house price dynamics with dispersed information abstract we use a user cost model to study how dispersed information affects the equilibrium house price in the model agents are disparately informed about local economic conditions consume housing services and speculate on price changes optimists who expect high house price growth buy in anticipation of capital gains pessimists who expect capital losses prefer to rent because of short selling constraints on housing pessimistic expectations are not incorporated in the price of owned houses and the equilibrium price is higher and more volatile relative to the benchmark case of common information we present evidence supporting the model s predictions in a panel of us cities

why is the market for long term care insurance so small abstract long term care represents one of the largest uninsured financial risks facing the elderly in the united states we present evidence of supply side market failures in the private long term care insurance market in particular the typical policy purchased exhibits premiums marked up substantially above expected benefits it also provides very limited coverage relative to the total expenditure risk however we present additional evidence suggesting that the existence of supply side market failures is unlikely by itself to be sufficient to explain the very small size of the private long term care insurance market in particular we find enormous gender differences in pricing that do not translate into differences in coverage and we show that more comprehensive policies are widely available if seldom purchased at similar loads to purchased policies this suggests that factors limiting demand for insurance are also likely to be important in this market our evidence also sheds light on the likely nature of these demand side factors

the developmental effect of state alcohol prohibitions at the turn of the twentieth century john p lennon treasurer of the american federation of labor says that seventy percent of the drink bill of the united states is contributed by the american laboring man this means that liquor money is usually bread money meat money shoe money and money that ought to go for clothing american issue maryland edition june 12 1909 as cited in odegard 1928 i introduction work by economists provides considerable evidence consistent with the fetal origins hypothesis that various chronic health outcomes are prompted by an adverse in utero environment e g banerjee et al 2010 deschenes et al 2009 1 while the outcomes and conditions vary across studies the underlying findings emphasize the risks associated with negative exposures during this critical development period most studies in the fetal origins literature exploit the variation afforded by temporary adverse in utero shocks e g famines and focus on early life outcomes e g low birth weight however recent research in this area examines the effects in adulthood of positive in utero and childhood exposures for example hoynes schanzenbach and almond 2012 find that the beneficial effects of food stamp access in utero and during childhood persist into adulthood suggesting the potential for positive and sustained environmental changes during gestation and in early childhood to have long lasting impacts 2 results from bleakley 2007 suggest higher adult incomes among cohorts in the american south with more childhood exposure to hookworm eradication efforts 3 we contribute to this growing literature by exploiting the quasi randomization of alcohol consumption created by state level alcohol prohibition laws passed in the united states in the early part of the twentieth century we argue that such laws represented a positive shock to individuals who were in utero or who were young children around the times of the laws adoption using a large dataset of world war ii enlistees we examine the long term effects of these state prohibition laws on adult educational attainment obesity and height although we do not observe alcohol consumption and hence our results provide intent to treat estimates our design avoids the reporting problems associated with using more recent data on alcohol use we find small but statistically significant effects which do not appear to be the result of pre existing trends for two of the three outcome variables ii background reduced consumption of alcohol could lead to improved outcomes for those individuals in utero or in early childhood during this period through two channels first reduced alcohol consumption by the household members who likely consumed the most alcohol during this period namely men may have shifted resources to other members of the household namely women and children second reduced consumption by pregnant women themselves would reduce fetal exposure to alcohol we provide some historical evidence on the potential relevance of these mechanisms in the context of state level alcohol prohibitions a intrahousehold shift in resources to women and young children liquor traffic as the enemy of the home was a favorite theme of the anti saloon league and other temperance organizations of the time odegard 1928 42 4 the suggestive titles of pamphlets distributed by such organizations included better babies unborn children why babies die and boys worth more than taxes the obvious intention of such propaganda was to convey the message that the saloon culture and the alcohol consumption that came with it resulted in adverse outcomes for children and families that would be reversed under prohibition determining whether or not this reversal materialized is difficult given the lack of historical consumption data state level data on alcohol consumption are not available for this period however national data on consumption and other measures that are likely to be associated with consumption provide some evidence to suggest lower alcohol consumption in the period during which many states adopted alcohol prohibition laws

evaluating welfare reform in the united states this paper reviews the economic literature on welfare reform over the 1990s a brief summary of the policy changes is followed by a discussion of the methodological techniques that analyze the effects of these changes on outcomes the paper then critically reviews the econometric and experimental literature on caseload changes labor force changes poverty and income changes and family formation changes a growing body of evidence suggests that recent policy changes have influenced economic behavior and well being one particular set of new style welfare programs seems to show especially promising results with significantly increased work and earnings and reduced poverty

effects of welfare reform on women s voting participation this study investigates the effects of welfare reform in the united states in the 1990s on voting among low income women using the november current population surveys with the added voting and registration supplement for the years 1990 through 2004 and exploiting changes in welfare policy across states and over time we estimate the causal effects of welfare reform on women s voting registration and voting participation during the period in which welfare reform unfolded during this time period voter turnout was decreasing in the united states we find robust evidence that welfare reform led to smaller declines in voting about 3 to 4 percentage points which translates to about 10 relative to the baseline mean for women who were exposed to welfare reform compared to several different comparison groups of similar women who were much less exposed the robust findings suggest that welfare reform had prosocial effects on civic participation as characterized by voting the effects were largely confined to presidential elections were stronger in democratic than republican states were stronger in states with stronger work incentive policies and appeared to operate through employment education and income jel d72 h53 i38 j21

effects of welfare reform on illicit drug use of adult women exploiting changes in welfare policy across states and over time and comparing relevant population subgroups within an econometric difference in differences framework we estimate the effects of welfare reform on adult women s illicit drug use from 1992 to 2002 the period during which welfare reform unfolded in the u s the analyses are based on all available and appropriate national datasets each offering unique strengths and measuring a different drug related outcome we investigate self reported illicit drug use from the national household surveys on drug abuse and national surveys on drug use and health drug related prison admissions from the national corrections reporting program drug related arrests from federal bureau of investigation uniform crime reports and drug related emergency department episodes from the drug abuse warning network we find robust evidence that welfare reform led to a 10 21 decline in illicit drug use among women at risk of relying on welfare as well as associated declines in drug related arrests 6 7 drug related hospital emergency department episodes 7 11 and possibly drug related prison admissions 11 19 the findings indicate that an appropriately designed system with sufficient job opportunities for those are able to work can result in both increases in employment and decreases in drug use

