NBER News and Research Archive

12 September 2012

Air Pollution and Mortality Rates

Since its initiation in 2003, the U.S. emissions cap-and-trade market – the NOx Budget Trading Program (NBP) –has greatly reduced NOx emissions. Michael Greenstone, Olivier Deschenes, and Joseph Shapiro find that the reductions in NOx emissions decreased the number of summer days with high ozone levels by about 25 percent. They estimate that NBP also led to reductions in expenditures on prescription pharmaceuticals of almost 2 percent, while the summer mortality rate declined by approximately one half of one percent. That translates into 2,200 fewer premature deaths per summer, mainly among individuals 75 and older.

11 September 2012

How Much Unemployment Does Mismatch Explain?

Analyzing data on job vacancies from two sources, one of which covers all online advertisements of U.S. jobs, Ayşegül Şahin, Joseph Song, Giorgio Topa, and Giovanni Violante find that a mismatch between unemployed workers and available jobs in various industries and occupations explains at most one third of the total observed increase in the unemployment rate since 2006. They further find that a geographical mismatch between jobs and workers does not appear to play any role in increasing unemployment.

10 September 2012

Corporate Taxes and Corporate Leverage

Over the period 1990-2011, corporate income tax rates changed at different times across a number of U.S. states. Florian Heider and Alexander Ljungqvist show that firms increased their leverage by 114 basis points on average (equivalent to $62.1 million in extra debt) when their home state raised tax rates, but did not reduce their leverage in response to tax cuts. Even within firms, tax increases that were later reversed nonetheless led to permanent increases in a firm’s leverage. The researchers find that tax sensitivity is greater among profitable and investment-grade firms which have a greater marginal tax benefit and lower marginal cost of issuing debt, respectively.

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.
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