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Today’s Economist: Casey B. Mulligan: Patterns of Health Insurance Changes

May 15, 2013 by Leave a Comment

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Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

A number of industries can expect big changes in employee health insurance in the next year or two, while others will continue with business as usual.

Today’s Economist

Perspectives from expert contributors.

Beginning next year, states and the federal government intend to create opportunities for families to purchase health insurance, separate from their employers, through insurance “exchanges” in the states. Insurers and the federal government will heavily advertise the new plans. Most important, middle- and low-income families may qualify for valuable federal subsidies that will serve to reduce premiums and out-of-pocket health costs.

To qualify for subsidized exchange plans, workers cannot be offered affordable insurance by their employers. Paradoxically, employers will create subsidy opportunities for their middle- and low-income employees whenever they fail to offer health insurance.

On the other hand, an employer dropping its health insurance next year will put its high-income employees in a tough spot, because they will have to buy insurance on their own without the tax advantages they had in the past by obtaining health insurance through their employer. As a result, employers with relatively many high-income employees will be under pressure to keep their insurance, whereas an employer of middle- and low-income employees may find them asking for health insurance to be dropped from the employee benefit menu.

Administrative costs, rising premiums and other costs have already made a number of employers lukewarm about health insurance, but they offered it in order to attract employees who do not care to be uninsured or to end up on Medicaid. The new insurance opportunities that become available next year may give their employees enough of an alternative that the lukewarm employers can drop their plans.

Both of these situations are closely correlated across industries, which leaves me to suspect that we can readily predict the industries that will retain employer insurance and predict those that will drop whatever health benefits they currently have. The scatter diagram below displays Bureau of Labor Statistics data on several industries according to the percentage of their employees in families above three times the poverty line (horizontal axis) and the percentage of employers offering health benefits as of March 2012 (vertical axis).

Bureau of Labor Statistics

I measured employees relative to three times the poverty line because that is the family income threshold beyond which the new exchange subsidies are less valuable than the income tax preference for employer-sponsored health insurance.

Industries like colleges, utilities and banking almost always offer health insurance, and about 80 percent of their employees will be getting a better deal on employer health insurance than they would from the exchange plans because their families are above three times the poverty line. For these reasons, I am confident that these industries will continue to offer health insurance to their employees in much the same way that they have in the past.

A couple of industries like “accommodation and food services” (i.e., restaurants), leisure and hospitality, administrative and waste services, and construction already have a mix of employers in terms of their health insurance offerings, so it would not be unusual from an industry perspective for those that currently have health plans to drop them during the next couple of years.

Moreover, the diagram shows how 45 to 60 percent of their employees do not come from families above three times poverty and therefore will have a significant federal health insurance subsidy waiting for them as soon as their employers drop coverage.

Employers that do not offer health insurance may be subject to penalties, but the penalties are not levied based on part-time employees, or levied on small employers, and even the penalties levied will be less than the subsidy opportunities created by an employer of middle- and low-income people that fails to offer health insurance.

For these reasons, I suspect that the stories we will hear about employers dropping insurance will disproportionately come from the industries shown in the lower left part of the scatter diagram, which collectively employ about 25 million people. Some employers in these industries have already discussed such plans.

Article source: http://economix.blogs.nytimes.com/2013/05/15/patterns-of-health-insurance-changes/?partner=rss&emc=rss

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Today’s Economist: Casey B. Mulligan: What Job-Sharing Brings

May 8, 2013 by Leave a Comment

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Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

When employer costs are taken into account, it is unclear whether jobs are something that can be efficiently shared.

Today’s Economist

Perspectives from expert contributors.

The idea behind work-sharing is that employers have a certain amount of work that needs to be done, and that the work can be divided by many employees working a few hours each or a few employees working many hours each. If hours per employee could be limited, by this logic employers would have to hire more employees to get the same amount of work done.

