Ryan Goodstein

Can Social Security Explain Trends in Labor Force Participation of Older Men in the United States

After a long decline, the Labor Force Participation Rate (LFPR) of older men in the United States leveled off in the 1980s, and began to increase in the late 1990s. We examine how changes in Social Security rules affected these trends. We attribute only a small portion of the decline from the 1960s-80s to the increasing generosity of Social Security over this period. Increases in the Full Retirement Age and the Delayed Retirement Credit explain one quarter to one half of the recent increase in the LFPR. Increasing educational attainment and increasing LFPR of married women also contributed to the recent rise.

Do Foreclosures Increase Crime

Among the policy concerns associated with increased foreclosures is an increase in neighborhood crime. We propose that foreclosures increase crime by decreasing informal policing by residents, an aspect of crime deterrence little explored in the empirical economics literature. We investigate the effect of foreclosures on crime using a national county-level panel dataset covering the period 2002 to 2007. Employing an instrumental variables strategy to correct for measurement error in foreclosure rates, we find robust evidence that foreclosures increase burglary. A one percentage point increase in foreclosure rates is estimated to increase burglary rates by 10.1 percent. Sensitive to sample period, we also find positive effects on larceny and on aggravated assault. Our estimates indicate that the recent spike in foreclosure activity will result in associated community-wide burglary costs of at least

Are Foreclosures Contagious

4.6 billion, and of at least

Contagion Effects in Strategic Mortgage Defaults

17.4 billion when considering the impact on all types of crime.

The Effects of Bank and Nonbank Provider Locations on Household Use of Financial Transaction Services

Using a large sample of U.S. mortgages observed over the 2005-2009 period, we find that foreclosures are contagious. After controlling for major factors known to influence a borrower’s decision to default, including borrower and loan characteristics, local demographic and economic conditions, and changes in property values, the likelihood of a mortgage default increases by as much as 24% with a one standard deviation increase in the foreclosure rate of the borrower’s surrounding zip code. We find that foreclosure contagion is most prevalent among strategic defaulters: borrowers who are underwater on their mortgage but are not likely to be financially distressed. Taken together, the evidence supports the notion that foreclosures are contagious.

Boomeranged! The Effect of Coresiding Adult Children on Housing Transitions Among Older Homeowners

Using a large sample of U.S. mortgages observed over the 2005–2009 period, we document contagion effects in strategic mortgage defaults. Strategic defaults result from borrowers choosing to exercise their in the money default option and our findings suggest this choice is influenced by the delinquency rate in surrounding zip codes (within a 5 mile radius), after controlling for other known determinants of mortgage default. These controls include a large array of borrower and loan characteristics, local demographic and economic conditions, spatial correlations, and changes in property values. Our findings that the local area delinquency rate is an important factor for strategic defaulters (borrowers that can be influenced in their decision) but not for defaults that are the result of inability to pay (borrowers that had no choice) lend support the contagion hypothesis. Our estimates suggest that a 1% increase in the local area delinquency rate may increase the probability of a strategic default by 7.25–16.5%.

What Explains Trends in Labor Force Participation of Older Men in the United States

We examine the influence that geographic proximity to bank branches and (nonbank) alternative financial services providers has on use of financial transaction services among U.S. households. We specify a bivariate probit model of bank account ownership and use of nonbank transaction products to reflect the joint nature of these choices, and estimate the model on a large, nationally representative dataset. Our results indicate that households with reasonable geographic access to bank branches are more likely to have a bank account and less likely to use nonbank transaction products. Although the influence of bank and nonbank provider locations is fairly modest overall, effects are bigger for certain subgroups more likely to be on the margin of bank account ownership. However, even among such households, the effects of bank and nonbank provider locations on financial transaction services use are not as large as those associated with key household-level attributes, such as income, education, or race.

The effects of bank and nonbank provider locations on household use of financial transaction services

This paper presents new evidence of a causal link between coresiding adult children and housing transitions among older homeowners in the U.S. Estimates from OLS and IV models indicate the effects are relatively large in magnitude. For example, a one-child increase in the number of adult child coresidents over the two year period of observation is estimated to reduce the probability of becoming a renter by roughly 1 to 2 percentage points, or 40 to 60 percent of the mean tenure transition rate among homeowners in the sample. Effects on probability of moving to a smaller home (i.e. downsizing) are similar in magnitude.