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An Analysis of Reasons for the Disparity in Wages Between Men and Women

Economic research has identified numerous factors that contribute to the observed difference between wages paid to women and wages paid to men, commonly called the gender wage gap. Many relate to differences in the choices and behavior of women and men in balancing their work, personal, and family lives. These factors include, most notably, the occupations and industries in which they work, and their human capital development, work experience, career interruptions, and motherhood. Other factors are sources of wage adjustments that compensate specific groups of workers for benefits or duties that disproportionately impact them. These factors include health insurance, other fringe benefits, and overtime work.

This report presents, first, an integrative summary of pertinent economic research that has investigated possible sources of the observed difference between the earnings of women and men. Then, it presents results from a statistical analysis of the gender wage gap that, based on evidence from that research, has expanded the set of possible explanatory factors that have been examined using data from the Current Population Survey. The report demonstrates that it is not possible now, and doubtless will never be possible, to determine reliably whether any portion of the observed gender wage gap is not attributable to factors that compensate women and men differently on socially acceptable bases, and hence can confidently be attributed to overt discrimination against women.

Click here to see the complete report.

Technical, Analytical, Economic, and Statistical Support Related to the Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act (FMLA) of 1993 allows eligible employees of a covered employer to take up to 12 weeks of unpaid job-protected leave in any 12 month period when the employee or the employee’s parent, child, or spouse has a serious health condition, or for a child’s birth or placement for adoption or foster care. Title I of the FMLA applies to private sector employers of 50 or more employees, to public agencies, and to certain federal employers and entities such as the U.S. Postal Service and the Postal Rate Commission. Title II applies to civil service employees covered by various federal annual and sick leave systems, and Title V extends leave provisions to certain employees of the U.S. Senate and House of Representatives. The current regulations implementing the FMLA are published in Part 825 of Title 29 of the Code of Federal Regulations (29 CFR 825). The decision by the U.S. Supreme Court in Ragsdale vs. Wolverine Worldwide, Inc., invalidated section 825.700(a) of the regulations. In light of this decision, Congressional hearings, and other feedback the Department has received from stakeholder meetings, the Employment Standards Administration (ESA), Wage and Hour Division of the U.S. Department of Labor (DOL) decided to review the regulations and to consider revisions that will benefit both employees and employers.

The U. S. Congress was also considering expanding coverage under the FMLA to include caregivers of wounded soldiers. More specifically, under proposed bill S. 1894, ‘Support for Injured Servicemembers Act of 2007,’ the Family and Medical Leave Act would be amended by extending FMLA coverage to a primary caregiver of a seriously injured military service member for a combined total amount of leave of 26 weeks to be taken within a 12-month period.

CONSAD’s study was undertaken to estimate the likely economic impacts that will result from implementing a set of proposed revisions to the FMLA regulations that were under consideration by the ESA, including estimates of the number of seriously injured military service members and the number of potential workers eligible to take FMLA leave to care for them. The results of the study were presented in a report prepared for the ESA.

Review and Analyze Department of Labor Risk Assessment Practicies and Risk Management in Rulemaking and Guidance

The Office of the Assistant Secretary for Policy (OASP) within the Department of Labor (DOL) sought information and analysis to assist DOL in determining how risk assessment and risk management procedures and policies could be tailored to the specific context of the DOL regulatory mission. The inquiry was undertaken in response to the Office of Management and Budget (OMB) publishing a proposed “Risk Assessment Bulletin” for public review and comment in January 2006 and the recommendation by the National Research Council (NRC) committee that reviewed the Bulletin at OMB’s request that OMB withdraw the Bulletin and issue a revised bulletin that would “outline goals and general principles of risk assessment designed to enhance the quality, efficiency, and consistency of risk assessment … (and) direct the agencies to develop technical guidance that would implement the general principles, be consistent with each agency’s legislative mandates and missions, and draw on the expertise that exists in federal agencies and other organizations.”

