Social Security benefits, hiring discrimination and more – Community News
Social Security

Social Security benefits, hiring discrimination and more

Studies in this week Hutchin’s Roundup found older workers were retiring at higher rates during the pandemic but not increasing Social Security benefits claims, some major US companies systematically discriminate against black applicants, and more.

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Using survey and administrative data on U.S. workers, Gopi Shah Goda of Stanford and co-authors find that the employment of 50- to 70-year-olds has declined significantly as a result of the COVID-19 pandemic. The decline in employment was mainly caused by an increase in unemployment and the departure of the labor force due to retirement (for persons aged 62-70) or the departure of the labor force for reasons other than retirement or incapacity for work (for persons aged 62-70). 50-61 years). However, more exits from the labor market due to retirement were not associated with more older workers moving into Social Security during the pandemic, say the authors. Monthly claims for Social Security retirement benefits remained unchanged and Social Security disability insurance claims declined 15% from their pre-pandemic forecast levels. Older workers may have had temporary alternatives to Social Security (e.g., higher unemployment benefits) or encountered difficulties applying (e.g., due to office closures) reducing spillovers to the program during the crisis, the authors suggest.

In an experiment that sent 83,000 job applications to 108 Fortune 500 companies, UC Berkeley’s Patrick Kline and co-authors found that much of the racial discrimination in the U.S. hiring process is perpetuated by a small number of highly discriminatory companies. In the study, fictitious “applicants” were given either a distinctly black or white name (chosen if more than 90% of the people with that name were black or white, respectively) and otherwise equally qualified for entry-level job openings. Black-named applicants were 2.1% less likely to hear from employers than white applicants for the same job. The top 20% of the most racially discriminatory companies accounted for about half of all discrimination against black job applicants. The illegal practice was concentrated in companies in certain sectors such as automotive services, sales and certain forms of retail. Identifying the individual discriminating companies is important, the authors say, because the information can help workers avoid biased employers and inform the decisions of the Equal Employment Opportunity Commission, the federal agency charged with preventing and remediating illegal employment. discrimination at work.

The green debt market, which grew to $730 billion in 2020, consists of green bonds, green loans and sustainability-related loans, all of which are seen as a way to reduce greenhouse gas emissions and/or increase resilience to climate change. enlarge. Using data from the companies in the S&P Global 1200 index, IMF’s Jochen M. Schmittmann and Chua Han Teng find that companies that issue green bonds have lower issuance levels than companies that do not issue them. But green bank borrowers – who take out loans for environmental projects – are not that different from other borrowers after adjusting for industry composition. However, borrowers of green bonds, green loans and sustainability-related loans are reducing their issuance intensity more quickly over time than other companies. Since there is little evidence that green bond issuance reduces borrowing costs, the authors suggest that green bond issuers try to signal their green credentials rather than trying to save money.

Line chart showing gross domestic product (index: fourth quarter 2019=100) of China, India, US, Germany and UK from October 2019 to January 2021

Source: The Wall Street Journal

“One of the main fault lines remains the pandemic. If we see newer virus variants, which are much more transmissible – such as the Delta variant we see now – in a world where access to vaccines remains highly inequitable, it will be a major blow to the economic recovery. Another important risk and fault line concerns the financial conditions. If inflation in the US, for example, were more persistent than we expected, it could lead to more rapid monetary policy tightening, which in turn could disrupt financial market conditions. So these are some of the biggest risks we’re concerned about.” says Gita Gopinath, chief economist of the International Monetary Fund.

“First of all, the world needs to be vaccinated more fully. This requires multilateral action to ensure adequate vaccine doses are made available to developing countries. Individual governments will have to tailor their policy support to the stage of the crisis. They will have to do this by nesting their fiscal policies into credible medium-term fiscal frameworks. In the case of monetary policy, central banks should look at what temporary inflation moves are. However, it is very important that they remain prepared and clearly communicate what they will do if inflation turns out to be even higher and much more persistent than expected.”