Skip to main content


Estimating the Economic Value of Zoning Reform
Santosh Anagol, University of Pennsylvania
Fernando V. Ferreira, University of Pennsylvania and NBER
Jonah M. Rexer, Princeton University

Anagol, Ferreira, and Rexer develop a framework to estimate the economic value of a recent zoning reform in the city of São Paulo, which altered maximum permitted construction at the city-block level. Using a spatial regression discontinuity design, the researchers find that developers file for more multi-family construction permits in blocks with higher allowable densities. They incorporate these microestimates into an equilibrium model of housing supply and demand to estimate the long term impact of zoning changes. Supply responses from the reform produce a 2.2 percent increase in the total housing stock, leading to a 0.5% reduction in prices on average, with substantial heterogeneity across neighborhoods. Consumer welfare gains due to price reductions are small, but increase 4-fold once Anagol, Ferreira, and Rexer account for changes in the built environment, with more gains accruing to college-educated and higher income households. However, nominal house price losses faced by existing homeowners and landlords overshadow all consumer welfare gains.


This paper was distributed as Working Paper 29440, where an updated version may be available.

Reducing Ordeals through Automatic Enrollment: Evidence from a Health Insurance Exchange
Mark Shepard, Harvard University and NBER
Myles Wagner, Harvard University

Incomplete take-up is a major concern in safety net programs, including health insurance. Studying a targeted auto-enrollment policy in Massachusetts, Shepard and Wagner find that removing hassles through a simple shift in defaults has substantial impacts, boosting enrollment 30-50% and differentially enrolling young, healthy, low-cost individuals. While auto-enrollment worsens targeting according to the classic criterion - enrolling people with lower value for insurance - this criterion is incomplete because low (private) value is correlated with low public cost and misses uncompensated care spillovers. Relative to subsidies, auto-enrollment has similar targeting properties but is 36-125% more cost-effective by avoiding new spending on inframarginal enrollees.

Opportunity Unraveled: Private Information and the Missing Markets for Financing Human Capital
Daniel Herbst, University of Arizona
Nathaniel Hendren, Harvard University and NBER

Investing in college carries high returns, but comes with considerable risk. Financial products like equity contracts can mitigate this risk, yet college is typically financed through nondischargeable, government-backed student loans. This paper argues that adverse selection has unraveled private markets for college-financing contracts that mitigate risk. Herbst and Hendren use survey data on students' expected post-college outcomes to estimate their knowledge about future outcomes, and the researchers translate these estimates into their implication for adverse selection of equity contracts and several state-contingent debt contracts. Herbst and Hendren find students hold significant private knowledge of their future earnings, academic persistence, employment, and loan repayment likelihood, beyond what is captured by observable characteristics. For example, their empirical results imply that a typical college-goer must expect to pay back $1.64 in present value for every $1 of equity financing to cover the financier's costs of covering those who would adversely select their contract. Herbst and Hendren estimate that college-goers are not willing to accept these terms so that private markets unravel. Nonetheless, their framework quantifies significant welfare gains from government subsidies that would open up these missing markets and partially insure college-going risks.


This paper was distributed as Working Paper 29214, where an updated version may be available.

Rationing Medicine Through Bureaucracy: Authorization Restrictions in Medicare
Zarek C. Brot-Goldberg, University of Chicago
Samantha Burn, Harvard University
Timothy Layton, Harvard University and NBER
Boris Vabson, Harvard University
The Racial Wealth Gap, 1860-2020
Ellora Derenoncourt, Princeton University and NBER
Chi Hyun Kim, University of Bonn
Moritz Kuhn, University of Bonn
Moritz Schularick, University of Bonn

The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this paper, Derenoncourt, Kim, Kuhn, and Schularick provide a new long-run series on white-to-Black per capita wealth ratios from 1860 to 2020, using data from the US Census, historical state tax records, and a newly harmonized version of the Survey of Consumer Finances (1949-2019), among other sources. Derenoncourt, Kim, Kuhn, and Schularick combine these data with a parsimonious framework of wealth accumulation by each racial group to show that the path of racial wealth convergence will remain extremely slow given vastly different starting conditions under slavery. Further, the observed path of convergence indicates that stopped around 1980 and the wealth gap is currently on track to persist or even diverge again due to portfolio differences and the increasing importance of capital gains that affect wealth-accumulating conditions for Black and white Americans differentially. Their findings speak to the potential importance of policies such as reparations, which address the historical origins of today's persistent gap, as well as policies that reduce wealth inequality and thereby improve the relative wealth position of Black Americans.