To obtain the desired information and perform the necessary analyses, the Office of the Assistant Secretary for Policy (OASP) contracted with CONSAD to provide OASP with compilations of information, reports and other technical assistance related to the investigation of past and current practices of DOL (specifically OSHA and MSHA) and other federal agencies (including EPA, NIOSH, and DOT) in relation to risk assessment and the application of risk assessment in the development of regulatory policies and guidance, and in the analysis of regulatory costs, benefits, and impacts.

CONSAD performed three distinct tasks and produced a separate report summarizing the results of each task. The three tasks included: 1) a review, analysis, and synthesis describing the current state of knowledge, best practices, and issues regarding the conduct and application of risk assessment and risk management decision-making in occupational safety and health regulatory policy, and other federal regulatory policy dealing with hazards and exposure scenarios similar to those regulated by DOL; 2) an assessment of OSHA and MSHA risk assessment practices and risk management in rulemaking and guidance procedures, and 3) preparation of a draft exposure factors and risk characterization handbook for DOL based upon the findings and recommendations from the previous two tasks. Detailed citations for all source documents were provided.

Evaluation of Recidivism: Increasing Compliance Among Previously Investigated Employers

In collaboration with SRA, CONSAD conducted an evaluation for the Wage and Hour Division (WHD) in the Employment Standards Administration (ESA) in the U.S. Department of Labor (DOL) that examined the effectiveness of a variety of methods intended to reduce recidivism among employers who have previously been detected violating provisions of Acts enforced by the WHD. The goals and measures relating to recidivism that have been established by WHD under the Government Performance and Results Act (GPRA) were first reviewed. Then, the effectiveness of the enforcement tools and compliance actions that WHD uses to discourage recidivism among previously investigated employers were evaluated.

Economic Modeling – Evaluate the Potential Cost Effectiveness of Attainment in Residual PM2.5 Non-Attainment Areas

In this economic modeling project undertaken for the Environmental Protection Agency (EPA), CONSAD performed a comparative screening analysis of multiple abatement options for emissions sources in the cement manufacturing industry and the iron and steel manufacturing industry. The analysis has been performed using a linear programming model that calculates the allocation of control responsibility among emissions sources that will achieve specified improvements in ambient concentrations of fine particulate matter (particles with aerodynamic diameters of 2.5 microns or less: PM2.5) in multiple PM2.5 non-attainment areas at minimum total abatement cost. The analysis has therefore considered: emissions of PM2.5 and its precursors [i.e., oxides of nitrogen (NOx) and sulfur dioxide (SO2)] from individual sources in both of those industries; emissions controls that are available for reducing emissions of PM2.5, NOx, and/or SO2 from those types of sources, the control efficiencies and the total annualized costs of the controls; and the impacts of reductions in emissions of PM2.5, NOx, and/or SO2 from individual sources on ambient PM2.5 concentrations in specific non-attainment areas.

The screening analysis has been expressly designed to provide valid comparison of results produced by the linear programming model for different plausible scenarios for the cement manufacturing industry and the iron and steel manufacturing industry separately and jointly.

The screening analysis conducted in this project clearly demonstrated that the linear programming model developed by CONSAD provides credible, economically coherent estimates of the cost-effective allocation of emission control responsibility among sources for the purpose of simultaneously achieving specified improvements in ambient PM2.5 concentrations in multiple non-attainment areas. Further, the analysis demonstrates that useful estimates are obtained when the analysis is restricted to a small number of industries, and when multiple control options are considered for use on individual emission sources. Previous applications of the model did not examine its capabilities under such conditions. The analysis also demonstrated that the model is capable of providing similarly useful and informative estimates under other circumstances that have not yet been attempted.

Click here to see the report.

Click here to see the tables.

