A large literature following Ruhm (2000) suggests that mortality falls during recessions and rises during booms. The panel-data approach used to generate these results assumes that either there is no substantial migration response to temporary changes in local economic conditions, or that any such response is accurately captured by intercensal population estimates. To assess the importance of these assumptions, we examine two natural experiments: the recession in cotton textile-producing districts of Britain during the U.S. Civil War, and the coal boom in Appalachian counties of the U.S. that followed the OPEC oil embargo in the 1970s. In both settings, we find evidence of a substantial migratory response. Moreover, we show that estimates of the relationship between business cycles and mortality are highly sensitive to assumptions related to migration. After adjusting for migration, we find that mortality increased during the cotton recession, but was largely unaffected by the coal boom. Overall, our results suggest that migration can meaningfully bias estimates of the impact of business-cycle fluctuations on mortality.
Estimating the Recession-Mortality Relationship When Migration Matters by Vellore Arthi, Brian Beach, William Walker Hanlon :: SSRNJune 24, 2017
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.
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.
Start at birth, coordinate services into comprehensive early childhood programs and achieve greater economic and social gains. Professor Heckman’s latest research, “The Lifecycle Benefits of an Influential Early Childhood Program,” shows that high quality birth-to-five programs for disadvantaged children can deliver a 13% per year return on investment—a rate substantially higher than the 7-10% return previously established for preschool programs serving 3- to 4-year-olds. Heckman, his University of Chicago colleague Jorge Luis García, Duncan Ermini Leaf of the Leonard D. Schaeffer Center for Health Policy and Economics at University of Southern California, and María José Prados of the Dornsife Center for Economic and Social Research at University of Southern California, find that significant gains are realized through better outcomes in education, health, social behaviors and employment.
Individual Investments in Education and Health: Policy Responses and Interactions by Jared C. Carbone, Snorre Kverndokk :: SSRNDecember 10, 2016
Empirical studies show that years of schooling are positively correlated with good health. The implication may go from education to health, from health to education, or from factors that influence both variables. We formalize a model that determines an individual’s demand for knowledge and health based on the causal effects, and study the impacts on the individual’s decisions of policy instruments such as subsidies on medical care, subsidizing schooling, income tax reduction, lump sum transfers and improving health at young age. Our results indicate that income redistribution policies may be the best instrument to improve welfare, while a medical care subsidy is the best instrument for longevity. Subsidies to medical care or education would require large imperfections in these markets to be more welfare improving than distributional policies.
Savings after Retirement: A Survey by Mariacristina De Nardi, Eric French, John Bailey Jones :: SSRNDecember 7, 2016
The saving patterns of retired US households pose a challenge to the basic life-cycle model of saving. The observed patterns of out-of-pocket medical expenses, which rise quickly with age and income during retirement, and heterogeneous life span risk can explain a significant portion of US saving during retirement. However, more work is needed to distinguish these precautionary saving motives from other motives, such as the desire to leave bequests. Progress toward disentangling these motivations has been made by matching other features of the data, such as public and private insurance choices. An improved understanding of whether intended bequests left to children and spouses are due to altruism, risk sharing, exchange motivations, or a combination of these factors is an important direction for future research.