Jeffrey Grogger

Market Wages and Youth Crime

To study the problem of widespread youth crime, I analyze a time‐allocation model in which consumers face parametric wages and diminishing marginal returns to crime. The theory motivates an econometric model that I estimate using data from the National Longitudinal Survey of Youth. My estimates suggest that youth behavior is responsive to price incentives and that falling real wages may have been an important determinant of rising youth crime during the 1970s and 1980s. Moreover, wage differentials explain a substantial component of both the racial differential in criminal participation and the age distribution of crime.

Changes in College Skills and the Rise in the College Wage Premium

The college wage premium for new labor market entrants rose sharply during the 1980s. We ask how much of this change arose from changes in the skill level of the typical college graduate. We find that skills attained prior to college, as measured by standardized test scores and high school grades, had no effect on the change in the college wage premium for men. In contrast, the returns to math ability rose considerably for women; failing to account for math skills thus substantially overstates the growth in the female college wage premium. Skills acquired in college, as reflected in the distribution of students across majors, had important effects on the relative wages of men. The trend away from low-skill subjects such as education and toward high-skill subjects such as engineering accounts for one-fourth of the rise in the male college wage premium.

THE EFFECTS OF TIME LIMITS, THE EITC, AND OTHER POLICY CHANGES ON WELFARE USE, WORK, AND INCOME AMONG FEMALE-HEADED FAMILIES

Of all of the welfare reforms that were implemented during the 1990s, time limits may represent the single greatest break from past policy. This paper expands on what is known about this important welfare reform measure by exploiting the predictions from Grogger and Michalopoulos (2003) to estimate the effects of time limits on welfare use, employment, labor supply, earnings, and income among female-headed families. Results based on data from the March Current Population Survey suggest that time limits have had important effects on welfare use and work, accounting for about one-eighth of the decline in welfare use and about 7 of the rise in employment since 1993. They have had no significant effect on earnings or income, however. The analysis also shows that the collective effects of other reforms have had important impacts on employment and labor supply. Furthermore, it identifies the Earned Income Tax Credit (EITC) as a particularly important contributor to both the recent decrease in welfare use and the recent increase in employment, labor supply, and earnings.

Welfare Dynamics under Time Limits

Among the most important changes brought about by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 are time limits, which provide consumers with an incentive to conserve their welfare benefits for future use. Among forward‐looking, expected‐utility‐maximizing consumers who face liquidity constraints and earnings uncertainty, economic theory predicts that the incentive to conserve should be strongest among families with the youngest children. We test this prediction using data from Florida’s Family Transition Program, a randomized welfare reform experiment. Our estimates generally exhibit the predicted age dependence, which suggests that time limits affect welfare use before they become binding. Our estimates indicate that, in the absence of other reforms that increased welfare use, FTP’s time limit would have reduced welfare receipt by 16 percent.

Local violence and educational attainment

Violence in and around schools has drawn increasing attention lately from both the public and policymakers. Despite the importance of the problem, however, research on this topic has been limited. In this paper I analyze how local violence affects high school graduation and college attendance. Using data from the High School and Beyond survey, I find that local violence has important effects. Moderate levels of violence reduce the likelihood of high school graduation by 5.1 percentage points on average, and lower the likelihood that a student will attend college by 6.9 percentage points.

Immigration and the Economic Status of African-American Men

The employment rate of black men, and particularly of low-skilled black men, fell precipitously between 1960 and 2000. At the same time, their incarceration rate rose. This paper examines the relation between immigration and these trends in employment and incarceration. Using data from the 1960–2000 US censuses, we find that a 10% immigration-induced increase in the supply of workers in a particular skill group reduced the black wage of that group by 2.5%, lowered the employment rate by 5.9 percentage points, and increased the incarceration rate by 1.3 percentage points.

THE EMERGENCE OF CRACK COCAINE AND THE RISE IN URBAN CRIME RATES

Despite widespread popular accounts that link crack cocaine to inner-city decay, little systematic research has analyzed how the emergence of crack affected urban crime. We study this question using FBI crime rates for 27 metropolitan areas and two sources of information on when crack first appeared in those cities. Using methods designed to control for unobserved differences among metropolitan areas, we find that the introduction of crack had substantial effects on crime. In the absence of crack cocaine, the 1991 peak in urban crime rates would have been approximately 10 lower, remaining below the previous peak levels of the early 1980s.

The impact of grading standards on student achievement, educational attainment, and entry-level earnings

Despite recent theoretical work and proposals from educational reformers, there is little empirical work on the effects of higher grading standards. In this paper we use data from the High School and Beyond survey to estimate the effects of grading standards on student achievement, educational attainment, and entry level earnings. We consider not only how grading standards affect average outcomes but also how they affect the distribution of educational gains by skill level and race/ethnicity. We find that higher standards raise test scores throughout the distribution of achievement, but that the increase is greatest toward the top of the test score distribution. Higher standards have no positive effect on educational attainment, however, and indeed have negative effects on high school graduation among blacks and Hispanics. We suggest a relative performance hypothesis to explain how higher standards may reduce educational attainment even as they increase educational achievement.

Testing for Racial Profiling in Traffic Stops From Behind a Veil of Darkness

The key problem in testing for racial profiling in traffic stops is estimating the risk set, or “benchmark,” against which to compare the race distribution of stopped drivers. To date, the two most common approaches have been to use residential population data or to conduct traffic surveys in which observers tally the race distribution of drivers at a certain location. It is widely recognized that residential population data provide poor estimates of the population at risk of a traffic stop; at the same time, traffic surveys have limitations and are more costly to carry out than the alternative that we propose herein. In this article we propose a test for racial profiling that does not require explicit, external estimates of the risk set. Rather, our approach makes use of what we call the “veil of darkness” hypothesis, which asserts that police are less likely to know the race of a motorist before making a stop after dark than they are during daylight. If we assume that racial differences in traffic patterns, driving behavior, and exposure to law enforcement do not vary between daylight and darkness, then we can test for racial profiling by comparing the race distribution of stops made during daylight to the race distribution of stops made after dark. We propose a means of weakening this assumption by restricting the sample to stops made during the evening hours and controlling for clock time while estimating daylight/darkness contrasts in the race distribution of stopped drivers. We provide conditions under which our estimates are robust to a substantial nonreporting problem present in our data and in many other studies of racial profiling. We propose an approach to assess the sensitivity of our results to departures from our maintained assumptions. Finally, we apply our method to data from Oakland, California and find that in this example the data yield little evidence of racial profiling in traffic stops.

The Effect of Welfare Payments on the Marriage and Fertility Behavior of Unwed Mothers: Results from a Twins Experiment

We study the relationship between welfare benefits and the time to first marriage and time to next birth among initially unwed mothers. We use twin births to generate random within‐state variation in benefits, effectively controlling for unobservables that may confound the relationship between welfare payments and behavior. Higher base welfare benefits (1) lead unwed white mothers to forestall their eventual marriage and (2) lead unwed black mothers to hasten their next birth. The magnitudes of these effects are fairly modest. Moreover, we find no evidence that the marginal benefit paid at the birth of an additional child—the focus of the family cap debate—affects fertility.