quick job entry or long term human capital development the dynamic effects of alternative training schemes this study evaluates and compares the eectiveness of two alternative training schemes for the unemployed short job search oriented training and long human capital oriented training we investigate the impact dynamics of these pro grams considering both unemployment and employment duration our analysis uses a rich administrative longitudinal data set for germany where both programs were implemented at the same time our estimation strategy flexibly accounts for dy namic selection on observables and unobservables as well as heterogeneous treatment eects the results indicate that short term training schemes can be an eective tool to reduce unemployment in the long run in particular if participation occurs early during unemployment long term training schemes increase the average du ration of employment spells more strongly than short term training however they increase the expected unemployment duration if they are started early during un employment this negative short run impact of long term training is an important driver of its overall eectiveness

alcohol prices consumption and traffic fatalities we examine the relationships among alcohol prices consumption and traffic fatalities using data across u s states from 1982 to 2000 some previous studies have found large negative associations between alcohol taxes and fatalities however commonly used price data suggest little or no connection between alcohol prices and fatalities these apparently conflicting findings may result from measurement error and or endogeneity in the price data which biases ordinary least squares estimators toward a finding of no price effects using alcohol taxes as instrumental variables fatali ties are found to be negatively related to prices in addition alcohol consumption is strongly posi tively related to fatalities however biases may still remain because taxes are not entirely suitable as instruments

violence related injury and the price of beer in england and wales this paper examines the influence of the real price of beer on violence related injuries across the economic regions in england and wales the data are monthly frequency of violent injury collected from a stratified sample of 58 national health service emergency departments 1995 2000 an econometric model based on economic socio demographic and environmental factors was estimated using panel techniques we show that the rate of violence related injury is negatively related to the real price beer as well as economic sporting and socio demographic factors the principal conclusion of the paper is that the regional distribution of the incidence of violent injury is related to the regional distribution of the price of beer the major policy conclusion is that increased alcohol prices would result in substantially fewer violent injuries and reduced demand on trauma services

accounting for the decline in afdc caseloads welfare reform or the economy we use state level monthly panel data to assess the relative contributions of the macroeconomy and welfare reform in accounting for the 1993 96 decline in aid to families with dependent children afdc caseloads our results suggest that the decline in per capita afdc caseloads is attributable largely to the economic conditions in states and not to waivers from federal welfare policies nationwide we attribute 66 percent of the decline to the macroeconomy however we do find substantial heterogeneity in the impact and timing of alternative waivers on afdc caseloads states with waivers impacting parental responsibilities experienced greater caseload declines than states with waivers that made work more attractive overall our model predicts that had it not been for the influence of economic factors welfare reform would not have led to any decrease in aggregate caseloads

understanding alcohol consumption across countries with unpublished data from the international comparison program that cover the consumption of three alcoholic beverages in over 150 countries we analyse drinking patterns around the world with an

household labor supply and welfare participation in sweden using a sample of swedish households we estimate a household labor supply model assuming that preferences for consumption and leisure can be described by a direct translog utility function the labor supply and welfare participation decisions are treated as a discrete choice problem and we assume that these choices follow a simple conditional logit rule in addition we allow unobserved individual specific effects to be correlated across alternatives we assume that these unobserved effects are drawn from a discrete distribution and the correlation across alternatives is modeled using factor loading techniques classification error in hours is allowed for by using a multiplicative measurement error specification the estimates from the structural model yield inelastic labor supply among husbands and positive wage elasticity for wives further the cross elasticities are close to zero

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

divided we reform evidence from us welfare policies abstract divided government is often thought of as causing legislative deadlock i investigate the link between divided government and economic reforms using a novel data set on welfare reforms in us states between 1978 and 2010 panel data regressions show that under divided government a us state is around 25 more likely to adopt a welfare reform than under unified government several robustness checks confirm this counter intuitive finding case study evidence suggests an explanation based on policy competition between governor senate and house

what mean impacts miss distributional effects of welfare reform experiments labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings transfers and income yet most welfare reform research focuses on mean impacts we investigate the importance of heterogeneity using random assignment data from connecticut s jobs first waiver which features key elements of post 1996 welfare programs estimated quantile treatment effects exhibit the substantial heterogeneity predicted by labor supply theory thus mean impacts miss a great deal looking separately at samples of dropouts and other women does not improve the performance of mean impacts we conclude that welfare reform s effects are likely both more varied and more extensive than has been recognized

changes in the consumption income and well being of single mother headed families there is a long standing debate over how the material well being of the disadvantaged has changed over time in the united states this debate has intensified in light of notable increases in income inequality in the 1970s and 1980s and during the 1990s dramatic changes in welfare and tax policies that target poor families including expansions in the earned income tax credit eitc welfare waivers and the passage of the personal responsibility and work opportunity reconciliation act prwora while some championed these changes as catalysts for self sufficiency others predicted that these reforms would lead to severe deprivation 1 a large body of research has shown that these changes were associated with a dramatic fall in welfare receipt and increases in work and earnings 2 there is little consensus however on how material well being has changed during this period particularly for the most disadvantaged families such as those at the bottom of the income or consumption distribution in this paper we analyze changes in material well being between 1993 and 2003 for single mother headed families a group that has been the target of these recent changes in tax and wel fare policy for these families we analyze changes in income and total consumption as well as changes in disaggregated consumption time use and health insurance coverage we describe the underlying trends in well being for disadvantaged families during this dynamic period rather than identifying the causal effects of individual policies or macroeconomic conditions we begin by briefly documenting the recent trends in income and consumption for single mother headed families for income the trends differ sharply for different deciles of single moth ers for example between 1993 1995 and 1997 2000 reported income in the bottom decile falls by about 16 percent while reported income rises by more than 17 percent in the third fourth and fifth deciles the trends for reported consumption on the other hand tell a very different story these data show neither the sharp decline at low percentiles nor the large increases at the remaining percentiles in the bottom half of the distribution of single mothers rather we find a modest about 7 to 12 percent rise in consumption throughout the entire distribution while we do not examine the reasons for the sharp differences in income and consumption changes in this paper we do argue that consumption is a better measure of material well being for those at the bottom of the distribution