Analysis of the Economic Impacts of Regulatory Policies Affecting the Attainment of the NAAQS for Particulate Matter

In setting air pollution control requirements for emission sources, the effect of controlling emissions from regional fossil-fuel-fired power plants on ambient PM2.5 concentrations in all nonattainment areas has been fully taken into account, whereas the effect of controlling emissions from local sources in individual nonattainment areas on ambient PM2.5 concentrations in other nonattainment areas has in the past been systematically ignored. The potential practical importance of this has been made evident by some recent research findings. Also, recent atmospheric research has found that only a minor portion of the ambient concentration of fine particulate matter in an air quality control region (AQCR) is attributable to emissions of the pollutant and its precursors from local sources. The major portion is caused by long-range transport of the pollutant and its precursors from more remote sources.

In this study, CONSAD Research Corporation and Booz Allen Hamilton, Inc., collaborated in performing an initial analysis of the implications of these research results for cost-effective air pollution control. A computer-based model (developed and used in previous work by CONSAD) was first revised to include a suitably expanded objective function that the model seeks to minimize. The objective function computes the total abatement cost that is required to achieve, or to come as close as possible to achieving, the annual NAAQS for PM2.5 in all nonattainment areas concurrently.

The CONSAD model previously used to examine the economic and air quality impacts of applying emission controls within an area was modified, and the data used in the model was correspondingly expanded to describe both the local and the interregional effects of pollutant emissions on ambient PM2.5 concentrations in specific nonattainment areas. Specifically, transfer coefficients were developed to express the contribution of emissions from upwind nonattainment areas on ambient concentrations in downwind nonattainment areas using detailed analysis of wind patterns and plume profiles. Using emissions data, pollution control costs, and the transfer coefficients, the overall cost of seeking to achieve NAAQS compliance cost-effectively was estimated using a linear programming algorithm.

The overall results indicate that most of the reductions in annual average ambient PM2,5 concentrations that would be achieved by implementing cost-effective patterns of controls are attributable to controls applied to coal-fired electricity generating stations. However, the results at the nonattainment area level revealed that in several nonattainment areas, appreciable incremental reductions in concentration would be achieved if other sources of emissions of primary PM2.5, SO2, and NOx located in other nonattainment areas were included as potential candidates for emission control.

Analytical Support and Data Gathering for a Preliminary Economic Analysis for a Proposed Standard for Work on Electric Power Generation, Transmission, and Distribution Lines and Equipment

The Occupational Safety and Health Administration (OSHA) is proposing to revise the standard addressing the work practices to be used during the construction of electric power transmission and distribution systems. The existing rules for this type of work are almost 30 years old and are not consistent with the more recent, corresponding rules promulgated in 1994 for the operation and maintenance of electric power generation, transmission, and distribution systems. In conjunction with this rulemaking, OSHA is also proposing a new, separate standard on electrical protective equipment for the construction industry, and (to promote uniformity), a variety of miscellaneous changes to the two corresponding general industry standards for electric power generation, transmission, and distribution work and for electrical protective equipment. These changes would ensure that employers face consistent requirements for work performed under the construction and general industry standards and would further protect employees performing electrical work covered under the general industry standards.

CONSAD provided technical and analytical support for these proposed rulemakings by gathering data and performing economic analyses for use in OSHA’s Regulatory Impact Analysis (RIA) and Preliminary Economic Analysis (PEA). CONSAD also provided support for the Agency’s Regulatory Flexibility Analysis (RFA) and Small Business Regulatory Enforcement Fairness Act (SBREFA) review panel process. Specific tasks included: a review of the proposed regulatory requirements; the development of an industry profile of affected businesses; the development of an accident database; a risk assessment of the safety risks associated with performing work activities related to the construction, maintenance, and repair of power generation, transmission, and distribution systems; the estimation of the safety benefits; the development of estimates of current compliance with the proposed revisions and the associated costs to comply with the proposed revisions; and the estimation of the economic impacts associated with the proposed revisions to these standards, including the economic impacts on small businesses.

Click here to see the complete report.

