derekwu92 / Program-Dynamics-NTJ-Revision-

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Responding to Referees #1

Open derekwu92 opened 5 months ago

derekwu92 commented 5 months ago

Hey Jonathan- hope your travels to Singapore went well! Super sorry for the delay in replying - I've been caught up with a bunch of other deadlines and wasn't able to carve out time to work on this until this weekend.

In any case, I have a few updates. Thought I would open a Github thread because it's easier to show figures this way in case we want to go back and forth a bit before formalizing responses to referees and edits (also - I don't have edit access in the Google Doc?).

First, the lower-hanging fruit:

Addressing R2's main comment: When we expand our sample to include HHs in the survey for shorter periods of time (meaning we have fewer quarters pre- and post-receipt), the results look essentially the same. Here are the trends in market income for different sample sizes (now made q=-2 the omitted period rather than q=-4 given the shorter pre-periods for the larger samples):
SNAP: mktincpovtrends_snap_rchecks_samples Medicaid: mktincpovtrends_med_rchecks_samples UI: mktincpovtrends_ui_rchecks_samples
Related to the point above, R2 had some concerns about why the average age of WIC recipients was so high (43.96) and only 47.3% have kids between the ages of 0-4 (perhaps driven by sample choice?). I have a few answers after digging into this. On the age issue, this is the average of the household head (who isn't necessarily the parent receiving WIC; could be a grandparent, for example). When limiting to the receiving parent, the average age falls to I think the mid-30s. The low share of kids 0-4 is also due to the fact that this is measured during the first month of receipt, and WIC recipients can start receiving benefits when they are pregnant. The share increases to about three-quarters if we measure having a kid 0-4 at any point in the 16 months after initial receipt. It is not 100% because kids may live in a different household at the time of interview (low-income families may have more complex lives). Figure we can discuss some of this in a footnote in the main text.
In terms of controlling for the state-level unemployment rate, we were already bringing it in at the year-month level. So there was a typo in the main text when we said that it only varied at the annual level.
R2 also had a comment about potentially adding some age restrictions, as patterns may differ for those above and below 65. What are your thoughts about limiting the sample to include only heads below the age of 65? We could alternatively keep our sample as is and have some results in the appendix breaking down results by below vs above 65. In general, the changes are more muted for elderly households (with having kids being a bit of an outlier, perhaps because the baseline means are so low):
SNAP: coefplot_snap_byelderly Medicaid: coefplot_med_byelderly coefplot_ui_byelderly

Next, here are some thornier issues:

R1 had a seemingly innocuous suggestion about including month-fixed effects (to account for seasonality of receipt), but the results actually changed quite a bit more than I expected. In particular, the patterns are more muted. Not sure what to make of them (didn't expect there to be so much seasonality in receipt) but the results are below. Note that the rest of the results in this thread are OMITTING month-fixed effects (unless noted otherwise).
Market Income: mktincpovtrends_regs_ci_monthctrl Post-Transfer Income: fullincpovtrends_regs_ci_monthctrl Any Employed: anyemployed_regs_ci_monthctrl Any Disabled: anydisabled_regs_ci_monthctrl Has Child 0-4: haschild_regs_ci_monthctrl Any Separation: anyseparated_regs_ci_monthctrl
Related to the above issue, the results for "any employed" actually disappear for the most part (except for UI) when including month-fixed effects. To be fair, having a value of 0 for "any employed" requires no one in the household to be working, which may be more stringent of a criteria that we want. Alternatively, we could define "any not working" (i.e., either unemployed or not in labor force but between the ages of 25-59) and here are these results INCLUSIVE of month-fixed effects:
anynotworking_regs_ci_monthctrl
Finally, in regards to better connecting to the existing literature, my RA put together a longer document summarizing findings in other papers as well as a shorter summary document. They are attached below. A number of papers look at employment and having kids as triggers, but fewer look at disability and separation. It does seem like the literature tends to be a lot older (for example, most papers using the PSID or SIPP look at data from the 80s or 90s; no paper appear to use the 2008 Panel or later) and there also doesn't seem to be any distinction between recession vs non-recession periods. So those are potentially two avenues we could go down. I did some breakdowns first by SIPP panel (1996 Panel vs 2001-04 Panels grouped together vs 2008 Panel vs 2014 Panels). Don't see super compelling differences at first glance but you might notice some patterns I don't:
SNAP: coefplot_snap_bypanel Medicaid: coefplot_med_bypanel UI: coefplot_ui_bypanel
Alternatively, I divided results into recession vs non-recession. Specifically, I classified an observation as corresponding to "recession" if any date in the pre-receipt period overlapped with 3/01-11/01 or 12/07-6/09 (official dates of 2001 and Great Recessions). Here, there does seem to be some more pronounced differences? (more so for UI and least so for Medicaid)
SNAP: coefplot_snap_byrecession Medicaid: coefplot_med_byrecession UI: coefplot_ui_byrecession Market income for all programs: coefplot_thmktinc_byrecession

