Combining capitation with a cap on health care providers' average revenue can reduce allocative inefficiency. But the cap may be undercut by health care providers who churn their patient censuses. We investigate this possibility in the U.S. hospice industry, where Medicare pays hospice programs fixed daily rates but caps their average annual revenue. By leveraging variation generated by the cap's nonlinear design and the transition between fiscal years, we find that programs on track to exceed the cap raise enrollment rates by 5.8 % and live discharge rates by 4.3 % in the fourth quarter. But this churning falls far short of eliminating their financial penalties: it amounts to 10 % of an average program's excess revenue at most. Marginal enrollees have longer remaining lifetimes and more fragmented hospice spells on average, suggesting weaker intrinsic demand for hospice care. We discuss the cap's implications for market structure.

We extend the conventional life-cycle framework for valuing health and longevity improvements to a stochastic setting with multiple health states and apply it to data on mortality, quality of life, labor earnings, and medical spending for adults with different comorbidities. We find that sick adults are willing to pay nearly twice as much per quality-adjusted life-year (QALY) to reduce mortality risk as healthy adults, and that reducing the risk of serious illness is valued similarly to reducing the risk of mild illness. Our results provide a rational explanation for why people oppose a single threshold value for rationing care and why they invest less in prevention than in treatment.

The growth of physician vertical integration raises concerns about distorted referral patterns, higher spending, and market foreclosure. Using 100% Medicare data, we combine reduced-form analysis with a discrete choice model to estimate the effects of physician vertical integration on patients' provider choices and welfare for two common "downstream" surgical procedures. Physician-hospital integration results in an approximately 10% increase in referrals to higher-priced facilities instead of lower-priced providers. Our counterfactual analysis implies that if all primary care physicians become integrated, total Medicare spending will increase by $315 million.

This paper estimates how public pensions affect retirement timing by examining the Railroad Retirement Act of 1937, which replaced private railroad pensions with a national program comparable in many ways to Social Security. Leveraging linked decennial census records between 1910-1940, the first part of the analysis compares male labor force nonparticipation in 1940 relative to 1930, between workers previously in railroad versus other industries with broad pension coverage, and by age. Higher benefits led to earlier retirement, largely driven by exit at age 65. The second part of my analysis also exploits the switch from flat to progressive benefits in average wages to estimate the elasticity of nonparticipation with respect to benefits for men aged 65-69. My central estimate of 0.55 indicates a large retirement response. Application of these estimates to Social Security expansions in the 1950s suggests rising benefits was the key driver of earlier retirement among the already-insured male population during this era.

How the labor force participation of mothers of young children responds to unconditioned cash support remains an open question in policy debates. Using data from Baby's First Years, a large-scale randomized controlled study, we generate new estimates of the impact of an unconditional monthly cash transfer on maternal employment behavior through a child's first four years of life. We find no overall statistically detectable differences in whether mothers participated in the paid workforce or on total household earnings. Receipt of the cash transfer appears to have reduced hours of maternal work during the height of the pandemic in 2020-21.

The Earned Income Tax Credit (EITC) is the largest cash-based means-tested transfer program in the United States. In 2021, 31 million households received $64 billion from the federal EITC. Twenty-eight states also offer eligible taxpayers a supplement to the federal program. An estimated one-fifth of eligible households fail to claim the federal credit, but little is known about take-up of these state programs. We use administrative data from California on the population of Supplemental Nutrition Assistance Program (SNAP) recipients linked to state tax records to estimate the number of households who are eligible for California's supplement to the federal EITC (CalEITC) but do not claim it. We find that over 400,000 households who received SNAP benefits and who were eligible for the state EITC in 2017 did not receive the credit. This includes approximately 40,000 eligible households who claimed the federal EITC but not the state credit; nearly 98,000 eligible households who filed a state tax return but did not claim the state or federal credit; and roughly 270,000 eligible households who did not file a state tax return. The corresponding take-up rate for the CalEITC among eligible SNAP-enrolled households was 54%. Altogether, these households left a total of $71 million in state EITC funds on the table. If received, these credits would have increased incomes among these households by 2.7% and increased total state EITC outlays by 20%.

We show that Covid-19 illnesses and related work absences persistently reduce labor supply. Using an event study, we estimate that workers with week-long Covid-19 absences are 7 percentage points less likely to be in the labor force one year later compared to otherwise-similar workers who do not miss a week of work for health reasons. Our estimates suggest Covid-19 absences have reduced the U.S. labor force by approximately 500,000 people (0.2 percent of adults) and imply an average labor supply loss per Covid-19 absence equivalent to $9,000 in forgone earnings, about 90 percent of which reflects losses beyond the initial absence week.

