Marshall Steinbaum

regulations.utah.edu/academics/6-...

21 Mar

🚨🚨New version of our student debt cancellation paper is out.🚨🚨 Using a nationally representative credit panel, we follow borrowers whose federal loans were canceled in 2021–2024 for up to four years. Cancellation raised homeownership, credit scores, and credit access. 1/20

The payment pause, which these borrowers had before cancellation, didn't move homeownership. Cancellation did, because it removes the balance that underwriters count against you. Principal reduction is what relieves the constraint. 19/20

Removing student debt while holding education fixed leaves borrowers better off, with higher credit scores, more access to credit, and more homeownership, and without more unsecured borrowing. A system that doesn't leave students indebted would leave them better off too. 20/20

Credit scores drift up a bit before cancellation, which we attribute to the payment pause. Netting out a linear pre-trend still leaves gains of 15.5 points and 6.2 pp at 700+. The delinquency effect does not survive detrending, so we treat it as suggestive. 17/20

Homeownership gains concentrate in the 2021 cohorts, who were PSLF-profile, observed longest, and canceled at ~3% mortgage rates. By 2023–24, rates of 6–7.8% meant 50–60% higher payments. Credit gains are largest for the most distressed, later cohorts. 18/20

Mortgage debt rises, but among borrowers who already had a mortgage, balances rise only 1.4%. It's nearly all new homeowners. Meanwhile credit card, auto, and other non-mortgage debt doesn't increase. Borrowers swapped unsecured student debt for a wealth-building asset. 15/20

Credit scores rise 17 points from a base of 701, and they rise in every one of the 15 cohorts (by 12–22 points). The share at 700+, a common cutoff for the best mortgage and card pricing, rises 7 pp from 54%. Card limits rise 3.6%. 16/20

We use a staggered difference-in-differences design (Sun & Abraham 2021) across 15 quarterly cohorts. Control borrowers have active loans of similar vintage and no cancellation, discharge, or refinancing, and are matched on 2019 payment and balance by quarter. 13/20

The homeownership effect builds over time, ~1 pp after one year, 2 pp after two, and still rising for the cohorts we observe longest. About two-thirds of it is first-time home purchase. 14/20

Much of the gap is relief (Borrower Defense, disability) for defaulted loans that had already aged off credit reports, leaving no balance to fall to zero (Briones 2025). The rest is approval-to-posting lags and relief that litigation shows was executed late or not at all. 11/20

The raw trends already tell the story. Canceled cohorts' balances drop to zero and stay there. The 2021 and 2022 cohorts show clear gains in homeownership at cancellation, and they end about 20 points higher on credit scores. 12/20

We also require affirmative evidence a loan wasn't being repaid and 4+ years of borrowing history, and use status codes to strip out refinancings, transfers, bankruptcies, and charge-offs. The rules are conservative by design, trading some misses for fewer false positives. 9/20

We identify $74B in cancellation in the panel ($97B under expanded criteria), versus the $180B the Education Dept. announced through 2024. Our quarterly cohorts track the rollout, with the largest lining up with the spring 2023 PSLF surge and the IDR account adjustment. 10/20

Of loans that hit a zero balance in 2021–24, only ~2% have a payment reported in that quarter, so we cannot impute cancellation from the absence of payments. Instead, we identify it from what a loan's balance did in the 8 quarters before it hit zero. 7/20

In the left panel, loans with documented repayment amortize steadily. In the right panel, many loans without it sit flat, often at or above the amount borrowed, and then drop to zero in a single quarter. 8/20

Cancellation cuts debt while holding attainment fixed. That means we can estimate the cost of a debt-financed higher education system to the people who financed their education with debt, as well as to the rest of us: a failure of social reproduction. 5/20

Estimating the effect of cancellation from credit data is hard. Credit files have no code for “canceled,” and most servicers don't report the payments borrowers actually make. 6/20

Averaged over the post-cancellation period, we find effects on: • Homeownership +1.2 pp (2 pp two years out, still growing) • Credit scores +17 points • Share with a 700+ score +7 pp • Credit card limits +4% • Delinquent non-student balances down 3/20

Most estimates of the effect of student debt can't separate the debt from the education it paid for. More loan access raises attainment, while higher cost raises debt but lowers attainment, so the two effects get tangled together. 4/20

Review of Economics and Statistics (REStat)

The paper, led by Eduard Nilaj with Laura Beamer, Sultana Fouzia, Jack Landry, Sérgio Pinto, Robert Stutchbury, and me, is here: marshallsteinbaum.org/wp-content/u... 2/20

Marshall Steinbaum reposted

@restatjournal.bsky.social

13 May

CVS's acquisition of Target's retail pharmacy business reduced pay, especially for low-wage workers. Just Accepted new paper by Enas Farag, Alaa Abdelfattah, Chris Compton, Anna Stansbury @annastansbury.bsky.social and Marshall Steinbaum @econmarshall.bsky.social zurl.co/NvgSz

zurl.coA Retrospective Analysis of the Acquisition of Target’s Pharmacy Business by CVS Health: Labor Market PerspectiveAbstract. We analyze the labor market impact of CVS Health’s acquisition of Target’s pharmacy business in December 2015 using Lightcast job postings data.

