Class Notes: The cost of the biological clock, standardized tests, and more

This week in Class Notes:

• The cost of the biological clock for women in the marriage market.
• Higher minimum wages result in better care in nursing homes.
• Joint taxation and spousal Social Security benefits reduce female employment

• Time spent on child care differs for college and noncollege educated families, according to this week’s top chart.
• Universities need to do a better job of investing in and supporting students, writes Neil Lewis Jr. in The Atlantic.
• Check out our new work on college enrollment gaps.
• For your calendar: Reducing child poverty, support for student parents, and a discussion on the farm sector’s financial health.

The cost of the biological clock for women in the marriage market

Both men and women value the income of a potential marriage partner. But most men also have a preference for a younger spouse. This means that in the marriage market, women face a trade-off between age and earnings, since earnings typically rise with age. In a new paper drawing on data from real online daters, Corinne Low finds that for every year a woman ages, she needs to earn $7,000 more annually to remain equally attractive on the marriage market. These preferences of men seem largely to be driven by questions over fertility: Low shows that men who already have children, or have limited knowledge of the age-fertility relationship (specifically, believing wrongly that female fertility doesn’t decline until 45), do not have the same preferences for younger women. Low’s paper highlights the increasing complexity of marriage markets, and the sharper trade-offs that are faced by women because of sex differences in the relationship between age and fertility.

Higher minimum wages result in better care in nursing homes

Higher minimum wages have been shown to be good for consumers, for example by improving the quality of produced goods – where quality improvements are relatively easy to measure. But what about in a service sector environment? Krista Ruffini examines the impact of higher wages on quality of service in nursing homes. She shows that an increase in the minimum wage nudges up earnings by 1% to 2% and reduces staff turnover. The minimum wage increases seemed to improve outcomes for clients too, with fewer health inspections, a drop in the number of moderate-to-severe pressure ulcers, and lowered mortality. Of note, however, was a slight fall in the share of Medicaid patients (equivalent to 0.3 fewer in a 100 bed facility following a 10% minimum wage increase), almost certainly to offset higher labor costs with more clients paying out of pocket.

Joint taxation and Social Security benefits for spouses significantly lower female employment

Are taxes and benefits for married couples reducing the incentives for women to be in the labor force? Margherita Borella and co-authors use data from the Panel Study of Income Dynamics and the Health and Retirement Study, with a focus on the 1941-1945 and 1951-1955 birth cohorts, to answer this question. They highlight two major factors influencing labor decisions for married women. First, second-earner spouses, historically women, face a higher marginal tax rate when filing taxes jointly. Second, they are eligible for Social Security spousal and survivor benefits based on the past contributions of their spouse. Taken together, these create significant disincentives to employment. Their model finds, for example, that eliminating both Social Security spousal and survivor benefits as well as joint income taxation for the 1945 cohort would raise labor force participation by 20 percentage points for married women over 25, and by five percentage points for single women. They find similar results for those born a decade later, and with even larger general welfare gains because of higher levels of human capital for women in this cohort.

Top chart: Time spent on child care by socioeconomic status

In a paper for the Journal of Economic Perspectives, Sarah Flood and co-authors look at time spent on caring for children by education and socioeconomic status. Parents with higher levels of education spend fewer overall hours on child care but spend a little more time on “direct” child care activities such as playing and reading.

Chart source: Flood et al.

Choice opinion: Are standardized tests racist, or are they anti-racist

“These days universities often claim to have goals of inclusion. They talk about the value of educating not just children of the elite, but a diverse cross-section of the population. Instead of searching for and admitting students who have already had tremendous advantages and specifically excluding nearly everyone else, these schools could try to recruit and educate the kinds of students who have not had remarkable educational opportunities in the past,” writes Neil Lewis Jr. in The Atlantic.

Self-promotion: More students are enrolling in college, but gaps in academic preparation still persist.

Young adults today are more likely to enroll in college than in previous generations, but there are still significant gaps by race, gender, and socioeconomic background. Sarah Reber and Ember Smith use the High School Longitudinal Survey to look at these disparities in two-year and four-year college enrollment and examine how factors such as GPA and test scores affect student enrollment. They find that students with higher GPAs and better test scores are more likely to enroll, and that enrollment gaps by race and gender are quite small once among students with similar test scores and levels of academic preparation.

For your calendar: reducing child poverty, support for student parents, and a discussion on the farm sector’s financial health

Reducing child poverty in the United States

Brookings Institution

Wednesday, March 1, 2023

1:00 PM – 3:00 PM EST

Supporting pregnant and parenting students

Urban Institute

Tuesday, March 7, 2023

12:00 PM – 1:30 PM EST

The state of the farm economy

American Enterprise Institute

Monday, February 27, 2023

9:30 AM – 12:30 PM EST