NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Abstracts of Selected Recent NBER Working Papers

WP 14759

Jason Abaluck, Jonathan Gruber

Choice Inconsistencies Among the Elderly: Evidence from Plan Choice in the Medicare Part D Program

The Medicare Part D Prescription Drug Plan represents the most significant privatization of the delivery of a public insurance benefit in recent history, with dozens of private insurers offering a wide range of products with varying prices and product features; the typical elder had a choice of roughly 40 stand-alone drug plans. In this paper we evaluate the choices of elders across this wide array of Part D options using a unique data set of prescription drug claims matched to information on the characteristics of choice sets. We first document that the vast majority of elders are choosing plans that are not on the "efficient portfolio" of plan choice in the sense that an alternative plan offers better risk protection at a lower cost. We then estimate several discrete choice models to document three dimensions along which elders are making choices which are inconsistent with optimization under full information: elders place much more weight on plan premiums than they do on expected out of pocket costs; they place almost no value on variance reducing aspects of plans; and they value plan financial characteristics beyond any impacts on their own financial expenses or risk.These findings are robust to a variety of specifications and econometric approaches. We develop an "adjusted" revealed preference approach that combines data from consumer choices with ex ante restrictions on preferences, and find that in a partial equilibrium setting, restricting the choice set to the three lowest average cost options would have likely raised welfare for elders under the program.

WP 14790

Kanaka Shetty, Thomas DeLeire, Chapin White, Jayanta Bhattacharya

Changes in U.S. Hospitalization and Mortality Rates Following Smoking Bans

U.S. state and local governments are increasingly restricting smoking in public places. This paper analyzes nationally representative databases, including the Nationwide Inpatient Sample, to compare short-term changes in mortality and hospitalization rates in smoking-restricted regions with control regions. In contrast with smaller regional studies, we find that workplace bans are not associated with statistically significant short-term declines in mortality or hospital admissions for myocardial infarction or other diseases. An analysis simulating smaller studies using subsamples reveals that large short-term increases in myocardial infarction incidence following a workplace ban are as common as the large decreases reported in the published literature.

WP 14800

Chulhee Lee

Labor Force Participation of Older Males in Korea: 1955-2005

This study estimates the labor force participation rate (LFPR) of older males in Korea from 1955 to 2005, and analyzes the effects of several determining factors on labor force participation decisions at older ages. The LFPR of older men increased substantially from the mid-1960s to the late-1990s. This pattern is in sharp contrast to the historical experiences of most OECD countries, where the LFPR of older males declined rapidly over the last century. The rise in the LFPR of older males in Korea between 1965 and 1995 is largely explained by the dramatic increase in the labor-market activity of the rural elderly population. The results of regression analyses suggest that the acceleration of population aging in rural areas due to the selective out-migration of younger persons was the major cause of the sharp increase in the LFPR of older males. It is likely that the relative decline of the rural economy in the course of industrialization made it increasingly difficult for the rural elderly population to save for retirement.

WP 14811

Gabriel Aranovich, Jay Bhattacharya, Alan Garber, Thomas MaCurdy

Coping with Chronic Disease? Chronic Disease and Disability in Elderly American Population 1982-1999

It is well known that disability rates among the American elderly have declined over the past decades. The cause of this decline is less well established. In this paper, we test one important possible explanation - that the decline in disability occurred because of chronic disease prevention efforts among the elderly. For this purpose we analyze data from the National Long Term Care Survey and from the National Health and Interview Survey. Our findings suggest that primary prevention, as reflected in decreased disease prevalence, was not responsible for advances made in elderly functioning between 1980 and 2000. We found a broad decline in less severe forms of disability that is unlikely to have resulted from improved disease management. Instead, these measured improvements in functioning may reflect environmental, technological, and/or socioeconomic changes. Improvements in the more severe forms of disability were modest and were restricted to those suffering from particular illnesses, which make improved and/or more aggressive management a plausible explanation and one that might increase costs should the trend persist.

