Mary C. Daly, Executive Vice President and Director of Research, Federal Reserve Bank of San Francisco

Mary C. Daly

Executive Vice President and Director of Research

Labor, public economics, social welfare

Mary.Daly (at)


Working Papers
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The Outlook for U.S. Labor-Quality Growth

2016-14 | With Bosler, Fernald, and Hobijn | July 2016

abstract (+)
Over the past 15 years, labor-quality growth has been very strong—defying nearly all earlier projections—and has added around 0.5 percentage points to an otherwise modest U.S. productivity picture. Going forward, labor quality is likely to add considerably less and may even be a drag on productivity growth in the medium term. Using a variety of methods, we project that potential labor-quality growth in the longer run (7 to 10 years out) is likely to fall in the range of 0.1 to 0.25 percent per year. In the medium term, labor-quality growth could be lower or even negative, should employment rates of low-skilled workers make a cyclical rebound towards pre-recession levels. The main uncertainties in the longer run are whether the secular decline in employment of low-skilled workers continues and whether the Great Recession pickup in educational attainment represents the start of a new boom or is simply a transitory reaction to a poor economy.
The Intensive and Extensive Margins of Real Wage Adjustment

2016-04 | With Hobijn | March 2016

abstract (+)
Using 35 years of data from the Current Population Survey we decompose fluctuations in real median weekly earnings growth into the part driven by movements in the intensive margin-wage growth of individuals continuously full-time employed-and movements in the extensive margin-wage differences of those moving into and out of full-time employment. The relative importance of these two margins varies significantly over the business cycle. When labor markets are tight, continuously full-time employed workers drive wage growth. During labor market downturns, the procyclicality of the intensive margin is largely offset by net exits out of full-time employment among workers with lower earnings. This leads aggregate real wages to be largely acyclical. Most of the extensive margin effect works through the part-time employment margin. Notably, the unemployment margin accounts for little of the variation or cyclicality of median weekly earnings growth.
Protecting Working-Age People with Disabilities: Experiences of Four Industrialized Nations

2015-08 | With Burkhauser and Ziebarth | June 2015

abstract (+)
Although industrialized nations have long provided public protection to working-age individuals with disabilities, the form has changed over time. The impetus for change has been multifaceted: rapid growth in program costs; greater awareness that people with impairments are able and willing to work; and increased recognition that protecting the economic security of people with disabilities might best be done by keeping them in the labor market. We describe the evolution of disability programs in four countries: Germany, the Netherlands, Sweden, and the United States. We show how growth in the receipt of publicly provided disability benefits has fluctuated over time and discuss how policy choices played a role. Based on our descriptive comparative analysis we summarize shared experiences that have the potential to benefit policymakers in all countries.
Disability Benefit Growth and Disability Reform in the U.S.: Lessons from Other OECD Nations

2013-40 | With Burkhauser, McVicar, and Wilkins | December 2013

abstract (+)
Unsustainable growth in program costs and beneficiaries, together with a growing recognition that even people with severe impairments can work, led to fundamental disability policy reforms in the Netherlands, Sweden, and Great Britain. In Australia, rapid growth in disability recipiency led to more modest reforms. Here we describe the factors driving unsustainable DI program growth in the U.S., show their similarity to the factors that led to unsustainable growth in these other four OECD countries, and discuss the reforms each country implemented to regain control over their cash transfer disability program. Although each country took a unique path to making and implementing fundamental reforms, shared lessons emerge from their experiences.
Shocks to Firms

2013-32 | With Fernald, Jorda, and Nechio | March 2016

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The manner firms respond to shocks reflects fundamental features of labor, capital, and commodity markets, as well as advances in finance and technology. Such features are integral to constructing models of the macroeconomy. In this paper we document secular shifts in the margins firms use to adjust to shocks that have consequences for their cyclical behavior. These new business cycle facts on the comovement of output and its inputs are a natural complement to analyzing output and its expenditure components. Our findings shed light on the changing cyclicality of productivity in response to different shocks.
Inequality and Mortality: New Evidence from U.S. County Panel Data

2013-13 | With Wilson | May 2013

abstract (+)
A large body of past research, looking across countries, states, and metropolitan areas, has found positive and statistically significant associations between income inequality and mortality. By contrast, in recent years more robust statistical methods using larger and richer data sources have generally pointed to little or no relationship between inequality and mortality. This paper aims both to document how methodological shortcomings tend to positively bias this statistical association and to advance this literature by estimating the inequality-mortality relationship. We use a comprehensive and rich new data set that combines U.S. county-level data for 1990 and 2000 on age-race-gender-specific mortality rates, a rich set of observable covariates, and previously unused Census data on local income inequality (Gini index and three income percentile ratios). Using panel data estimation techniques, we find evidence of a statistically significant negative relationship between mortality and inequality. This finding that increased inequality is associated with declines in mortality at the county level suggests a change in course for the literature. In particular, the emphasis to date on the potential psychosocial and resource allocation costs associated with higher inequality is likely missing important offsetting positives that may dominate.
Dissecting Aggregate Real Wage Fluctuations: Individual Wage Growth and the Composition Effect

