Kathryn Edwards

Kathryn Anne Edwards

Associate Economist
RAND Corporation


Working Papers

Who Helps the Unemployed? Young Workers’ Receipt of Private Cash Transfers

Financial transfers provided to individuals from friends and family members in times of need are difficult to measure, yet the role of private, informal assistance in determining economic outcomes is important to identify, as private transfers may serve as a source of insurance for households. In this paper, I use longitudinal data from the Panel Study of Income Dynamics (PSID) to measure the extent to which an unemployment spell increases the likelihood that a young worker receives a cash transfer from family. Using within-person variation in unemployment and cash transfer receipt, I find that unemployment increases the probability a young worker receives financial assistance from their family by 50 percent. I then use cross-state and cross-year variation in public unemployment insurance eligibility to evaluate the relationship between the informal private insurance flowing to young unemployed workers and its public counterpart. The increase in the probability of receiving a family transfer is reduced by half if the worker is eligible for unemployment insurance. Hence, my paper provides evidence that family-provided insurance responds to income shocks but is also a function of available public insurance. This implies that the trend towards stricter UI eligibility is partially absorbed by family networks.
Latest Version PDF

View abstract »

The Intergenerational Wealth Effects of the Social Security Notch

with Malcolm Kang and Kegon Teng Kok Tan

This paper investigates the role of parental retirement wealth in determining offspring wealth. We examine a prominent policy change to Social Security benefit determination, the Notch, in which a handful of birth cohorts received higher benefits relative to neighboring cohorts. Using multiple datasets, we find that the effect of the policy change on the wealth distribution of the children of affected retirees is significant. We further investigate two possible mechanisms at work - intervivos gifts and bequests. Our estimates suggest that the change in retirement benefits led to parents increasing financial transfer amounts to children (intensive margin), rather than encouraging more parents to make transfers (extensive margin). Both intervivos gifts and bequests combined can account for some of retirement wealth effect on child wealth, but not all. Our findings are important given the notable effects that wealth has on a wide variety of outcomes, ranging from human capital investment to health.
Latest Version PDF

View abstract »

Who Needs Medicare? Health Insurance Sources for Disability Insurance Recipients Before and After Medicare Eligibility

Social Security Disability Insurance (DI) recipients are the only individuals who qualify for Medicare, the universal health care program for retirees, before age 65. The two-year waiting period between the DI benefit award and Medicare eligibility offers an insight into the health insurance system in U.S. DI recipients are both constrained not to work and to be chronically ill or dying. Hence, this population is part of the most expensive users of the health care system but with greatly reduced access to the primary insurance provider (employer). Using the 2001 to 2008 panels of the Survey of Income and Program Participation, I document trends in the source of or lack of coverage during the waiting period, and the effect of Medicare eligibility on each form of insurance, as well as uninsurance. I estimate a measure of crowd out. This paper serves as a first-order characterization of pre-Affordable Care Act settings and offers a test for ACA effectiveness in the future.
Latest Version PDF

View abstract »

How Does Unsecured Credit Usage During Unemployment Change During a Crunch?

with J. Michael Collins and Max Schmeiser

Credit cards and other forms of unsecured debt can be borrowed without underwriting earnings. Forward looking creditworthy households can use unsecured debt during unemployment to support consumption during an earnings shock. This paper uses the Survey of Income and Program Participation (SIPP) data to estimate consumer debt levels of households before, during and after unemployment spells across economic expansions and contractions from 1995 to 2012, including recessionary periods with credit contractions. The data indicate a consistent pattern of households increasing use of unsecured credit as they transition into unemployment, and continue to have elevated levels of debt in the future. These effects are larger for the households in the lower half of the wealth distribution, and appear larger overall for the 2009 recession compared to prior periods.
Latest Version PDF

View abstract »

Works in Progress

Trends in Earnings Eligibility for Unemployment Insurance, 1973-2013

Private Cash Transfers in the Wake of Welfare Reform

Moonlighting to Make Ends Meet: The Impact of Multiple Job Holding on Family Economic Wellbeing

with Jennifer Scott and Alexandra Stanczyk

Living Arrangements and the Economic Well-being of Single Parents: A Cross-national Comparison

with James Raymo, Timothy Smeeding, and Hilary Caruthers.