ES EN
Menu Menú

Publications

Publicaciones

Search Publications

Buscar publicaciones

Filters Filtro de búsqueda

to a

clear selection Quitar los filtros

none

Article Artículo

United States

Workers

The Drop in Employment Among Less-Educated Men: Underlying Trend or Weak Economy?

The drop in employment rates among workers — and especially men — without college degrees has been widely noted. The employment rate for men over the age of 25, with just a high school diploma is down by more than 5.0 percentage points compared with its pre-recession level in 2007. It is down by more than 7.0 percentage points when compared to its 2000 level.

While this drop in employment rates is not in dispute, the explanation is. The predominant view in the economics profession is that the drop is explained mostly by changes in the labor market and changes in the motivations of this group of men.

The labor market explanation hinges on the idea that the spread of technology has reduced the need for workers without more education. We need fewer people now to dig ditches or to turn screws on assembly lines. This argument holds that the declining employment rate among men is part of a long-term trend, so we shouldn’t find the drop in recent years surprising.

Dean Baker and Brian Dew / September 11, 2017

Article Artículo

Revising Our Thinking on Retirement Income

C. Adam Bee and Joshua Mitchell, two economists at the Census Bureau, recently released an analysis of retirement income that qualitatively changes our understanding of the well-being of retirees. The analysis matched administrative data (essentially tax filings) with the reported income in the Current Population Survey (CPS), which has been the standard basis for the measurement of household income, including retirement income.

Bee and Mitchell found that the income of households in the administrative data was substantially higher than what was reported in the CPS. The overall median for households over age 65 in the administrative data was $44,371 in 2012 (the year that was the basis of their analysis), 30.4 percent higher than the $34,037 reported in the CPS for the same households. Their analysis found sharply higher incomes at all points along the income distribution than what was reported in the CPS. They also show a corresponding reduction in poverty rates among older households.

This is good and important news. While there is much room for additional analysis based on the Bee and Mitchell findings, there are two points that jump out. First, defined benefit (DB) pensions have been more effective in supporting retirement incomes than we had realized. This is good news. The second point is not good. There is nothing in the Bee and Mitchell analysis that suggests we had been overly pessimistic about the extent to which defined contribution (DC) pensions will provide adequate income to future retirees.

On the first point, by far the largest single source of the gap between the income as measured in the administrative data and income as measured in the CPS is uncounted income from DB pensions. This is due to both the fact that many people who receive a DB benefit do not report it on the CPS and also that many people who do receive a DB benefit under-report the amount.[1] Bee and Mitchell find that DB pensions make a large contribution to the income of older households for the 3rd decile and above in the income distribution. Their results are shown in the table below.

 

 

Administrative Data

   

CPS Data

    

Income Decile

Income

DB

DB

  

Income

Retirement

Retirement
   

Income

Share

    

Income

Share

First

$7,518

$376

5%

  

$6,630

$332

5%

Second

$13,046

$652

5%

  

$11,620

$465

4%

Third

$18,841

$2,073

11%

  

$15,381

$923

6%

Fourth

$25,171

$4,531

18%

  

$19,604

$1,960

10%

Fifth

$32,505

$7,151

22%

  

$25,075

$4,012

16%

Sixth

$41,819

$11,291

27%

  

$31,757

$6,987

22%

Seventh

$52,646

$14,214

27%

  

$40,793

$10,606

26%

Eighth

$67,436

$20,231

30%

  

$54,286

$15,200

28%

Nineth

$92,249

$25,830

28%

  

$76,677

$21,470

28%

Tenth

$230,579

$46,116

20%

  

$172,800

$32,832

19%

 

Source: Bee and Mitchell 2017, Table 9.

CEPR / September 10, 2017

Article Artículo

United States

Workers

Blacks and Hispanics Benefit from Low Unemployment

Two years ago, in August of 2015, the national unemployment rate stood at 5.1 percent. This was at or below widely accepted estimates of the non-accelerating inflation rate of unemployment or NAIRU. This meant that if these estimates were right, the inflation rate would start to increase if the unemployment rate fell further or possibly even if it stayed at its 5.1 percent level.

As it turns out, the unemployment rate has continued to fall and stood at 4.3 percent in August of 2017. Inflation has remained steady or even fallen slightly. By all measures, it is below the 2.0 percent rate targeted by the Federal Reserve Board.

Many economists, including some at the Fed, wanted to raise interest rates enough to prevent any further decline in unemployment out of concerns over inflation. Fortunately, the Fed did not go along with this position.

Dean Baker and Daniella Zessoules / September 07, 2017