American labor law has traditionally placed some limits on employee hours, such as overtime regulations. While the recent Affordable Care Act does not strictly limit hours per employee, beginning next year it gives employers a strong push toward part-time employment by levying a significant fee per full-time employee and exempting part-time employees from the fee.

A number of employers have said they would change some work schedules to part time from full time to avoid some Affordable Care Act fees. Because part-time workers generally have fewer benefits than full-time employees, this could save employers a considerable sum. From the work-sharing perspective, the part-time employee exemption by itself would be expected to increase employment, because employers would have to hire more people (probably on a part-time basis) to complete work their employees used to accomplish when full time.

But it is possible that work-sharing would reduce employment rather than increase it, because it prevents employers from accomplishing their tasks at minimum cost, adding administrative and coordination expenses. Higher costs for employers may put them out of business, or at least reduce the scale of their business. When companies reduce the scale of their activities, that means fewer employees.

It is also possible that work-sharing would reduce employment by making jobs less attractive to people who desire full-time work. One reason that people sometimes justify commuting long distances to work or enrolling in demanding training programs – trucking and nursing are two such occupations — is that they expect to recoup those cost by taking advantages of opportunities to earn extra by working long hours.

Work-sharing proponents have credited Germany’s comparative low unemployment rate to its adoption of a work-sharing program, because the program encourages German employers to reduce employee hours rather than lay workers off. Work-sharing proponents may be right, although Germany carried out a number of labor-market reforms at the same time, such as allowing businesses to use temporary workers more easily.

As the Affordable Care Act suddenly pushes business toward part-time employment, we economists will have an unusual opportunity to learn whether cutting employee hours creates jobs, or destroys them.

Article source: http://economix.blogs.nytimes.com/2013/05/08/what-job-sharing-brings/?partner=rss&emc=rss

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Economix Blog: Casey B. Mulligan: The Logic of Cutting Payroll Taxes

September 22, 2011 by Leave a Comment

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Casey B. Mulligan is an economics professor at the University of Chicago.

Payroll taxes are by no means the only thing that stops people from working, but one of President Obama’s payroll tax cut proposals could nonetheless create a million or more jobs.

Today’s Economist

Perspectives from expert contributors.

Last week I estimated that the president’s proposal to cut the employer portion of the payroll tax by 3.1 percentage points could raise employment by more than a million, and maybe as much as three million.

You might (as some readers wrote to me) think that a payroll tax cut is not, by itself, a good reason for employers to hire, and on that basis conclude that my estimate is way off.

I agree that jobs are not created by payroll tax cuts alone, and my estimate reflects that fact. About 131 million adults are working now, and 109 million adults are not working. If I’m right that the payroll tax cut would raise employment by one million to three million, that means that 106 million to 108 million adults would still not be working despite the payroll tax cut.

The chart below illustrates the results for the case that the payroll tax cut raises employment by exactly two million.

In other words, my estimate is that at least 97 percent of people not working would still not be working regardless of the payroll tax cut. That’s because, as you might deduce, payroll taxes are only one factor among many that determine how many people are employed. Nevertheless, raising employment by one million to three million would be an accomplishment for the president, and one that would be visible in the national statistics.

By the same logic, if someone were to propose raising the payroll tax by 3.1 percentage points, I would expect employment to be reduced by one million to three million. Again, the payroll tax is only one of many factors affecting hiring decisions, which is why my estimate of a payroll tax increase implies that more than 97 percent of workers would continue to work despite the increase.

Indeed, we all know people who would continue to work even if the payroll tax were raised by 30 percentage points, let alone three. We also know people who would not work even if taxes were eliminated completely.

But the fact that more than 100 million people are not employed, and more than 100 million people are employed, suggests that there could well be a million people (or two million, or three million) who are near the fence. For that small fraction of the population, there are almost as many things pushing toward making them employed as making them unemployed; a payroll tax cut could tip the balance.

For hundreds of millions of others, the balance is tilted too far for a payroll tax cut to make a difference. But while economists can debate the exact numbers, few of us can conclude that a small tax cut has no effect. Rather, a small tax cut should be expected to have a small effect — and at this point one worth seeking.

