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AN NBER PUBLICATION ISSUE: No. 6, June 1999

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
High aptitude students are now more likely to end up surrounded by fellow high aptitude students and are more likely to be matched to demanding, costly educational programs. In the last three decades, the incomes and wages of college-educated Americans have become more dispersed. In fact, inequality in their incomes has risen faster than income inequality among Americans overall. In Explaining Rising Income and Wage Inequality Among the College-Educated (NBER Working...

Research Summaries

Article
A 10 percent increase in the price of cigarettes would reduce the probability of using marijuana by between 3.4 and 7.3 percent and would decrease the average level of use by regular users by between 3.6 and 8.4 percent. One of the most fiercely debated issues in the controversy over restricting youth access to tobacco products is whether such deterrence will steer them towards use of illicit drugs, including marijuana. Opponents of cigarette price increases have...
Article
Herd behavior among all institutional investors increased significantly during the Korean economic crisis.  In Foreign Portfolio Investors Before and During a Crisis (NBER Working Paper No. 6968) , Woochan Kim and Shang-Jin Wei analyze foreign investors' stock positions before and during the Korean economic crisis of 1997-8 and observe that in the midst of the turmoil, there was a convergence in behavior among all types of foreign investors -- institutional and...
Article
Income-differentiated mortality reduces the progressivity in the Social Security system by more than half. Higher earners, on average, live longer than poor people. Thus, Social Security in its present form is not as progressive as is commonly thought: the benefits formula is progressive, but because higher earners live longer, they collect more benefits. Relatedly, the reforms to shore up Social Security's finances by cutting benefits and raising taxes - considered...

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