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Betsey Stevenson

Professor of Public Policy and Economics




Research

Law and Economics

Trust in Public Institutions over the Business Cycle

with Justin Wolfers

American Economic Review Papers and Proceedings, 101(3) 281-287, May 2011

We document that trust in public institutions and particularly trust in banks, business and government has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy of the Great Recession, and those countries whose unemployment grew the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial sector. Finally, analysis of several repeated cross-sections of confidence within U.S. states yields similar qualitative patterns, but much smaller magnitudes in response to state-specific shocks.

Download data and Stata programs

Beyond the Classroom: Using Title IX to Measure the Return to High School Sports

Review of Economics and Statistics, 92(2) 284-301, May 2010.

Previous research has found that male high school athletes experience better outcomes than non-athletes, including higher educational attainment, employment rates, and wages. However, students self-select into athletics so these may be selection effects rather than causal effects. To address this issue, I examine Title IX which provides a unique quasi experiment in female athletic participation. Between 1972 and 1978 U.S. high schools rapidly increased their female athletic participation rates to approximately the same level as their male athletic participation rates in order to comply with Title IX. This paper uses variation in the level of boys' athletic participation across states before Title IX as an instrument for the change in girls' athletic participation over the 1970s. Analyzing differences in outcomes for both the pre- and post-Title IX cohorts across states, I find that a 10-percentage point rise in state-level female sports participation generates a 1 percentage point increase in female college attendance and a 1 to 2 percentage point rise in female labor force participation. Furthermore, greater opportunities to play sports leads to greater female participation in previously male-dominated occupations, particularly for high-skill occupations.

Title IX and the Evolution of High School Sports

Contemporary Economic Policy, 25(4), October 2007. [Lead Article]

The passage of Title IX, the 1972 Education Amendments to the Civil Rights Act, expanded high school athletic opportunities to include girls, revolutionizing mass sports participation in the United States. This paper analyzes high school athletic participation in the United States and how sports offerings for boys and girls changed subsequent to thepassage of this legislation. Girls' sports participation rose dramatically both following the enactment of Title IX and subsequent to enhancements to its enforcement. Approximately half of all girls currently participate in sports during high school; however, there remains a substantial gap between girls and boys participation in many states. States' average education level and social attitudes regarding Title IX and women's rights are correlated with this remaining gender gap. Examining individual high school students, sports participation is seen more frequently among those with a privileged background: white students with married, wealthy, educated parents are more likely to play sports. This finding points to an overlooked fact: while Title IX benefited girls by increasing the opportunity to play sports, these benefits were disproportionately reaped by those at the top of the income distribution.

Marriage, Divorce and Behavior within Famlies

Trends in Marital Stability

with Justin Wolfers

Research Handbook in the Law and Economics of the Family, Edward Elgar Press, 2011.

Recent reports about the stability of marriages appear to yield conflicting conclusions. We reconcile these estimates, showing that data from several sources uniformly point to increasing marital stability among those married since the mid-late 1970s.

Women's Education and Family Behavior: Trends in Marriage, Divorce and Fertility

with Adam Isen

In John Shoven (ed), Demography and the Economy, University of Chicago Press, 2010.

This paper examines how marital and fertility patterns have changed along racial and educational lines for men and women. Historically women with more education have been the least likely to marry and have children, but this marriage gap has eroded as the returns to marriage have changed. Marriage and remarriage rates have risen for women with a college degree relative to women with fewer years of education. However, the patterns of, and reasons for, marriage have changed. College educated women marry later, have fewer children, are less likely to view marriage as "financial security", are happier in their marriages and with their family life, and are not only the least likely to divorce, but have had the biggest decrease in divorce since the 1970s compared to women without a college degree. In contrast, there have been fewer changes in marital patterns by education for men.

Divorce Law and Women's Labor Supply

Journal of Empirical Legal Studies, 5(4), December 2008.

