that differences in the quality of K-12 schooling are a key mechanism driving variation in intergenerational mobility. Access to college may play a larger role, but is also not a dominant factor. The largest part of the variation derives from direct impacts of parental income on children's income controlling for human capital. This points to job networks or the structure of the local labor market as plausible mechanisms.

Joseph Altonji, Yale University and NBER, and Richard Mansfield, Cornell University

Quantifying Family, School and Location Effects in the Presence of Complementarities and Sorting

Janna Johnson, University of Minnesota, and Samuel Schulhofer-Wohl, Federal Reserve Bank of Minnesota

The Declining Geographic Mobility of U.S. Youth: Explanations and Implications

Johnson and Schulhofer-Wohl revisit the debate over decreasing geographic mobility and its impact on the U.S. labor market by measuring migration in continuous rather than discrete time among two cohorts of young adults. Authors reproduce previous studies' findings that migration has declined when measured at an annual frequency. However, their new approach reveals an increase in migration at higher frequencies. Young adults in the late 1990s and early 2000s were more likely than young adults in the 1980s and early 1990s to try out a new location for less than a year and then return to their original location. This increase in high-frequency return migration suggests that it is becoming easier for young adults to move and that moving costs are not the cause either of deteriorating youth labor market outcomes or of the widely studied decrease in annual migration rates. Rather, Johnson and Schulhofer-Wohl find that migration has become negatively associated with the probability of employment, suggesting that recent migrants face greater labor market frictions at the destination, relative to the previous generation.

Steven Raphael, University of California at Berkeley and NBER, and Sandra Rozo, USC, Marshall School of Business

Racial Disparities in the Acquisition of Juvenile Arrest Records

Using administrative data for California, Raphael and Rozo first estimate the effect of a prior booked arrest on the likelihood that a future interaction with law enforcement results in a formal booked arrest exploiting the discontinuous increase in the bookings probability at age 18. This analysis reveals evidence of a large causal effect of a prior booked arrest on the likelihood that a future arrest is booked rather than cited on the order of 11 percentage points. The researchers then document very large racial and ethnic disparities in the propensity of law enforcement to formally book, and thus officially record juvenile arrests. A fair share of the black-white disparity can be attributed to differences in arrest offense severity and arrest history, though this is not true for Hispanic-white disparities. In addition, a very large share of the raw differences can be explained by differences in practice between law enforcement agencies that tend to arrest minority youth and law enforcement agencies that tend to arrest white youth. Racial disparities in the propensity to book arrests tend to be largest for offender age ranges, offenses, and in department where the greatest discretion is exercised. The researchers' data reveal a surprisingly high fraction of youth who have prior interactions with the police. Focusing specifically on the 1990 to 1993 birth cohorts, the unduplicated counts of individuals with at least one juvenile arrest in the administrative data set amount to approximately two-thirds the population of African Americans in this birth cohort observed in the 2013 American Community Survey, 28 percent of the Hispanic population, and 20 percent of the white population. The comparable estimate for those with booked arrests (arrests that will appear on criminal history records) are 34 percent of black youth, 13 percent of Hispanic youth, and 8 percent of white youth. Closing the bookings rate differential would narrow the differentials in prevalence rates somewhat (by between 8 and 20 percent for the black-white gap). However, inter-racial differences in the overall frequency of interactions with the police as well as differences in the average recorded severity of the underlying incidents explain the lion’s share of racial disparities in the prevalence of a juvenile arrest record among young adults.

Till von Wachter, University of California at Los Angeles and NBER, and Hannes Schwandt, University of Zurich

The Effects of Graduating High School in Recessions and Booms on Early Career Outcomes and Long Term Earnings

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