Wu - Program Dynamics Literature (Revised).docx Program Dynamics Literature Summary Write-Up.docx

jzhang722 commented 5 months ago

Thanks Derek

Let me get back to you on the thornier issues, will need to read your comments and your RAs document in depth (at Heathrow airport atm). My initial thought on the recession results: are we sure we want to go down this route and make recession heterogeneity be one of our key contributions? It was merely an off-hand suggestion by R1. As for the results, I'm not sure what to make of them. On one hand, one would expect market incomes to drop more during recessions, but recessions can also induce less severely impacted applicants to apply.. and it's unclear which effect is larger.

jzhang722 commented 5 months ago

Do you want to meet on Thursday after our VA DC call or I'm also free all day on Friday.

derekwu92 commented 5 months ago

Thanks for these thoughts, Jonathan!

Re age restriction, I could see a case for restricting to under 65 in the main results - especially for our three main programs (SNAP, Medicaid, and UI). And perhaps include elderly results in appendix? SSDI would be natural to actually condition on below 65 (since it turns into old-age insurance when you’re older). I agree that SSI would be a bit more unnatural, so conditioning on being non-elderly would be effectively be focusing on families with disabled children.

Re recession heterogeneity, I’m not necessarily sold either but it sounded like R1 wanted us to have more of a “hook”. I think the natural one is that we have more recent data, but the differences by panel aren’t super pronounced. Another route is recession vs non-recession, but I agree with you that it risks opening up Pandora’s Box b/c things could go in different directions for different reasons. But let’s talk more about this? I could meet at 12 pm on Thursday 3/28 (right after our VA meeting) or at 3 pm that day. Alternatively could do early afternoon (2 pm-ish) on Friday.

On Mar 25, 2024, at 3:49 AM, Jonathan Zhang @.***> wrote:

Do you want to meet on Thursday after our VA DC call or I'm also free all day on Friday.

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jzhang722 commented 5 months ago

Let's do 12pm on Thursday 3/28? Thanks!

derekwu92 commented 5 months ago

Sounds good! Will send you an invite

On Mar 26, 2024, at 7:58 AM, Jonathan Zhang @.***> wrote:

Let's do 12pm on Thursday 3/28? Thanks!

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jzhang722 commented 5 months ago

Thornier issues:

1. Including month fixed effects

2. Any not working

3. Contribution Why don't we try something like this: "Many papers look at employment and having kids; however, few look at other sociodemographic changes such as separations, disability, and health (cite the few that do). Moreover, these papers typically focus on an older period (e.g., Boisjoly et al. 1998 looks at 1960s) and the collection of papers utilize different datasets. Using a unified event study approach approach with a single panel dataset, we study sociodemographic trajectories post-welfare reform."

derekwu92 commented 5 months ago

@jzhang722 Thanks for these comments! Yes, you're right that the point estimates don't change that much after including month FEs and if anything are more pronounced in a few cases...it's just the estimates are noisier. I actually tried including quarter-of-year FEs, and it attenuated things even more for SNAP while making things a bit more significant for Medicaid. Removing clustering (i.e., using heteroskedastic-robust errors) has virtually no effect, interestingly. May try seeing what happens when I increase the sample size with an unbalanced panel.

And re contribution, I think the pitch you propose is good but maybe we can go further. I think the referees would think about (b) refreshing the time period as the biggest contribution - mainly including the patterns after GR, which is a recent time period I don't think any paper has looked at. But then we also don't want to get sucked into trying to explain differences in estimates over time, but maybe we can get away by saying that these patterns have continued to persist even in recent years? Maybe we can brainstorm more about this tomorrow...

jzhang722 commented 5 months ago

Hi @derekwu92, I was tasked with comparing and benchmarking our estimates with the literature. Based on my reading from what your RA put together (which was very helpful), our estimates aren't easily comparable to the literature.