the effects of the macroeconomy and welfare reform on food stamp caseloads since 1994 there has been an unprecedented decline in the number of people receiving food stamp benefits from a record high of 27 5 million in 1994 the number of food stamp recipients fell over 30 to 18 0 million by mid 1999 during this period the united states has experienced the third longest economic expansion of the twentieth century this has resulted in a dramatic growth of new jobs and the lowest unemployment rate in a generation simultaneously the welfare system has undergone a major transformation beginning in the early 1990s when many states made changes to their welfare programs through federal waivers from aid to families with dependent children afdc requirements the personal responsibility and work opportunity reconciliation act of 1996 prwora furthered these changes by replacing afdc where states contributions were matched by the federal government with a block grant program called temporary assistance for needy families tanf prwora introduced new rules on tanf recipients such as terminal time limits work requirements and personal responsibility measures it also directly changed the food stamp program by ending the eligibility of some recipients and reducing average benefit levels at the same time innovative changes in the delivery of food stamp benefits have been taking place with the introduction of electronic benefit trans

can targeted transfers improve birth outcomes evidence from the introduction of the wic program abstract the goal of federal food and nutrition programs in the united states is to improve the nutritional well being and health of low income families a large body of literature evaluates the extent to which the supplemental program for women infants and children wic has accomplished this goal but most studies have been based on research designs that compare program participants to non participants if selection into these programs is non random then such comparisons will lead to biased estimates of the program s true effects in this study we use the rollout of the wic program across counties to estimate the impact of the program on infant health we find that the implementation of wic led to an increase in average birth weight and a decrease in the fraction of births that are classified as low birth weight we find no evidence that these estimates are driven by changes in fertility or selection into live births our preferred estimates suggest that wic initiation raised average birth weight by 2 g or by 7 g among infants born to mothers with low education levels these translate into estimated birth weight increases among participating mothers of approximately 18 to 29 g estimated treatments on the treated impacts among infants born to participating mothers with low education are of similar magnitude

discretionary policy and multiple equilibria in lq re models we study discretionary equilibria in dynamic linear quadratic rational expectations models in contrast to the assumptions that pervade this literature we show that these models do have multiple equilibria in some situations we demonstrate the existence of multiple discretionary equilibria by example we investigate general properties of discretionary equilibria and discuss implications for numerical algorithms

welfare dynamics under time limits among the most important changes brought about by the personal responsibility and work opportunity reconciliation act of 1996 are time limits which provide consumers with an incentive to conserve their welfare benefits for future use among forward looking expected utility maximizing consumers who face liquidity constraints and earnings uncertainty economic theory predicts that the incentive to conserve should be strongest among families with the youngest children we test this prediction using data from florida s family transition program a randomized welfare reform experiment our estimates generally exhibit the predicted age dependence which suggests that time limits affect welfare use before they become binding our estimates indicate that in the absence of other reforms that increased welfare use ftp s time limit would have reduced welfare receipt by 16 percent

viewpoint further results on measuring the well being of the poor using income and consumption we evaluate the relative merits of income and consumption based measures of well being our results provide evidence that consumption better captures well being for those with few resources the bottom deciles of expenditures exceed those of income suggesting under reporting of income the under reporting rate for government transfers is high and rising overall non response is more severe in u s income data than in expenditure data furthermore a consumption data set requires fewer observations than an income data set to obtain the same level of precision for typical estimates finally very low consumption is more strongly related to other bad outcomes than very low income on evalue les merites relatifs des mesures de bien etre fondees sur le revenu et la consommation les resultats montrent que la consommation mesure mieux le bien etre de ceux qui ont peu de ressources les deciles au bas de la distribution des depenses depassent les deciles de la distribution des revenus ce qui suggere qu il y aurait des revenus non rapportes le taux de sous declaration des transferts gouvernementaux est eleve et croissant le taux global de non reponses est plus important aux etats unis pour les revenus que pour les depenses de plus les bases de donnees sur la consommation requierent moins d observations que celles sur le revenu pour obtenir le meme degre de precision des evaluations typiques finalement une tres basse consommation est plus fortement co reliee a d autres mauvaises conditions qu un tres bas niveau de revenu

arrested development theory and evidence of supply side speculation in the housing market this paper incorporates speculation into the standard supply and demand framework used to analyze housing booms and busts speculation reverses the common intuition that elastic housing supply attenuates housing booms housing market frictions make land a more attractive speculative investment than housing as a result undeveloped land both facilitates construction and intensies

has asian export performance been unique abstract it is often argued that technological spillovers or other externalities associated with exports or trade are sector specific yet trade and growth linkages are typically examined at the level of macroeconomic aggregates this paper extends the analysis another level of specificity analyzing the commodity composition of trade this paper addresses three interrelated sets of questions first have asian countries exhibited unusually high exports in particular industries has their commodity composition of exports been unusually concentrated second has specialization in particular sectors emerged unusually rapidly the case of asian countries third can export similarity across asian countries be explained by economic fundamentals

can high costs justify weak demand for the home equity conversion mortgage home equity conversion mortgages hecms implicitly bundle nondefaultable credit lines with put options that let borrowers or their heirs sell mortgaged homes for the credit line limit when borrowers move or die the put option s value net of closing costs bounds hecm s value to borrowers below older homeowners weak demand is commonly attributed to hecm s high costs and the government prices insurance intending to avoid subsidy however simulations indicate put value has often exceeded closing costs even ignoring other embedded options and using backward looking expectations near the recent price cycle peak these results make weak demand more puzzling

japan s different trade regime an analysis with particular reference to keiretsu many claim that although formal trade barriers have been removed at the border japanese markets remain unusually closed because of non tariff barriers after describing japan s development strategy and the debate over the sources of japanese growth we consider current trade barriers recent research has made some headway investigating the impact of one of the alleged invisible barriers in particular efforts have been made to test if the behavior of japanese corporate groups known as keiretsu creates a barrier to trade finally we consider whether private sector trade restrictions warrant a public response what if anything should be done about keiretsu

why don t people insure late life consumption a framing explanation of the under annuitization puzzle rational models of risk averse consumers have difficulty explaining limited annuity demand we posit that consumers evaluate annuity products using a narrow investment frame that focuses on risk and return rather than a consumption frame that considers the consequences for lifelong consumption under an investment frame annuities are quite unattractive exhibiting high risk without high returns survey evidence supports this hypothesis whereas 72 percent of respondents prefer a life annuity over a savings account when the choice is framed in terms of consumption only 21 percent of respondents prefer it when the choice is framed in terms of investment features