WP 14820

David Bloom, David Canning, Gunther Fink, Jocelyn Finlay

The Cost of Low Fertility in Europe

We analyze the effect of fertility on income per capita with a particular focus on the experience of Europe. For European countries with below-replacement fertility, the cost of continued low fertility will only be observed in the long run. We show that in the short run, a fall in the fertility rate will lower the youth dependency ratio and increase the working-age share, thus raising income per capita. In the long run, however, the burden of old-age dependency dominates the youth dependency decline, and continued low fertility will lead to small working-age shares in the absence of large migration inflows. We show that the currently very high working-age shares generated by the recent declines in fertility and migration inflows are not sustainable, and that significant drops in the relative size of the working-age population should be expected. Without substantial adjustments in labor force participation or migration policies, the potential negative repercussions on the European economy are large.

WP 14886

Kathleen Mullen, Richard Frank, Meredith Rosenthal

Can You Get What You Pay For? Pay-For-Performance and the Quality of Healthcare Providers

Despite the popularity of pay-for-performance (P4P) among health policymakers and private insurers as a tool for improving quality of care, there is little empirical basis for its effectiveness. We use data from published performance reports of physician medical groups contracting with a large network HMO to compare clinical quality before and after the implementation of P4P, relative to a control group. We consider the effect of P4P on both rewarded and unrewarded dimensions of quality. In the end, we fail to find evidence that a large P4P initiative either resulted in major improvement in quality or notable disruption in care.

WP 14987

John Cawley, Joshua Price

Outcomes in a Program that Offers Financial Rewards for Weight Loss

Obesity rates in the U.S. have doubled since 1980. Given the medical, social, and financial costs of obesity, a large percentage of Americans are attempting to lose weight at any given time but the vast majority of weight loss attempts fail. Researchers continue to search for safe and effective methods of weight loss, and this paper examines one promising method - offering financial rewards for weight loss. This paper studies data on 2,407 employees in 17 worksites who participated in a year-long worksite health promotion program that offered financial rewards for weight loss. The intervention varied by employer, in some cases offering steady quarterly rewards for weight loss and in other cases requiring participants to post a bond that would be refunded at year's end conditional on achieving certain weight loss goals. Still others received no financial incentives at all and serve as a control group. We examine the basic patterns of enrollment, attrition, and weight loss in these three groups. Weight loss is modest. After one year, it averages 1.4 pounds for those paid steady quarterly rewards and 3.6 pounds for those who posted a refundable bond, under the assumption that dropouts experienced no weight loss. Year-end attrition is as high as 76.4%, far higher than that for interventions designed and implemented by researchers.

WP 15000

Anne Case, Christina Paxson

The Impact of the AIDS Pandemic on Health Services in Africa: Evidence from Demographic and Health Surveys

We analyze the effect of fertility on income per capita with a particular focus on the experience of Europe. For European countries with below-replacement fertility, the cost of continued low fertility will only be observed in the long run. We show that in the short run, a fall in the fertility rate will lower the youth dependency ratio and increase the working-age share, thus raising income per capita. In the long run, however, the burden of old-age dependency dominates the youth dependency decline, and continued low fertility will lead to small working-age shares in the absence of large migration inflows. We show that the currently very high working-age shares generated by the recent declines in fertility and migration inflows are not sustainable, and that significant drops in the relative size of the working-age population should be expected. Without substantial adjustments in labor force participation or migration policies, the potential negative repercussions on the European economy are large.

WP 15005

Richard Burkhauser, John Cawley, Maximilian Schmeiser

Differences in the U.S. Trends in the Prevalence of Obesity Based on Body Mass Index and Skinfold Thickness

There are several ways to measure fatness and obesity, each with its own strengths and weaknesses. The primary measure for tracking the prevalence of obesity has historically been body mass index (BMI). This paper compares long-run trends in the prevalence of obesity when obesity is defined using skinfold thickness instead of body mass index (BMI), using data from the full series of U.S. National Health Examination Surveys. The results indicate that when one uses skinfold thicknesses rather than BMI to define obesity, the rise in the prevalence of obesity is detectable ten to twenty years earlier. This underscores the importance of examining multiple measures of fatness when monitoring or otherwise studying obesity.

 

 
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