Taylor Watson

Opponents of regulation argue it stifles economic activity — but what actually happens when governments enforce regulations on noncompliant firms? I estimate how enforcement affects individual plants in the context of the US Occupational Safety & Health Administration, linking data on surprise inspections to restricted-use Census micro data. Using a matched-stacked event study design, I find that while high regulatory fines decrease employment and increase closure probability, low fines have the opposite effect. I interpret these results with a conceptual framework in which plants try to comply with those regulations they believe to be profitable, while a regulator uses fines to incentivize compliance. The framework predicts that fines are lower when safety is more profitable, and higher when the social benefits exceed the private costs. I provide evidence consistent with this prediction, showing that high fines are associated with higher private costs such as reputation damage and productivity losses, while low fines may result in profitable spillovers such as improvements in management. These findings show that enforcement effects are not uniformly negative, and may in some cases improve plant performance.

Wage theft is a pervasive issue for American workers, yet research on the subject is stymied by underreporting: workers fear retaliatory firing if they report. This paper investigates if reporting decisions are affected by work-contingent government transfers, as they should make remaining employed more attractive, increasing the cost of being fired. Using variation in state Earned Income Tax Credits over time, I find that increases in transfers are associated with lower reporting counts, analyzing at the ZIP code level. To confirm that this decrease truly reflects changes in reporting rather than a decrease in wage theft itself, I estimate the relationship between transfers and several intensive-margin outcomes of wage theft. Finding no evidence that transfers decrease wage theft intensity, I conclude that transfers reduce reporting propensities.

The exacerbating fertility crisis has renewed interest in the drivers of fertility choice. I estimate the importance of an under-researched factor, social capital, using a distinct historical experiment: the spread of the Grange Movement in the late 19th Century. This group was dedicated to fostering strong communities through education and social inclusion. I digitize archives of chapter formation and dissolution, and link them to the full-count Censuses to produce a novel panel dataset of individuals and their hometown Grange status. I then exploit the quasi-random nature of chapter formation, wherein organizers travelled between towns in plausibly-exogenous routes, to construct an instrument for Grange presence. I first show that Granges had a positive causal impact on social capital, using the formation of high schools as a proxy. I then estimate the effects of Grange exposure on fertility, finding strong positive effects. Policymakers interested in raising fertility rates should consider policies which will increase social capital as an effective mechanism.