2011-23 | With Hobijn and Wiles | May 2012

abstract (+)
Using data from the Current Population Survey from 1980 through 2011 we examine what drives the variation and cyclicality of the growth rate of real wages over time. We employ a novel decomposition technique that allows us to divide the time series for median weekly earnings growth into the part associated with the wage growth of persons employed at the beginning and end of the period (the wage growth effect) and the part associated with changes in the composition of earners (the composition effect). The relative importance of these two effects varies widely over the business cycle. When the labor market is tight job switchers get large wage increases, making them account for half of the variation in median weekly earnings growth over our sample. Their wage growth, as well as that of job-stayers, is procyclical. During labor market downturns, this procyclicality is largely offset by the change in the composition of the workforce, leading aggregate real wages to be almost non-cyclical. Most of this composition effect works through the part-time employment margin. Remarkably, the unemployment margin neither accounts for much of the variation in nor much of the cyclicality of median weekly earnings growth.
supplement (+)
wp11-23bk_sept2011supplement.pdf – September 2011 WP version
Keeping Up with the Joneses and Staying Ahead of the Smiths: Evidence from Suicide Data

2006-12 | With Wilson | May 2006

abstract (+)
This paper empirically assesses the theory of interpersonal income comparison using a unique data set on suicide deaths in the United States. We treat suicide as a choice variable, conditional on exogenous risk factors, reflecting one’s assessment of current and expected future utility. Using this framework we examine whether differences in group-specific suicide rates are systematically related to income dispersion, controlling for socio-demographic characteristics and income level. The results strongly support the notion that individuals consider relative income in addition to absolute income when evaluating their own utility. Importantly, the findings suggest that relative income affects utility in a two-sided manner, meaning that individuals care about the incomes of those above them (the Joneses) and those below them (the Smiths). Our results complement and extend those from studies using subjective survey data or data from controlled experiments.
The Supplemental Security Income Program

2002-20 | With Burkhauser | July 2002

The Employment of Working-Age People with Disabilities in the 1980s and the 1990s: What Current Data Can and Cannot Tell Us

2001-20 | With Burkhauser, Houtenville, and Nargis | November 2001

Economic Outcomes of Working-Age People with Disabilities over the Business Cycle: An Examination of the 1980s and 1990s

2001-07 | With Burkhauser, Houtenville, and Nargis | March 2001

Unintended Policy Interactions: the Rising Returns to Work for Youth with Disabilities

Manuscript | With Armour, Burkhauser, and Kwok | August 2011

abstract (+)
This paper demonstrates that since the early 1980s automatic changes embedded in SSI-disabled adults and SSDI program benefit formula together with some specific changes in program rules have resulted in the unintended consequence that less work is required for each new cohort of children transitioning off the SSI-disabled children program to earn SSDI benefits greater than their SSI-disabled adults program benefits. This does not appear to be matched with systematic increases in the work of categorically eligible youth, suggesting that the full returns to work may not be fully understood by young adults and their advocates.
Disability and Subjective Well-Being

Manuscript | With Gardiner | June 2011

abstract (+)
This paper examines the relationship between disability and subjective well-being using data from the Health and Retirement Study and the General Social Survey. Consistent with previous studies we find a negative relationship between disability status and subjective well-being. This finding holds in cross-sectional and panel regressions. Although the effect of disability is somewhat mitigated by employment, income and wealth, it remains an important and statistically significant determinant of subjective well-being. Importantly, we find some evidence to suggest that individuals habituate to their disabilities over time, although not completely.
Self-Insurance against Disability: Family Labor Supply Decisions

Manuscript | January 2004

Published Articles (Refereed Journals and Volumes)
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Unexpected Life Cycle Events and Economic Well-Being

Forthcoming in Edited Volume | With Couch and Zissimopoulos

Disability and Subjective Well-Being

Forthcoming in Unexpected Lifecycle Events and Economic Well-Being, ed. by Daly/Couch/Zissimopoulus. Stanford University Press | With Gardiner

Persistence of Regional Wage Differences in China

Pacific Economic Review 20(3), August 2015, 365-387 | With Candelaria and Hale

abstract (+)
Regional wage differences in China appear to be persistent and even to have grown over the past two decades. We study potential explanations for this phenomenon. After adjusting for the difference in the cost of living across provinces, we find that some of the cross-province differences in real wages could be related to the quality of labour, industry composition and geographic location of provinces. These factors, taken together, explain approximately half of the cross-province real wage variation. Interestingly, we find that interprovincial government transfers have not offset regional wage differences during the time period we consider. We also demonstrate that interprovincial migration, while driven in part by levels and changes in wage differences across provinces, did not help offset these differences. These results are consistent with findings in the literature that cross-province labour mobility in China is still limited.
Downward Nominal Wage Rigidities Bend the Phillips Curve

