IT'S ABOUT TIME: EFFECTS OF THE AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE ON TIME USE

We examine how the Affordable Care Act's dependent coverage mandate (DCM) affected young adults' time allocation. Exploiting more accurate measures from the American Time Use Surveys, we find that the DCM reduced labor supply. The question then arises, what have these adults done with the extra time? Estimates suggest a reduction in job‐lock, as well as in the duration of the average doctor's visit, including time spent waiting and receiving care. The latter effect is consistent with substitution from emergency‐department utilization toward more routine care. Estimates suggest that the extra time has gone into socializing, and into educational and job‐search activities. (JEL I1, J2, H0)     

CAREERS OF YOUNG WOMEN DURING THE TRANSITIONAL DECADE OF THE 1970s

This paper uses data from the National Longitudinal Survey of Young Women to explore the careers of young women during the transitional decade of the 1970s. The paper pays particular attention to women in skilled, traditionally male occupations. Contrary to human capital theory predictions, women with high initial labor force attachment entered skilled jobs in the traditionally female sector rather than skilled jobs in the traditionally male sector. The women most likely to enter skilled male jobs were those with low initial labor force attachment who entered skilled jobs later in life. Women experienced mixed success in skilled male jobs. Those who entered skilled male jobs were less likely to make long-term careers in these jobs than were women who entered skilled non-male jobs. On the other hand, women who remained in skilled male jobs earned considerably more than did other women. Women's chances of remaining in skilled male jobs from year to year increased over the decade of the 1970s, suggesting that prospects for women in these jobs improved over the decade.     

THE EFFECTS OF FEEDBACK ON SELF‐ASSESSMENT

It is a well‐known phenomenon that people have difficulties in assessing their ability correctly. Often they overestimate their (relative) abilities. We conduct an experiment to test whether the self‐assessment of individuals improves when they receive feedback and there are incentives to make a correct self‐assessment. We investigate the subjects' reactions to feedback in several subsequent rounds to see not only if, but also when and how they react. Our main finding is that feedback influences subjects' decisions and can improve their overall self‐assessment. The effects, however, depend on the kind of feedback. Furthermore, we observe differences in the reactions of subjects (e.g., to what extent they follow feedback), the robustness of their belief about their relative ability, and how they process feedback.     

A HUMAN CAPITAL METHODOLOGY FOR ESTIMATING THE LIFELONG PERSONAL COSTS OF YOUNG WOMEN LEAVING THE SEX TRADE

Abstract

This article combines case study interviews with the tools of economic cost-benefit analysis to estimate the lifelong effects for individuals in Manitoba, Canada, who began engaging in prostitution as youths. The empirical findings reveal that sex workers retain only a small portion of their earnings from prostitution after feeding drug addictions and third-parties extortions of net residual earnings. The sex-trade worker typically suffers from debilitating addictions and health conditions that are symptomatic of the stress and danger of engaging in this lifestyle. After leaving prostitution, the former sex worker faces major challenges in rejoining the mainstream labor market. The issues engender multiple reasons for policy-makers to direct their attention to counteracting the conditions of vulnerability that bring youth into this lifestyle and, thereby, effectively disrupting the supply of sex workers.     

THE EFFECT OF PARENTAL MEDICAID EXPANSIONS ON CHILDREN'S HEALTH INSURANCE COVERAGE

Research on public health insurance expansions has typically focused on those targeted by the expansions; we estimate the spillover effects of parental Medicaid expansions on the insurance coverage of their children. Expanding parental Medicaid eligibility may increase participation by already‐eligible, uninsured children by increasing the value of Medicaid enrollment for the entire family. However, parental expansions may also generate crowd out from private coverage. Using the Survey of Income and Program Participation during a period of major parental Medicaid expansions, we find substantial effects of the expansions on the Medicaid participation of children, with evidence of crowd out among some subsamples. (JEL H51, I13, I38)     