health and mortality delta assessing the welfare cost of household insurance choice we develop a pair of risk measures health and mortality delta for the universe of life and health insurance products a life cycle model of insurance choice simplifies to replicating the optimal health and mortality delta through a portfolio of insurance products we estimate the model to explain the observed variation in health and mortality delta implied by the ownership of life insurance annuities including private pensions and long term care insurance in the health and retirement study for the median household aged 51 to 57 the lifetime welfare cost of market incompleteness and suboptimal choice is 3 2 of total wealth

does job search monitoring intensity affect unemployment evidence from northern ireland because unemployment benefit reforms typically package together a number of changes few existing evaluations have been able to isolate the effects of changes in job search monitoring intensity on benefit recipient stocks or flows those few studies that do so draw mixed conclusions this paper provides new estimates of monitoring impacts by exploiting plausibly exogenous periods where search monitoring has been temporarily withdrawn with the regime otherwise unchanged during a series of benefit office refurbishments in northern ireland as we would expect from search theory withdrawal of monitoring significantly increases the stock of unemployment benefit recipients via reduced outflows

minimum wage effects throughout the wage distribution this paper provides evidence on a wide set of margins along which labor markets can adjust in response to increases in the minimum wage including wages hours employment and ultimately labor income not surprisingly the evidence indicates that low wage workers are most strongly affected while higher wage workers are little affected workers who initially earn near the minimum wage experience wage gains nevertheless their hours and employment decline and the combined effect of these changes on earned income suggests adverse consequences on net for low wage workers

non parametric estimates of the labor supply effects of negative income tax programs this article reports nonparametric estimates of the effect of labor supply behavior on the payments to families enrolled in the seattle denver income maintenance experiment the randomized assignment of families to the treatment groups in this experiment was designed to permit the calculation of these nonparametric estimates however the nonparametric estimates have never been reported even though they are easy to construct using a simple weighting procedure unfortunately responses to the data collection instrument which depended on costly surveys were not random and this opens up some ambiguity in the results

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

welfare the earned income tax credit and the labor supply of single mothers during 1984 1996 welfare and tax policy were changed to encourage work by single mothers the earned income tax credit was expanded welfare benets were cut welfare time limits were added and welfare cases were terminated medicaid for the working poor was expanded as were training programs and child care during this same time period there were unprecedented increases in the employment and hours of single mothers we show that a large share of the increase in work by single mothers can be attributed to the eitc and other tax changes with smaller shares for welfare benet cuts welfare waivers training programs and child care programs

the behavioral effects of welfare time limits time limits are among the most fundamental of recent welfare reforms whereas welfare benefits were an entitlement under the old aid to families with dependent children afdc program the personal responsibility and work opportunity reconciliation act of 1996 prwora which replaced afdc with the temporary aid to needy families tanf program restricts most families to 60 months of federally funded benefits although the states are free to extend benefits further using their own funds almost all have incorporated some sort of time limit into their tanf programs time limits may affect welfare receipt in two distinct ways the most obvious effect is mechanical reducing welfare use once recipients exhaust their benefits however time limits may also reduce welfare receipt before recipients reach the limit if families are forwardlooking they may reduce their current welfare use in order to preserve their benefits for the future the purpose of this paper is to provide evidence on such anticipatory or behavioral effects of time limits i use data from the survey of income and program participation sipp to replicate my earlier estimates based on the current population survey cps i also exploit the sipp to relax some of the restrictive assumptions that were implicit in my previous work

can variation in subgroups average treatment effects explain treatment effect heterogeneity evidence from a social experiment we assess whether welfare reform affects earnings only through mean impacts that are constant within but vary across subgroups this is important because researchers interested in treatment effect heterogeneity typically focus on estimating mean impacts that only vary across subgroups using a novel approach to simulating treatment group earnings under the constant mean impacts within subgroup model we find this model does a poor job of capturing treatment effect heterogeneity for connecticut s jobs first welfare reform experiment notably ignoring within group heterogeneitywould lead one to miss evidence that treatment effects are consistent with basic labor supply theory

the rise in old age longevity and the market for long term care this paper analyzes how markets for old age care respond to the aging of populations we consider how the biological forces which govern the stocks of frail and healthy persons in a population interact with economic forces which govern the demand and supply for labor intensive care we test our predictions empirically using state and county level evidence on the u s market for long term care in nursing homes over the last three decades excerpt

what does japanese trade structure tell us about japanese trade policy some argue foreign access to japanese markets remains tightly controlled and that if japan is to be a member in good standing of the international economic system japan must do more than just adhere to the formal rules of the gatt japan must show by the results of its international economic transactions that foreign access to its market is not tightly controlled as this point of view is increasingly dominating american economic diplomacy with japan it is particularly important that its premise be examined first i examine japan s growth record and trade record to the extent that japan s trade performance is different i explore whether the difference can legitimately be attributed to japanese policies this paper finds that neither the price behavior of japanese firms nor the pattern and volume of what japan imports or exports suggests that japan s trade regime is different some of japan s economic institutions may be distinctive but there is little evidence they produce outcomes which distort the international economic system what remains to be explained is the conviction of so many that japan is more a parasite than a pillar of the international economic system the record of economic research directly and indirectly bearing on this issue does not support such a conclusion at all

life cycle individual thrift and the wealth of nations this paper provides a review of the theory of the determinants of individual and national thrift that has come to be known as the life cycle hypothesis lch of saving applications to some current policy issues are also discussed part i deals with the state of the art on the eve of the formulation of the lch some 30 years ago part ii sets forth the theoretical foundations of the model in its original formulation and later amendment calling attention to various implications distinctive to it and sometimes counter intuitive it also includes a review of a number of crucial empirical tests both at the individual and the aggregate level part iii reviews some applications of lch to current policy issues though only in sketchy fashion as space constraints prevent fuller discussion this abstract was borrowed from another version of this item

combat exposure cigarette consumption and substance use this study estimates the relationship between combat exposure and several risky health behaviors cigarette consumption binge drinking and drug use we find that the u s active duty military personnel deployed to combat zones with enemy firefight are more likely to subsequently smoke cigarettes consume alcohol and use illicit drugs than their counterparts deployed to noncombat operations our results suggest that the mental health effects of combat can explain up to two thirds of the estimated association between combat exposure and risky health behaviors jel h56 i12