Journal of Money, Credit, and Banking 46(S2), 2014, 51-93 | With Hobijn

abstract (+)
We introduce a model of monetary policy with downward nominal wage rigidities and show that both the slope and curvature of the Phillips curve depend on the level of inflation and the extent of downward nominal wage rigidities. This is true for the both the long-run and the short-run Phillips curve. Comparing simulation results from the model with data on U.S. wage patterns, we show that downward nominal wage rigidities likely have played a role in shaping the dynamics of unemployment and wage growth during the last three recessions and subsequent recoveries.
Labor Markets in the Global Financial Crisis: The Good, the Bad and the Ugly

National Institute Economic Review 228: R58-R64, May 2014 | With Nechio, Fernald, and Jorda

abstract (+)
This note examines labor market performance across countries through the lens of Okun’s Law. We find that after the 1970s but prior to the global financial crisis of the 2000s, the Okun’s Law relationship between output and unemployment became more homogenous across countries. These changes presumably reflected institutional and technological changes. But, at least in the short term, the global financial crisis undid much of this convergence, in part because the affected countries adopted different labor market policies in response to the global demand shock.
Relative Status and Well-Being: Evidence from U.S. Suicide Deaths

Review of Economics and Statistics 95(5), December 2013, 1480-1500 | With Wilson and Johnson

abstract (+)
We assess the importance of interpersonal income comparisons using data on suicide deaths. We examine whether suicide risk is related to others’ income, holding own income and other individual and environmental factors fixed. We estimate models of the suicide hazard using two independent data sets: (1) the National Longitudinal Mortality Study and (2) the National Center for Health Statistics’ Multiple Cause of Death Files combined with the 5 percent Public Use Micro Sample of the 1990 decennial census. Results from both data sources show that, controlling for own income and individual characteristics, individual suicide risk rises with others’ income.
Is Australia One Recession Away From Disability Blowout? Lessons from Other OECD Countries

Australian Economic Review 46(3), August 2013, 357-368 | With Burkhauser and Lucking

abstract (+)
Blowout in disability-based cash transfer programs resulted in fundamental reforms over the last decade in several OECD countries. Similar reforms are being proposed in the United States in the wake of their disability program growth following the Global Financial Crisis. We compare trends in U.S. and Australian disability receipt with those of the Netherlands and Sweden and argue that Australia’s current Disability Support Pension program is vulnerable to the same forces that caused unsustainable program growth in these countries. Absent fundamental reforms focused on return to work over benefit receipt, Australia could be one recession away from disability benefit blowout.
Disability and Subjective Well-Being

In Lifecycle Events and Their Consequences, ed. by Couch/Daly/Zissimopolous | Stanford University Press, 2013 | With Gardiner

A Search and Matching Approach to Labor Markets: Did the Natural Rate of Unemployment Rise?

Journal of Economic Perspectives 26(3), June 2012, 3-26 | With Hobijn, Sahin, and Valletta

abstract (+)
The U.S. unemployment rate has remained stubbornly high since the 2007-2009 recession, leading some observers to conclude that structural rather than cyclical factors are to blame. Relying on a standard job search and matching framework and empirical evidence from a wide array of labor market indicators, we examine whether the natural rate of unemployment has increased since the recession began, and if so, whether the underlying causes are transitory or persistent. Our analyses suggest that the natural rate has risen over the past several years, with our preferred estimate implying an increase of close to a percentage point above its pre-recession level. An assessment of the underlying factors responsible for this increase, including labor market mismatch, extended unemployment benefits, and uncertainty about overall economic conditions, implies that only a small fraction is likely to be persistent.
supplement (+)
wp11-05bk.pdf – September 2011 version
wp11-05bkJanuary2011.pdf – January 2011 version
JEP-slides.pdf – Slides with updated results covering data through August 7, 2012
Social Security Disability Insurance: Time for Fundamental Change

Journal of Policy Analysis and Management 31, February 2012, 454-461 | With Burkhauser

Dark Contrasts: The Paradox of High Rates of Suicide in Happy Places

Journal of Economic Behavior and Organization 80(3), 2011, 435-442 | With Oswald, Wilson, and Wu

abstract (+)
Suicide kills more Americans than die in motor accidents. Its causes remain poorly understood. We suggest in this paper that the level of others’ happiness may be a risk factor for suicide (although one’s own happiness likely protects one from suicide). Using U.S. and international data, the paper provides evidence for a paradox: the happiest places tend to have the highest suicide rates. The analysis appears to be the first published study to be able to combine rich individual-level data sets–one on life satisfaction in a newly available random sample of 1.3 million Americans and another on suicide decisions among an independent random sample of about 1 million Americans–to establish this dark-contrasts paradox in a consistent way across U.S. states. The study also replicates the finding for the Western industrialized nations. The paradox, which holds individual characteristics constant, is not an artifact of population composition or confounding factors (or of the ecological fallacy). We conclude with a discussion of the possible role of relative comparisons of utility.
Happiness, Unhappiness, and Suicide: An Empirical Assessment