  1. Most of the literature in the 80s and 90s were concerned with transitions off welfare and sometimes back onto welfare. These include Blank and Ruggles 1996, Stevens 1999, Hoynes 2000. Bane and Ellwood 1986 also look at transitions out of poverty spells (and onto). This literature is just more concerned with how to get people off welfare/poverty.
  2. Some other papers look at P(welfare | characteristic) which is flipped from what we study P(characteristic | welfare). For example Grogger 2004 looks at P(welfare | child), but we are studying P(child | welfare), so without knowing P(child) and P(welfare), cannot compare.
  3. A bunch of other papers also look at the impact of some shock on outcomes, again flipped from what we are studying. These shocks include job displacement, evictions, hospitalizations, etc.
  4. A larger literature study the impact of programs on outcomes (Medicaid Dague et al. 2017, Buchmueller et al. 2021, SSDI Deshpande et al. 2021, SNAP Hastings & Shapiro 2018). I know many referees asked us to cite these papers and I can see how the panel aspect is related to ours, but really they're a lot further from our paper than the older literature.
  5. The two most closely related papers to ours are Myers and Mok 2019 and Deshpande et al. 2021. Myers and Mok 2019 finds drops in earnings, pre-transfer, post-transfer incomes of 12.7%, 7.1%, and 5.2% in the year prior to (self-reported) disability onset (all disabled). Our estimates for DI are 12.5% for market income, +7.0% for post-transfer (opposite signed to Myers and Mok). Deshpande et al. 2021 look at rates of bankruptcies, foreclosures, and evictions before SSDI application (outcomes we don't observe)

Takeaway: We should definitely compare our estimates to Myers and Mok 2019 in the paper. Do you think I've missed any papers that look at P(characteristic|welfare)? What do you think about making part of our contribution that we're flipping around what the literature has typically looked at?

derekwu92 commented 5 months ago

Hey @jzhang722 - thanks so much for this, and sorry for the slow reply. I finally had a chance to also go through the literature and think a lot of your thoughts make sense, though I may have a slightly different perspective on a few things.

My basic take on the literature (which can perhaps be fleshed out more in a new "Section 2" of the paper):

So given this background, I think there are several contributions of our paper that are worth highlighting:

Finally a quick update on the other results...sorry for the delay in getting back to you on them, but I hope to have revised results outputted in the next day or two. The key update is that when we use an unbalanced panel, which increases our sample size by a lot, we are sufficiently powered for our regression estimates even after including calendar month FEs!

jzhang722 commented 5 months ago

An old literature on training programs finds a dip in participant earnings in the lead up to participation (Ashenfelter 1978, Ashenfelter and Card 1985, Card and Sullivan 1988, Heckman and Smith 1999). Suggests that changes in life circumstances may precede enrollment in other programs as well.

You are right. To the extent that training program can be compared to welfare programs, I totally agree. I think they are comparable, but not perfectly. These training programs are about improving human capital and future gains, whereas welfare programs are more about improving levels.

My comment about P(characteristic|welfare) is trying to highlight 2 things. First, it means we can't compare our estimates (which was at least my objective) and second, is what you said, we are focusing on those participating in programs. Whereas these other papers are interested in getting on/off programs.

A number of studies look at more macro or policy determinants of program participation (Hoynes 2000, Gittleman 2001, Ribar et al. 2008, Ganong and Liebman 2018). This is of course related to our paper, but it is also fundamentally distinct from what we are looking at because we are focused on individual- and household-level changes.

I don't see these as related enough to mention in detail for a literature review. To me the Collinson, Dague, Hastings Shapiro, etc. papers are even less relevant. Collinson is looking at evictions, Hastings and Shapiro + other papers are looking at impact of program on outcomes, and the Dague et al. is the most related since they show that there is reduction in earnings prior to going in health insurance, but that is not the main point of the paper.

I really like how you summarized the 3 bullets for our contribution. I'd like to add to the first bullet that these older literature typically focus on static characteristics and many are concerned about getting off welfare or out of poverty. These older literature also compare characteristics across participant vs non-participant, whereas we are making comparisons within a participant (technically cohort..) across time. These are points related to your third point, but I think what we are doing is fundamentally different from (most of) the older literature, even if they "feel" the same.

derekwu92 commented 5 months ago

@jzhang722 Thanks - this all makes sense. Your addition to the first bullet sounds great as well - sorry I had meant to add something about the fact that the older papers are often concerned about poverty/welfare exits (since you had identified that) but it slipped my mind. Re the more recent papers, I agree that their main focus is far afield from what we are looking at, but I wonder if it is worth still briefly discussing at least Hastings and Shapiro, Dague et al., and Cook and East. In some ways, their results on changes before program receipt are most comparable to ours in terms of benchmarking estimates (especially Hastings and Shapiro and Cook and East on SNAP). But more importantly, the fact that they are relegated to a minor subsection of a given paper points to the paucity of relevant estimates in the modern era - further emphasizing the need for a paper like ours to fill this gap.