A Review of the Small Business Administration's Methods for Determining Firm Size Standards

For the U.S. Small Business Administration, CONSAD was asked to conduct a comprehensive review of its industry size standards. The current process for setting size standards for individual industries is based on two “anchor” standards. One of the “anchor” standards, for which separate values have been specified for four broad groups of industries, measures size on the basis of a firm's volume of receipts. The other “anchor” standard, for which separate values have been established for two broad groups of industries, measures size on the basis of a firm's number of employees. Collectively, the industries in these six groups comprise 70 percent of NAICS industries. The “anchor” standards were initially set in 1953. The employment-based “anchor” standards have remained unchanged since then. The receipts-based “anchor” standards have been adjusted periodically for inflation. The last comprehensive review of the size standards was performed in the 1980s. CONSAD conducted three distinct tasks in its independent review of SBA industry size standards and the process through which they are established: 1) reconsideration of the “anchor” size standards [focusing on how well they comply with legislative requirements, how well they accord with conventional concepts of firm size, how well they serve the objectives of both the SBA financial assistance (loan and loan guarantee) program and the SBA Federal contracting program, and how well they serve the objectives of other Federal programs that rely on the standards]; 2) examination of alternative methods for setting separate size standards for specific industries; and 3) consideration of alternative approaches to clarifying and simplifying the setting of levels for industry size standards. CONSAD’s findings were documented in a final report submitted to the SBA.

A Review of the Small Business Administration's Export Working Capital Program (EWCP)

For the U.S. Small Business Administration, CONSAD conducted a study whose objective was to enhance the understanding of the key financing issues faced by small businesses that want to export their products. In particular, SBA wanted to determine if there is a financing gap that is preventing small businesses from exporting, and if so to what extent the SBA Export Working Capital Program (EWCP) is helping to alleviate that gap. SBA was also seeking information that would help to make the SBA EWCP more attractive and useful to lenders and borrowers who want to export. Finally, if small businesses interested in exporting were finding other means to fund their export activities (such as working capital loans without SBA guarantees, or loans with guarantees from other sources, such as the Export-Import Bank), SBA was interested in learning more about the financing tools used.

The data gathering approach used by CONSAD applied the case study method. Interviews were conducted with individuals from the following five groups: (1) small business exporters with SBA EWCP loan guarantees; (2) small business exporters without SBA EWCP loan guarantees; (3) small businesses that currently do not export, but are considering starting to export; (4) lenders that have made export loans to small businesses, including lenders that have participated in the SBA program or other export loan guarantee programs that serve small businesses; and (5) export-oriented trade associations that deal with small businesses who export or are considering exporting. Information was also sought from the 18 regional managers from the SBA international trade program who are working in U.S. Export Assistance Centers (USEACs).

CONSAD’s analysis suggests that, by and large, small businesses that wish to export can find the necessary working capital to do so. But, a primary reason for this finding is the fact that loan guarantee programs, such as SBA’s EWCP and others, are available to encourage lenders to provide EWC loans to small businesses by minimizing the risk to lenders who participate in the program. In other words, without such loan guarantee programs, many exporters would find it difficult and/or much more expensive to secure the needed EWC financing. Thus, in the absence of these programs, one could conclude that there, indeed, would be a financing gap preventing some small businesses from exporting. Moreover, this study has also identified aspects of the SBA EWCP that can be improved upon so that EWC financing can be made more easily available to many more small businesses that wish to export. These suggested improvements were presented in the comprehensive report prepared for the SBA.

Assistance to the Small Business Administration With Policy Papers on Issues Important to Small Business

For the U.S. Small Business Administration, CONSAD was asked to examine national policies in the areas of healthcare, trade, taxes, and energy and the impact these policies have on small businesses. This work was performed to coincide with the National Small Business Week (NSBW) conference, held annually. CONSAD was responsible for gathering the various arguments, summarizing the information, analyzing the information, and providing recommendations consistent with and supportive of the SBA Administrator’s positions on these various policies.

