7 September 2012

Responses to Reductions in Dutch Disability Insurance Benefits

The 1993 reforms of the disability insurance (DI) system In the Netherlands affected different groups of individuals in different ways, and had varied effects even within age cohorts. Lex Borghans, Anne Gielen, and Erzo Luttmer find that individuals who faced benefit reductions offset one euro of lost DI benefits by collecting 31 cents more from other social assistance programs. This benefit-substitution effect declines somewhat over time, but is still 20 percent after eight years. These researchers also find that on average, labor earnings increased by 62 percent of the value of lost DI benefits.

6 September 2012

Federal Health Insurance Reform and the Health Insurance Status of Young Adults

The federal Patient Protection and Affordable Care Act (ACA) allows young adults up to age 26 to enroll as dependents on a parent’s private health plan. Analyzing data from 2004-10, and focusing on the variation across states in the speed with which they implemented this provision of the new law, Joel Cantor, Alan Monheit, Derek DeLia, and Kristen Lloyd find that this section of the ACA increased insurance coverage among young adult dependents by over 5 percentage points. This resulted in a 3.5 percentage point decline in their rate of uninsurance.

5 September 2012

Mental Accounting and the Demand for Premium Gasoline

Using aggregate data from the Energy Information Administration covering the period 1990-2009, as well as data on households’ purchases of gasoline from a large grocery retailer over the period 2006-9, Justine Hastings and Jesse Shapiro find that when gasoline prices rise, consumers substitute to lower octane gasoline. A $1 increase in the price of a gallon of gasoline increases a typical household’s propensity to purchase regular gasoline by 1.4 percentage points. This effect is substantially larger than one would predict based on the income effect of a rise in gasoline prices.

4 September 2012

Carry-Along Trade

Andrew Bernard, Emily Blanchard, Ilke Van Beveren, and Hylke Vandenbussche find that Carry-Along Trade -- that is, the export of goods where the firm exports more than it produces -- is widespread and important, occurring at more than 90 percent of exporters, appearing in more than 95 percent of exported products, and accounting for more than 30 percent of export value. They study data on Belgian manufacturing firms and find that 75 percent of the exported products and 30 percent of the export value from these firms are in goods that are not produced by the firm.

31 August 2012

Autism Prevalence and the Demand for Auxiliary Healthcare Workers

Dhaval Dave and Jose Fernandez investigate how changes in the number of autism cases at each of the 21 regional development centers in California have affected the wages and quantity of auxiliary health providers such as speech pathologists, behavioral therapists, and occupational therapists. Unlike physicians and psychologists who can diagnose autism, those providers cannot induce their own demand. The authors study whether an increase in the incidence of autism, without any increase in other mental disorders, raises the demand for auxiliary health providers and results in both higher wages and an increase in their number. Using data from the American Community Survey, they confirm that a 100 percent increase in the number of autism cases increases the wages of auxiliary health workers relative to those in non-autism health occupations by 8-to-11 percent and increases the number of providers by 7-to-15 percent the following year.

30 August 2012

Enhancing the Efficacy of Teacher Incentives

Roland Fryer, Steve Levitt, John List, and Sally Sadoff conducted an experiment in nine schools in Chicago Heights, IL during the 2010 school year. Teachers were randomly selected to participate in a pay-for-performance program: one set of teachers – the “Gain” group – received bonuses linked to student achievement at the end of the year; the other participating teachers – the “Loss” group – were given an identical lump sum payment at the beginning of the school year and informed that they would have to return some or all of it if their students did not meet performance targets. The researchers find that paying teachers in advance and asking them to give back the money if their students do not improve sufficiently was associated with a larger increase in math test scores among students than paying teachers after the fact if their students' test scores improved.

29 August 2012

Health and Work at Older Ages

Kevin Milligan and David Wise try to unravel the mystery of why people are living longer and healthier lives but not necessarily working longer. They postulate that age-specific mortality rates are an indicator of health status, and therefore argue that men who have the same mortality rates in different years – but who are of different ages -- have similar capacity for work. After analyzing the employment rates of older men in a number of nations, they find that American men aged 55 to 69 in 2007 would have worked 3.7 years longer, on average, if they had worked as much as they did in 1977 at each mortality level. French men in 2007 would have worked 4.6 years longer, on average, if they had worked as much as American men at each level of mortality. In contrast, Japanese men work slightly more than American men, given levels of mortality.

28 August 2012

The Impact of Bilingual Education Programs

Texas requires school districts to offer bilingual education when they have at least 20 limited English proficient (LEP) students enrolled in a particular elementary grade and language. Using data from these districts, Aimee Chin, Meltem Daysal, and Scott Imberman find that bilingual education programs do not significantly affect the standardized test scores of students with Spanish as their home language but do have positive effects on their non-LEP peers.

27 August 2012

Revaluation of Targets after Merger Bids

Ulrike Malmendier, Marcus Opp, and Farzad Saidi collect data on all unsuccessful merger bids in the United States between 1980 and 2008 and document initial announcement effects of 15 percent for stock deals and 25 percent for cash deals. They then show that by the time of the deal's failure, the value of the target firms in stock transactions falls below its pre-announcement level while the value of the targets in cash deals remains about 15 percent above the pre-announcement level. These estimates imply that for the average cash deal completed during their sample period, approximately $78m (in 2010 dollars) is attributable to target revaluation rather than to the merger.

24 August 2012

When Does It Pay to Delay Social Security?

John Shoven and Sita Nataraj Slavov find that if real interest rates are close to zero, then most households – even those with mortality rates that are twice the average – benefit from some delay in taking Social Security benefits, at least for the primary earner. However, at real interest rates closer to their historical average, singles even with substantially greater than average mortality do not benefit from delay. Primary earners with high mortality, on the other hand, can still improve the present value of their household’s benefits through delay.
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us