Journal of European Economic Association 7, 2009, 539-549 | With Wilson

abstract (+)
The use of subjective well-being (SWB) data for investigating the nature of individual preferences has increased tremendously in recent years. There has been much debate about the cross-sectional and time-series patterns found in these data, particularly with respect to the relationship between SWB and relative status. Part of this debate concerns how well SWB data measures true utility or preferences. In a recent paper, Daly, Wilson, and Johnson (2007) propose using data on suicide as a revealed preference (outcome-based) measure of well-being and find strong evidence that reference-group income negatively affects suicide risk. In this paper, we compare and contrast the empirical patterns of SWB and suicide data. We find that the two have very little in common in aggregate data (time series and cross-sectional), but have a strikingly strong relationship in terms of their determinants in individual-level, multivariate regressions. This latter result cross-validates suicide and SWB micro data as useful and complementary indicators of latent utility.
Cross-National Trends in Earnings Inequality and Instability

Economics Letters 99(2), May 2008, 215-219 | With Valletta

abstract (+)
We compare trends in earnings inequality in the United States, Germany, and Great Britain. Estimation of a heterogeneous growth model of permanent and transitory earnings variation reveals substantial convergence in the permanent component of inequality in these countries during the 1990s.
Regional Economic Conditions and Aggregate Bank Performance

In Research in Finance, 24, ed. by A. Chen | Bingley, UK: Emerald Group Publishing, 2008. 103-127 | With Krainer and Lopez

abstract (+)
The idea that a bank’s overall performance is influenced by the regional economy in which it operates is intuitive and broadly consistent with historical bank performance. Yet, micro-level research on the topic has borne mixed results, failing to find a consistent link between various measures of bank performance and regional economic variables. This chapter attempts to reconcile the intuition with the micro-level data by aggregating bank performance, as measured by nonperforming loans, up to the state level. This level of aggregation reduces the influence of idiosyncratic bank effects sufficiently so as to examine more clearly the influence of state-level economic variables. We show that regional variables, such as employment growth and changes in real estate prices, are not particularly useful for predicting changes in bank performance, but that coincident indicators developed to track a state’s gross output are quite useful. We find that these coincident indicators have a statistically significant and economically important influence on state-level, aggregate bank performance. In addition, the coincident indicators potentially contribute to the out-of-sample forecasts of the relative riskiness of state-level bank portfolios, which should be of interest to bankers and bank supervisors.
Inequality and Poverty in the United States: The Effects of Rising Dispersion of Men’s Earnings and Changing Family Behavior

Economica 73(289), February 2006, 75-98 | With Valletta

abstract (+)
Using semiparametric density estimation techniques, we analyze the effect of rising dispersion of men’s earnings and related changes in family behavior on increasing inequality in the distribution of family income in the United States. For the period 1969-1989, the growing dispersion of men’s earnings and changing family structure can account for most of the rise in family income inequality. By contrast, the increase in labor force participation by women offset this trend. Inequality grew at a slower rate in the 1990s than in earlier decades, largely because of stabilization in the relative earnings of men from low-income families.
The Improving Relative Status of Black Men

Journal of Income Distribution Fall/Winter, Fall 2003, 56-78 | With Couch | yes

abstract (+)
Using data from the Current Population Survey, we examine recent trends in the relative economic status of black men. Our findings point to gains in the relative wages of black men (compared to whites) during the 1990s, especially among younger workers. In 1989, the average black male worker (experienced or not) earned about 69 percent as much per week as the average white male worker. In 2001, the average younger black worker was earning about 86 percent as much as an equally experienced white male; black males at all experience levels earned 72 percent as much as the average white in 2001. Greater occupational diversity and a reduction in unobserved skill differences and/or labor market discrimination explain much of the trend. For both younger and older workers, general wage inequality tempered the rate of wage convergence between blacks and whites during the 1990s, although the effects were less pronounced than during the 1980s.
Left Behind: SSI in the Era of Welfare Reform

Focus 22(3), Summer 2003 | With Burkhauser

abstract (+)
SSI was established in 1972, born out of a compromise at the time between those wanting to provide a guaranteed income floor and those wishing to limit it to individuals not expected to work: the aged, blind, and disabled. SSI is now the largest federal means-tested program in the United States, serving a population dominated by low-income adults and children with disabilities. With other forms of federal support devolving to state programs (e.g., welfare), policymakers pressing to redefine social expectations about who should and should not work, and the Americans with Disabilities Act guaranteeing people with disabilities the right to employment, the goals and design of SSI have come under scrutiny. In this article we review the role that SSI has played to this point and consider the directions SSI might take in a work-dominated welfare environment where people with disabilities increasingly wish to be included in the labor market.
Employment Declines among People with Disabilities: Population Movements, Isolated Experience, or Broad Policy Concern?

