Working papers

(JMP) Inequality, Referral Networks, and Occupational Segregation

This paper studies the impact of racially segregated referral networks on inequality and aggregate welfare. I show racial differences in the composition of referral networks and the use of referral networks by occupation. In particular, non-college black and white workers who obtain a job via referral display substantial social segregation, using same-race contacts around 90% of the time. While non-college black and white workers use referrals at a similar rate overall, black workers use referrals for higher-skill and higher-paying occupations at a lower rate than white workers. I also document racial differences in occupational choice, with white workers sorting into higher-skill occupations. I connect and rationalize these observations by incorporating a referral-based matching function into a standard search and match model with occupational choice, heterogeneous ability levels, free entry, and wages determined by Nash bargaining. Social segregation can lead to differences in occupational choice by race, and thus wage and employment inequality, in the steady state. After calibrating the model to examine black and white workers in the United States, the estimates show that racially biased networks alone can generate a black-white wage gap of 1.96% and an employment gap of 0.74 percentage points. Moving from the segregated to the desegregated steady state harms the majority white workers while helping the minority black workers, resulting in a decrease in aggregate welfare.

Work in progress

Returns to Experience and Labor Supply: Racial disparities in the United States

The forces driving differences in the supply of labor between black and white workers over the past few decades are only partially understood. The contributions of this paper are twofold: using individual fixed effects combined with an instrumental variables approach, I document the extent to which returns to work experience differ for black and white workers; I then use a life-cycle model with a learning-by-doing human capital production function to assess the consequences of these differences for the supply of labor. Returns to an extra thousand hours of work experience for the typical white worker are 23 cents per hour in 2012 USD (amounting to an additional $478 per year of full time work), compared to 12 cents for an otherwise identical black worker (amounting to an additional $250 per year). Using a life-cycle model, I can evaluate the extent to which differences in average hours worked over the life-cycle for black and white workers can be attributed to differences in returns to experience.

Post-College Spatial Job Search and Gender Inequality with Meifeng Yang

Publications (Short Articles)

Tasci, M., Treanor, C. (2018), “Labor Market Tightness Across U.S. States Since the Great Recession.” Federal Reserve Bank of Cleveland, Economic Commentary. https://www.clevelandfed.org/publications/economic-commentary/2018/ec-201801-labor-market-tightness-across-the-united-states-since-the-great-recession 

Tasci, M., Treanor, C., Vecchio, C. (2017), “The State of States’ Unemployment in the Fourth District”. Federal Reserve Bank of Cleveland, Economic Commentary No. 2017-02. https://www.clevelandfed.org/publications/economic-commentary/2017/ec-201702-state-of-states-unemployment-in-the-fourth-district 

Heimer, R. Z., Stehulak, T., Treanor, C. (2016), “Geographic Mobility and Consumer Financial Health: Evidence from Oil Production Boom Towns”. Federal Reserve Bank of Cleveland, Economic Commentary No. 2016-13. https://www.clevelandfed.org/publications/economic-commentary/2016/ec-201613-geographic-mobility-and-consumer-financial-health-oil-boom-towns 

Knotek, E.S., Verbrugge, R.J., Garciga, C., Treanor, C., Zaman, S. (2016), “Federal Funds Rate Based on Seven Simple Monetary Policy Rules”. Federal Reserve Bank of Cleveland, Economic Commentary No. 2016-07. https://www.clevelandfed.org/publications/economic-commentary/2016/ec-201607-federal-funds-rates-from-simple-policy-rules 

Tasci, M., Treanor, C. (2015), “Forecasting Unemployment in Real Time during the Great Recession: An Elusive Task”. Federal Reserve Bank of Cleveland, Economic Commentary No. 2015-15. https://www.clevelandfed.org/publications/economic-commentary/2015/ec-201515-forecasting-unemployment-in-real-time-during-great-recession 

Treanor, C., Costello, B. (2015), “The Toledo Metropolitan Statistical Area”. Federal Reserve Bank of Cleveland, Economic Trends. https://fraser.stlouisfed.org/files/docs/historical/frbclev/trends/frbclev_econtrends_20150903.pdf 

Ergungor, E.O., Treanor, C. (2015), “Household Debt and Post-Recession Auto Lending”. Federal Reserve Bank of Cleveland, Economic Trends. https://fraser.stlouisfed.org/title/economic-trends-federal-reserve-bank-cleveland-3952/economic-trends-march-2015-529734/households-consumers-517745