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The Effect of Shocks to College Revenues on For-Profit Enrollment: Spillover from the Public Sector

May 25, 2015 Comments off

The Effect of Shocks to College Revenues on For-Profit Enrollment: Spillover from the Public Sector (PDF)
Source: Federal Reserve Board

This paper investigates whether declines in public funding for post-secondary institutions have increased for-profit enrollment. The two primary channels through which funding might operate to reallocate students across sectors are price (measured by tuition) and quality (measured by resource constraints). We estimate, on average, that a 10 percent cut in appropriations raises tuition about 1 to 2 percent and decreases faculty resources by 1/2 to 1 percent, creating substantial bottlenecks for prospective students on both price and quality. These cuts, in turn, generate a nearly one percentage point increase in the for-profit market share of “elastic” enrollment (i.e. attendees of community colleges plus for-profit institutions), owing entirely to students who, in a better funding environment, would have attended a public institution. We estimate an elasticity of for-profit enrollment with respect to state and local appropriations of 0.2. Finally, we extend our analys is to show that for every 1 percent increase in flagship tuition generated by funding shortfalls, for-profit attendance increases by 1-1/2 percent.

The Evolution of Retirement Wealth

May 18, 2015 Comments off

The Evolution of Retirement Wealth (PDF)
Source: Federal Reserve Board

Is the current mix of tax preferences for employer-sponsored pensions and individual retirement saving in the U.S. delivering the best possible retirement-preparedness across and within generations? Using data from the triennial Survey of Consumer Finances for 1989 through 2013, cohort-based analysis of life-cycle trajectories shows that (1) overall retirement plan participation was relatively stable or even rising through 2007, though participation fell noticeably in the wake of the Great Recession and has remained lower, (2) participation is strongly correlated with income, and the shift in the type of pension coverage occurred within—not just across—income groups, (3) relative to previous cohorts and a counterfactual lifecycle benchmark, the recent decline in retirement plan participation and defined contribution (DC) retirement account balanceto-income ratios is concentrated among younger families and lower-income families.

Competing for Jobs: Local Taxes and Incentives

May 15, 2015 Comments off

Competing for Jobs: Local Taxes and Incentives (PDF)
Source: Federal Reserve Bank of San Francisco

State and local governments frequently offer tax incentives to attract businesses to locate in their area. Proponents view these incentives as a valuable tool to encourage economic development. Critics, on the other hand, argue either that incentives have little effect on business location decisions—and hence are wasteful giveaways—or that their benefits come at the expense of reduced economic activity in other areas. A key element in this debate is distinguishing what is best from a local versus a national perspective.

The Evolution of Retirement Wealth

May 13, 2015 Comments off

The Evolution of Retirement Wealth (PDF)
Source: Federal Reserve Board

Is the current mix of tax preferences for employer-sponsored pensions and individual retirement saving in the U.S. delivering the best possible retirement-preparedness across and within generations? Using data from the triennial Survey of Consumer Finances for 1989 through 2013, cohort-based analysis of life-cycle trajectories shows that (1) overall retirement plan participation was relatively stable or even rising through 2007, though participation fell noticeably in the wake of the Great Recession and has remained lower, (2) participation is strongly correlated with income, and the shift in the type of pension coverage occurred within–not just across–income groups, (3) relative to previous cohorts and a counterfactual lifecycle benchmark, the recent decline in retirement plan participation and defined contribution (DC) retirement account balance-to-income ratios is concentrated among younger families and lower-income families.

FRB OIG — Semiannual Report to Congress

May 13, 2015 Comments off

Semiannual Report to Congress
Source: Federal Reserve System, Office of Inspector General

The OIG is responsible for keeping Congress informed of our work. We issue our Semiannual Report to Congress on April 30 and October 31 of each year, summarizing our activities, accomplishments, and ongoing work on audits and investigations. These reports keep both Congress and the agencies that we oversee abreast of our significant findings, progress that the agencies have made, and our recommended areas for further improvement.

Consumers’ Attitudes and Their Inflation Expectations

May 12, 2015 Comments off

Consumers’ Attitudes and Their Inflation Expectations (PDF)
Source: Federal Reserve Board

This paper studies consumers’ inflation expectations using micro-level data from the Surveys of Consumers conducted by University of Michigan. It shows that beyond the well-established socio-economic factors such as income, age or gender, other characteristics such as the households’ financial situation and their purchasing attitudes are important determinants of their forecast accuracy. Respondents with current or expected financial difficulties, pessimistic attitudes about major purchases, or expectations that income will go down in the future have a stronger upward bias in their expectations than other households. However, their bias shrinks by more than that of the average household in response to increasing media reporting about inflation. Equivalent results are found during recessions.

What’s Required in Your State? The Role of Personal Financial Education in the Southeast

May 12, 2015 Comments off

What’s Required in Your State? The Role of Personal Financial Education in the Southeast
Source: Federal Reserve Bank of Atlanta

Throughout the Southeast, personal finance instruction varies how and whether it is included in the curriculum. What follows is an overview of the current status of personal finance instruction for states in the Sixth Federal Reserve District. Note that the curriculum in each state continues to change and evolve as standards are revised and new legislation is passed.

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