In The Decline in Employment of People with Disabilities, ed. by Stapleton and Burkhauser | Kalamazoo, MI: Upjohn, 2003. 87-129 | With Houtenville

abstract (+)
We look beyond the overall decline in employment among working-age people with disabilities in the 1990s to track the importance of three factors on the observed changes: (1) trends among key subgroups, especially those with employment-risk factors other than disability; (2) population shifts towards subgroups with lower-than-average employment rates; and (3) changes in self-reported health status. Our analysis is based on crosssectional data from the Current Population Survey. Our results suggest that the decline was broad-based, present in a wide range of demographic and educational subgroups. In terms of population shifts, we find no evidence that compositional changes in the population with disabilities account for the average employment decline during the 1990s. In contrast, we find that compositional changes were important to the increase in employment among those with disabilities during the 1980s. Finally, we show that self-reported health among those with disabilities remained relatively stable in the latter half of the 1990s, making changes in health status an unlikely cause of declining employment rates.
The Supplemental Security Income Program

In Means-Tested Transfer Programs in the United States, ed. by Moffitt | Chicago: NBER and University of Chicago Press, 2003. 79-139 | With Burkhauser

Self-Reported Work Limitation Data: What They Can and Cannot Tell Us

Demography 39(3), August 2002, 541-555 | With Burkhauser, Houtenville, and Nargis

abstract (+)
Data constraints make the long-term monitoring of the working-age population with disabilities a difficult task. Indeed, the Current Population Survey (CPS) is the only national data source that offers detailed work and income questions and consistently asked measures of disability over a 20-year period. Despite its widespread use in the literature, the CPS and surveys like it have come under attack of late, with critics discounting the results of any research obtained from such data. We put these criticisms in perspective by systematically examining what the CPS data can and cannot be used for in disability research. Based on comparisons with the National Health Interview Survey (NHIS), a data set with much more information on health than the CPS, we find that the work limitation-based definition of disability available in the CPS underestimates the size of the broader population with health impairments in the NHIS, but that the employment trends in these two populations in the NHIS are not significantly different from one another. We then show that the trends in employment observed for the NHIS population defined by self-reported work limitation are not statistically different from those found in the CPS. Based on these findings, we argue (1) that the CPS and other nationally representative employment-based data sets can be used to monitor trends in outcomes of those with disabilities and, (2) that the dramatic decline in the employment of people with disabilities we describe in the CPS during the 1990s is not an artifact of the data.
United States Disability Policy in a Changing Environment

Journal of Economic Perspectives 16(1), 2002, 213-224 | With Burkhauser

abstract (+)
In this paper we provide a broader perspective from which to evaluate current disability policy. We begin by reviewing the major aspects of the Disability Insurance and Supplemental Security Income programs. We then examine trends in employment and disability benefit receipt among those with disabilities, paying particular attention to the last 15 years. Within this framework we summarize the primary difficulties in crafting an efficient and equitable assistance program for a heterogeneous population that changes with its environment. Finally, we place disability policy in the context of the broader United States social welfare system and consider how changes in other social welfare programs likely will affect disability program usage in the future.
Black-White Wage Inequality in the 1990s: A Decade of Progress

Economic Inquiry 40(1), 2002, 31-41 | With Couch

abstract (+)
Using Current Population Survey data, we find that the gap between the wages of black and white males declined during the 1990s at a rate of about .60 percentage point per year. Wage convergence was most rapid among workers with less than 10 years of potential experience, with declines in the gap averaging 1.40 percentage points per year. Using standard decomposition methods, we find that greater occupational diversity and reductions in unobserved or residual differences are important in explaining this trend. General wage inequality tempered the rate of wage convergence between blacks and whites during the 1990s.
Optimal Indicators of Socioeconomic Status for Health Research

American Journal of Public Health 92, 2002, 1151-1157 | With Duncan, McDonough, and D. Williams

abstract (+)
This paper examines the relationship between various measures of socioeconomic status (SES) and mortality for a representative sample of individuals. We use data from the Panel Study of Income Dynamics, sampling 3,734 individuals aged 45 and older who participated in the 1984 interview and tracking them between 1984 and 1994 using Cox event-history regression models. We found that wealth and recent family income were the indicators that were most strongly associated with subsequent mortality. These associations persisted after we controlled for the other SES indicators and were stronger for women than for men and for nonelderly than for elderly individuals. We found that the economic indicators of SES were usually as strongly associated with mortality as, if not more strongly associated with mortality than, the more conventional indicators of completed schooling and occupation.
How Working-Age People with Disabilities Fared over the 1990s Business Cycle