In other news, I have updated nearly all figures in our paper - see here (also on Overleaf): Program_Dynamics_in_SIPP_and_VA-7.pdf

There are several key methodological changes throughout:

One thing to note is that after bringing in these changes, there is a bit more divergence in the patterns depending on the choice of sample (see Figures C4-C6; more pronounced for SNAP).

Finally, along the lines of contributions to literature, I wonder if we may want to include two additional figures to the paper and perhaps discuss them at the end of the results section. The first would show changes in market income by family type (elderly vs non-elderly with children vs non-elderly without children); given that the prior literature has focused mostly on families with children, it would be useful to see if similar or different patterns materialize for other groups. The second would show changes by pre- vs post-08. We probably wouldn't want to go down too much of a rabbit hole in terms of making sense of these results, but we could speculate briefly on them and that would at least be somewhat responsive to R1's comments. In any case, here are these two figures:

coefplot_thmktinc_byfam coefplot_thmktinc_bypost08
jzhang722 commented 5 months ago

Thanks @derekwu92 I think we're almost there!

I like the new figures. Many of them look much better (for example TANF is significant now). A few comments on this:

Our sample is now completely unbalanced right? Is there anything like X months before and X months after? We're sort of in the spirit of addressing this comment.

I think the main things to do now are to write up the contribution for introduction. Can you do this? I feel you have a better grasp than me at this point. I think it makes sense to have it be a little showy and on the more detailed side just to show that we've taken it seriously. They might come back asking us to trim it down and that's fine.

Could you take a look at the VA part that I did a month back (or maybe you already did and I missed it). I also left a couple comments.

Re: final 2 figures you produced. I'm not sure. One option (and this is how I'm leaning) is to write up the contribution as you suggested in https://github.com/derekwu92/Program-Dynamics-NTJ-Revision-/issues/1#issuecomment-2053731992, and then in the response document under the part where the response to editor and R1's " another option would be to examine whether and how these associations changed after the Great Recession." We can say we looked at pre/post GR and also by household composition (include the figures in response doc). We do think this is a new contribution, but not super informative. We're happy to include it in the paper if you'd like us to.

Shall we schedule a call for next week (after we iterate once on the intro) to go through the response doc together?

derekwu92 commented 4 months ago

@jzhang722 Thanks for these thoughts! Some quick responses:

Good idea re scheduling a call for next week. I'm hoping to try and carve out some time later this week and/or this weekend to work on this - how about sometime next Tues 4/23 (free all day) or Th 4/25 (free before 3:30 pm)?

jzhang722 commented 4 months ago

Yes our sample is now completely unbalanced. The only restriction is that we must observe at least one month prior to initial participation. Could think perhaps varying this restriction a bit to observe e.g. at least 2 quarters, 4 quarters prior to enrollment while keeping sample unbalanced (as a robustness check). I'm also not sure about why the balanced vs unbalanced trends are so different for SNAP in Figure C4, but it does at least seem like the differences are most pronounced in the post-period (which we are less focused on). The pre-period drop is still noticeable even though attenuated.

I don't feel strongly. But do you think we should make the main specification balanced +/- 9 months before to be entirely responsive to R2? We're being somewhat responsive already by trying an unbalanced panel.

Re writing up contribution: yes happy to do this. I was actually thinking about including a new section after the introduction purely dedicated to a literature review and ending with our contribution, just so we err on the side of being overly responsive. Better to have them say we overdid it than say we didn't do enough.

I'm good with this!

