O-Lab 2021 Year in Review
Dear friends,
As we move into the new year, we’re taking a moment to look back at some of the projects O-Lab has been working on and developing through 2021. The last year was another hard one, full of continued uncertainty around COVID-19, political instability, and economic insecurity. These challenges have been especially acute for individuals, families, and communities already struggling with unstable employment, underlying health conditions, and low wages, among other challenges. Our enduring goal at the Opportunity Lab is to generate rigorous evidence on how economic and social policy can help these most vulnerable families and communities. So while 2021 was a challenging one for us, it was also an important opportunity to demonstrate the valuable role of rigorous research in shaping social and economic policy.
We are incredibly proud of the achievements of our faculty and students over the last year. Among other highlights, this has included the honor of a Nobel Prize for David Card’s leadership in making economics a more rigorous empirical field of study. The year also saw two faculty members - Danny Yagan and Catherine Wolfram - appointed to key roles in the Biden Administration. And through two new initiatives, one focused on developing new evidence on how to promote racial equity in the labor market, and one focused on training the next generation of scholars in environmental justice and environmental economics, we are widening the circle of students and faculty who are part of the O-Lab community at Berkeley.
Please take a look below at some of the work we produced over the last year, as well as some of the important contributions to policy, media, and support for students at all stages at UC Berkeley. And from all of us at the Opportunity Lab, we’re wishing you a secure, healthy, and happy new year.
Research & Impact
David Card Wins 2021 Nobel Prize in Economics
Professor David Card, along with Joshua Angrist of MIT and Guido Imbens of Stanford University, won the 2021 Nobel Prize in Economics for work that has “helped to answer important questions for society,” according to chair of the Economic Sciences Prize Committee Peter Fredriksson. Card has been a consistent advocate for “more evidence-based analysis in economics,” using cutting-edge empirical methods to study topics of minimum wage, education, and inequality.
O-Lab Launches the Initiative on Equity in Energy and Environmental Economics
In 2021, the Opportunity Lab and the Energy Institute at Haas launched the joint Initiative on Equity in Energy and Environmental Economics with generous support from the Alfred P. Sloan Foundation.
In addition to funding a new portfolio of research, the initiative provides a unique opportunity for PhD students to mentor and train undergraduates on tools and topics in environmental economics. With the goal of diversifying the field of environmental economics, the program is providing a new model for how to enlist and train students who have been historically underrepresented in the field.
Hilary Hoynes Urges Congress to Make CTC Expansion Permanent
In September, O-Lab Director Hilary Hoynes led a group of leading economists in urging Congress to make permanent the Biden administration’s 2021 expansion of the Child Tax Credit. The letter, signed by over 400 other economists, lays out a strong body of evidence for the impact of the CTC on poverty rates, long-term educational and health outcomes, racial disparities, and employment, among other outcomes.
““The truth of our politics lies in the risks we refuse to accept, and it is rising worker power, not continued poverty, that we treat as intolerable.””
O-Lab Hosts Event on Housing and Homelessness
In March 2021, the Opportunity Lab hosted a discussion about California Housing and Homelessness in a post-COVID Economy. The event brought in hundreds of attendees and included a keynote speech from California State Senator Scott Wiener. O-Lab faculty member Enrico Moretti and other Bay Area practitioners, policy analysts, and journalists shared critical insights and strategies for regional development and poverty alleviation.
Chris Walters on the Power of Pre-K
Chris Walters’ research on the long-term effects of universal pre-school was featured in the New York Times in June 2021. The study showed that winners of the pre-school lottery in Boston had lower incarceration rates and higher rates of college enrollment, although evidence for better test scores was mixed. Check out the article and read the full paper here.
Gaubert, Kline, and Yagan on Trends in U.S. Spatial Inequality
In January, Cecile Gaubert, Patrick Kline, Damian Vergara, and Danny Yagan published an important new paper analyzing trends in income inequality across the U.S. from 1960-2019. Among other findings, their paper demonstrates the increasing spatial dimension of economic inequality in the US, and finds that a great deal of it is driven by the increasing segregation of top earners into exclusive communities.
Read the full paper here. And for more on O-Lab’s work on regional dimensions of inequality and opportunity, take a look at some of the other work emerging from our Place-Based Policy Initiative
American Prospect Spotlights UC-Berkeley Economics Leadership on Inequality
UC Berkeley has been a world leader in the rigorous study of inequality, the social safety net, and empirical analysis of social and economic policy. In March 2021, the American Prospect spotlighted this leadership role, with a particular focus on O-Lab faculty and graduate researchers, including Hilary Hoynes for her work on child poverty, David Card and Michael Reich for their pathbreaking research on minimum wage, and Gabriel Zucman and Emmanuel Saez for their impactful research reshaping how we think about taxes and inequality, among others.
““Over the past two decades, Berkeley’s economics department and associated institutes have been at the forefront of two critical changes in the practice of economics: a heightened emphasis on empirical research, and an increasing focus on inequality.”
- American Prospect”
O-Lab Launches Initiative on Racial Equity in the Labor Market
2021 saw the launch of a new initiative at O-Lab focused on how employment policy can serve as a tool for advancing racial equity in wealth and earnings. With leadership from Claire Montialoux at Berkeley and Ellora Derenoncourt at Princeton, and with support from the WorkRise Network hosted by the Urban Institute, the Initiative on Racial Equity in the Labor Market is building a body of evidence regarding “the role of state and federal wage and employment policy in reducing racial wage and wealth disparities and building a more equitable labor market.”
Danny Yagan Appointed as Chief Economist of the Office of Management and Budget
In January, Danny Yagan was appointed as the chief economist of the White House’s Office of Management and Budget. At OMB, Danny leads budget management and execution for the Executive branch of the Biden administration.
Patrick Kennedy and Harrison Wheeler Featured in NYT and David Wessel’s Book
In April, O-Lab graduate fellows Patrick Kennedy and Harrison Wheeler were featured in the New York Times for their research on Opportunity Zone (OZ) investments. Their research - the first of its kind of the OZ program - showed that the 2017 program has led primarily to increased investment in regions that were already becoming “richer and whiter,” with almost no investment in rural areas at all.
Kennedy and Wheeler’s research was included in David Wessel’s new book Only the Rich Can Play, which outlines the history of place-based policies in the United States. It has also been cited in multiple Congressional hearings focused on economic development strategies and evaluating the success of the 2017 OZ program.
Solomon Hsiang on Estimating the Cost of Carbon
In October 2021, Sol Hsiang co-authored a study published in Nature quantifying the social costs of carbon emissions by “characterizing how additional CO2 emissions today impact future economic outcomes through altering the climate.” Read more here!