Goldman School of Public Policy - University of California, Berkeley

Selected Publications

  • The EITC: A Key Policy to Support Families Facing Wage Stagnation

    IRLE Policy Brief, Institute for Research on Labor and Employment, UC Berkeley, January 2017.

  • Do Politicians Use Policy to Make Politics? The Case of Public-Sector Labor Laws

    Anzia, Sarah F., and Terry M. Moe. 2016. "Do Politicians Use Policy to Make Politics? The Case of Public-Sector Labor Laws." American Political Science Review 110 (4): 763-777.

    Schattschneider’s insight that “policies make politics” has played an influential role in the modern study of political institutions and public policy. Yet if policies do indeed make politics, rational politicians have opportunities to use policies to structure future politics to their own advantage—and this strategic dimension has gone almost entirely unexplored.  Do politicians actually use policies to make politics?  Under what conditions?  In this paper, we develop a theoretical argument about what can be expected from strategic politicians, and we carry out an empirical analysis on a policy development that is particularly instructive: the adoption of public-sector collective bargaining laws by the states during the 1960s, 1970s, and early 1980s—laws that fueled the rise of public-sector unions, and “made politics” to the advantage of Democrats over Republicans.  

  • The Effect of Disability Insurance Payments on Beneficiaries’ Earnings

    With Timothy Moore and Alexander Strand. Forthcoming, American Economic Journal: Economic Policy.

    A crucial issue is whether social insurance affects work decisions through income or substitution effects. We examine this in the context of U.S. Social Security Disability Insurance (DI), exploiting discontinuous changes in the benefit formula with a regression kink design to estimate the income effect of payments on earnings and employment. Using administrative data on all new DI beneficiaries from 2001 to 2007, our preferred estimate is that an increase in DI payments of one dollar causes an average decrease in beneficiaries’ earnings of twenty cents and that annual employment rates decrease by 1.3 percentage points per $1,000 of DI payments. These findings suggest that the income effect accounts for a majority of DI-induced reductions in earnings.

  • Child Poverty, the Great Recession, and the Social Safety Net in the United States

    Marianne Bitler, Hilary Hoynes and Elira Kuka, Forthcoming, Journal of Policy Analysis and Management.

    In this paper, we comprehensively examine the effects of the Great Recession on child poverty, with particular attention to the role of the social safety net in mitigating the adverse effects of shocks to earnings and income. Using a state panel data model and data for 2000 to 2014, we estimate the relationship between the business cycle and child poverty, and we examine how and to what extent the safety net is providing protection to at-risk children. We find compelling evidence that the safety net provides protection; that is, the cyclicality of after-tax-and-transfer child poverty is significantly attenuated relative to the cyclicality of private income poverty. We also find that the protective effect of the safety net is not similar across demographic groups, and that children from more disadvantaged backgrounds, such as those living with non-Hispanic black or Hispanic, single, or particularly immigrant household heads-or immigrant spouses, experience larger poverty cyclicality than non-Hispanic white, married, or native household heads with native spouses. Our findings hold across a host of choices for how to define poverty. These include measures based on absolute thresholds or more relative thresholds. They also hold for measures of resources that include not only cash and near cash transfers net of taxes but also several measures of medical benefits.

  • Do In-Work Tax Credits Serve as a Safety Net?

    Forthcoming, Journal of Human Resources

    The cash and near cash safety net in the U.S. has undergone a dramatic transformation in the past fifteen years. Federal welfare reform has led to the “elimination of welfare as we know it” and several tax reforms have substantially increased the role of “in-work”' assistance. In 2012, we spent more than 7 dollars on the Earned Income Tax Credit (EITC) for every dollar spent on cash benefits through Temporary Assistance for Needy Families (TANF), whereas in 1994 on the eve of federal welfare reform these programs were about equal in size. In this paper, we evaluate and test whether the EITC demonstrates a defining feature of a safety net program—that it responds to economic need. In particular, we explore how EITC participation and expenditures change with the business cycle. The fact that the EITC requires earned income leads to a theoretical ambiguity in the cyclical responsiveness of the credit. We use administrative IRS data to examine the relationship between business cycles and the EITC program. Our empirical strategy relies on exploiting differences in the timing and severity of economic cycles across states. The results show that higher unemployment rates lead to an increase in EITC recipients and total dollar amounts of credits for married couples. On the other hand, the effect of business cycles on use of the EITC is insignificant for single individuals, whether measured by the number of recipients or expenditures. Estimates that further cut by education show that the protective effects of the EITC are concentrated among those with higher skills (and potential earnings). In sum, our results show that the EITC serves to mitigate the effects of income shocks for married couples with children and other groups likely to have moderate earnings, but does not do so for the majority of recipients—single parents with children. The patterns we identify are consistent with the predictions of static labor supply theory, which we confirm with an analysis of earnings, and with expectations about how economic shocks are likely to vary across family type and skill group.

  • Can Variation in Subgroups' Average Treatment Effects Explain Treatment Effect Heterogeneity? Evidence from a Social Experiment

    Marianne Bitler, Jonah Gelbach and Hilary Hoynes, Forthcoming, Review of Economics and Statistics.

    In this paper, we assess whether welfare reform affects earnings only through mean impacts that are constant within but vary across subgroups. This is important because researchers interested in treatment effect heterogeneity typically restrict their attention to estimating mean impacts that are only allowed to vary across subgroups. Using a novel approach to simulating treatment group earnings under the constant mean-impacts within subgroup model, we find that this model does a poor job of capturing the treatment e ect heterogeneity for Connecticut's Jobs First welfare reform experiment. Notably, ignoring within-group heterogeneity would lead one to miss evidence that the Jobs First experiment's effects are consistent with central predictions of basic labor supply theory.

  • Strengthening Temporary Assistance for Needy Families

    The Hamilton Project, Policy Proposal 2016-04, May 2016

    The Great Recession was the longest and by some measures the most severe economic downturn in the postwar period. The experience revealed important weaknesses in the central cash welfare program for families with children in the United States, Temporary Assistance for Needy Families (TANF). First, TANF fails to reach a sizeable share of needy families, does little to reduce deep poverty, and is not targeted to the most needy. Second, in its current form the program does not automatically expand during economic downturns, when the need for the program is likely greatest and the additional consumer spending would be particularly welcome. To strengthen TANF, we propose reforms to expand its reach, improve its responsiveness to cyclical downturns, and enhance its transparency. Together these reforms would make the program more effective in protecting families from deep poverty.

  • The Supplemental Nutrition Assistance Program: A central component of the social safety net

    IRLE Policy Brief, Institute for Research on Labor and Employment, UC Berkeley, April 2016.