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AN NBER PUBLICATION ISSUE: No. 4, April 2016

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Health status at older ages has improved, not worsened; labor force participation has not kept pace. Raising the eligibility ages for benefits is sometimes advanced as a possible response to the rising cost of Social Security and Medicare that will be associated with the aging of the U.S. population in coming decades. By raising the age at which pension and health benefits could be claimed, these changes would make it more costly for older individuals to leave...

Research Summaries

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Article
When a company's stock price is rising, granting the same number of at-the-money stock options every year amounts to increasing compensation. During the period of rising stock prices in the 1990s and early 2000s, the total compensation of chief executive officers rose rapidly. The pay of the median CEO at an S&P 500 firm was $2.9 million in 1992, measured in 2011 dollars. By 2001 this figure had more than tripled, to $9.3 million. In contrast, the periods...
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Article
Approval of a startup's first patent application is associated with higher growth in sales and employment, more innovation, and a greater likelihood of going public. Prompt patent approvals are associated with greater job and sales growth and higher investor returns at startup firms, Joan Farre-Mensa, Deepak Hegde, and Alexander Ljungqvist find in The Bright Side of Patents (NBER Working Paper No. 21959). Delays in approval substantially hurt a startup's growth...
Article
Enrollee health status explains 47 percent of the difference in health spending of those who selected the most generous and least generous insurance plans at a large firm. A central challenge in designing health insurance plans is providing coverage that will provide for participants' unexpected health care needs without encouraging unnecessary spending. When insured individuals bear a smaller share of their medical care costs, they are likely to consume more...
Article
Study finds that relying on pre-employment test scores does a better job of identifying workers who will have longer tenure than allowing managers to use discretion. It has long been recognized that resumes, interviews, and other screening tools have only a limited capacity to determine whether a potential employee has the right skills and is a good fit for a particular job. Even if there are valid indicators in this screening information, the managers who make...
Article
Inclusion of women on juries was followed by large changes in conviction rates for sex offenses and violent crimes against women. The role of women in civic, political, and economic life has expanded slowly but steadily over the past century, as women have secured voting rights and assumed increasingly diverse and powerful positions in the public and private sectors. Yet measuring the impact of this inclusion has been challenging, in part because it has been...

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