the effects of time limits the eitc and other policy changes on welfare use work and income among female headed families of all of the welfare reforms that were implemented during the 1990s time limits may represent the single greatest break from past policy this paper expands on what is known about this important welfare reform measure by exploiting the predictions from grogger and michalopoulos 2003 to estimate the effects of time limits on welfare use employment labor supply earnings and income among female headed families results based on data from the march current population survey suggest that time limits have had important effects on welfare use and work accounting for about one eighth of the decline in welfare use and about 7 of the rise in employment since 1993 they have had no significant effect on earnings or income however the analysis also shows that the collective effects of other reforms have had important impacts on employment and labor supply furthermore it identifies the earned income tax credit eitc as a particularly important contributor to both the recent decrease in welfare use and t

electronic filing tax preparers and participation in the earned income tax credit abstract in 2002 more than 18 million low income individual taxpayers received the earned income tax credit eitc despite its size non participation in this program is a concern and substantial effort is devoted by the irs local governments and many non profits to address it using variation across states in the introduction of state electronic filing programs we show that the introduction of electronic filing had a significant effect on participation in the eitc our results are robust to accounting for other welfare eitc and irs reforms introduced during the same period we speculate that the impact of this policy change on the tax preparation industry played an important role in increasing participation

jump starting self employment evidence among welfare participants in argentina one important concern of governments in developing countries is how to phase out large safety net programs the authors evaluate the short run effects of one possible exit strategy programs that promote self employment in argentina they provide evidence that a small fraction of beneficiaries were attracted by this program overall potential participants to self employment are more likely to be female household heads and more educated beneficiaries relative to the average jefes beneficiaries using nonexperimental methods the authors show that participation in the program does affect the labor supply of participants by reducing the probability of having an outside job especially for males and increasing the total number of hours worked but the intervention fails to produce on average income gains to participating individuals and households in the short run the fact that a small subset of former welfare beneficiaries are attracted to the program coupled with the fact that only a subset of participants younger and more educated beneficiaries and with previous self employment experience benefited from participation has important implications for this intervention to represent a viable exit strategy from welfare

child support enforcement and welfare caseloads although there is a large body of research devoted to the issue of the determinants of welfare caseloads none of these studies has incorporated the effects of child support enforcement cse we employ annual state panel data from 1980 to 1999 and find that states with more effective cse have significantly lower welfare caseloads the improvement in cse over this period reduces welfare caseloads by about 9 percent in 1999 we also discover that individual child support variables may not be good indicators of state cse vigor and that a cse index that includes multiple dimensions of cse is more likely to capture the multiplicative functions of cse

transitions from welfare and the employment prospects of low skill workers this study examines the effects that labor market conditions and welfare policy changes had on single mothers welfare participation and economic outcomes using longitudinal individual level data from the 1992 and 1993 panels of the survey of income and program participation sipp the study uses special versions of the sipp panels that include state and county identifiers and links the individual information to county specific measures of low skill employment opportunities and state measures of welfare policies it estimates transition models of program entry and exit and regression models of economic outcomes the study finds that employment conditions and welfare benefit levels were significant determinants of single mothers welfare participation and economic success over the period 1992 95 however it does not find statistically distinguishable differences in participation and economic success between states that did and did not reform their welfare programs through waivers to the federal rules jel classification i3 j3

targeting transfers through restrictions on recipients our objective is to design transfer programs that maximize some social welfare function following the optimal income tax formulation we assume that a random process endows individuals with characteristics that influence welfare such as ability to earn income medical condition or unmonitorable income the goal is to maximize the utility of a randomly chosen individual other individualistic social welfare functions would lead to equivalent results if the random characteristics were observable a first best outcome could be achieved by making them the basis for lump sum transfers in practice however we can observe only indicators of these characteristics such as earnings medical expenditures or consumption patterns the challenge for policy is to design an efficient second best transfer program based on indicators in this paper we argue that 1 an optimal transfer program in general must sacrifice productive efficiency to target efficiency this is done by imposing restrictions on the choices made by intended beneficiaries 2 a program that incorporates restrictions such as means tested in kind transfers commodity specific taxes and subsidies and even ordeals i e the imposition of deadweight costs to qualify for a transfer will perform better than programs that rely solely on income taxes and cash transfers

policy watch the 1996 welfare reform welfare reform legislation was passed in the summer of 1996 four key research questions that the new law presents to social scientists are as follows 1 can states design and operate better programs than afdc this includes questions about the ability of afdc women to work a significant number of hours the legislation s effect in areas of concentrated urban poverty and the extent to which women will be able to improve their families economic status under the legislation 2 will jobs be available 3 how will the new block grant affect states fiscal situation and 4 what new research methodology questions does this legislation introduce

the effect of marital breakup on the income distribution of women with children having a female firstborn child significantly increases the probability that a woman s first marriage breaks up recent work has exploited this exogenous variation to measure the effect of divorce on economic outcomes and has concluded that divorce has little effect on women s mean household income however using a quantile treatment effect methodology abadie et al 2002 we find that divorce widens the income distribution it increases the probability that a woman has very low or very high household income it appears that some women successfully generate income through child support welfare combining households and increased labor supply after divorce while others are markedly unsuccessful thus although divorce has little effect on mean income it nonetheless increases poverty and inequality these findings imply that divorce has important welfare consequences

aging in place housing maintenance and reverse mortgages we study the role of housing wealth in financing retirement consumption in our model retirees 1 derive utility benefits from remaining in their home aging in place and 2 choose in each period whether to maintain their house the evidence that we present shows that these features are important in explaining the saving decisions of the elderly the costs and the maintenance requirement of reverse mortgages rms reduce or eliminate the benefits of the loans for retirees who wish to do less maintenance we evaluate the impact of different loan features on retirees utility cash flows to lenders and to the government agency that provides mortgage insurance we show that combining rms with insurance against a forced home sale e g due to a move to a nursing home is pareto improving and can lead to increased demand for the loans due to product complementarities

poverty among minorities in the united states explaining the racial poverty gap for blacks and latinos the two largest minorities in the united states african americans and people of hispanic origin show official poverty rates at least twice as high as those of non hispanic whites these similarly high poverty rates between the two minorities are however the result of different combinations of factors related to the specific characteristics of these two groups in this article we analyse the role of demographic and labour related variables in the current differential of poverty rates among racial and ethnic groups in the united states and its recent evolution our results show first that these differentials are largely explained by differing family characteristics of the ethnic groups furthermore we show that while labour market activity of family members and a preponderance of single mothers play a more significant role in the higher poverty rates of blacks a larger number of dependent children is closely associated with higher poverty among latinos who also suffer from a larger educational att

