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Subject: Fw: Information about NBER Appointment
I thought it was a good idea to share the message below with all the members of the Health Economics Program
I am writing to all NBER Health Economics Program members who received appointments in 2000, 2001, or 2002 to provide some information about the appointment. Almost all members of the Bureau research staff are Faculty Research Fellows (FRFs) or Research Associates (RA). A FRF is an untenured assistant professor, while a RE is a tenured associate or full professor. A much smaller number of staff members are Research Economists (RE). This title is most commonly used for staff in foreign countries or for staff who do not have academic appointments.
An initial appointment is made for a period of three years. After that staff members who show activity are retained and promoted to RA if they have been promoted to associate professor with tenure. Activity is based on participation in the Summer Institute, program meetings, and conferences; authoring papers in the NBER Working Paper Series; and submitting grant applications through the Bureau.
There are two advantages to you of funding research through the NBER.
(1). Research associates who fund or make serious efforts to fund get a $3,000 honorarium. Faculty research fellows do not get this.
(2). The Bureau allows you to fund three summer months and a day a week during the academic year. Most universities limit this to 2 or 2.5 summer months.
The advantage to the Bureau is that it gets the indirect cost rather than the university. I know that this can be a problem because some universities want the indirect cost. It is an especially common issue if your academic appointment is in a medical school or a school of public health. But you may be able to argue that you have funded through your university in the past and that you get significant benefits via your NBER affiliation.
I think it is important to recognize that the Bureau provides substantial benefits to its staff. It incurs costs when you put a paper in the Working Paper Series. Obviously, it also incurs costs when it funds your travel to conferences, program meetings, and the Summer Institute. Indirect costs on grants help to offset these costs.
The Bureau encourages funding through the federal government rather than through private foundations. There are two reasons for this. First, the federal grants contain a much higher indirect cost rate than private foundation grants. The Bureau's current indirect cost rate, which is set by the National Science Foundation, is 61.4 percent of wages, salaries, and fringe benefits. This is the rate on all NIH grants--the largest source of funds for health economics research. Private foundations, on the other hand, typically use an indirect cost rate of no more than 9 or 10 percent of total direct costs.
The second reason for encouraging federal funding is that NSF computes the NBER indirect cost rate as the ratio of wages, salaries, and fringe benefits on federal grants to total wages, salaries, and fringe benefits. Hence, the receipt of a private foundation grant lowers the NBER federal indirect cost rate.
An exception to the above is that Martin Feldstein has negotiated an indirect cost rate of 40 percent of wages, salaries, and fringe benefits with the Robert Wood Johnson Foundation. That is in addition to the 9 percent of total direct cost rate used by that Foundation.
A very modest amount of money is available in an unrestricted fund account allocated to the Health Economics Program to offset lost indirect cost and a lower federal indirect cost rate caused by the receipt of a private foundation grant. But, if you are thinking about submitting a grant, your first choice should be NIH, NSF, or RWJ.
If you need more information about funding possibilities or would like to discuss your ideas for grant applications, feel free to contact me. For help in preparing grant application budgets, contact Chris Nagorski, the NBER New York Business Manager (cngorski@gc.cuny.edu or 212-817-7962) or Sue Colligan, Vice President for Administration and Budget (colligan@nber.org or 617-588-0306).
Finally, Kosali Simon and Thomas Dee have primary affiliations with the Children's Program, directed by Jonathan Gruber, and secondary affiliations with the Health Economics Program. They may want to contact Jon for more information about his program.
Michael Grossman
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