Article source: http://feeds.nytimes.com/click.phdo?i=a1bb3ef8f31b3799b20d54afce88a488

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Square Feet | The 30-Minute Interview: Mike Kirby

August 7, 2011 by Leave a Comment

 

Q How did the firm get started?

A I was 24 — straight out of University of Chicago business school — when I started the company with Jon Fosheim. He stayed for 20 years, then went off to start up a hedge fund. We started Green Street to do something a little different than what it now does: we were looking for opportunities in the junkyard, basically distressed properties.

We came across a couple of REITs that bankers were having problems with, and did our own due diligence. We came to the conclusion, in the case of one, that the company was worth less than zero. Then we came across a research report by a major Wall Street house that said this company was a $12 stock and that they just did an equity offering. That’s when the light bulb went on over our heads that a) nobody really understood the real estate in REITs; and b) the conflicts were pretty egregious.

Q How have REITs changed since you began tracking them?

A REITs were a $10 billion niche; now it’s about $350 billion. We follow over 90 percent of the market cap of U.S. REITs and now over 50 percent of the market cap in European REITs. Our business grows as the industry grows.

Q What is your assessment of the domestic REIT market?

A REITs had a great 2.5-year run: they delivered total returns of 27 percent two years ago and 20 percent last year, and this year they’re up something like 10 percent year to date. That’s the good news. The bad news is, that came on the heels of a 75 percent drop.

Q So what does this mean for average investors?

A Most people should be 5 to 10 percent in real estate; it’s an asset class that tends to zig when other things zag, and so it’s a good diversifier. To the investor already in REITs, it’s probably not a bad idea to be on the lighter side of allocation. Today we sort of view the valuations as on the rich side.

Q Who are your main clients?

A Generally mutual fund managers or pension fund advisers.

Q Are you bullish on any commercial property sectors now?

A The one sector that’s just on fire is apartments, and this is true in New York and nationwide. So what’s happened in apartment land is, the fundamentals didn’t weaken as much as in the other sectors. During the downturn, they were supported by the fact that the homeownership rate declined through the recession, creating more demand for apartments. Meanwhile, there’s been very little construction in the last few years, and really there won’t be any in another year or two. That has been sort of a perfect storm for apartments.

Q How is the New York office market faring?

A New York is doing better right now from a fundamental and a valuation perspective. We didn’t see anything near the layoffs we feared we might during the downturn, and there is increasing demand. You’re also seeing rents jump up.

If you’re buying in New York today, you really have to be pretty bullish that New York is always going to be the dominant place that attracts the best and the brightest of whatever industry, which has certainly been true over the last 20 years.

Q Do you have any numbers?

A During the trough in early- to mid-’09, Manhattan office values went down over 50 percent, and since then they’ve rallied up 78 percent from the trough. So today we’re 15 to 20 percent lower than the ’07 peak.

Q A couple of years ago it was difficult even to put a value on many properties.

A Right, it was pretty much a guessing game. The market is pretty liquid now. Pricing among higher-quality property has really skyrocketed in the past two years. I think that’s going to level off because we’re going to see a lot more stuff get put up for sale.

Q That’s good for all the cash-ready institutions, like REITs, waiting on the sidelines to buy.

A In the last year they’ve had trouble finding enough stuff to buy. A lot of REITs are well positioned to take advantage of any buying opportunities. I don’t think they’re going to be necessarily distressed sales. There will be bidding contests.

Q Your bio says you were born on Christmas.

A It’s kind of nice having a birthday on Christmas once you’re older, because then you could either ignore it or at least you’ve got all your family around.

Article source: http://feeds.nytimes.com/click.phdo?i=08d54d195c478f9e9e5b57d31e9b8398

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Economix: More Evidence That Supply Matters

August 3, 2011 by Leave a Comment

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Casey B. Mulligan is an economics professor at the University of Chicago.