Firms and Unemployment Insurance Take-Up
Marta Lachowska, W.E. Upjohn Institute for Employment Research
Isaac Sorkin, Stanford University and NBER
Stephen A. Woodbury, Michigan State University

This paper uses administrative data from Washington State to quantify the role of employers in the incomplete take-up of unemployment insurance (UI). Consistent with previous literature, nearly half of the workers who appear to be UI-eligible do not claim UI. Moreover, there is a steep income gradient in claiming. Distinctively, Lachowska, Sorkin, and Woodbury find substantial dispersion in both firm-level UI claim rates and appeals (of UI claims) rates. Firm-level claim and appeals rates are negatively correlated, which is consistent with a deterrent effect of firms' appeals on workers' claiming. Claims and appeals rates are tightly related to workers' pre-separation wage rates, and firm fixed effects explain a large share of the income gradient in take-up and appeals. The researchers show that if firms with below-median firm effects in claims rates had the median claims rate, then take-up would increase by about six percentage points. Finally, Lachowska, Sorkin, and Woodbury estimate a simple model of experience rating and claims and use it to assess the targeting properties of UI and how experience rating affects targeting and take-up. The main source of targeting error in the system arises through incomplete take-up and decreasing experience rating would increase take-up. Lachowska, Sorkin, and Woodbury also solve for the changes in experience rating that would achieve similar increases in take-up as compressing the firm effects distribution.

Sufficient Statistics for Nonlinear Tax Systems with Preference Heterogeneity
Antoine Ferey, University of Munich
Benjamin Lockwood, University of Pennsylvania and NBER
Dmitry Taubinsky, University of California, Berkeley and NBER

This paper provides general and empirically-implementable sufficient statistics formulas for optimal nonlinear tax systems in the presence of preference heterogeneity. Ferey, Lockwood, and Taubinsky study unrestricted tax systems on income and savings (or other commodities) that implement the optimal direct-revelation mechanism, as well as simpler tax systems that impose common restrictions like separability between earnings and savings taxes. The researchers characterize the optimum using familiar elasticity concepts and a sufficient statistic for across-income preference heterogeneity: the difference between the cross-sectional variation of savings with income, and the causal effect of income on savings. The Atkinson-Stiglitz Theorem is a knife-edge case corresponding to zero difference, and a number of other key results in optimal tax theory are subsumed as special cases. Their formulas also apply to other sources of across-income heterogeneity, including heterogeneity in rates of return on savings, inheritances, and the ability to shift income between tax bases. Ferey, Lockwood, and Taubinsky provide tractable extensions of these results that include multidimensional heterogeneity, additional efficiency rationales for taxing heterogeneous asset returns, and corrective motives to encourage more saving. Applying these formulas in a calibrated model of the U.S. economy, the researchers find that the optimal savings tax is positive and progressive.

Racial Disparities in Housing Returns
Amir Kermani, University of California, Berkeley and NBER

Kermani and Wong document the existence of a racial gap in realized housing returns that is an order of magnitude larger than disparities arising from housing costs alone, and is driven almost entirely by differences in distressed home sales (i.e. foreclosures and short sales). Black and Hispanic homeowners are both more likely to experience a distressed sale and to live in neighborhoods where distressed sales erase more house value. Importantly, absent financial distress, houses owned by minorities do not appreciate at slower rates than houses owned by non-minorities. Racial differences in income stability and liquid wealth explain a large share of the differences in distress. Kermani and Wong use quasi-experimental variation in loan modifications to show that policies that restructure mortgages for distressed minorities can increase housing returns and reduce the racial wealth gap.


This paper was distributed as Working Paper 29306, where an updated version may be available.