what causes public assistance caseloads to grow this paper uses state panel data to investigate changes in public assistance caseloads through the end of the afdc program in 1996 with particular attention to the rapid increase in caseloads between 1990 and 1994 previous research has focused on total caseloads with attention to economic and policy variables and does a relatively poor job of explaining this caseload increase this paper utilizes a much richer set of control variables to investigate the causes of caseload change it separates afdc caseloads into three subcomponent programs separately investigating changes within the afdc up program afdc child only cases and the remaining core afdc cases with benefits paid to single mothers and their children and it explores whether this caseload rise was driven by changes in takeup rates versus in eligibility the results indicate a large unexplained rise in total afdc caseloads even with a very rich specification a good share of this is due to sharp increases in child only cases driven by program and demographic shifts to a lesser extent this rise was caused by the expansion of afdc up to all states these two factors explain half of the overall rise and all of the unexplained rise in afdc caseloads the remaining increase in core afdc cases benefits received by single mothers and their children is well explained within the model and is the result of economic demographic political and policy changes these variables appear to have increased eligibility among the core afdc population in the early 1990s during the economic slowdown takeup rates also increased during this time period but not by a large amount

distinguished lecture on economics in government fighting poverty lessons from recent u s history in his 1964 state of the union address his first after assuming the presidency president lyndon johnson declared a war this administration today here and now declares unconditional war on poverty in america the result of johnson s declaration was a series of major legislative changes whose success or failure is still hotly debated by the mid 1990s the focus of policy concern had shifted from fighting poverty to reducing welfare dependence however one might argue that the 1990s rather than the 1960s were truly the decade in which the united states fought a war on poverty the 1990s were a time of substantial legislative change in programs designed to assist low income families at the same time a remarkable change also occurred in the behavior of low income families with plummeting use of public assistance and substantial increases in labor market involvement i will start by documenting the magnitude and speed of these behavioral changes during the 1990s and then investigate the role of both the macroeconomy and policy in producing these outcomes i end by discussing how these changes may or may not translate into improvements in long term family well being

changes in the distribution of children s family income over the 1990 s while the 1990 s were a good decade for many u s families there has been an ongoing debate about how children particularly poor children have been faring child poverty rates did not fall substantially in the economic expansion of the 1980 s and rose to the very high rate of 23 percent in 1993 furthermore substantial changes in public assistance programs were implemented over this decade major legislative reform in 1996 increased work mandates on welfare recipient families and gave states much greater discretion to enforce these mandates and actually terminate assistance these changes could make at least some poor families worse off if they lost public assistance and were unable to find steady employment we propose to investigate changes in the entire distribution of children s family income over the 1990 s which allows us to observe the relative changes in income experienced among children in higherand lower income families we are particularly interested in two questions i how has the economic status of children changed at different points in the income distribution ii is there any evidence that welfare reform contributed to the observed changes some evidence on changes in child wellbeing over the 1990 s suggests good news child poverty rates fell to 16 percent by 2001 and poverty rates among black children hit a historical low of 30 percent in that year blank 2002 and jeffrey grogger et al 2002 provide a complete set of citations to the growing literature that looks at changes in income and consumption over the past decade at least some of this research indicates that not all low income families experienced economic gains in this paper we use data on children s household income from the march current population survey cps and average together information from 1992 1995 and 1997 2000 by averaging four years of data we have an adequate number of observations to observe income reliably at each centile 1 100 in the distribution we focus on these comparison years because they both bracket the economic expansion of the 1990 s and they bracket the 1996 legislative changes in welfare programs to account for differences in family size across families our focus is on the income to needs ratio defined as the income level of the child s family divided by the official poverty line for that family rather than on actual income levels we compare data from two samples one that includes all children and another that includes only children in families without both parents present this latter sample is largely composed of children in single parent families but also includes children who live with neither parent about 3 percent of all children in the mid 1990 s

taxes and time allocation evidence from single women and men the classic model of becker 1965 suggests that labor supply decisions should be analyzed within the broader context of time allocation and market good consumption choices but most empirical work on policy has focused exclusively on measuring impacts on market work this paper examines how income taxes affect time allocation during the entire day and how these time allocation decisions interact with expenditure patterns using the panel study of income dynamics from 1975 to 2004 we analyze the response of single women s housework labor supply and other time to variation in tax and transfer schedules across income levels number of children states and time we find that when the economic reward to participating in the labor force increases market work increases and housework decreases with the decrease in housework accounting for approximately two thirds of the increase in market work analysis of repeated cross sections of time diary data from 1975 to 2004 shows that home production decreases substantially when market hours of work increase in response to policy changes data on expenditures from the consumer expenditure survey from 1980 to 2003 show some evidence that expenditures on market goods likely to substitute for housework increase in response to a greater incentive to join the labor force the baseline estimates imply that the elasticity of substitution between consumption of home and market goods is 2 61 the results are consistent with the becker model meanwhile single men show little response to changes in tax policy and we are able to rule out an elasticity of substitution between home and market goods for this group of more than 1 52

welfare rules incentives and family structure we reexamine the effects of welfare on family structure emphasizing that afdc and tanf rules are based more on the biological relationship of the mother s children to any male in the household than on marriage or cohabitation we find that many 1990s welfare reform policies did not affect family structure but that several work related reforms increased single parenthood and decreased marriage to biological fathers these effects are most evident when work related reforms are bundled and examined over a longer time period we hypothesize that these effects stem from increased earnings of single mothers and factors specific to biological fathers

public policy private preferences and the japanese trade pattern as nontariff forms of trade protection proliferate it has become more difficult to analyze the impact of trade policy on trade flows in a number of well known papers researchers have attempted to infer the impact of trade policy indirectly by ascribing to trade policy the differences between actual and predicted trade flows much of the work has been applied to analysis of japanese trade policy and the conclusions of these studies have differed widely some previous research has also ascribed a role to the keiretsu or networks of affiliated firms in explaining japan s apparently distinctive trade performance this paper presents a model that integrates data on factor endowments observable protection in traditional and nontraditional forms and the keiretsu it extends existing research in two principal ways first alternative cross national models of comparative advantage are nested to permit the identification of critical modeling assumptions underlying the divergent conclusions of the previous stu