In Ensuring Health and Income Security for an Aging Workforce, ed. by Budetti et al. | Kalamazoo, MI: Upjohn Institute for Employment Research, 2001. 291-346 | With Burkhauser and Houtenville

abstract (+)
Using data from the March Current Population Survey (CPS) we show that while the longest peacetime economic expansion in the United States’ history has increased the economic well-being of most Americans, the majority of working-age men and women with disabilities have been left behind. Robust economic growth since the recession of the early 1990s has lifted nearly all percentiles of the income distribution of working-age men and women without disabilities beyond their previous business cycle peak levels of 1989. In contrast, the majority of working-age men and women with disabilities did not share in economic growth over this period. Not only did their employment and labor earnings fall during the recession of the early 1990s, but their employment and earnings continued to fall during the economic expansion that followed.
Premiums and Penalties for Surplus and Deficit Education: Evidence from the United States and Germany

Economics of Education Review 19(2), 2000, 169-178 | With Buchel and Duncan

abstract (+)
An intriguing finding in the literature on the role of education in the labor market concerns workers who have acquired either more or less education than they say their jobs require. Contrary to predictions from a rigid, structural view of jobs, several authors have found that the labor market rewards workers for having completed more schooling than their jobs require and penalizes workers who have “too little” schooling. We investigate whether the structural changes in the labor market in the United States over the 1970s and 1980s (see Levy, F., and Murnane, R. 1992. “U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations” Journal of Economic Literature 30, pp. 1,333-1,381) affected the rewards and penalties associated with having too much or too little schooling for a job. We then examine whether the same rewards and penalties for surplus and deficit education observed in the United States apply in Germany, a country with a much more structured educational system and labor market. We test explicitly for differences over time in the United States and at a point in time between the United States and Germany. We find, consistent with a universalistic view of labor markets, more similarities across countries than over time.
Testing the Significance of Income Distribution Changes over the 1980s Business Cycle: A Cross-National Comparison

Journal of Applied Econometrics 14, 1999, 253-272 | With Burkhauser, Crews, and Jenkins

Time? Money? Both? Modeling the Decision to Care for an Elderly Parent

Demography 36(2), 1999, 219-232 | With Couch and Wolf

abstract (+)
We provide estimates of a reduced-form model of the allocation of household time and money resources. We consider four demands for these resources: time spent working, time spent providing care for non-coresident elderly parents, time spent performing housework, and monetary transfers to non-coresident elderly parents. We focus on the effects of wage rates and parental characteristics on the allocation decisions of adult children and their households concerning these four demands. We find that households with individuals earning high wages rely relatively more on cash transfers and relatively less on time transfers than do lower-wage households. We also find evidence consistent with an unmeasured tendency of some families to provide multiple sources of support.
Macro-to-Micro Linkages in the Relation between Income Inequality and Mortality

The Milbank Quarterly 76(3), 1998, 315-339 | With Duncan, Kaplan, and Lynch

Characteristics of SSI and SSDI Recipients in the Years Prior to Receiving Benefits: Evidence from the PSID

In Growth in Disability Benefits: Explanations and Policy Implications, ed. by Rupp and Stapleton | Kalamazoo, MI: Upjohn Institute for Employment Research, 1998

Recounting Winners and Losers in the 1980s: A Critique of Income Distribution Methodology

Economics Letters 54, 1997, 35-40 | With Burkhauser and Crews

Who Is Protected by the ADA? Evidence from the German Experience

Annals of the American Academy 549, 1997, 101-116

Worker Adaptation and Employer Accommodation Following the Onset of a Work-Limiting Health Impairment

Journal of Gerontology 51b(2), 1996, s53-s60 | With Bound

The Potential Impact of the ADA on the Employment of People with Disabilities

In Implementing the Americans with Disabilities Act, ed. by West | Cambridge, MA: Blackwell Publishers, 1996 | With Burkhauser

Employment and Economic Well-Being Following the Onset of a Disability

In Disability, Work, and Cash Benefits, ed. by Mashaw, et al. | Kalamazoo, MI: Upjohn Institute for Employment Research, 1996 | With Burkhauser

The Economic Consequences of Disability: A Comparison of German and American People with Disabilities

Journal of Disability Policy Studies 5(1), 1994, 25-52 | With Burkhauser

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Lifecycle Events and Their Consequences

2013 | Standford University Press | Couch Daly Zissimopoulos Editors

The Declining Work and Welfare of People with Disabilties

2011 | AEI Press | Daly Burkhauser

FRBSF Publications
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What’s Up with Wage Growth?

