Lucie Schmidt

Gender, Marriage, and Asset Accumulation in the United States

Wealth accumulation has important implications for the relative well-being of households. This article describes how household wealth in the United States varies by gender and family type. Evidence is found of large differences in observed wealth between single-female-headed households and married couples. Although some of this gap reflects differences in observable characteristics correlated with gender and wealth -- such as position in the life cycle, education, and family earnings -- controlling for these characteristics reduces but does not eliminate the estimated wealth gap. The wealth holdings of single females in the US, controlling for these same characteristics, are also significantly lower than the wealth holdings of single males. In contrast, observed wealth gaps between genders in a sub-sample of young households disappear when controlling for observable characteristics, suggesting either that in the US these gaps are disappearing for younger households or that these gaps do not emerge until later in life.

Risk Preferences and the Timing of Marriage and Childbearing

The existing literature on marriage and fertility decisions pays little attention to the roles played by risk preferences and uncertainty. However, given uncertainty regarding the availability of suitable marriage partners, the ability to contracept, and the ability to conceive, women’s risk preferences might be expected to play an important role in marriage and fertility timing decisions. By using data from the Panel Study of Income Dynamics (PSID), I find that measured risk preferences have a significant effect on the timing of both marriage and fertility. Highly risk-tolerant women are more likely to delay marriage, consistent with either a search model of marriage or a risk-pooling explanation. In addition, risk preferences affect fertility timing in a way that differs by marital status and education, and that varies over the life cycle. Greater tolerance for risk leads to earlier births at young ages, consistent with these women being less likely to contracept effectively. In addition, as the subgroup of college-educated, unmarried women nears the end of their fertile periods, highly risk-tolerant women are likely to delay childbearing relative to their more risk-averse counterparts and are therefore less likely to become mothers. These findings may have broader implications for both individual and societal well-being.

Infertility Insurance Mandates and Fertility

Infertility is considered by the medical community to be a disease of the reproductive system. It currently affects over 6 million individuals, and one in ten couples cannot conceive without medical assistance. The psychological effects of infertility have been compared to the effects of other diseases such as cancer and heart disease (e.g., Anne T. Fidler and Judith Bernstein, 1999), and the financial costs of treatment can be quite large. However, only 25 percent of all health-plan sponsors provide coverage for infertility services. In response to a perceived need for coverage, legislation was introduced at the federal level in 2003 that would require health plans to provide infertility benefits. As the fraction of the population affected by infertility continues to rise, there are likely to be continued efforts to mandate coverage. Understanding the costs and benefits of these policies thus becomes increasingly important. The first component of a full analysis is to determine whether these mandates will actually have an effect on fertility. By reducing the price of infertility treatment, one might expect to see an increase in utilization of treatments. This could be true if the mandate expands access to individuals who previously could not afford treatment, or if individuals who were previously receiving treatment now choose to consume higher quantities (or a higher quality) of treatment. However, it is also possible that these mandates have no effect on access or on treatment consumed but simply provide windfall gains to those individuals who would have purchased treatment in the absence of insurance coverage. Finally, mandates may also have dynamic effects on the timing of births. Individuals could seek treatment earlier, which is beneficial from a medical perspective. Alternatively, individuals could further delay childbearing, with the knowledge that they will ultimately be covered. In this paper, I ask the first-order question of whether the mandated insurance coverage of infertility treatment has affected birth rates. As of 2003, 15 states have enacted some form of infertility insurance mandate. Using a differencein-differences approach, I exploit variation in the enactment of mandates both across states and over time and identify control groups that should not have been affected by infertility coverage. My results suggest that the mandates increase firstbirth rates for women over age 35 by 32 percent.

Immigrant-Native Fertility and Mortality Differentials in the United States

Immigrants have been discussed as a means of alleviating fiscal pressures on Social Security. Their long-term impact on the Social Security system depends critically on their fertility and mortality patterns. In this paper, we examine the fertility and mortality patterns of immigrants to the United States and compare these patterns with those of non-immigrants. We find that both the recent and cumulative fertility of immigrant women is higher than that of native-born women, but that a large share of these differentials can be “explained” by differences in age structures, race and ethnicity, years in the United States, and country of origin. Using a synthetic cohort approach, we examine the role of years in the United States in more detail, and find no evidence of assimilation towards native-born fertility patterns. Consistent with previous research, we find evidence of a disruption effect on fertility – the fertility of immigrant women in the most recent arrival cohorts is low, but increases at a faster rate relative to both the fertility of immigrants from earlier cohorts and relative to the fertility of natives. We find that immigrants experience lower mortality than native-born individuals in the United States, and these differences remain even after controlling for underlying differences in observable characteristics. However we find that they do not exhibit differences in their subjective expectations of their mortality.