Marshall Steinbaum reposted

Ulrich Atz

@ulrichatz.org

20 Apr

One takeaway from the paper is that disclosure is necessary but not sufficient: Franchise Disclosure Documents make these restraints visible, but they do not undo switching costs,hold-up, or post-term noncompetes. The FTC's Franchise Rule emphasizes disclosure over substantive regulation.

Marshall Steinbaum@econmarshall.bsky.social

🚨🚨Revised paper 🚨🚨 The Balance of Power in Franchising w/@ulrichatz.org, Blake Eliason, @mikelipsitz.bsky.social, @pnorlander.bsky.social, & @stpinto.bsky.social. We built the 1st comprehensive panel dataset of franchise contract terms: 46,000 documents, 4,500 chains, 20+ provisions, 2009-2024. /1

20 Apr

substack.comWhat Happened to the SPLC—and MeUnion breaking, Gaza, and fear of MAGA turned the SPLC into an organization that abandoned its own civil rights principles.

4 Apr

READ THIS

Michael Edison Hayden@michaelehayden.bsky.social

New: I wrote about how the SPLC let union breaking and fear of MAGA drive it away from its own civil rights principles. After I spoke up about Gaza, the SPLC disciplined me and terminated my employment—leading to a discrimination settlement: substack.com/home/post/p-...

Marshall Steinbaum reposted

Anna Stansbury

@annastansbury.bsky.social

Important findings! Understanding franchising in detail is crucial for understanding many parts of the low wage labor market, and this team keeps producing papers that hugely advance our knowledge

Marshall Steinbaum@econmarshall.bsky.social

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

This is also a vertical analog to Azar et al. (2023), who find heterogeneous minimum wage effects by horizontal employer concentration. Our dimension of heterogeneity is vertical: how much does the upstream firm control the downstream one? /17

Thank you for reading. Possibly of interest to @imarinescu.bsky.social @arindube.bsky.social @aaronsojourner.org @annastansbury.bsky.social @benzipperer.org @dsosinskiy.bsky.social @jcwetcoast.bsky.social Stay tuned for two, possibly three more new working papers in the coming weeks!

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

Franchisees with exclusive territories, by contrast, have more local market power and more leverage with the franchisor. They can afford to pay above the floor, so minimum wage increases don't bite as hard. /15

The upshot: one source of inter-firm pay inequality is the degree to which employers-of-record are constrained by dominant lead firms. The less autonomy employers have, the worse employers they are — exactly the fissured workplace mechanism identified by David Weil. /16

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

Event study results confirm: wages rise more steeply and job postings fall more sharply in RPM-restrained chains after a minimum wage hike. The opposite for chains with exclusive territories. /13

Why? We think franchisees with less business autonomy are squeezed: they can't pass through costs to retail prices (because of RPM), so they pay workers less. That puts them closer to the minimum wage floor, making statutory increases more binding. /14

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

Same pattern for job postings: RPM chains reduce hiring by 6.6% after a minimum wage increase vs. 2.9% for non-RPM chains. The point estimates are large but imprecisely estimated due to the aggregated nature of the job ads data. /11

For exclusive territories, the pattern reverses: chains that grant franchisees an exclusive territory show a smaller wage response to minimum wage increases (1.8% vs 4.2%) and a smaller reduction in job postings. More franchisee autonomy = less sensitivity to the wage floor. /12

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

Overall, minimum wage increases raise real posted wages by 3.9% and reduce job postings by 1.4% — consistent with the prior literature. Higher minimum wages improve pay and reduce turnover in this low-wage sector. /9

The key result: the wage effect of minimum wage increases is MUCH larger for chains using RPM (7.6%) than for chains without it (1.3%). That difference is statistically significant (p = 0.04). Minimum wages are more binding where franchisees have less autonomy. /10

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

This confirms the main finding of @briancallaci.bsky.social et al. (2025) with better, i.e. panel, data. Our restraint effects are identified by within-chain time variation rather than cross-sectional differences alone. marshallsteinbaum.org/wp-content/u... /7

We then estimate the causal effect of state minimum wage increases using a stacked difference-in-differences design, comparing states that raised their minimum wage between 2012-2016 to states that stayed at the federal floor. /8

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

We link that franchise contract panel to the near-universe of online job ads from Lightcast, covering 740 franchise chains and 6.7 million job postings across all 50 states + DC from 2010-2020. /5

Baseline result: franchise chains that use RPM pay lower wages (2.2% lower) and post more job ads (indicating higher turnover). Chains with exclusive territories pay higher wages (3.1% higher) and post fewer ads. Less franchisee autonomy = worse labor standards. /6

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

We focus on two vertical restraints in franchise contracts. Resale Price Maintenance (RPM) means the franchisor sets retail prices, reducing franchisee autonomy. Exclusive Territories grant franchisees a local monopoly, increasing their autonomy vis-à-vis the franchisor. /3

First finding: RPM has become more prevalent over time, while exclusive territories have declined. Power in franchising has shifted toward franchisors and away from franchisees. This is the central finding of Atz et al. (2025), whose franchise chain panel data we use. /4

NEW WORKING PAPER Minimum Wages and Vertical Restraints in Franchising joint with Swayam Sarangi, @stpinto.bsky.social, and Blake Eliason. marshallsteinbaum.org/wp-content/u... #EconSky /1

Franchising is a paradigmatic Fissured Workplace: the franchisor (the lead firm) controls much of the business, but the franchisee is the employer of record. We ask: does franchisor control over franchisees affect how workers are paid and how minimum wage increases play out? /2