Effects on Revenues from Repealing the Estate Tax and Limiting the Step-up in Basis

In this study for the American Family Business Institute, CONSAD has estimated the change -- at the margin -- in government revenues from imposing limits on the "step-up in basis" provisions over a ten-year period. Results of CONSADs modeling demonstrate that immediate repeal of the estate tax and adoption of the specified limited step-up in basis will generate a cumulative net increase in government tax revenues equal to $38.0 billion over the period from 2003 through 2012.

Click here to see the complete report.

CONSAD Modeling Work Highlighted by NFIB

CONSAD was acknowledged by its client the National Federation of Independent Business (NFIB) for the development of the RIM - Regulatory Impact Model. The RIM assists NFIB Foundation analysts in examining the impacts of Federal and state regulatory actions on small business.  The model works in concert with the REMI regional model.

  • Comments of NFIB President, Jack Farris in MyBusiness magazine.


Projected Economic Impacts of Presque Isle Downs, Inc. Race Track and Slots Casino on the Northwestern Pennsylvania Region

The development and operation of the proposed Presque Isle Downs, Inc. (PIDI) thoroughbred racetrack and slots casino (or, alternatively, racino) near the intersection of Interstate Highway 90 and State Route 97 in Summit Township in Erie County would involve substantial expenditures by PIDI, its employees, and its visitors. Those expenditures would stimulate economic activity throughout the Northwestern Pennsylvania region. CONSAD was contracted by Presque Isle Downs, Inc to produce projections of the total direct, indirect, and induced economic impacts that would be stimulated by the construction and the first five years of operation of the racino. The impact estimates were produced by applying to the corresponding expenditure estimates economic multipliers from the Regional Input-Output Modeling System (RIMS II) that have been prepared by the Regional Economic Analysis Division of the Bureau of Economic Analysis in the U.S. Department of Commerce. The multipliers produced estimates of the total impacts of the racino-related expenditures on the total output of all industries affected by the spending, on the earnings of households with workers employed in those industries, and on employment in those industries throughout the six-county region.

Study of the Economic Impacts of a Ten Percent Tax on Poured Alcoholic Beverages in Allegheny County, PA

CONSAD Research Corporation was engaged by Friends Against Counterproductive Taxation (FACT) to conduct an analysis of the impact of the proposed (and subsequently enacted) ten percent drink tax on the food and beverage service industry in Allegheny County, PA. The analysis was based on data obtained from the published economics literature, publicly accessible sources, and interviews with and proprietary data from representative members of the food and beverage service industry in the county. CONSAD documented the results from the analysis in a report presented to members of the Allegheny County, PA council.

Economic Impact Study of the Proposed Trans-Allegheny Interstate Line (TRAIL) In Pennsylvania

CONSAD Research Corporation was engaged by the Trans-Allegheny Interstate Line Company (TrAILCo) to perform an economic impact study of the high voltage electric transmission lines and related facilities that TrAILCo has applied to locate, construct, operate, and maintain in Washington and Greene Counties in Southwestern Pennsylvania. CONSAD’s study analyzed the direct, indirect, and induced economic impacts that will result first from the construction and then from the operation and maintenance of the Pennsylvania-based components of the Trans-Allegheny Interstate Line (TrAIL). The study also produced estimates of the direct, indirect, and induced impacts from additional electric generation facilities (including renewable and other nontraditional power technologies) and related developments (such as energy intensive industrial plants; supporting suppliers of equipment, materials and services; and infrastructure) that might be stimulated in Southwestern Pennsylvania by development of the TrAIL. The array of economic impacts that were examined included employment, employee compensation (earnings), value added, output, business volume (i.e., output plus the cost of goods sold in the wholesale and retail trade sectors), and selected tax revenues, including revenues from the sales tax, personal income tax, corporate net income tax, and business franchise tax. Separate impact estimates were developed for the construction components of the TrAIL, the operation and maintenance components of the TrAIL, and the total impacts over time. CONSAD provided a series of detailed briefings of its finding to TrAILCo representatives and also prepared written testimony (and rebuttal testimony) for use in the public hearings before the PA Public Utility Commission (PUC).


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