annuities and individual welfare advancing annuity demand theory we present suffcient conditions for the optimality of full annuitization under market completeness that are substantially less restrictive than those used by yaari 1965 we examine demand with market incompleteness finding that positive annuitization remains optimal widely but complete annuitization does not how uninsured medical expenses affect demand for illiquid annuities depends critically on the timing of the risk a new set of calculations with optimal consumption trajectories very different from available annuity income streams still shows a preference for considerable annuitization suggesting that limited annuity purchases are plausibly due to psychological or behavioral biases

short run marginal medical costs from booze and butts evidence from the states this article uses a panel data set of u s states over the 1980 to 2007 period to estimate the demands for medical care cigarettes and beer the estimation process generates own price income and cross price elasticities for all three goods implied per capita beer and cigarette consumption elasticities of per capita health care expenditures suggested by our baseline estimates are 0 83 and 0 14 respectively these results are robust to a number of specification tests simulations suggest that yearly marginal medical costs amount to approximately 12 per bottle and 27 cents per cigarette in the short run in 2012 dollars these results are likely to be driven by the much larger corresponding increases in the consumption of binge drinkers and heavy smokers

marriage and economic incentives evidence from a welfare experiment can economic incentives be used to affect marriage behavior and slow the growth of single parent families this paper provides new evidence on the effects of welfare benefit levels on the marital decisions of poor women exogenous variation in welfare benefit incentives arises from a randomized experiment carried out in california that allows me to measure responses beyond simple year to year changes in benefit levels i find that a regime of lower benefits and stronger work incentives encourages married aid recipients to stay married but has little effect on the probability that single parent aid recipients marry the effects on married recipients become larger over time suggesting that long run effects may exist

the effect of welfare payments on the marriage and fertility behavior of unwed mothers results from a twins experiment we study the relationship between welfare benefits and the time to first marriage and time to next birth among initially unwed mothers we use twin births to generate random within state variation in benefits effectively controlling for unobservables that may confound the relationship between welfare payments and behavior higher base welfare benefits 1 lead unwed white mothers to forestall their eventual marriage and 2 lead unwed black mothers to hasten their next birth the magnitudes of these effects are fairly modest moreover we find no evidence that the marginal benefit paid at the birth of an additional child the focus of the family cap debate affects fertility

pre 1997 trends in welfare and food assistance in a national sample of families both the food stamp program fsp and aid to families with dependent children afdc saw unprecedented caseload growth from the late 1980s until 1994 followed by caseload declines in the following years these rapid caseload declines are attributed to changing macroeconomic conditions and to substantial changes in program design first in the early 1990s state applied for waivers from federal welfare program regulations which allowed them more freedom to experiment with welfare reforms then in 1996 congress redesigned the federal safety net for low income americans through the personal responsibility and work opportunity reconciliation act prwora this paper uses data from the panel study of income dynamics psid to investigate participation transitions from year to year during the waiver period from 1989 to 1996 the distinctive feature of the approach here is that it considers all possible transitions at the individual level among three participation states afdc with or without fsp fsp only and neither rather than treating each program separately this investigation provides a baseline for future work using psid data to study the impact of the 1996 welfare reforms

single mothers working at night standard work and child care subsidies a single parent is constantly scrambling for someone to care for her two preschool daughters while she processes paperwork and inmates at a county jail in winston salem n c hers is an unpredictable ever shifting schedule some days she picks up the phone and calls in her sister who s often busy with her own teen ager some nights she persuades a friend with two little ones of her own to let the girls sleep over her predicament is shared by millions of americans who find themselves working long nonstandard or erratic hours and having to hunt for child care to match hays 1995 i introduction working outside the standard weekday hours of 8 a m to 6 p m between monday and friday is an increasingly common practice in the united states for example 34 3 of all female workers in the united states were nonstandard workers in 1995 kalleberg et al 1997 the investigation of nonstandard work is important for a number of reasons first there is evidence suggesting that workers engaged in nonstandard work are more likely to be assigned to routine jobs and to receive less training and fewer promotions than others barker 1993 tilly 1996 consequently these workers tend to earn less and they are less likely to have health insurance and pension benefits than standard workers hipple and stewart 1996 loprest 1999 and 2002 there also exists a positive link between the quality of an initial job and the likelihood of maintaining employment over time cancian and meyer 2000 rangarajan et al 1998 strawn and martinson 2000 second nonstandard work is linked to a number of adverse outcomes for parents and children such as work and family conflicts marital instability health problems for both parents and children and poor educational outcomes for children heymann 2000 presser 2000 staines and pleck 1983 finally the majority of nonstandard workers view employment during nonstandard hours as an accommodation to labor market needs not as a personal preference according to the current population survey more than half of the workers with nonstandard schedules report the nature of their jobs as the reason for their choice only about 6 of nonstandard workers report working such schedules for better pay and only 4 give better child care as their reason for working nonstandard schedules beers 2000 with the passage of welfare reform in 1996 child care assistance has become a more significant tool for helping welfare recipients move into the workforce and for helping other low income families stay off welfare 1 according to the general accounting office gao the majority of states make welfare recipients and families transitioning from welfare to work eligible for child care assistance or give them priority over other low income families when resources are insufficient to cover all who apply gao 2003 almost a decade after the passage of welfare reform congress now debates legislation to reauthorize welfare reform and child care funding remains a key issue however very little is known about whether child care subsidies have in fact played a role in increasing employment among welfare recipients or in general low income individuals in the post welfare reform period blank 2002 even less is known about the effect of these subsidies on standard nonstandard employment decisions of these individuals since the passage of welfare reform the employment rate of single mothers has risen dramatically jones deweer et al 2003 however leaving welfare does not necessarily mean gaining adequate work and increasing economic serf sufficiency in fact only 8 of welfare leavers have been able to sustain employment over a period of four years martinson 2000 over three quarters 78 of employed low income single mothers are concentrated in typically low wage and low benefit occupations jones deweer et al 2003 these occupations typically demand a greater number of hours outside the standard weekday times of 8 a

a cure for discrimination affirmative action and the case of california s proposition 209 proposition 209 enacted in california in 1996 and made effective the following year ended state affirmative action programs not only in education but also for public employment and government contracting this paper uses cps data and triple difference techniques to take advantage of the natural experiment presented by this change in state law to gauge the labor market impacts of ending affirmative action programs employment among women and minorities dropped sharply a change that was nearly completely explained by a decline in participation rather than by increases in unemployment this decline suggests that either affirmative action programs in california had been inefficient or that they failed to create lasting change in prejudicial attitudes