We test the income fungibility assumption from standard economic theory by analyzing spending responses to South Korea's labeled COVID-19 stimulus payments. We exploit unique policy rules for identification: (1) recipients cannot use payments outside their province of residence, and (2) they can only use payments at establishments in pre-specified sectors. Using data on card transactions in Seoul, we find that households do not consider stimulus payments fungible. Compared to Seoul residents' benchmark spending responses to cash income gains by sector, the stimulus payments disproportionately increased Seoul residents' spending in the allowed sector compared to the non-allowed sector. The payments did not increase non-Seoul residents' card spending. Our results imply that labeled stimulus payments with usage restrictions can boost household consumption spending in targeted sectors or locations during economic recessions.

This paper examines how direct-to-consumer advertising (DTCA) for prescription drugs influences utilization by exploiting a large and plausibly exogenous shock to DTCA driven by the introduction of Medicare Part D. Part D led to larger increases in advertising in geographic areas with higher concentrations of Medicare beneficiaries. We examine the impact of this differential increase in advertising on non-elderly individuals to isolate advertising effects from the direct effects of Part D. We find that exposure to advertising led to large increases in treatment initiation and improved medication adherence. Advertising also had sizeable positive spillover effects on non-advertised generic drugs. Our results imply significant spillovers from Medicare Part D on the under-65 population and an important role for non-price factors in influencing prescription drug utilization.

Does socioeconomic diversity affect people's perceptions of the income distribution and their preferences for redistribution? I exploit a financial aid reform that drastically raised the share of low-income students at an elite university in Colombia and leverage variation in exposure to low-income peers across cohorts and majors using difference-in-differences. Using original survey data and administrative records, I study how exposure to low-income peers affects high-income students' social networks, perceptions, and preferences. The policy caused high-income students to interact more with low-income students, giving them more accurate perceptions of the income distribution and boosting their support for progressive redistribution.

The Paycheck Protection Program (PPP), a principal element of the fiscal stimulus enacted by Congress in response to the COVID-19 economic shock, was intended to assist small businesses to maintain employment and wages during the crisis, as well as cover other expenses. We use high-frequency administrative payroll data from ADP-one of the world's largest payroll processing firms-to estimate the causal effect of the PPP on the evolution of employment at PPP-eligible firms relative to PPP-ineligible firms, where eligibility is determined by industry-specific firm-size cutoffs. Our estimates indicate that the PPP boosted employment at eligible firms by between 2 percent to 5 percent at its peak effect around mid-May 2020. The boost to employment waned thereafter and ranged from no effect to a 3 percent boost at the end of 2020. Our estimates imply that employers retained an additional 3.6 million jobs as of mid-May 2020, and 1.4 million jobs at the end of 2020, as a consequence of PPP. The estimated cost per year of employment retained was to , equal to 3.4 to 5.2 times median earnings.

This paper examines the impact of switching from paper to electronic invoicing on firm tax compliance and performance using quasi-experimental variation in the roll-out of VAT e-invoicing in Peru. We find that e-invoicing increases reported firm sales, purchases and VAT liabilities by over 5 percent in the first year after adoption. The impact is concentrated among small firms and sectors with higher rates of noncompliance, suggesting that e-invoicing enhances compliance by lowering compliance costs and strengthening deterrence. However, we also find that existing stocks of VAT credits were used to offset the reform's positive effects on VAT collection, suggesting that digital tools such as e-invoicing would need to be complemented by other reforms to improve revenue mobilization.

Two sources of treatment heterogeneity can undermine the scale-up and replication of successful human capital interventions: variation in the treatment itself and changes to the population served. This paper combines two new summer youth employment experiments in Chicago and Philadelphia with previously published evidence to show how repeated study of an intervention as it scales and changes contexts can guide decisions about public investment. Results show that these programs generate consistently large proportional decreases in criminal justice involvement, even as administrators recruit additional youth, hire new local providers, find more job placements, and vary the content of their programs. Using both endogeneous stratification within cities and variation in 62 new and existing point estimates across cities uncovers a key pattern of individual responsiveness: impacts grow linearly with the risk of socially costly behavior each person faces. Identifying more interventions that combine this pattern of robustness to treatment variation with bigger effects for the most disconnected could aid efforts to reduce social inequality efficiently.

This paper studies how the communication of political leaders affects the expectation formation of the public. Specifically, we examine the expectation management of the German government regarding COVID-19-related regulatory measures during the early phase of the pandemic. We elicit beliefs about the duration of these restrictions via a high-frequency survey of individuals, accompanied by an additional survey of firms. To quantify the success of policy communication, we use a regression discontinuity design and study how beliefs about the duration of the regulatory measures changed in response to three nationally televised press conferences by former Chancellor Angela Merkel and the Prime Ministers of the German federal states. We find that the announcements of Angela Merkel and her colleagues significantly prolonged the expected duration of restrictions, with effects being strongest for individuals with higher ex-ante optimism.

