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AN NBER PUBLICATION ISSUE: No. 7, July 2005

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The presence of Medicaid is sufficient to explain why at least two-thirds of all households would prefer not to purchase private long-term care insurance Most health insurance in the United States is provided through a mix of public and private sources. Often the public insurance - although heavily subsidized from the individual's perspective - offers only limited protection. This holds true in many other countries as well, where public insurance against risks such as...

Research Summaries

Article
After the 1993 tax reform under President Clinton, single mothers worked fewer hours per year, but this decline was overwhelmed by a solid increase in low-income mothers going to work. Reducing taxes on low-income single mothers can have an especially favorable effect: some of these women will leave welfare and get paid employment. In Evaluation of Four Tax Reforms in the United States: Labor Supply and Welfare Effects for Single Mothers (NBER Working Paper No. 10935...
Article
In the long run, about 17 percent of a cut in labor taxes is recouped through higher economic growth. The comparable figure for a cut in capital taxes is about 50 percent. Do tax cuts pay for themselves? To a substantial extent, yes, N. Gregory Mankiw and Matthew Weinzierl conclude in their study, Dynamic Scoring: A-Back-of-the-Envelope Guide (NBER Working Paper No. 11000). Mankiw and Weinzierl note that when the staffs of the Treasury Department or Congressional...
Article
More financial development reduces poverty by easing credit constraints on the poor, reduces income inequality, and improves the allocation of capital. For decades, politicians and economists have puzzled over how to alleviate severe poverty in the world more quickly. More than half of the world's inhabitants, 2.7 billion people, lived on less than $2 a day in 2001, and 1.1 billion lived on less than $1 a day. One way to help, economists Thorsten Beck, Asli...
Article
Economies that trade less with other countries are more prone to sudden stops and to currency crises. Many a debate over the merits of free trade focuses on whether a country that is more exposed to international markets makes itself more vulnerable to a form of economic whiplash known as a "sudden stop." The term refers to situations in which a country experiences an abrupt cessation of foreign investment, which can precipitate a currency crisis. Some argue that an...
Article
A 10 percent increase in the average state excise tax on beer will reduce the gonorrhea rate by 4.4 percent for boys 15-19 and by 3.7 percent for men aged 20-24. Studies of teenagers suggest that heavy drinkers are more likely to be sexually active, more likely to have multiple partners, and less likely to use condoms. Because all of these behaviors are risk factors for sexually transmitted diseases (STDs), if alcohol control policies reduce alcohol consumption and...

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