We explore how households insure themselves against consumption volatility. We asked households how they would fund an unexpected emergency consumption expense equivalent to one month’s income. Answers reveal a range of consumption insurance mechanisms, including borrowing from credit markets and social networks. Despite this, more than one quarter of households have no plan to insure their consumption. The likelihood of non-insurance increases with poor financial literacy and is highest among households most at risk of experiencing a financial shock. Among these households we see large effects of poor financial literacy on non-insurance.
Do Minimum Wage Increases Influence Worker Health? by Brady P. Horn, Johanna Catherine Maclean, Michael R. Strain :: SSRNFebruary 5, 2017
This study investigates whether minimum wage increases in the United States affect an important non-market outcome: worker health. To study this question, we use data on lesser-skilled workers from the 1993-2014 Behavioral Risk Factor Surveillance Surveys coupled with differences-in-differences and triple-difference models. We find little evidence that minimum wage increases lead to improvements in overall worker health. In fact, we find some evidence that minimum wage increases may decrease some aspects of health, especially among unemployed male workers. We also find evidence that increases reduce mental strain among employed workers.
Environmental Amenities and Quality of Life Across the United States by Mona Ahmadiani, Susana Ferreira :: SSRNFebruary 3, 2017
This paper investigates the spatial variation in subjective well-being across the United States (U.S.). We match individual-level survey data from the Behavioral Risk Factor Surveillance System (BRFSS) that includes a life satisfaction question, to county-level local amenities between 2005 and 2010. We show that subjective well-being varies widely across U.S. counties (even if these are in the same state and after controlling for individual characteristics), which suggests that housing price and wage differentials are not fully compensating for differences across locations. We also show that local amenities including climate, geography, environmental externalities, and other local public goods, explain a sizable fraction of this variation.
Do More of Those in Misery Suffer from Poverty, Unemployment or Mental Illness? by Sarah Flèche, Richard Layard :: SSRNFebruary 3, 2017
Studies of deprivation usually ignore mental illness. This paper uses household panel data from the USA, Australia, Britain and Germany to broaden the analysis. We ask first how many of those in the lowest levels of life‐satisfaction suffer from unemployment, poverty, physical ill health, and mental illness. The largest proportion suffers from mental illness. Multiple regression shows that mental illness is not highly correlated with poverty or unemployment, and that it contributes more to explaining the presence of misery than is explained by either poverty or unemployment. This holds both with and without fixed effects.
The Life-Cycle Benefits of an Influential Early Childhood Program by Jorge Luis García, James J. Heckman, Duncan Ermini Leaf, María José Prados :: SSRNJanuary 18, 2017
This paper estimates the long-term benefits from an influential early childhood program targeting disadvantaged families. The program was evaluated by random assignment and followed participants through their mid-30s. It has substantial beneficial impacts on health, children’s future labor incomes, crime, education, and mothers’ labor incomes, with greater monetized benefits for males. Lifetime returns are estimated by pooling multiple data sets using testable economic models. The overall rate of return is 13.7% per annum, and the benefit/cost ratio is 7.3. These estimates are robust to numerous sensitivity analyses.
Unfair Pay and Health by Falk Armin, Fabian Kosse, Ingo Menrath, Pablo Emilio Verde, Johannes Siegrist :: SSRNJanuary 6, 2017
This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative panel data. In a simple principal-agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents’ heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control, and which has been shown to predict coronary heart disease in the long-run. Our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using observational data from a large representative panel data set. Complementary to our experimental findings we show a strong and significant negative association between unfair pay and health outcomes, in particular cardiovascular health.
He sees an epidemic of pain and a related flood of opioids into communities over the past decade as being, more than globalisation or economic dislocation, the real cause of rising mortality among middle-aged white Americans.
With Gallup’s help he has been collecting data on how many people report having felt physical pain in the past 24 hours and says the numbers are staggering in the US. What is causing that epidemic — and its links to Trump’s rise — remains unclear, he says. He seems more willing to blame pharmaceutical companies and doctors for overprescribing opioids. A surge in addiction (drug overdoses caused more deaths in the US last year than auto accidents) has, he argues, proved far more fatal than globalisation.