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AN NBER PUBLICATION ISSUE: No. 1, January 2003

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Allocations to company stock are substantially lower in plans that offer more alternatives. The authors cannot reject the hypothesis that investors follow a simple "1/n" investment allocation for company stock, where n is the total number of investment alternatives available. Currently, about 45 million workers participate in a 401(k)-type plan, and aggregate assets of these plans totaled $1.97 trillion in 2001. The trend toward 401(k)-type plans has forced employees...

Research Summaries

Article
The police measure that most consistently reduces crime is the arrest rate... Felony arrest rates (except for motor vehicle thefts) rose 50 to 70 percent in the 1990s. When arrests of burglars increased 10 percent, the number of burglaries fell 2.7 to 3.2 percent. When the arrest rate of robbers rose 10 percent, the number of robberies fell 5.7 to 5.9 percent. During the 1990s, crime rates in New York City dropped dramatically, even more than in the United States as a...
Article
In spite of the waiting period before those on DI receive Medicare coverage, there is no reduction in insurance coverage among DI applicants. Disability Insurance (DI), one of America's largest social insurance programs, pays out cash benefits and provides health insurance for 4.7 million beneficiaries. However, health coverage under DI, provided through the Medicare program, is only available after a two-year waiting period. Are many individuals left with no health...
Article
Legal innovations have worsened the asbestos crisis by making trial outcomes more favorable to plaintiffs and therefore giving plaintiffs' lawyers an incentive to file additional claims in the same courts. Although asbestos has not been used since the 1970s, the number of asbestos personal injury claims filed each year has been increasing, rather than decreasing, over time. At least 600,000 people have now filed asbestos exposure claims. Eighty firms have filed for...
Article
A $1.00 increase in per pupil state aid increases aggregate per pupil housing values by about $20.00, indicating that potential residents value education expenditure. An enduring question in education policy is whether spending additional public resources improves schools. Those who argue against strategies to increase public spending argue that current spending levels are too high and that public schools spend their current revenues inefficiently. In Using Market...
Article
The adoption of confidential voting procedures had no significant impact on subsequent voting outcomes. Confidential voting in corporate proxies is a principal recommendation of activist institutional investors, such as TIAA-CREF, and is the first principle listed among the "core corporate governance policies" of the Council of Institutional Investors. The rationale behind these recommendations is that shareholders with conflicts of interest will not feel constrained...

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