Department of Economics
University of Virginia
Monroe Hall, Room 248
248 McCormick Rd
Charlottesville, VA 22903
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Information about this author at RePEc
NBER Working Papers and Publications
|January 2018||Targeting with In-kind Transfers: Evidence from Medicaid Home Care|
with Ethan M.J. Lieber: w24267
Making a transfer in kind reduces its value to recipients but can improve targeting. We develop an approach to quantifying this tradeoff and apply it to home care. Using randomized experiments by Medicaid, we find that in-kind provision significantly reduces the value of the transfer to recipients while targeting a small fraction of the eligible population that is sicker and has fewer informal caregivers than the average eligible. Under a wide range of assumptions within a standard model, the targeting benefit exceeds the distortion cost. This highlights an important cost of recent reforms toward more flexible benefits.
|March 2016||Government Old-Age Support and Labor Supply: Evidence from the Old Age Assistance Program|
with Daniel K. Fetter: w22132
Many major government programs transfer resources to older people and implicitly or explicitly tax their labor. In this paper, we shed new light on the labor supply and welfare effects of such programs by investigating the Old Age Assistance Program (OAA), a means-tested and state-administered pension program created by the Social Security Act of 1935. Using Census data on the entire US population in 1940, we exploit the large differences in OAA programs across states to estimate the labor supply effects of OAA. Our estimates imply that OAA reduced the labor force participation rate among men aged 65-74 by 8.5 percentage points, more than half of its 1930-40 decline. But both reduced-form evidence and an estimated structural model of labor supply suggest that the welfare cost to recipients...
Published: Daniel K. Fetter & Lee M. Lockwood, 2018. "Government Old-Age Support and Labor Supply: Evidence from the Old Age Assistance Program," American Economic Review, vol 108(8), pages 2174-2211. citation courtesy of
|December 2014||Incidental Bequests and the Choice to Self-Insure Late-Life Risks|
Despite facing significant uncertainty about their lifespans and health care costs, most retirees do not buy annuities or long-term care insurance. In this paper, I find that retirees' saving and insurance choices are highly inconsistent with standard life cycle models in which people care only about their own consumption but match well models in which bequests are luxury goods. Bequest motives tend to reduce the value of insurance by reducing the opportunity cost of precautionary saving. The results suggest that bequest motives significantly increase saving and significantly decrease purchases of long-term care insurance and annuities.
Published: Lee M. Lockwood, 2018. "Incidental Bequests and the Choice to Self-Insure Late-Life Risks," American Economic Review, vol 108(9), pages 2513-2550.