A Denial a Day Keeps the Doctor Away
Abe Dunn, Bureau of Economic Analysis
Joshua D. Gottlieb, University of Chicago and NBER
Adam Shapiro, Federal Reserve Bank of San Francisco
Daniel J. Sonnenstuhl, University of Chicago
Pietro Tebaldi, Columbia University and NBER

Who bears the consequences of administrative problems in healthcare? Dunn, Gottlieb, Shapiro, Sonnenstuhl, and Tebaldi use data on repeated interactions between a large sample of US physicians and many different insurers to document the complexity of healthcare billing, and estimate its economic costs for doctors and consequences for patients. Observing the back-and-forth sequences of claims' denials and resubmissions for past visits, the researchers can estimate physicians' costs of haggling with insurers to collect payments. Combining these costs with the revenue never collected, they estimate that physicians lose 17% of Medicaid revenue to billing problems, compared with 5% for Medicare and 3% for commercial payers. Identifying off of physician movers and practices that span state boundaries, Dunn, Gottlieb, Shapiro, Sonnenstuhl, and Tebaldi find that physicians respond to billing problems by refusing to accept Medicaid patients in states with more severe billing hurdles. These hurdles are just as quantitatively important as payment rates for explaining variation in physicians' willing to treat Medicaid patients. Dunn, Gottlieb, Shapiro, Sonnenstuhl, and Tebaldi conclude that administrative frictions have first-order costs for doctors, patients, and equality of access to healthcare.


This paper was distributed as Working Paper 29010, where an updated version may be available.

Why Does Disability Increase During Recessions? Evidence from Medicare
Colleen Carey, Cornell University and NBER
Nolan H. Miller, University of Illinois at Urbana-Champaign and NBER
David Molitor, University of Illinois at Urbana-Champaign and NBER

Benefit awards for Social Security Disability Insurance (DI) increase during recessions and fall during expansions. Carey, Miller, and Molitor use Medicare administrative data for all DI recipients who entered Medicare between 1993 and 2017 to provide new evidence on the health of DI recipients who apply at different points in the business cycle. The researchers find that each percentage point increase in the unemployment rate at the time of application corresponds to 4.1% more awards and 0.4% lower Medicare spending among new entrants. Carey, Miller, and Molitor then investigate whether this relationship is driven by changes in health, with deteriorating economic conditions making individuals less healthy, or by changes in the opportunity cost of applying for disability insurance, with reduced earning potential making the program more appealing. To separate these two channels, they leverage a feature of the DI eligibility process that relaxes the criteria at certain age thresholds. Carey, Miller, and Molitor find that marginal DI entrants have similar spending, regardless of whether they were induced to enter by poor economic conditions or by the age discontinuities in the eligibility criteria. The findings suggest that the opportunity-cost channel accounts for nearly all recession-related DI entry.

Social Position and Fairness Views
Kristoffer B. Hvidberg, University of Copenhagen
Claus Kreiner, University of Copenhagen
Stefanie Stantcheva, Harvard University and NBER

Hvidberg, Kreiner, and Stantcheva link survey data on Danish people's perceived income position and views of inequality within various reference groups to administrative records on their reference groups, income histories, and life events. For all reference groups, people exhibit center bias, whereby lower-ranked respondents in a group tend to place themselves higher because they think others' incomes are lower, while higher-ranked respondents place themselves lower. People view inequalities within co-workers and education group as most unfair, but underestimate inequality most exactly within these groups. Perceived fairness of inequalities is strongly related to current position, moves with shocks like unemployment or promotions, and changes when experimentally showing people their actual positions.


This paper was distributed as Working Paper 28099, where an updated version may be available.