ASYMMETRIC EFFECTS OF MARITAL SEPARATION ON HEALTH INSURANCE AMONG MEN AND WOMEN

Despite widespread interest among policy researchers in the effect of job displacement on insurance loss, there is little focus in the literature on the insurance implications of a married person losing his or her spouse. Using a large household survey, this article finds that despite legislation aimed at protecting separating spouses, individuals remain at risk of losing health insurance in the event of marital disruption. This is especially true for wives who are enrolled in their husbands’ plans prior to marital termination. (JEL D13, I18)     

THE IMPORTANCE OF CONSECUTIVE SPELLS OF POVERTY: A PATH‐DEPENDENT INDEX OF LONGITUDINAL POVERTY

In this paper we propose a new index of individual poverty in the longitudinal perspective, taking into account the way poverty and non‐poverty spells follow one another along individual life courses. The Poverty Persistence Index (PPI) is based on all the pairwise distances between the waves of poverty. The PPI is normalized and it assigns a higher degree of (longitudinal) poverty to people who experience poverty in consecutive, rather than separated, periods, for whom the distances from the poverty line are larger along time and moreover, when the worst years are consecutive and/or recent. We also propose an aggregate index of persistence in poverty (APPI) in order to measure the distribution of the persistence of poverty in a society, and evaluate at once the diffusion of poverty, its depth, duration, and recentness. The indices are tested in comparison with other measures from the literature both at the individual as well as at the societal level.     

A SEARCH‐EQUILIBRIUM APPROACH TO THE EFFECTS OF IMMIGRATION ON LABOR MARKET OUTCOMES

We analyze the impact of the U.S. skill‐biased immigration influx that took place between 2000 and 2009 within a search and matching model that allows for skill heterogeneity, differential search cost, and capital‐skill complementarity. We find that although the skill‐biased immigration raised the overall net income to natives, it had distributional effects. Specifically, unskilled native workers gained in terms of both employment and wages. Skilled native workers, however, gained in terms of employment but lost in terms of wages. Nevertheless, in an extension where skilled natives and immigrants are imperfect substitutes, even the skilled wage rises.     

LONGER‐RUN EFFECTS OF ANTI‐POVERTY POLICIES ON DISADVANTAGED NEIGHBORHOODS

We assess evidence on the longer‐run effects of minimum wages, the Earned Income Tax Credit, and welfare on key economic indicators of economic self‐sufficiency in disadvantaged neighborhoods. The evidence suggests that the longer‐run effects of the Earned Income Tax Credit are to increase employment and to reduce poverty and public assistance. We also find some evidence consistent with higher welfare benefits having longer‐run adverse effects, and stronger evidence that tighter welfare time limits reduce poverty and public assistance in the longer‐run. The evidence on the longer‐run effects of the minimum wage on poverty and public assistance is not robust. (JEL J22, J23, J38)     

TIME‐VARYING EFFECTS OF HUMAN CAPITAL ON MILITARY RETENTION

This paper examines how human capital acquired at the onset of a military career has an evolving effect on retention decisions. Using data of Marine officers that extends across 20‐year horizons, estimates of the hazard related to separation rates indicate that initial differences in general and firm‐specific human capital have time‐varying effects on retention across the duration of a career. Additional evidence suggests that the effects of higher economy‐wide unemployment as well as the onset of wars succeeding from September 2001 also change retention decisions and depend on officers' length of service. (JEL J6, J41, J45)     

EFFECTS OF INDEX‐FUND INVESTING ON COMMODITY FUTURES PRICES

We develop a simple model of futures arbitrage that implies that if purchases by commodity index funds influence futures prices, then the notional positions of the index investors should help predict excess returns in these contracts. We find no evidence that the positions of index traders in agricultural contracts as identified by the Commodity Futures Trading Commission can help predict returns on the near futures contracts. Although there is some support that these positions might help predict changes in oil futures prices over 2006–2009, the relation breaks down out of sample.     

