Medicaid Insurance in Old Age De Nardi, Mariacristina; French, Eric; Jones, John Bailey
The American economic review,
11/2016, Letnik:
106, Številka:
11
Journal Article
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The old age provisions of the Medicaid program were designed to insure retirees against medical expenses. We estimate a structural model of savings and medical spending and use it to compute the ...distribution of lifetime Medicaid transfers and Medicaid valuations across currently single retirees. Compensating variation calculations indicate that current retirees value Medicaid insurance at more than its actuarial cost, but that most would value an expansion of the current Medicaid program at less than its cost. These findings suggest that for current single retirees, the Medicaid program may be of the approximately right size.
This paper provides an empirical analysis of the effects of employer-provided health insurance, Medicare, and Social Security on retirement behavior. Using data from the Health and Retirement Study, ...we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses. Our results suggest that Medicare is important for understanding retirement behavior, and that uncertainty and saving are both important for understanding the labor supply responses to Medicare. Half the value placed by a typical worker on his employer-provided health insurance is the value of reduced medical expense risk. Raising the Medicare eligibility age from 65 to 67 leads individuals to work an additional 0.074 years over ages 60-69. In comparison, eliminating 2 years worth of Social Security benefits increases years of work by 0.076 years.
Savings After Retirement: A Survey De Nardi, Mariacristina; French, Eric; Jones, John Bailey
Annual review of economics,
01/2016, Letnik:
8, Številka:
1
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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.
We document the growth in higher education costs and tuition over the past 50 years. To explain these trends, we develop a general equilibrium model with skill- and sector-biased technical change. ...Finding the model’s parameters through a combination of estimation and calibration, we show that it can explain the rise in college costs between 1961 and 2009, along with the increase in college attainment and the change in the relative earnings of college graduates. The model predicts that if college costs had ceased to grow after 1961, enrollment in 2010 would have been 3%–6% higher.
Medical Spending of the US Elderly De Nardi, Mariacristina; French, Eric; Jones, John Bailey ...
Fiscal studies,
September–December 2016, Letnik:
37, Številka:
3-4
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We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 ...and that they are very concentrated: the top 10 per cent of all spenders are responsible for 52 per cent of medical spending in a given year. In addition, those currently experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We also find that the poor consume more medical goods and services than the rich and have a much larger share of their expenses covered by the government. Overall, the government pays for over 65 per cent of the elderly’s medical expenses. Despite this, the expenses that remain after government transfers are even more concentrated among a small group of people. Thus, government health insurance, while potentially very valuable, is far from complete. Finally, while medical expenses before death can be large, on average they constitute only a small fraction of total spending, both in the aggregate and over the life cycle. Hence, medical expenses before death do not appear to be an important driver of the high and increasing medical spending found in the US.
This paper constructs a model of saving for retired single people that includes heterogeneity in medical expenses and life expectancies, and bequest motives. We estimate the model using Assets and ...Health Dynamics of the Oldest Old data and the method of simulated moments. Out‐of‐pocket medical expenses rise quickly with age and permanent income. The risk of living long and requiring expensive medical care is a key driver of saving for many higher‐income elderly. Social insurance programs such as Medicaid rationalize the low asset holdings of the poorest but also benefit the rich by insuring them against high medical expenses at the ends of their lives.
The goal of this paper is to assess how the wage penalty for career interruptions by married women changed between the 1970s and the 1990s. We estimate the wage penalty for career interruptions using ...the work‐history model and PSID data. We use several approaches to control for various forms of endogeneity and selection bias. Our empirical results suggest that (i) the wage penalty for married women's career interruptions increased from 40.4% to 73.7% over the period, (ii) the ratio of the wage penalty for married women to that of married men also increased, from 1.33 to 2.43, (iii) Blinder–Oaxaca decompositions show that changes in education‐ or occupation‐specific wage penalties account for most of the wage penalty increase.
Using a rich panel of owner-operated New York dairy farms, we provide new evidence on entrepreneurial behavior. We formulate a dynamic model of farms facing uninsured risks and financial constraints. ...Farmers derive nonpecuniary benefits from operating their businesses. We estimate the model via simulated minimum distance, matching both production and financial data. We find that financial factors and nonpecuniary benefits are of first-order importance. Collateral constraints and liquidity restrictions inhibit borrowing and the accumulation of capital, especially among high-productivity firms seeking to expand. The nonpecuniary benefits to farming are large and keep small, low-productivity farms in business. Although farmers are risk averse, eliminating uninsured production risk has only modest effects on capital and output.
Cumulative effects assessment (CEA) ― a type of environmental appraisal ― lacks effective methods for modeling cumulative effects, evaluating indicators of ecosystem condition, and exploring the ...likely outcomes of development scenarios. Random forests are an extension of classification and regression trees, which model response variables by recursive partitioning. Random forests were used to model a series of candidate ecological indicators that described lakes and rivers from a case study watershed (The Muskoka River Watershed, Canada). Suitability of the candidate indicators for use in cumulative effects assessment and watershed monitoring was assessed according to how well they could be predicted from natural habitat features and how sensitive they were to human land-use. The best models explained 75% of the variation in a multivariate descriptor of lake benthic-macroinvertebrate community structure, and 76% of the variation in the conductivity of river water. Similar results were obtained by cross-validation. Several candidate indicators detected a simulated doubling of urban land-use in their catchments, and a few were able to detect a simulated doubling of agricultural land-use. The paper demonstrates that random forests can be used to describe the combined and singular effects of multiple stressors and natural environmental factors, and furthermore, that random forests can be used to evaluate the performance of monitoring indicators. The numerical methods presented are applicable to any ecosystem and indicator type, and therefore represent a step forward for CEA.
•Random forests were used to model biological and chemical attributes of lakes and rivers.•The best biological model explained 75% of the variance in an a multivariate index of community structure.•The best chemical model explained 76% of the variance in the conductivity of river water.•Random forests allow effects of multiple environmental factors to be understood collectively and individually.•Random forests can be used to evaluate indicators and explore consequences of development scenarios.
Using a heterogeneous agent, life-cycle model of Social Security claiming, labor supply and saving, we consider the implications of lifespan inequality for Social Security reform. Quantitative ...experiments show that welfare is maximized when baseline benefits are independent of lifetime earnings, the payroll tax cap is 50% larger than its current level, and claiming adjustments are reduced. The Social Security system that would maximize welfare in a “2050 demographics” scenario, characterized by longer lifespans and an increased education-mortality gradient, is similar to the one that would maximize welfare today.
•We assess Social Security reforms using a heterogeneous agent model with longer lifespans for high earners.•Welfare is maximized when benefits are independent of lifetime earnings.•The welfare-maximizing reforms also include raising the payroll tax cap and reducing the claiming adjustments.•Imposing “2050 demographics”, with a stronger education-mortality gradient, has little effect on our recommendations.•One reason for our findings is that longer lifespans automatically encourage high earners to work longer.
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