Filling holes in the safety net? Material hardship and subjective well-being among disability benefit applicants and recipients after the 1996 welfare reform

Some of the rapid recent growth in disability income receipt in the United States is attributable to single mothers post-welfare reform. Yet, we know little about how disability benefit receipt affects the economic well-being of single mother families, or how unsuccessful disability applicants fare. We compare disability recipients to unsuccessful applicants and those who never applied among current and former welfare recipients, and examine how application and receipt affect material hardships and subjective measures of well-being. We then examine whether alternative ways of making ends meet mediate differences in well-being. After controlling for alternative sources of support, no significant differences in overall actual hardships or difficulty living on current income remained between the three groups. However, even after controlling for these strategies, unsuccessful applicants were significantly more likely to report that they expected hardships in the next two months. Our results suggest a pervasive level of economic insecurity among unsuccessful applicants.

The Supplemental Security Income Program and Welfare Reform

Over the past 20 years, the Supplemental Security Income Program (SSI), which provides federally funded income support for disabled individuals, has become one of the most important means‐tested cash aid programs in the United States. However, little research has examined the determinants of growth in SSI caseloads across states and over time. In this paper I use state panel data, exploiting variation both across states and over time, to determine what factors determine SSI disabled caseloads. I examine the relative importance of a number of factors, including economic conditions, health conditions, relative program generosity, and state fiscal situations. I then examine the effect of welfare reform as well as the effect of variation across states in welfare policies. Given previous research that provides evidence of interactions between the SSI program and other welfare programs that provide income support to single‐mother families, I also examine how the effects of the factors listed above have changed since the passage of major welfare reform in 1996. Results suggest that both economic conditions and welfare reform have significant effects on SSI participation and that the SSI program has become more responsive to business cycles since welfare reform.

Taxes, Wages, and the Labor Supply of Older Americans.

Given the aging of the U.S. population and the greater contributions of older workers to the labor force, understanding how policy levers can affect elderly labor supply has become increasingly important. The authors use data from the Health and Retirement Study linked to state identifiers to estimate the responsiveness of the labor supply of older workers to the wage and features of the tax code, both on the probability of participating in the labor market and on hours of work for those who choose to work. The authors find that a 10% increase in the wage is associated with a 5% increase in participation, and they estimate slightly larger responses to marginal tax rates. These results suggest that government policies could increase the labor supply of older individuals by changing the returns to work through the tax code.

How do Immigrants Fare in Retirement

The extensive literature documenting differences in wages between immigrants and US-born workers suggests immigrant households may enter retirement at a significant financial disadvantage relative to households headed by the native-born. However, little work has examined differences in retirement resources and retirement security between immigrant and native households. In this paper, we use data from the Health and Retirement Study, linked with restricted data from the Social Security Administration, to compare retirement resources between immigrant and native-born households. Our results suggest that while immigrants have lower levels of Social Security benefits than natives, they have higher levels of private net worth after controlling for education, age, race, and ethnicity. The estimated immigrant differentials vary a great deal by years in the US, with the most recent immigrants the least prepared for retirement.

The Great Recession, Older Workers with Disabilities, and Implications for Retirement Security

Evidence suggests that older workers with disabilities have been hit particularly hard by the recent recession. The increased difficulty in finding a job faced by individuals with disabilities, combined with the longer spells of unemployment experienced by all workers in this recession, could mean that laid-off disabled workers in their pre-retirement years may never return to work. In this paper, we use data from the 2004-2010 waves of the Health and Retirement Study to examine how the great recession has affected workers with chronic health conditions that put them at greater risk of disability. Our results suggest that increases in job losses were 30% greater for those with greater underlying risk of disability than for the general HRS population, and decreases in consumption were 20% greater. These results have important implications for the well-being of disabled individuals nearing retirement.

Comprehensive Wealth of Immigrants and Natives

The 1965 Immigration and Nationality Act had a profound impact on the demographic and skill composition of immigrants arriving in the U.S. A large literature has investigated the relative earnings of immigrants and natives, but much less is known about relative wealth accumulation and the preparation of immigrants for retirement. This paper compares the retirement preparation of older immigrants to that of native-born households using an annualized comprehensive measure of available resources. We find that immigrants have less wealth overall, but that they appear to be drawing down resources at a slower rate. We attempt to make sense of the trends in annualized wealth with the help of a lifecycle framework that incorporates uncertain longevity, bequests, risk in retirement resources, as well as endogenous housing wealth. Simulations from the model indicate that it is difficult to match the observed patterns in annualized wealth without the combination of both an explicit bequest motive and an explicit treatment of housing choice. These patterns mask a good deal of heterogeneity, however, in terms of socioeconomic and demographic characteristics. Some of the largest differences within immigrants occur along the margins of race and ethnicity, as well as the number of years since arrival. The evidence suggests that the typical immigrant is relatively well situated in retirement, but that more recent immigrants have low levels of total resources and are likely to have difficulty maintaining adequate levels of spending in retirement.