Divorce law changes made in the 1970s affected marital formation, dissolution, and bargaining within marriage. By altering the terms of the marital contract these legal changes impacted the incentives for women to enter and remain in the labor force. Whereas earlier work had suggested that the impact of unilateral divorce on female employment depended critically on laws governing property division, I show that these results are not robust to alternative specifications and controls. I find instead that unilateral divorce led to an increase in both married and unmarried female labor force participation, regardless of the pre-existing laws regarding property division.

Marriage and Divorce: Changes and their Driving Forces

with Justin Wolfers

Published, Journal of Economic Perspectives, 21(2) 27-52, Spring 2007.

Previously: NBER Working Paper #12994

We document marriage and divorce behavior, comparing trends through the past 150 years and outcomes across demographic groups and countries. While divorce rates have risen over the past 150 years, they have been falling for the past quarter century. Marriage rates have also been falling, but more strikingly, the importance of marriage at different points in the life cycle has changed, reflecting rising age at first marriage, rising divorce followed by high remarriage rates, and a combination of increased longevity with a declining age gap between husbasnds and wives. Cohabitation has also become increasingly important, emerging as a widely used step on the path to marriage. Out-of-wedlock fertility has also risen, consistent with declining "shotgun marriages". Compared with other countries, marriage maintains a central role in American life. We then turn to documenting some of the driving forces causing these changes in the marriage market: the rise of the pill and women's control over their own fertility; sharp changes in wage structure, including a rise in inequality and partial closing of the gender wage gap; dramatic changes in home production technologies; and the emergence of the internet as a new matching technology. Finally, we discuss how these facts should inform family policy debates.

The Evolution of the American Family: An Economic Interpretation

American Journal of Family Law, 22(3), Fall 2008

The last few decades have seen enormous changes in family forms. The institution of the family has been influenced by an array of socio-economic, regulatory, and even technological forces. Families involving same-sex marriage, divorce, remarriage, and planned childbirth or semi-permanent cohabitation in the absence of marriage have gained social acceptability if not legal rights. Additionally, the institutions of marriage and family have by no means come to rest. The debate among policymakers and the public continues over the effect of divorce on children, whether unilateral divorce or abortion laws need to be revised or overturned, and whether long-term cohabitants or same-sex partners have a right to employment or death benefits. As these debates become disputes and find their way to the legal system, the family lawyer can play a vital role in shaping the future of the family.

The Impact of Divorce Laws on Marriage-Specific Capital

Journal of Labor Economics, 25(1), January 2007.

Abstract: This article considers how divorce law alters the incentives for couples to invest in their marriage, focusing on the impact of unilateral divorce laws on investments in new marriages. Differences across states between 1970 and 1980 provide useful quasi-experimental variation with which to consider incentives to invest in several types of marriage specificcapital: spouse's education, children, household specialization, and home ownership. I find that adoption of unilateral divorce regardless of the prevailing property-division laws reduces investment in all types of marriage-specific capital considered except home ownership. In contrast, results for home ownership depend on the underlying property division laws.

Bargaining in the Shadow of the Law: Divorce Laws and Family Distress

with Justin Wolfers

Quarterly Journal of Economics 121(1), February 2006

(Previously circulated under the title "Til Death Do Us Part: The Effects of Divorce Laws on Suicide, Domestic Violence and Intimate Homicide")

Over the past thirty years changes in divorce law have significantly increased access to divorce. The different timing of divorce law reform across states provides a useful quasi-experiment with which to examine the effects of this change. We analyze state panel data to estimate changes in suicide, domestic violence and spousal murder rates arising from the change in divorce law. Suicide rates are used as a quantifiable measure of happiness and well-being, albeit one that focuses on the extreme lower tail of the distribution. We find a large, statistically significant, and econometrically robust decline in the number of women committing suicide following the introduction of unilateral divorce. No significant effect is found for men. Domestic violence is analyzed using both data on family conflict resolution, and intimate homicide rates. The results indicate a large decline in domestic violence for both men and women in states that adopted unilateral divorce. We find suggestive evidence that unilateral divorce led to a decline in females murdered by their partners, while the data revealed no discernible effects for men murdered. In sum, we find strong evidence that legal institutions have profound real effects on outcomes within families.