Does providing financial assistance to people who have just experienced an income shock affect their healthcare use? To address this question, we examine healthcare outcomes in a setting where people at risk of homelessness due to an income shock were offered or denied referral to financial assistance quasi-randomly. Among callers who have been screened as eligible for assistance at Chicago's Homelessness Prevention Call Center (HPCC), some are denied assistance because the availability of funding varies. Conditional on some observable characteristics, funding availability is as-good-as-randomly assigned to callers. We link callers to healthcare utilization records and observe their inpatient hospital stays and emergency department visits. We find that referral to financial assistance has little effect on overall healthcare use-we can reject increases in total utilization greater than 7% of the base rate and decreases of more than 4%. This null effect can be explained, in part, by the fact that the income shock does not significantly change overall healthcare use among those not receiving assistance, suggesting that these individuals can insure health and healthcare demand against these shocks in other ways.

I use an unbalanced panel of over 11,000 academic records spanning from Spring 2017 to Spring 2020 to identify the difference in effects of the COVID-19 pandemic across lower- and higher-income students' academic performance. Using difference-in-differences models and event study analyses with individual fixed effects, I find a differential effect by students' pre-COVID-19 academic performance. Lower-income students in the bottom quartile of the Fall 2019 cumulative GPA distribution outperformed their higher-income peers with a 9% higher Spring 2020 GPA. This differential is fully explained by students' use of the flexible grading policy with lower-income ones being 35% more likely to exercise the pass/fail option than their counterparts. While no such GPA advantage is observed among top-performing lower-income students, in the absence of the flexible grading policy these students would have seen their GPA decrease by 5% relative to their counterfactual pre-pandemic mean. I find suggestive evidence that this lower performance may be driven by lower-income top-performing students experiencing greater challenges with online learning. These students also reported a higher use of incompletes than their higher-income peers and being more concerned about maintaining (merit-based) financial aid.

This paper documents the magnitude and distribution of U.S. earnings changes during the COVID-19 pandemic and how fiscal relief offset lost earnings. We build panels from administrative tax data to measure annual earnings changes. The frequency of earnings declines during the pandemic were similar to the Great Recession, but the distribution was different. In 2020, workers starting in the bottom half of the distribution were more likely to experience an earnings decline of at least 10 percent. While most workers experiencing large annual earnings declines do not receive unemployment insurance, over half of beneficiaries were made whole in 2020, as unemployment insurance replaced a median of 105 percent of their annual earnings declines. After incorporating unemployment insurance, the likelihood of large earnings declines among low-earning workers was not only smaller than during the Great Recession, but also smaller than in 2019.

What are the effects of school closures during the Covid-19 pandemic on children's education? Online education is an imperfect substitute for in-person learning, particularly for children from low-income families. Peer effects also change: schools allow children from different socio-economic backgrounds to mix together, and this effect is lost when schools are closed. Another factor is the response of parents, some of whom compensate for the changed environment through their own efforts, while others are unable to do so. We examine the interaction of these factors with the aid of a structural model of skill formation. We find that school closures have a large, persistent, and unequal effect on human capital accumulation. High school students from low-income neighborhoods suffer a learning loss of 0.4 standard deviations after a one-year school closure, whereas children from high-income neighborhoods initially remain unscathed. The channels operating through schools, peers, and parents all contribute to growing educational inequality during the pandemic.

COVID-19 relief legislation offers a unique setting to study how political representation shapes the distribution of federal assistance to state and local governments. We provide evidence of a substantial small-state bias: an additional Senator or Representative per million residents predicts an additional 670 dollars in aid per capita across the four relief packages. Alignment with the Democratic party predicts increases in states' allocations through legislation designed after the January 2021 political transition. This benefit of alignment with a unified federal government operates through the American Rescue Plan Act's size and through the formulas it used to distribute transportation and general relief funds.

We show that tax-induced increases in alcohol prices can lead to substantial substitution and avoidance behavior that limits reductions in alcohol consumption. Causal estimates are derived from a natural experiment in Illinois where spirits and wine taxes were raised sharply and unexpectedly in 2009. Beer taxes were increased by only a trivial amount. We construct representative and consistent measures of alcohol prices and sales from scanner data collected for hundreds of products in thousands of stores across the US. Using several difference-in-differences models, we show that alcohol excise taxes are instantly over-shifted. That is, a $1 tax increase translates into a price increase of up to $1.50. We find evidence suggesting that consumers react by switching to less expensive products. In particular, they increase purchases of beer, thus significantly moderating any tax-induced reductions in total ethanol consumption. Our study highlights the importance of tax-induced substitution, the implications of differential tax increases by beverage group and the impacts on public health of alternative types of tax hikes whose main aims are to increase revenue.

We investigate the optimal response of unemployment insurance to economic shocks, both with and without commitment. The optimal policy with commitment follows a modified Baily-Chetty formula that accounts for job search responses to future UI benefit changes. As a result, the optimal policy with commitment tends to front-load UI, unlike the optimal discretionary policy. In response to shocks intended to mimic those that induced the COVID-19 recession, we find that a large and transitory increase in UI is optimal; and that a policy rule contingent on the change in unemployment, rather than its level, is a good approximation to the optimal policy.