26 July 2013

Encouraging School Attendance in Developing Nations

Najy Benhassine, Florencia Devoto, Esther Duflo, Pascaline Dupas, and Victor Pouliquen study an experimental program in Morocco that provided a small cash transfer for education support to the fathers of poor, rural, school-aged children. Even though receipt of the transfer was not conditioned on the children's school attendance, there were large gains in school participation. The authors suggest that the program may have increased parents' belief that education was a worthwhile investment.

25 July 2013

Labor Market Effects of Import Competition

David Autor, David Dorn, Gordon Hanson, and Jae Song compare the earnings and employment experience of U.S. workers who, in 1991, worked in industries with high and low levels of subsequent import growth. They find that over the 1992-2007 period, workers in industries with higher import growth received lower cumulative earnings than those in industries with low import growth. The high-import workers were also more likely to leave the labor force and to receive Disability Insurance benefits.

24 July 2013

Do Some Workers "Work Just for the Insurance?"

Craig Garthwaite, Tal Gross, and Matthew Notowidigdo examine the employment effects of a policy change in 2005 that removed 170,000 Tennessee residents from the state's Medicaid rolls. They find a substantial increase in labor force participation among individuals who lose insurance coverage, suggesting that access to insurance has an important effect on the labor supply decisions of many low wage workers.

23 July 2013

Health Effects of College Completion

Kasey Buckles, Andreas Hagemann, Ofer Malamud, Melinda Morrill, and Abigail Wozniak use changes in the rate of college completion that were induced by the Vietnam War's student deferment program to estimate how completing college affects adult mortality. They find significant declines in cancer and heart disease, as well as overall mortality, associated with college completion.

22 July 2013

Do Higher Medicaid Payment Rates Improve Children's Access to Dental Care?

Thomas Buchmueller, Sean Orzol, and Lara Shore-Sheppard find that higher Medicaid payment rates for dental care are positively related to both the fraction of dentists who report treating any publicly insured patients, and the percent of dental patients who report having public insurance. They study variation in Medicaid payment rates across states and over the period 2001-2010.

19 July 2013

Financial Soundness in Historical Perspective

Andrew Atkeson, Andrea Eisfeldt, and Pierre-Olivier Weill construct a measure of financial soundness for individual firms using data on their equity volatility. They then analyze the financial soundness of U.S. financial firms between 1926 and 2012. They conclude that the financial soundness of financial firms largely resembles that of non-financial firms, and that fluctuations in asset volatility play a key role in affecting financial soundness.

18 July 2013

The VAT's Paper Trail Improves Tax Compliance

Dina Pomeranz examines the changes in self-reported tax liability among a randomly-selected subset of Chilean firms that were notified that they would face increased tax enforcement activity, and among a control group of firms that faced no change in this activity. Firms in the higher enforcement group increased their reported tax liability on transactions that were outside the VAT reporting system, but not on the types of transactions for which the VAT generates a paper trail. This suggests that the paper trail generated by the VAT impedes tax evasion and improves compliance.

17 July 2013

Early Evidence on the Use of Roth 401(k) Plans

John Beshears, James Choi, David Laibson, and Brigitte Madrian examine participant behavior at twelve large firms that added Roth options to their 401(k) plans between 2006 and 2010. In the year after the Roth option becomes available, roughly nine percent of 401(k) participants contribute to it. Participation is nearly twice as high among employees who were hired after the introduction of the Roth option as among those who were hired before, suggesting substantial inertia in retirement plan choices made at the time of hire.

16 July 2013

A Capital Asset Pricing Model of Stock Investors

Many investors form beliefs about future stock market returns based on past returns, even though these beliefs are hard to reconcile with existing models of the overall stock market. Nick Barberis, Robin Greenwood, Lawrence Jin, and Andrei Shleifer find that a consumption-based asset pricing model, in which some investors form beliefs about future price changes in the stock market by extrapolating past price changes while other investors hold fully rational beliefs, captures many features of actual prices and returns. This suggests that the evidence about investors' beliefs is consistent with the facts about prices and returns, and may be the key to understanding them.

15 July 2013

Patients and Their Doctors Respond to Prescription Drug Price Changes

Mariana Carrera, Dana Goldman, and Geoffrey Joyce analyze a sample of first-time cholesterol-lowering statin prescriptions issued to employees from a group of Fortune 500 firms. They find that drug co-pay variation across insurance plans has a relatively small effect on the choice of drug prescribed, and that this effect is not correlated with patient income. However, when the patent for Zocor (simvastatin) expired, prescriptions for it increased substantially, especially for lower-income patients.
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