The supply of various types of workers has increased during the recession, continuing an earlier trend. That such trends continue to be associated with trends for employment contradicts the Keynesian claim that supply suddenly stops mattering during recessions and “liquidity traps.”

Today’s Economist

Perspectives from expert contributors.

A number of bloggers have pointed out that employment in Texas has been rising and has almost reached prerecession levels. Paul Krugman’s explanation is that the supply of people available and willing to work has been increasing in Texas, continuing a previous trend.

One example of that supply is the inflow of immigrants from nearby Mexico; another is the migration of Americans seeking cheaper housing. I might quibble about the details, but I agree that supply trends are crucial for understanding what has happened in Texas.

In previous posts I have pointed out that national employment per capita actually increased among the elderly during the recession. I, and other researchers, concluded that elderly employment deviated so much from the general population because of changes in elderly labor supply.

In reaction to my post, Dean Baker attributed the elderly increase during the recession to a previous trend. Because the previous trend was itself the result of supply, Dr. Baker’s explanation of the recession is essentially a supply increase, too.

So we all agree that in at least two cases labor supply increased during the recession, and in each case the result was more jobs for the affected groups, or at least fewer job losses than in the general population.

Recession-era supply episodes like these are important to identify, because they can prove or reject Keynesians’ fundamental assertion (so far unproven) that supply does not matter during a recession or a “liquidity trap” such as we’ve experienced since the recession began.

Consider, hypothetically, an immigration trend that continued even after the recession. In my view, the market would create jobs for many, but not all, of the immigrants and would continue to do so after the recession.

In the Keynesian view, immigration might create jobs before the recession, but could not create them once the recession began because “what’s limiting employment now is lack of demand for the things workers produce,” Professor Krugman wrote. “Their incentives to seek work are, for now, irrelevant.”

In the Keynesian view, all that extra supply does during the recession is add to unemployment rather than adding to employment. In other words, supply trends normally affect employment, but Keynesians assert that they cease to affect employment during a recession or liquidity trap.

The chart below shows monthly employment (left scale) and unemployment (right scale) in Texas since 2007. Despite the fact that our nation is in a liquidity trap (near-zero interest rates on Treasury bills, the results of the extra supply in Texas since 2009 have been to increase employment much more than increase unemployment.

Data From The Federal Reserve Bank of St. Louis

Or consider that more recent cohorts have found themselves in careers that involve less manual labor, producing a increasing number of people reaching age 65 and still willing and able to continue their work. In my view, elderly employment would rise and might even be rising enough to more than offset a demand reduction during a recession.

In the Keynesian view, all that extra supply does during the recession is add to unemployment rather than adding to employment.

When it comes to analyzing specific events during the recession, fiscal stimulus advocates often take the common sense approach that labor supply affects employment. But when it comes to making promises about the anticipated results of a large fiscal stimulus, they insist, without proof, that supply doesn’t matter.

Article source: http://feeds.nytimes.com/click.phdo?i=0f6248eb9c3abca3f58e3f21658d153e

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Economix: Why Hasn’t Employment of the Elderly Fallen?

July 20, 2011 by Leave a Comment

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Casey B. Mulligan is an economics professor at the University of Chicago.

While employment rates have fallen sharply among the general population, they have not done so among the elderly. This result is difficult to reconcile with Keynesian characterizations of the labor market.

Today’s Economist

Perspectives from expert contributors.

The red line in the chart below displays an index of the per capita employment for the general population. For example, a value of 93 for 2010 means that the fraction of people employed in 2010 was 7 percent less than it was in 2007, before the recession began. The red line shows what we all know by now: many fewer people have jobs now than did a few years ago.

The other two series in the chart are for specific age groups: ages 65-69 and ages 70-74. Both groups have a somewhat greater fraction working now than in 2007 (the increase is even more for ages 75+, but that group is small, so it is omitted from the chart).

