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The Digest

Generational Effects of Welfare Reform on Food Insecurity
Article
Children who had greater exposure to the welfare reforms of the 1990s reported less food insecurity as adults. In 1992, some US states began experimenting with welfare reforms. Federal waivers allowed them to develop programs to reduce cash assistance by imposing work requirements and other conditions on beneficiaries. In 1996, the federal government ended cash welfare benefit entitlements and replaced them with block grants that imposed a five-year lifetime limit...

Business Formation Surged during Pandemic and Remains Strong
Article
The number of new business applications was higher during the summer of 2020 than at any time in the past 15 years, and it has remained strong ever since. Applications for new businesses plunged in the early months of the pandemic-induced recession, but rebounded before long. In July 2020, applications surged to historic heights, John C. Haltiwanger finds in Entrepreneurship during the COVID-19 Pandemic: Evidence from the Business Formation Statistics (NBER...

The Reporter

Wealth Inequality in the United States
Article
Author(s): Edward N. Wolff
Much attention has focused in the last few years on the issue of inequality. With recent proposals for a direct wealth tax, particular attention has been given to wealth inequality. My work also focuses on this issue. Here, I summarize studies of four different aspects. First, what are the general trends in wealth and wealth inequality over the last 60 years or so in the United States? I pay particular attention to the role of leverage and asset price movements in...

New Approaches to Understanding Choice of Major
Article
Author(s): Matthew J. Wiswall & Basit Zafar
College major choice and its relationship to labor market outcomes has long been a topic of study for social scientists. Stretching back at least to the 1970s, researchers have recognized that the particular field, and not just the level of education, deserves attention. A number of studies have demonstrated that the choice of post-secondary field is a key correlate of future earnings, and that choice of college major may be an important factor in explaining earnings...

The Bulletin on Retirement & Disability

The Evolution of Firms’ Retirement Plan Offerings
Article
Two-thirds of private-sector workers in the US have access to an employer-sponsored defined contribution plan. Annual contributions to such plans by employers and employees are about $500 billion. Retirees will increasingly rely on defined contribution plan wealth to supplement Social Security and maintain living standards in retirement, due to the long-term shift in employer pension plans from defined benefit to defined contribution type plans. While employer-sponsored...

Misperceptions of the Social Security Earnings Test and the Actuarial Adjustment
Article
The Social Security Retirement Earnings Test (RET) applies to people before the full retirement age (FRA), which is age 67 for those turning 62 in 2022 and beyond. For individuals who claim retired worker benefits before the FRA, Social Security withholds benefits if earnings exceed a certain exempt amount. In 2021, the exempt amount is $18,960, although a higher amount applies in the year of attaining the FRA. Benefits are withheld at a rate of $1 for each $2 in earnings...

The Bulletin on Health

Higher Prescription Drug Cost-Sharing Raises Mortality among Medicare Beneficiaries
Article
What are the health consequences when patients reduce their use of prescribed medications in response to higher out-of-pocket costs? In The Health Costs of Cost-Sharing (NBER Working Paper 28439), researchers Amitabh Chandra, Evan Flack and Ziad Obermeyer use the distinctive out-of-pocket cost-sharing features of Medicare Part D to demonstrate that such reductions can increase mortality. Their analysis makes use of the fact that two 65-year-old Medicare enrollees with...

Malpractice Allegations Alter Practice Patterns of Emergency Department Doctors
Article
When physicians are accused of malpractice, how does this experience affect their practice of medicine? Researchers Caitlin Carroll, David M. Cutler and Anupam Jena use administrative data on all emergency medicine physicians in Florida to answer this question in How Do Physicians Respond to Malpractice Allegations? Evidence from Florida Emergency Departments (NBER Working Paper 28330). During the 2005 to 2013 study period, 25 percent of emergency medicine physicians...

The Bulletin on Entrepreneurship

Measuring the Employment Impact of Immigrant Entrepreneurs
Article
Analysis of a million firms founded between 2005 and 2010 finds that immigrants are more likely than native-born Americans to launch new enterprises of all sizes. In "Immigration and Entrepreneurship in the United States" (NBER Working Paper 27778), Pierre Azoulay, Benjamin Jones, J. Daniel Kim, and Javier Miranda show that compared with native-born Americans, immigrants play a larger role as employers than as employees. The researchers analyze data on more...

How the Gig Economy Supports Entrepreneurial Activity
Article
Jobs in which self-employed individuals can regulate their working hours reduce the risk of launching new businesses by providing an income fallback. In the gig economy, software platforms provide self-employed individuals with easy access to flexible work opportunities. Gig workers contract with platform owners to provide on-demand services to their clients on a per-task basis. As independent contractors, these workers can determine how much they will work by...