Economic Letter 2016-07 | March 7, 2016 | With Hobijn and Pyle

Finding Normal: Natural Rates and Policy Prescriptions

Economic Letter 2015-22 | July 6, 2015 | With Nechio and Pyle

Does College Pay?

Federal Reserve Bank of San Francisco 2014 Annual Report | Apr 2015 | With Cao

Why Is Wage Growth So Slow?

Economic Letter 2015-01 | January 5, 2015 | With Hobijn

Mixed Signals: Labor Markets and Monetary Policy

Economic Letter 2014-36 | December 1, 2014 | With Bosler and Nechio

Is It Still Worth Going to College?

Economic Letter 2014-13 | May 5, 2014 | With Bengali

Interpreting Deviations from Okun’s Law

Economic Letter 2014-12 | April 21, 2014 | With Fernald, Jorda, and Nechio

Labor Markets in the Global Financial Crisis

Economic Letter 2013-38 | December 23, 2013 | With Fernald, Jorda, and Nechio

Gauging the Momentum of the Labor Recovery

Economic Letter 2013-30 | October 15, 2013 | With Hobijn and Bradshaw

The Changing Role of Disabled Children Benefits

Economic Letter 2013-25 | September 3, 2013 | With Burkhauser

The Path of Wage Growth and Unemployment

Economic Letter 2013-20 | July 15, 2013 | With Hobijn and Ni

The Future of Social Security Disability Insurance

Economic Letter 2013-17 | June 24, 2013 | With Lucking and Schwabish

Will Labor Force Participation Bounce Back?

Economic Letter 2013-14 | May 13, 2013 | With Bengali and Valletta

U.S. Economic Mobility: The Dream and the Data

Economic Letter 2013-06 | March 4, 2013 | With Bengali

Will the Jobless Rate Drop Take a Break?

Economic Letter 2012-37 | December 17, 2012 | With Elias, Hobijn, and Jorda

Why Has Wage Growth Stayed Strong?

Economic Letter 2012-10 | April 2, 2012 | With Hobijn and Lucking

Life-Cycle Shocks and Income

Economic Letter 2011-08 | March 14, 2011 | With Couch and Gardiner

Labor Force Participation and the Future Path of Unemployment

Economic Letter 2010-27 | September 13, 2010 | With Kwok and Hobijn

Okun’s Law and the Unemployment Surprise of 2009

Economic Letter 2010-07 | March 8, 2010 | With Hobijn

Did Welfare Reform Work for Everyone? A Look at Young Single Mothers

Economic Letter 2009-24 | August 3, 2009 | With Kwok

Jobless Recovery Redux?

Economic Letter 2009-18 | June 5, 2009 | With Hobijn and Kwok

Interprovincial Inequality in China

Economic Letter 2009-13 | April 10, 2009 | With Candelaria and Hale

Labor Supply Responses to Changes in Wealth and Credit

Economic Letter 2009-05 | January 30, 2009 | With Hobijn and Kwok

Regional Growth and Resilience: Evidence from Urban Growth Centers

Economic Review | 2009 | With Gerst and Doms

Retirement Savings and Decision Errors: Lessons from Behavioral Economics

Economic Letter 2008-16 | June 6, 2008 | With Armour

Labor Force Participation and the Prospects for U.S. Growth

Economic Letter 2007-33 | November 2, 2007 | With Regev

Relative Comparisons and Economics: Empirical Evidence

Economic Letter 2007-30 | October 5, 2007 | With Wilson

Educational Attainment, Unemployment, and Wage Inflation

Economic Review | 2007 | With Jackson and Valletta

Gains in U.S. Productivity: Stopgap Measures or Lasting Change?

Economic Letter 2005-05 | March 11, 2005 | With Furlong

Technology, Productivity, and Public Policy

Economic Letter 2004-07 | March 12, 2004 | With Williams

Performance of Urban Information Technology Centers: The Boom, the Bust, and the Future

Economic Review | 2004 | With Valletta

The Bay Area Economy: Down but Not Out

Economic Letter 2003-33 | November 7, 2003 | With Doms

Earnings Inequality and Earnings Mobility in the U.S.

Economic Letter 2003-28 | September 26, 2003 | With Valletta

Understanding State Budget Troubles

Economic Letter 2003-23 | August 15, 2003

Riding the IT Wave: Surging Productivity Growth in the West

Economic Letter 2002-34 | November 15, 2002

Recession in the West: Not a Rerun of 1990-1991

Economic Letter 2002-06 | March 8, 2002 | With Hsueh

Profile of a Recession: The U.S. and California

Economic Letter 2002-04 | February 22, 2002 | With Furlong

Information Technology and Growth in the Twelfth District

Economic Letter 2001-32 | November 9, 2001

Rising Price of Energy

Economic Letter 2001-11 | April 20, 2001 | With Furlong

Economic Impact of Rising Natural Gas Prices

Economic Letter 2001-04 | February 9, 2001

The Shipping News: Western Exports Rebound

Economic Letter 2000-33 | November 3, 2000 | With D’Souza

Recent Declines in Work and Income among Men with Disabilities

Economic Letter 2000-28 | September 22, 2000 | With Burkhauser and Houtenville

Have Californians Kept Up in the 1990s?