Recent studies have looked at the labor-market experiences of the elderly during the first half of the recession. The authors emphasize that, while the recession by itself might reduce elderly employment, the elderly have become increasingly willing to work. I agree.

Many elderly people, for example, saw the market values of their homes and retirement assets plummet in 2008 and feel they can no longer afford to be retired. Naturally, many of them react by looking for work.

The blue and green lines in the chart show that the elderly have been much more successful than the general population at obtaining and retaining jobs.

These findings contradict the Keynesian narrative of the labor market, in which the marketplace fails to recognize the degree to which people would like to have a job. (The Keynesian narrative helps rationalize, among other things, the assertion that unemployment insurance did not reduce employment during the recession, because “what’s limiting employment now is lack of demand for the things workers produce. Their incentives to seek work are, for now, irrelevant.”)

Employment, even during a recession, is not solely the result of lucky few finding available positions. All else being the same, the market tends to create and allocate jobs for those people who are most interested in working.

That’s why, if government is to avoid making employment any less than it has to be, it’s so important to pay attention to the incentives created by taxes, subsidies and government regulations.

Article source: http://feeds.nytimes.com/click.phdo?i=6df921c584dd989932beb3898ebd745d

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Economix: Labor Supply Always Matters

June 8, 2011 by Leave a Comment

Today's Economist

Casey B. Mulligan is an economics professor at the University of Chicago.

As it has for the last three summers, the economy’s regular seasonal cycle will accumulate yet more evidence against Keynesian models of recession labor markets.

Two important seasons in the labor market are Christmas and summer. The Christmas season is an obvious time of high demand — people want to spend more in November and December. Basic economics says that Christmastime demand, while it lasts, raises wages, employment and hours, while it reduces unemployment.

Employment and work hours are also high during the summer, and as you are reading this, employment is likely to be surging well above what it was a month ago (the Census Bureau employment data for June is not due out until July 8, and the July data not until a month after that).

In the past, a few readers of this blog have given demand the credit for the summer job surge. In my view, demand contributes a little to the summer job surge (after all, agriculture, construction and other industries are expected to be more active when the weather is warmer), but supply is the primary reason that jobs are created during the summer.

One basis for my opinion is that people in vast numbers become available for work when school lets out for the summer, and about the same number are no longer available when school resumes. For example, about 20 million people 16 and older are attending school during the academic year, and very few of them are working full time. Nobody knows the students’ intentions for sure, but certainly millions of them would like to work during the summer.

I don’t know of any change in demand occurring over the summer that would number in the millions (even doubling the size of our military overnight would not create much more than a million jobs).

It’s easy to tell the summer supply stories and demand stories apart. The demand story is a lot like Christmas — customers demand, employers want to satisfy customers, so they hire more workers. If the demand story applied to summer, then we should see summer employment and work hours surge, and wages increase, too, while unemployment should dip.

If I’m right that the summer job surge comes from supply — the increased availability of workers — then summer wages and unemployment should follow patterns opposite to Christmas: wages should fall and unemployment surge.

The charts below display three labor market indicators — weekly hours worked, hourly pay for full-time jobs and unemployment — for the two seasons. (I use data from the Current Population Survey Merged Outgoing Rotation Group from January 2000 through December 2009).



The charts show seasonal spikes: the level of the indicator during the Christmas season (November and December) or the summer (June through August), relative to the indicator during the four months near the season. Wages and unemployment are represented as a proportional change from their off-season values, and spikes in hours are expressed as a proportion of a group’s average hours for the entire season and adjacent months.

(A person not at work counts as zero. To create this particular chart — other charts and tables are also available — I focus on people less than 35 years old, because their job turnover rates are greater and thus more visibly display the effects of short-term fluctuations like Christmas or summer. Please note that I have truncated the green hours bar and indicated its actual value with text, because the teenage summer hours spike is 0.295, which far exceeds the scale needed to display the other figures.)

