Daniel Shoag

Tracking employment shocks using mobile phone data

Can data from mobile phones be used to observe economic shocks and their consequences at multiple scales? Here we present novel methods to detect mass layoffs, identify individuals affected by them and predict changes in aggregate unemployment rates using call detail records (CDRs) from mobile phones. Using the closure of a large manufacturing plant as a case study, we first describe a structural break model to correctly detect the date of a mass layoff and estimate its size. We then use a Bayesian classification model to identify affected individuals by observing changes in calling behaviour following the plants closure. For these affected individuals, we observe significant declines in social behaviour and mobility following job loss. Using the features identified at the micro level, we show that the same changes in these calling behaviours, aggregated at the regional level, can improve forecasts of macro unemployment rates. These methods and results highlight promise of new data resources to measure microeconomic behaviour and improve estimates of critical economic indicators.

Why Has Regional Income Convergence in the U.S. Declined

The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.

Asset management in public DB and non-DB Pension Plans

State and local pension plans are increasingly moving from the traditional defined benefit (DB) model to non-DB models that generally allow for participant-directed investment. This shift has important implications for the management of the more than US

Efficacy of Prostate-Specific Antigen Screening: Use of Regression Discontinuity in the PLCO Cancer Screening Trial

3 trillion in assets held to finance public employee retirement benefits. To investigate these implications, we introduce new data from a nationwide survey of public DB and non-DB plans and a unique data set on thousands of individual investors in the state of Florida’ sd efined contribution (DC) plan. Using these sources, we explore how participant involvement in the public sector affects the distribution of asset class allocations, management fees, investment outcomes, and portfolio rebalancing at both the individual and aggregate levels. We found that there is little difference between the DB and non-DB plans in terms of asset mix, returns, and fees, except that DB plan have greater access and allocations to alternative investments. We also found that while the average individual DC plan participant allocated their asset similarly to the DB plan, black females and older white males, on average, invested on opposite tails of the risk spectrum.

Vasectomy and Risk of Prostate Cancer in a Screening Trial

Acquisition, analysis, or interpretation of data: Yu, Tian, Drilon, Borsu, Arcila, Ladanyi. Drafting of the manuscript: Yu, Tian, Drilon, Borsu, Arcila, Ladanyi. Critical revision of the manuscript for important intellectual content: Yu, Tian, Drilon, Riely, Arcila, Ladanyi. Interpretation of molecular results: Arcila. Obtained funding: Ladanyi. Administrative, technical, or material support: Yu, Tian, Drilon, Borsu. Study supervision: Drilon, Riely, Arcila, Ladanyi.

Land Use Regulations and Fertility Rates

Background: Vasectomy has been implicated as a risk factor for prostate cancer in multiple epidemiologic studies over the past 25 years. Whether this relationship is causal remains unclear. This study examines the association between vasectomy and prostate cancer in the Prostate, Lung, Colorectal and Ovarian (PLCO) Cancer Screening Trial, which randomized men to usual care or annual prostate cancer screening. Methods: We performed a retrospective analysis of 13-year screening and outcomes data from the PLCO trial. Multivariable Cox proportional hazards regression stratified by study arm and age at vasectomy was performed. Results: There was an increased risk of prostate cancer in men who had undergone a vasectomy and were randomized to the usual care arm of the study (adjusted HR, 1.11; 95% confidence interval, 1.03–1.20; P = 0.008). There was no association between vasectomy and diagnosis of prostate cancer in men randomized to the prostate cancer screening arm. Only men undergoing vasectomy at an older age in the usual care arm of the study, but not the prostate cancer screening arm, were at increased risk of being diagnosed with prostate cancer. Conclusions: Vasectomy was not associated with prostate cancer risk among men who were screened for prostate cancer as part of a clinical trial, but was associated with prostate cancer detection in men receiving usual care. Impact: The positive association between vasectomy and prostate cancer is likely related to increased detection of prostate cancer based on patterns of care rather than a biological effect of vasectomy on prostate cancer development. Cancer Epidemiol Biomarkers Prev; 26(11); 1653–9. ©2017 AACR.

Taking my talents to South Beach (and back)

Previous literature has shown that land use regulations influence where people choose to live within the United States by impacting housing prices. In this chapter, we study the impact of these same regulations on another component of population growth-fertility rates. First, we employ a dataset on the stringency of land restrictions using court based measures created by Ganong and Shoag (Why has regional income divergence in the U.S. declined?.Journal of Urban Economics, in press). We add to this separate cross-sectional measures of land use regulations from the American Institute of Planners, the Wharton Urban Decentralization Project survey, and the Wharton Residential Land Use Regulation Index (WRLURI). Combining this data with fertility data from the CDC and the Survey of Epidemiology and End Results data, we explore the impact of land use regulations on fertility at both the state and county level. We find a significant negative relationship between land use restrictions and fertility rates across all measures and geographies. Specifically, we find that land use regulations reduce fertility rates for teens and women in their 20’s while increasing the fertility rate for women in their 30’s or older to a lesser degree.

Rules versus home rule: Local government responses to negative revenue shocks

Veuger and Shoag study the local economic spillovers generated by LeBron JamesA¢Â€Â™ presence on a team in the National Basketball Association. They trace the impact a star of Mr. JamesA¢Â€Â™ caliber can have on economic activity by analyzing the impact his departures and arrivals had on business activity close to the Cleveland Cavaliers and Miami Heat stadiums.

Risky Choices: Simulating Public Pension Funding Stress with Realistic Shocks

Local governments rely heavily on sales tax revenue. We use national bankruptcies of big-box retail chains to study sudden plausibly exogenous revenue shortfalls. Treated localities respond by reducing spending on law enforcement and administrative services. We further study how cities with different degrees of autonomy vary in their response. Cities in home rule states react more swiftly by raising taxes or issuing bonds. A regression discontinuity analysis of cities in Illinois emphasizes that this effect of local autonomy is causal. Home rule cities do not abuse their discretion: their bond ratings are more likely to be strong.

Do Political Protests Matter? Evidence from the Tea Party Movement*

State and local government pension funds in the United States collectively manage a very large and diverse pool of assets to meet the even large sum of accrued liabilities. Recent research has emphasized that widely-used accounting practices, like matching discount rates to expected asset returns, understate the market value of these liabilities. Less work has explored the risks inherent in existing diverse set asset allocations, and the accounting practices used by most state and local pensions do not capture or report this risk at all. To explore the effect of asset market risk, we build and simulate a dynamic model of pension funding using a realistic return generating process. We find that the range of potential outcomes is very large, meaning that state and local governments need to prepare for an extremely wide range of possible funding shocks in the next few decades. Moreover, this wide range of outcomes makes the ultimate impact of policy choices – such as changing the discount rate or failing to sufficiently contribute to the fund – nonlinear and difficult to anticipate. Together, these findings suggest the need for more attention and reporting of these risks and the attendant range of possible outcomes by public plans.