Economic Letter 2000-25 | August 25, 2000

FRBSF Publications Prior to 2000
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Understanding the Social Security debate
Mary C. Daly in FRBSF Economic Letter, Federal Reserve Bank of San Francisco, 1999

Who has benefited from California’s recovery?
Mary C. Daly & Heather N. Royer in FRBSF Economic Letter, Federal Reserve Bank of San Francisco, 1999

Optimal indicators of socioeconomic status for health research
Mary C. Daly & Peggy McDonough & Greg J. Duncan & David Williams in Working Papers in Applied Economic Theory, Federal Reserve Bank of San Francisco, 1999

Income inequality and mortality risk in the United States: is there a link?
Mary C. Daly & Greg Duncan in FRBSF Economic Letter, Federal Reserve Bank of San Francisco, 1998

Disability and work: the experiences of American and German men
Richard V. Burkhauser & Mary C. Daly in Economic Review, Federal Reserve Bank of San Francisco, 1998

Assessing the benefits of economic growth
Mary C. Daly in FRBSF Economic Letter, Federal Reserve Bank of San Francisco, 1997

A new look at the distributional effects of economic growth during the 1980s: a comparative study of the United States and Germany
Mary C. Daly & Amy D. Crews & Richard V. Burkhauser in Economic Review, Federal Reserve Bank of San Francisco, 1997

Earnings mobility and instability, 1969-1995
Mary C. Daly & Greg J. Duncan in Working Papers in Applied Economic Theory, Federal Reserve Bank of San Francisco, 1997

Other Works
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Testing Educational Tools to Demonstrate Returns to Work for Children Aging Out of the SSI-Disabled Children Program

Forthcoming in Financial Literacy Research Consortium Final Report, ed. by Annamarie Lusardi, Olivia Mitchell, Arie Kapteyn. Social Security Adiminstration/Dartmouth University/University of Pennsylvania | With Burkhauser

Disability, Aging, and Employment: Trends and Drivers

Disability Implications of an Aging Workforce, December 2010 | With Burkhauser and Tennant

The Effects of Pensions, Health, and Health Insurance on Retirement: A Comparative Analysis of California and the Nation

In Employment and Health Policies for Californians Over 50: Proceedings of a Conference, ed. by Rice and Yelin | Institute for Health and Aging, University of California, San Francisco, 2001. 183-200 | With Valletta

abstract (+)
Among the factors that affect individual retirement decisions, previous research has identified the timing of social security payments, private pension eligibility, health status, and health insurance coverage as key determinants. In this chapter, we first review existing research on the links between retirement outcomes and these key determinants. We then examine the impact of the first three factors (excluding health insurance) relying primarily on data from the 1998 California Work and Health Survey. We also compare results from the California survey with results based on nationally representative samples from the Current Population Survey and the Health and Retirement Survey. The empirical results indicate substantial effects of social security, private pensions, and poor health on retirement decisions in California and in the nation as a whole.
Population Mobility and Income Inequality in California

Public Policy Institute of California, California Counts 2(4), May 2001 | With Reed and Royer

abstract (+)
We examine trends in family income inequality through 1999, focusing in particular on the relationship between inequality and population movement into and out of California. We find that international immigration explains about one-third of California’s growing inequality over the past three decades, while the substantial exodus from the state in the 1990s had little effect, since out-migrants tended to be in families at all levels of the income distribution.
How the Fruits of Growth Were Distributed among Working Age Families in the United States and Germany in the 1980s

Labor Markets in the USA and Germany, Zentrum fur Europaische Wirtschaftsforschung (ZEW), Mannheim, 1998 | With Burkhauser and Crews

The PSID-GSOEP Equivalent Data File: A Product of Cross-National Research

In Dynamic Approaches to Comparative Social Research: Recent Developments and Applications, ed. by Vogues | Aldershot, Germany: Averbury Publishers, 1998 | With Burkhauser and Butrica

Premiums and Penalties for Over- and Undereducation: Cross-Time and Cross-National Comparisons in the United States and Germany

Vierteljahrshefte Zur Wirtschaftsforschung, 1997 | With Buchel and Duncan

Income Mobility and the Middle Class

In AEI Studies on Understanding Economic Inequality | Washington, DC: American Enterprise Institute for Public Policy Research, 1996 | With Burkhauser, Crews, and Jenkins

A Comparison of German and American People with Disabilities: Results from the German Socio-Economic Panel

Vierteljahrshefte Zur Wirtschaftsforschung 1-2, 1993, 17-26 | With Burkhauser