Each group’s hours spike is positive on Christmas. During the summer, the hours spikes are positive only for the two younger age groups, which we expect because those are the groups attending school during the academic year and becoming suddenly available to work in June. All three Christmas wage spikes (middle panel) are positive, while all three summer wage spikes are negative.

It’s hard to believe that summer involves the kind of demand surge we see over Christmas; summer wages and unemployment go in exactly the opposite direction that they do during Christmas.

Thus, the summer job surge is nothing like Christmas. The economy creates jobs in the summer — even during the last several years, when our economy supposedly suffered from a lack of demand — because millions of people become willing and available to work. This is not to say that everything is working well in the labor market — employment is much lower than it should be — it’s just that greater labor supply remains one route to higher employment.

As noted by Greg Mankiw, the Harvard economist, and Gauti Eggertsson of the New York Fed, the fact that, even now, jobs are created when people are willing to work is a big challenge to the Keynesian economic model that assumes that labor supply is irrelevant during recessions, liquidity traps and other labor-market crises.

As Paul Krugman put it: “What’s limiting employment now is lack of demand for the things workers produce. Their incentives to seek work are, for now, irrelevant.”

That’s why Keynesians contend that expanding unemployment insurance can increase employment, even while they know that it erodes work incentives. Yes, unemployment is too high and employment is too low, and I applaud Keynesian economists for trying to understand that.

But they have gone too far and have ultimately given the wrong advice, in assuming without proof that labor supply is irrelevant. The labor market’s seasonal cycle shows pretty clearly that they’re wrong.

Article source: http://feeds.nytimes.com/click.phdo?i=3c57a582f18d52b62b80ad9fc8ea7b2a

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Economix: Why People Pay Income Taxes

April 6, 2011 by Leave a Comment

Daniel Acker/Bloomberg News
Today's Economist

Casey B. Mulligan is an economics professor at the University of Chicago.

Millions of taxpayers are filling out their tax returns over the next several days. Economists are still not sure whether taxpayer honesty or fear of the Internal Revenue Service explains why taxpayers’ income reporting is pretty accurate.

But with the Treasury spending more than ever, it’s important to know why people pay their taxes and what will continue to motivate them to pay in the future.

It’s difficult to get exact numbers on income tax cheating, but I.R.S. studies (read about them and other tax-evasion analysis in Prof. Joel Slemrod’s paper) suggest that reporting of wages and salaries is so high that the Treasury receives 99 percent of what it would if all taxpayers were honest about that income (see Page 2 of this I.R.S. report).

You might think that people pay taxes merely to stay out of trouble with the I.R.S. But 99 percent of people are not audited by the I.R.S., and even the remaining 1 percent are penalized only about 10 percent of the amount underpaid. (The I.R.S. is, however, increasing its audits of the wealthy.)

From a financial point of view, underpaying taxes looks like a high expected return investment: a 99 percent chance of keeping the, say, $10,000 that you underpaid the Treasury and a 1 percent chance of having to pay the $10,000 plus a $1,000 penalty (on average, you get $9,790 for every $10,000 you hold back from the Treasury).

Some economists have tried to reconcile low penalties with high compliance, arguing that people obey the tax laws for non-economic reasons – people want to be honest and pay their share. Or perhaps individuals don’t understand that any one person’s tax payment is not critical to the functioning of our government, while the aggregate of millions of tax payments are.

To the extent that much of the Treasury’s revenue arrives because taxpayers are honest, public policy might not want to take honesty for granted. For example, the Treasury may receive less revenue over time if taxpayers increasingly distrust government because they perceive their tax dollars are wasted.

There’s some truth to the honesty theory (I’ll write next week about a study of integrity and tax compliance), but tax compliance still responds to incentives. When the probability of audit falls, compliance falls.

It’s difficult for the I.R.S. to verify many types of business income: as a result the amount of proprietor, rent and royalty income that is reported is actually less than the amount unreported.