Link to Data appendix, dataset and Stata programs.

Labor Markets

What explains the rapid increase in childcare time: A discussion of Gary Ramey and Valerie A. Ramey's 'The Rug Rat Race'

with Daniel W. Sacks

Brookings Papers on Economic Activity, Spring 2010

Stata 11 dataset, do file, and documentation (zip, 522KB)

Inaccurate Age and Sex Data in Census PUMS Files: Evidence and Implications

Public Opinion Quarterly, 74(3), 551-569, Fall 2010

We discover and document errors in public use microdata samples ("PUMS files") of the 2000 Census, the 2003-2006 American Community Survey, and the 2004-2009 Current Population Survey. For women and men ages 65 and older, age- and sex-specific population estimates generated from the PUMS files differ by as much as 15% from counts in published data tables. Moreover, an analysis of labor force participation and marriage rates suggests the PUMS samples are not representative of the population at individual ages for those ages 65 and over. PUMS files substantially underestimate labor force participation of those near retirement ages and overestimate labor force participation rates of those at older ages. These problems were an unintentional by-product of the misapplication of a newer generation of disclosure avoidance procedures carried out on the data. The resulting errors in the public use data could significantly impact studies of people ages 65 and older, particularly analyses of variables that are expected to change by age.

Full article also available online via Public Opinion Quarterly website.

Update on the Current Population Survey, from the Census Bureau

The Impact of the Internet on Worker Flows

The Internet has increased the ease and availability of employment information, but a question remains as to how, and if, this increased information has changed employment outcomes. This research examines the impact of the Internet on worker flows and job matching. While previous research found a negative impact of the Internet on unemployment duration, this research demonstrates the importance of including flows between employment to employment in an analysis of the impact of Internet. Over 80 percent of online job seekers are employed at the time of their job seeking and Internet users, conditional on observables, are more likely to change jobs and are less likely to transition to unemployment. Furthermore, those who use the Internet have greater wage growth when changing jobs. I use several approaches to attempt to isolate an exogenous source of Internet use in order to isolate the causal relationship between the Internet, job change, and wage growth. The first is to examine state-level aggregate data. As states' Internet penetration rates rose differentially through the 1990's so did employer-to-employer worker flows with a 10 percentage point rise in state-level internet penetration leading to a 5% increase in employer-to-employer flows. While it can be difficult to disentangle whether changes in state labor markets reflect Internet usage or drive Internet adoption, I find a useful instrument that isolates the causal mechanism: the Internet has diffused in much the same way as past innovations, and hence average state ownership rates of household appliances in 1960 describe Internet adoption patterns over the past decade.

The Internet and Job Search

Studies of Labor Market Intermediation, David Autor (ed.), University of Chicago Press, 2009.

This paper examines how the Internet has impacted job search behavior. Examining those who use the Internet for job seeking purposes, I show that the vast majority are currently employed. These employed job seekers are more likely to leave their current employer and are more likely to make an employment-to-employment transition. Examining the unemployed, I find that over the past ten years the variety of job search methods used by the unemployed has increased and job search behavior has become more extensive. Furthermore, the Internet has led to reallocation of effort among various job search activities.

Health Insurance Coverage of People in the Ten Years before Medicare Eligibility

with Katherine Swartz

Ensuring Health and Income Security for an Aging Workforce, Peter Budetti, Janice Gregory, Richard Burkhauser and Allan Hunt (eds), National Academy of Social Insurance (2001).

This paper examines the current 55 to 64-year-old cohort's economic status and financial preparation for their upcoming retirement. The age group in question has been of particular concern to policy makers as they are the first group of the baby-boom generation to become eligible for Medicare and Social Security.This paper evaluates relevant policy issues and potential solutions through a thorough examination of this group's current financial characteristics.

Subjective Well-Being

Subjective Well-Being and Income: Is There Any Evidence of Satiation?

with Betsey Stevenson

Forthcoming, American Economic Review, Papers and Proceedings, May 2013

Many scholars have argued that once basic needs have been met, higher income is no longer associated with higher in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of "basic needs" and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.