ASYMMETRIC EFFECTS OF THE BUSINESS CYCLE ON FIRM-FINANCED R&D

Abstract

Business cycles might affect the ability of firms to finance R&D, since firms rely on cash flow to finance most R&D activities. However, business cycles also influence the incentive to perform R&D. The opportunity cost of funds devoted to R&D falls during recessions, since the return on production will likely be lower than during an expansion. During recessions, this provides firms with an incentive to redistribute an existing pool of funds away from production and towards R&D projects. The changes in the size and distribution of the pool may also be asymmetric across the business cycle. For example, cash-flow constraints are more likely to bind during recessions than expansions. This paper finds strong evidence for the cash-flow effect, but not the opportunity-cost effect. This means that R&D is pro-cyclical, but smoothing out the business cycle will actually lead to reduced R&D, since the duration of expansions exceeds the duration of recessions.     

ON THE WELFARE EFFECTS OF CREDIT ARRANGEMENTS

This article studies the welfare effects of credit arrangements and how these effects depend on the trading mechanism and inflation. In a competitive market, credit arrangements can be welfare reducing, because high consumption by credit users drives up the price level, reducing consumption by money users who are subject to a binding liquidity constraint. By adopting an optimal trading mechanism, however, these welfare implications can be overturned. Both price discrimination and nonlinear pricing are essential features of an optimal mechanism.     

THE EFFECTS OF MACROECONOMIC FLUCTUATIONS ON THE DISTRIBUTION OF INCOME*

This study develops a microanalytic simulation model to examine the effects of macroeconomic fluctuations on the distribution on the distribution of income. A representational sample of the population of the United States is linked with equations determining the variability of various types of factor income. Each family's income experience is simulated under alternative aggregate conditions, and the income distributions arising under these conditions are compared. The main results are similar for alternative specifications of the model. The incidence of a downturn in economic activity, whether accompanied by changes in the rate of inflation or not, and measured in terms of the loss of factor income, leaves the upper middle class relatively better off than before and leaves most others relatively worse off. The very rich bear the heaviest burden.     

THE EFFECTS OF SECONDARY SCHOOL QUALITY ON THE DISTRIBUTION OF EARNINGS

A number of researchers have investigated the effects of school quality on average earnings in the postschooling years. In this article we broaden the discussion to investigate whether school quality has a measurable impact at other points in the conditional earnings distribution. We find that in specifications that do not control for individual and family background characteristics there are differential effects of school resources on earnings. The most significant effects occur in the top half of the conditional earnings distribution. However, after controlling for a variety of demographic variables, much of the impact of school resources on earnings is diminished. Exceptions to this seem to be school enrollment levels and, to a lesser degree, expenditures: higher enrollments tend to raise the upper tail of the earnings distribution without a similar increase in the bottom of the distribution; the effect of expenditures is positive and significant for the 0.25 quantile and the median.     

THE EFFECTS OF ENDOGENOUS MARKET ENTRY OF PHYSICIAN‐OWNED HOSPITALS ON MEDICARE EXPENDITURES: AN INSTRUMENTAL VARIABLES APPROACH

This study examines the effect of physician‐owned hospitals (POHs) on Medicare per enrollee expenditures at the metropolitan area (MSA) level nationwide, spanning the 8‐year time period from 1998 to 2005. The study uses fixed effects panel data estimation with instrumental variables to account for the bias introduced by endogenous POH market entry (i.e., POHs may be more likely to open in high‐growth/high‐demand markets with high levels of Medicare per enrollee expenditures). After controlling for other variables that are likely to affect expenditures (especially the age and sex distribution of the MSA), we find no association between POH presence and Medicare expenditures per enrollee at the MSA level. The results are robust to changes in model specification, estimation technique, and definition of geographic market. These findings suggest that the “demand inducement” aspects of physician ownership of acute care hospitals (if any) have no meaningful impact on market‐level Medicare expenditures per enrollee. Current policies based on an assumption that POHs are associated with significant increases in total expenditures may need to be reassessed. (JEL I11, L10, C33)