Research
Working papers
Did Decreasing Residential Segregation Reduce Racial Wealth Inequality? [Latest version]
Following the Fair Housing Act (FHA), which ended lawful housing discrimination in the US in 1968, racial residential segregation declined rapidly, and Black families started to accumulate housing wealth at a faster pace than Whites. In this paper, I examine whether the FHA could jointly explain these two phenomena, and I simulate how the FHA affected racial wealth inequality. I first present three stylized facts, which show that during the 1970s, racial residential segregation started to decline, the relocation of Black families from Black neighborhoods intensified, and average housing wealth increased rapidly among Black families. To investigate whether the FHA supported these changes, I estimate a heterogeneous agent life-cycle OLG model with spatial equilibrium and endogenous house prices. With this model, I simulate how the FHA affected families’ relocation across neighborhoods, neighborhood-level house prices, and the Black and White wealth distribution. Based on my simulation results, the FHA could explain the observed relocation patterns, the decreasing residential segregation, and partly the increasing housing wealth of Black families. My results suggest that the FHA substantially decreased racial wealth inequality at the top while, somewhat unexpectedly, it increased racial wealth inequality between the 2nd and 7th deciles of the wealth distribution.
Does Earlier Return to Work Help Mothers’ Career? Evidence via the Substitution Effect of Parental Leave [Working paper] (Submitted)
with Anikó Bíró, Lili Márk, and Tímea Laura Molnár
Does earlier return to work after childbirth affect mothers’ labor market trajectories? In this paper, we exploit a unique Hungarian policy reform that allowed mothers to keep maternity benefits even if they resumed work before their child turned two, creating a financial incentive to return earlier without reducing benefit levels. Such unique setting enables us to isolate the Substitution Effect inherent in Paid Parental Leave and to provide its first estimates. Using an Event Study design and administrative linked employer-employee data, we find a 2.8 percentage point (28 percent) rise in employment 19–24 months after childbirth, with no impact on later births or long-term employment propensities. 3–5 years after childbirth, eligible mothers tend to sort into firms with higher wage premiums, but into roles with fewer leadership responsibilities, lower time pressure or consequences of error, and less need for analytical thinking. Our results are consistent with mothers having an income target and trading off wages with job amenities, suggesting that earlier return to work shapes their careers. We find wage increases for some – mothers who give birth at an older age and live in Budapest – despite sorting into less managerial jobs, while those initially in lower-paying firms tend to move up, albeit into less managerial, but predictable jobs with a regular schedule.
Work in progress
Parental Resources and Major Choice
with Tyler Radler and Nikhil Rao
Since parental resources have been shown to insure against labor market risks informally, these resources might influence students’ human capital investment decisions. In this paper, we study how parental housing wealth affects children’s college major choices by combining surveys of United States undergraduates from the Higher Education Research Institute and spatial variation in housing demand growth during the 2000s housing boom. Using the structural break in three-digit zip-code-level house prices between 2000 and 2006 as an instrument for house price changes, we find that a one standard deviation increase in house prices increases enrollment in high-paying majors by 0.7 p.p, which change is driven by students whose parents are less likely to be homeowners. In contrast, in the case of a similar house price increase, students whose parents are the most likely to own homes decrease their enrollment in high-paying majors by 1.0 p.p. and increase their participation in majors with more volatile future earnings by 1.0 p.p.
The Impact of Slum Clearance on the Cleared: Evidence from US Public Housing
with Mel Stephens and Yvette Zhang