Ambulance Taxis
Paul J. Eliason, Brigham Young University
Riley J. League, Duke University
Jetson Leder-Luis, Boston University
Ryan C. McDevitt, Duke University
James W. Roberts, Duke University and NBER

Eliason, League, Leder-Luis, McDevitt, and Roberts study the relative effectiveness of administrative regulations, criminal enforcement, and civil whistleblower lawsuits for combatting health care fraud. Between 2003 and 2017, Medicare spent $7.7 billion on 37.5 million regularly scheduled, non-emergency ambulance rides for patients traveling to and from dialysis facilities, with dozens of lawsuits alleging that Medicare reimbursed rides for patients who did not meet the requirements for receiving one. Using a novel data set and an identification strategy based on the staggered timing of regulations and lawsuits across the US, Eliason, League, Leder-Luis, McDevitt, and Roberts find that a regulation requiring prior authorization for ambulance reimbursements reduced spending much more than criminal and civil lawsuits did. Despite the sharp drop in both ambulance transports and the companies that provide them following prior authorization, patients' health outcomes did not change, indicating that most rides were not medically necessary. Their results suggest that administrative actions have a much larger impact than targeted criminal enforcement, providing novel evidence that regulations may be more cost-effective than ex post ligation for preventing health care fraud.

Firm Investment, Labor Supply, and the Design of Social Insurance: Evidence from Accommodations for Workplace Disability
Naoki Aizawa, University of Wisconsin-Madison and NBER
Corina Mommaerts, University of Wisconsin-Madison and NBER
Stephanie L. Rennane, RAND Corporation

This paper studies the impact of firm accommodation decisions on labor market outcomes for individuals with workplace disabilities, and assesses the implications for optimal social insurance against workplace disability. We leverage detailed administrative data from a unique workers' compensation program in Oregon that provides wage subsidies to firms for workplace accommodation. Exploiting a policy change to the wage subsidy, we find that a five percentage point decrease in the wage subsidy rate led to a 5.5 percentage point decrease in accommodation and corresponding effects on employment and earnings through eight quarters after injury. We then develop and estimate a dynamic bargaining model between workers and firms in which labor market frictions, worker turnover, and imperfect experience rating can lead to under-accommodation and inefficient labor market outcomes after workplace disability. We use the quasi-experimental estimates to help identify key parameters of the model. Counterfactual analyses show that a wage subsidy of 40% maximizes overall worker welfare, with higher welfare gains for workers with low disutility of work during injury in labor markets with inefficiently low accommodation rates.



Thomas R. Berry-Stoelzle, University of Iowa
Harun Bulut, NCIS--National Crop Insurance Services
Samantha Burn, Harvard University
Marco Cosconati, Bank of Italy and IVASS
William Dodds, Tulane University
Martin Eling, University of St. Gallen
Chuck Fang, University of Pennsylvania
Antoine Ferey, University of Munich
Daniel M. Kaliski, University of London
Divya Kirti, International Monetary Fund
Christian Kubitza, University of Bonn
Rebecca Lester, Stanford University
James Tyler. Leverty, University of Wisconsin-Madison
Joanne Linnerooth-Bayer, International Institute for Applied Systems Analysis
Victor Lyonnet, Ohio State University
Moshe Arye. Milevsky, York University / Schulich School of Business
Michael Murray, Insurance Services Offices, Inc.
Stanislava Nikolova, University of Nebraska-Lincoln
Radek Paluszynski, University of Houston
Ioana M. Petrescu, Harvard University
Richard J. Rosen, Federal Reserve Bank of Chicago
Joan Schmit, University of Wisconsin-Madison
David Schoenherr, Princeton University
Ishita Sen, Harvard University
Rene M. Stulz, Oregon State University
Ana-Maria Tenekedjieva, Federal Reserve Board
Neil Thakral, Brown University
Andre F. Veiga, Imperial College London
Gordon Woo, Risk Management Solutions
Nan Zhu, Pennsylvania State University
Ivelin Zvezdov, AIR Worldwide

More from NBER

In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, and the Bulletin on Health — as well as online conference reports, video lectures, and interviews.



  • Lecture
Alan J. Auerbach, the Robert D. Birch Professor of Economics and Law at the University of California, Berkeley, and...
  • Article
Long-time NBER research associates Joshua Angrist, David Card, and Guido Imbens have been awarded the 2021 Nobel Prize in Economic Sciences in recognition of...
  • Lecture
The credible estimation of causal effects is a central task of applied econometrics. Two tools for this purpose that...