Nanny taxes -– self-employment taxes paid for household employees -– are another type of tax on which many people cheat, and enforcement on this front is weak. Though on this and other tax issues, high-profile people –- like political appointees –- should beware.

Among those whose failure to pay various taxes were widely publicized were Tom Daschle, President Obama’s nominee as secretary of health and human services; Treasury Secretary Timothy Geithner, and Zoe Baird, President Clinton’s nominee for attorney general.

A Ph.D. dissertation being written by Mark Phillips, a University of Chicago student (and an I.R.S. intern) argues that a reasonable fear of penalty explains much of why taxpayers pay their income tax. He agrees that I.R.S. audits are rare, but that the audits are well targeted, so the agency would quickly detect many ways that taxpayers might consider underreporting.

For example, Mr. Phillips asserts that the I.R.S. would easily notice a taxpayer who reported less wage and salary income on her return than appeared on the W-2 reported by her employer to the I.R.S. Taxpayers understand this, so they are pretty careful that their return matches the W-2, and the result is that deliberate discrepancies are infrequent and frequent audits are unnecessary.

For now, it looks as though both honesty and incentives help bring revenue to the Treasury.

Article source: http://feeds.nytimes.com/click.phdo?i=ca1b0198e8503c84099480412c759b7d

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Economix: Measuring Jobless Families

March 30, 2011 by Leave a Comment

Today's Economist

Casey B. Mulligan is an economics professor at the University of Chicago.

New data from the Census Bureau show that the frequency of families without employment was sharply higher during the recession — but still fairly rare.

Many indicators of economic activity, like the poverty rate and consumer spending, are measured at the family level, but widely cited labor market statistics like the unemployment rate are measured at the level of individuals.

The unemployment rate, for example, is the fraction of people who are actively seeking work (or on layoff) and are not employed. It is the fraction of people working — not the fraction of families working — that is one of the primary indicators used by the National Bureau of Economic Research to declare a recession.

These standard personal labor market indicators are incomplete and potentially misleading, because they do not put labor market activity in a family context. Among other things, a majority of working-age adults live with a spouse and apparently share their income. More than 85 percent of people live in families.

Presumably, it’s less traumatic for a family to have one of its two employed members out of a job than to have all its employed members out of a job.

For these reasons, it would be interesting to know what percentage of families have somebody working, as opposed to the percentage of people who have a job. The two measures could be more or less the same if each family had at most one worker but could be quite different when many families have two or more people who could potentially work.

In a study that Yona Rubinstein of the London School of Economics and I published in 2004, we calculated such measures for the years 1965 to 2000. We focused on prime-age families -– that is, families headed by an adult (or adults) 25 to 54 and therefore not expected to be in school or retired (two activities that interfere with working).

On average, all but 5 percent of people lived in a family with at least one person working (this includes one-person families). By comparison, almost 20 percent of prime-age adults were not employed.

In other words, it is much more common for a person to be without a job than for a family to be without a job.

As Catherine Rampell wrote in a post on Economix on Monday, the Census Bureau has released family employment statistics through 2010. The Census statistics are a bit different from those I cite above, because they include households headed by retirees and exclude people who live by themselves.

Not surprisingly, Professor Rubinstein and I found that the family nonemployment rate increased during recessions, like those of the early 1980s and of the early 1990s. The nonemployment rate increased by almost a third during those recessions, although even at their peak nonemployment was rare for families.

The latest Census Bureau release includes the most recent recession but needs some adjustment for its inclusion of retirement-age people. As a rough adjustment, I estimated the number of elderly people who live in families of more than one and the number of elderly people who live in families (of more than one) and have jobs.

The results are shown in the chart below (the Census Bureau technical notes and my paper explain why a more precise adjustment requires a lot more work).

The severity of this recession is obvious in the data, with the series reaching new highs in 2010. Still, it is relatively uncommon for a family to have nobody who is either working or retired.

Article source: http://feeds.nytimes.com/click.phdo?i=d47cbfa429f89a25a6274fb45c9cfd37

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