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AN NBER PUBLICATION ISSUE: No. 11, November 1997

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
... standardized math test scores rose significantly more rapidly for students who used vouchers to attend private schools than for their counterparts in public schools. Milwaukee's experiment with school vouchers has been a source of heated debate among parents, politicians, and educators, and also among social scientists trying to measure its effects. The program, started in 1990, gives selected children from low-income families taxpayer-funded vouchers to allow...

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More open countries...have experienced faster productivity growth throughout the decades 1960 to 1990. As rhythmic as the tide, every four years politicians rekindle the debate over trade policy. Is there a correlation between trade policy and economic performance? Do protectionist policies ensure growth or is it free trade that promotes rapid growth? The trade policy debate is hardly new, NBER Research Associate SebastianEdwards suggests in Openness, Productivity...
... prefunding Social Security and Medicare benefits would avoid the need for any tax increases 20 years or more from now. Because of increasing life expectancy, if no changes are made to the current Social Security and Medicare systems, then based on estimates by the Congressional Budget Office, tax rates to fund promised benefits would have to more than double by the year 2050. But in The Economics of Prefunding Social Security and Medicare Benefits (NBER Working...
... a 20 percent drop in wages leads to a 12 to 18 percent increase in youth participation in crime. According to a recent study on Market Wages and Youth Crime (NBER Working Paper No. 5983) by NBER Faculty Research Fellow Jeffrey Grogger, there is a strong relationship between wage levels and criminal behavior, which explains why, over the past 20 years, crime rates for young men have increased while their wages have decreased. This also at least partially explains...
...the 'traditional' and the 'voice' approaches... achieve equal amounts of cost reduction: almost 3 percent per year in real terms. One way for companies to raise profits is to reduce costs. For decades Japanese automakers have required their suppliers to reduce their costs by several percentage points per year. More recently, U.S. automakers have adopted the idea that the prices of the components they buy from suppliers should go down every year, even using the...
... in 1993 the Medicaid program lowered the wealth holdings of eligible households by 17.7 percent while raising consumption expenditures by 5.2 percent. Policymakers and economists alike worry that Americans aren't saving enough, especially lower income households. In Public Health Insurance and Private Savings (NBER Working Paper No. 6041), Jonathan Gruber and Aaron Yelowitz look at the effect of Medicaid, the government's health insurance program for low income...

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