new evidence on the money s worth of individual annuities this paper presents new information on the expected present discounted value of payouts on individual life annuities the annuity we examine is the single premium immediate life annuity an insurance product that pays out a nominal level sum as long as the covered person lives in exchange for an initial lump sum premium this annuity offers protection against the risk of someone outliving his saving given uncertainty about longevity for reasonable estimates of behavioral parameters we calculate that individual annuities are currently priced so that retirees without bequest motives should find these policies of substantial value in configuring their portfolios to smooth retirement consumption we also find that the expected present discounted value of payouts relative to the initial cost of the annuity has increased over the last decade these findings bear on the policy debate regarding the role of individual choice and self reliance in retirement planning this abstract was borrowed from another version of this item

restoring rational choice the challenge of consumer financial regulation abstract this lecture considers the case for consumer financial regulation in an environment where many households lack the knowledge to manage their financial affairs effectively the lecture argu

does the availability of high wage jobs for low skilled men affect welfare expenditures evidence from shocks to the steel and coal industries abstract we study shocks to the coal and steel industries to measure the effect of long term changes in demand for low skilled workers on welfare expenditures the coal and steel industries have historically paid high wages to low skilled men we find a substantial increase in welfare expenditures in response to the collapse of the steel and coal industries in the 1980s and an even more substantial reduction in welfare expenditures during the coal boom of the 1970s additional analysis indicates the reduction in welfare expenditures during the coal boom is due in part to a decline in single parent households

does welfare inhibit success the long term effects of removing low income youth from the disability rolls i estimate the effects of removing low income youth with disabilities from supplemental security income ssi on their earnings and income in adulthood using a regression discontinuity design based on a 1996 policy change in age 18 medical reviews i find that youth who are removed from ssi at age 18 recover one third of the lost ssi cash income in earnings ssi youth who are removed and stay off ssi earn on average 4 400 annually and they lose 76 000 in present discounted observed income over the 16 years following removal relative to those who do not receive a review jel i30 i38 j14 supporters of welfare programs defend them as vital lifelines for those who face barriers to work while critics charge that these programs create perverse incentives to qualify and perpetuate dependency encapsulating this debate is the controversy over the us supplemental security income ssi program a program that provides cash payments and medicaid eligibility to low income children and adults with disabilities and the aged elderly after three decades of rapid expansion ssi is now the largest nonwork based cash welfare program in the united states paying about 50 billion each year to 8 million recipients including 1 3 million children 1 ssi has been singled out by policymakers and the media for potential perverse incentives

the effect of cocaine prices on crime the relationship between cocaine prices and crime has critical implications for u s drug policy but is theoretically indeterminate because cocaine price changes affect crime through changes in both cocaine consumption and expenditures this paper investigates this relationship in annual data from 1981 95 on 29 large u s cities accounting for simultaneity by using two stage least squares with measures of wholesale supply factors and retail enforcement intensity as instruments for cocaine prices controlling for prices of other drugs deterrence socioeconomic factors and city and year specific effects a strong negative relationship exists between cocaine prices and six of seven fbi index crimes

a stock flow analysis of the welfare caseload this paper reconsiders the methods used in previous studies to assess the welfare caseload movements during the 1990s we develop a model in which the welfare caseload is the net outcome of past flows onto and off of the caseload and show that such a stock flow model can explain some of the anomalous findings in previous studies we then estimate the stock flow model using california administrative data we find that approximately 50 percent of the caseload decline in california can be attributed to the declining unemployment rate these estimates are more robust and larger than those obtained when applying more typical methods to the same california data

the impact of welfare on young mothers subsequent childbearing decisions the impact of welfare on fertility in the united states is explored focusing on the theory that some women have many children to increase their incomes and to prolong their stay on welfare rolls the author examines the relationship between welfare and births to women who already have a child using data on young mothers from the national longitudinal survey of youth nlsy i find that variations in welfare benefit levels and the incremental benefit have no statistically significant impacts on the subsequent childbearing decisions of young mothers in general nor on the subsequent childbearing decisions of women who received welfare in particular furthermore mothers who received welfare to support their first children are no more likely to have additional children in any given year through the age of 23 excerpt

when do women use aid to families with dependent children and food stamps the dynamics of eligibility versus participation this paper investigates dynamic patterns in the relationship between eligibility and participation in the aid to families with dependent children afdc and food stamp programs using monthly longitudinal data from the survey of income and program participation the results indicate that there are many relatively short eligibility spells that do not result in program participation and end with increases in income participation is most likely to occur among women with lower current and future earnings opportunities and is affected by locational and policy parameters those who elect to participate in these programs tend to start receiving benefits almost immediately upon becoming eligible a substantial number of women exit these programs before their eligibility ends among at least some of these women it is likely that unreported changes in income are occurring in 1989 if all eligible single parent families had participated in afdc and food stamps benefit payments in these programs would have been 13 5 billion higher

the virtuous tax lifesaving and crime prevention effects of the 1991 federal alcohol tax increase the last time that federal excise taxes on alcoholic beverages were increased was 1991 the changes were larger than the typical state level changes that have been used to study price effects but the consequences have not been assessed due to the lack of a control group here we develop and implement a novel method for utilizing interstate heterogeneity to estimate the aggregate effects of a federal tax increase on rates of injury fatality and crime we provide evidence that the relative importance of alcohol in violence and injury rates is directly related to per capita consumption and build on that finding to generate estimates a conservative estimate is that the federal tax which increased alcohol prices by 6 initially reduced injury deaths by 4 5 6480 deaths in 1991 and had a still larger effect on violent crime

the effects of in work benefit reform in britain on couples theory and evidence this paper examines the effects of the working families tax credit wftc on couples in britain we develop a simple model of household decisions which explicitly accounts for the role played by the tax and benefit system its main implications are then tested using panel data from the british household panel survey collected between 1991 and 2002 overall the financial incentives of the reform had negligible effects on a wide range of married mothers decisions such as eligible working at least 16 hours per week and full time employment working at least 30 hours per week employment transitions childcare use and divorce rates women s responses however were highly heterogeneous depending on their partners labour supply and earnings mothers married to low income men showed larger responses in employment especially if they had younger children they were more likely to remain in the labour force and had higher rates at which they entered it while more likely to receive the tax credit they also experienced a greater risk of divorce we find virtually no effect for women with higher income husbands likewise there are no statistically significant responses among married men