Harris School of Public Policy
University of Chicago
1307 East 60th Street
Chicago, IL 60637
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: University of Chicago
NBER Working Papers and Publications
|January 2019||Consumer Spending During Unemployment: Positive and Normative Implications|
with Pascal J. Noel: w25417
Using de-identified bank account data, we show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits. We use the high-frequency response to a predictable income decline as a new test to distinguish between alternative consumption models. The sensitivity of spending to income we document is inconsistent with rational models of liquidity-constrained households, but is consistent with behavioral models with present-biased or myopic households. Depressed spending after exhaustion also implies that the consumption-smoothing gains from extending UI benefits are four times larger than from raising UI benefit levels.
Published: Peter Ganong & Pascal Noel, 2019. "Consumer Spending during Unemployment: Positive and Normative Implications," American Economic Review, vol 109(7), pages 2383-2424.
|August 2018||Liquidity vs. Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession|
with Pascal Noel: w24964
We use variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments (“wealth”), and reducing short-term payments with approximately no change in long-term obligations (“liquidity”). Using regression discontinuity and difference-in-differences research designs with administrative data measuring default and consumption, we find that principal reductions that increase housing wealth without affecting liquidity have no effect, while maturity extensions that increase only liquidity have large effects. Our results suggest that liquidity drives borrower default and consumption decisions, and that distressed debt restructurings can be redesigned with substantial gains to borrowers, lenders, and taxpayers.
|July 2017||Why Has Regional Income Convergence in the U.S. Declined?|
with Daniel W. Shoag: w23609
The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.
Published: Peter Ganong & Daniel Shoag, 2017. "Why Has Regional Income Convergence in the U.S. Declined?," Journal of Urban Economics, .
|August 2013||The Decline, Rebound, and Further Rise in SNAP Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes|
with Jeffrey B. Liebman: w19363
Approximately 1-in-7 people and 1-in-4 children received benefits from the US Supplemental Nutrition Assistance Program (SNAP) in July 2011, both all-time highs. We analyze changes in SNAP take-up over the past two decades. From 1994 to 2001, coincident with welfare reform, take-up fell from 75% to 54% of eligible people. The take-up rate then rebounded, and, following several policy changes to improve program access, stabilized at 69% in 2007. Finally, take-up and enrollment rose dramatically in the Great Recession, with take-up reaching 87% in 2011. We find that changes in local unemployment can explain at least two-thirds of the increase in enrollment from 2007 to 2011. Increased state adoption of relaxed income and asset thresholds and temporary changes in program rules for childless a...
Published: Peter Ganong & Jeffrey B. Liebman, 2018. "The Decline, Rebound, and Further Rise in SNAP Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes," American Economic Journal: Economic Policy, vol 10(4), pages 153-176.