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AN NBER PUBLICATION ISSUE: No. 8, August 2005

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Every 10 percent increase in health insurance costs reduces the chances of being employed by 1.6 percent. It also reduces hours worked by 1 percent. Two-thirds of a premium increase is paid for with wages and the remaining third from a reduction in benefits. In an indication of why the cause of health care reform is attracting a broader constituency, two new NBER studies offer evidence that soaring health insurance premiums do more than swell the ranks of the...

Research Summaries

Article
When the foreign affiliates of U.S. multinational corporations engage in higher capital expenditures, the American multinationals also tend to increase investment back home. There is a widespread popular perception that when American companies invest abroad they necessarily reduce economic activity and employment in the United States. But in their recent study, Foreign Direct Investment and the Domestic Capital Stock (NBER Working Paper No. 11075), authors Mihir Desai...
Article
The cash wages for obese workers are lower than those for non-obese workers because the cost to employers of providing health insurance for these workers is higher. Increasingly, Americans are either overweight or obese. Individuals with a body mass index (BMI) of 25 to 29.9 are considered overweight, while those with a BMI of 30 or more are considered obese. The proportion of adults classified as obese increased from 12 percent in 1991 to 20.9 percent in 2001. (The...
Article
Good teachers do well with students at all levels of achievement, and there is no evidence that teacher education or performance on a certification examination contributes to quality teaching. In The Market for Teacher Quality (NBER Working Paper No. 11154), co-authors Eric Hanushek, John Kain, Daniel O'Brien, and Steven Rivkin use a unique dataset from the Texas School Microdata Panel to measure teacher quality by the annual growth in each student's scores on the...
Article
Bilateral exports rise by about 6-10 percent for each additional consulate a nation establishes in a customer country. Last fiscal year the U.S. Department of State paid $4.2 billion for diplomatic and consular programs, and another $1.5 billion for embassy security, construction, and maintenance. Was the money well spent? Perhaps, since one justification for diplomatic representation abroad, probably less well recognized, is that it promotes exports. Indeed,...

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