Longer working paper version, which has more detail.

The New Stylized Facts About Income and Subjective Well-Being

with Daniel Sacks and Betsey Stevenson

Emotion, 12(6) 1181-1187, December 2012.

Economists in recent decades have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related.

Subjective and Objective Indicators of Racial Progress

with Justin Wolfers

Journal of Legal Studies, 41(2) 459-493, June 2012

Subjective well-being data reveal that blacks are less happy than are whites. However, much of this racial gap in happiness has closed over the past 35 years. We investigate measures of subjective well-being that indicate that the well-being of blacks has increased both absolutely and relative to whites. These changes in well-being are found across various datasets and measures of subjective well-being. However the gains in happiness are concentrated among women and those living in the south. While the opportunities and achievements of blacks have improved over this period, the happiness gains far exceed that which can be attributed to these objective improvements.

The New Stylized Facts About Income and Subjective Well-Being

with Daniel Sacks and Justin Wolfers

Emotion, 12(6) 1181-1187, December 2012.

Economists in recent decades have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related.

Subjective Well-Being, Income, Economic Development and Growth

Development Challenges in a Post-Crisis World, World Bank ABCDE Conference Volume, 2010

with Daniel W. Sacks and Justin Wolfers

We explore the relationships between subjective well-being and income, as seen across individuals within a given country, between countries in a given year, and as a country grows through time. We show that richer individuals in a given country are more satisfied with their lives than are poorer individuals, and establish that this relationship is similar in most countries around the world. Turning to the relationship between countries, we show that average life satisfaction is higher in countries with greater GDP per capita. The magnitude of the satisfaction-income gradient is roughly the same whether we compare individuals or countries, suggesting that absolute income plays an important role in influencing well-being. Finally, studying changes in satisfaction over time, we find that as countries experience economic growth, their citizens' life satisfaction typically grows, and that those countries experiencing more rapid economic growth also tend to experience more rapid growth in life satisfaction. These results together suggest that measured subjective well-being grows hand in hand with material living standards.

Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox

with Justin Wolfers

Brookings Papers on Economic Activity, Spring 2008.

The "Easterlin paradox" suggests that there is no link between a society's economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

Download datasets and code

A digestible summary (six parts): 1, 2, 3, 4, 5, 6.

Happiness Inequality in the United States

with Justin Wolfers

Journal of Legal Studies, 37(S2), June 2008

This paper examines how the level and dispersion of self-reported happiness has evolved over the period 1972-2006. While there has been no increase in aggregate happiness, inequality in happiness has fallen substantially since the 1970s. There have been large changes in the level of happiness across groups: Two-thirds of the black-white happiness gap has been eroded, and the gender happiness gap has disappeared entirely. Paralleling changes in the income distribution, differences in happiness by education have widened substantially. We develop an integrated approach to measuring inequality and decomposing changes in the distribution of happiness, finding a pervasive decline in within-group inequality during the 1970s and 1980s that was experienced by even narrowly-defined demographic groups. Around one-third of this decline has subsequently been unwound. Juxtaposing these changes with large rises in income inequality suggests an important role for non-pecuniary factors in shaping the well-being distribution.

Download dataset and programs

A digestible summary (in three parts): 1, 2, 3

The Paradox of Declining Female Happiness

with Justin Wolfers

American Economic Journal: Economic Policy, August 2009

By most objective measures the lives of women in the United States have improved over the past 35 years, yet we show that measures of subjective well-being indicate that women's happiness has declined both absolutely and relative to male happiness. The paradox of women's declining relative well-being is found examining multiple countries, datasets, and measures of subjective well-being, and is pervasive across demographic groups. Relative declines in female happiness have eroded a gender gap in happiness in which women in the 1970s typically reported higher subjective well-being than did men. These declines have continued and a new gender gap is emerging—one with higher subjective well-being for men. Our findings raise provocative questions about the contribution of the women's movement to women's welfare and about the legitimacy of using subjective well-being to assess broad social changes.

Data appendix and Stata programs