How about Thursday 4/25 at 2pm?

derekwu92 commented 4 months ago

@jzhang722 Thanks! I modified appendix figures C4-C6 somewhat so that the sample restrictions now apply to the "unbalanced" panel...specifically in one we restrict the sample to include only households for whom we observe 2 quarters (8 months) of data before participation and in another we restrict the sample to include only households for whom we observe 4 quarters (16 months) of data before participation. Everything else is unbalanced though. Estimates look better:

SNAP (market income):

mktincpovtrends_snap_rchecks_ci

Medicaid (market income):

mktincpovtrends_med_rchecks_ci

UI (market income):

mktincpovtrends_ui_rchecks_ci

SNAP (post-transfer income):

fullincpovtrends_snap_rchecks_ci

Medicaid (post-transfer income):

fullincpovtrends_med_rchecks_ci

UI (post-transfer income):

fullincpovtrends_ui_rchecks_ci

We could also do a version where we condition on having some data post-enrollment too (as R2 suggests), but in a way we really just care about the pre-enrollment dip so perhaps it makes sense to condition the sample on having pre-enrollment data. Thoughts?

And Th 4/25 @ 2 pm sounds good! Will send you a calendar invite.

jzhang722 commented 4 months ago

Thanks @derekwu92!

It sounds like you prefer to keep the fully unbalanced panel for the main sample and then show these new robustness checks based on restrictions on pre-enrollment quarters. Am I right?

I'm fine with that. I think it's still pretty responsible to R2's comment.

derekwu92 commented 4 months ago

@jzhang722 Sorry realized that I never responded to this!

Figures C4-C6 in the latest version of the paper (https://www.overleaf.com/project/60c8d288f5c1979f26e60460) show the robustness checks, and the robustness checks I ended up including are balancing on 2 quarters pre-enrollment, 4 quarters pre-enrollment, and 2 quarters pre- and post-enrollment (latter is fully responsive to R2 - figure might as well just to be safe). But our overall estimates are fully unbalanced (we only restrict on observing one month prior to enrollment).

Also, I've been working on revising the paper and have rewritten the introduction and inserted a literature review section if you want to take a look before our Thursday meeting. Haven't yet gotten to Section 3 and later but hope to do some more work on it before we meet.

jzhang722 commented 4 months ago

Thanks! I'll take a look at intro and lit review before our meeting on Thursday.

jzhang722 commented 4 months ago

Hi @derekwu92

I've trimmed the literature paragraph in the intro by a little bit. I found it a little long and I'm still not really sure it's needed in the introduction. Most papers with a separate literature review section don't have literature paragraphs in the intro. I also put the citations around adverse non-program events (e.g., Collinson, etc.) in a footnote since I don't think they're all that related.

Section 2 (literature) is also 3.5 pages. I think that's at least 1 page too long so I made some changes with track changes on. I made some minor changes cutting some sentences down. The last three paragraphs need to be more concise. We can discuss this on the call.

jzhang722 commented 4 months ago

Hey @derekwu92

I am done with Sections 1 and 2 entirely. Everything is in track changes so please go through them once you get a chance.

I've also filled out more of the response document. Places where I need your attention or have to still do are highlighted.

I think on my end, I need to work on the VA appendix once you go through Section 3. Is there anything else I need to do?

derekwu92 commented 4 months ago

@jzhang722 Thanks very much! I'm going to prioritize this paper over the weekend and will look over your edits/incorporate more changes in later sections/edit response doc. Hope to pass something back to you by early next week. If you want to go ahead and try and make the VA appendix self-contained (with a discussion of the program details, etc.), that would be great. I will remove all references to it from the main text (except when we refer to the appendix)

derekwu92 commented 4 months ago

@jzhang722 Just an FYI that I've now gone through most of the draft...was hoping to finish it today but I had to make a last-minute trip to the Fed Board RDC yesterday and today (just came back) and ran out of steam. Just have a couple more things to do (finish going through Sec 2, discuss trends in total benefit dollars in Sec 3, and then the VA appendix section) but I'll finish that tomorrow and will also work on the response doc then. In any case, feel free to take a look through what I have so far if you get a chance. Thanks!

jzhang722 commented 4 months ago

Thanks @derekwu92 All I need are the VA DC SIPP results and for you to look through the response doc. I'm done with the rest.

derekwu92 commented 4 months ago

@jzhang722 Great - thanks. Just finished up full draft on my end and also went through the response doc: https://docs.google.com/document/d/1meN8m0p1gSTrzeqc7xFwpIAK32IJxk9OASq4eYlf_QY/edit.

Look forward to chatting later this afternoon - I think we're close!

derekwu92 commented 4 months ago

@jzhang722 Wrapped up my edits to paper and Google Doc so ready to pass it to you! Will be traveling rest of today but happy to get back to it tomorrow (Sun) or early next week.