reconciling the old and new census bureau education questions recommendations for researchers beginning with the 1990 census and the january 1992 current population survey cps the bureau of the census changed the emphasis of its educational attainment question from years of education to degree receipt using a matched sample from the 1991 and 1992 march cps this article addresses how to reconcile the old and new questions the effects of those methods on the estimated return s to education are then examined both the estimated linear return and the estimated college high school wage differential are slightly larger using information from the new question

approval of social security disability appeals analysis of judges decisions this article is an empirical analysis of decisions by judges regarding requests by individuals for disability benefits applicants for disability benefits who are twice denied through the normal process can appeal to one of the social security administration s administrative law judges who hold appointed positions the data for this study are taken from decisions made by approximately 1000 judges for cases heard from 2010 through 2012 using each judge as a unit of observation the data reveal the number of cases heard and the number of approvals granted we augmented the data with additional information on the presiding judge and with data from the state in which the court resides the purpose of the study is to determine whether a simple model can explain first the volume of decisions rendered at the judge level and second the proportion of approvals results indicate that the volume of decisions can be explained in part by the judge s recent record of leniency evidence also supports the hypothes

local level incapacity benefits rolls in britain correlates and convergence mcvicar d local level incapacity benefits rolls in britain correlates and convergence regional studies there is considerable variation across british local authority districts in the proportion of the working age population claiming incapacity benefits ranging from 2 in hart to 16 in merthyr tydfil and easington in 2008 these claimant rates are strongly correlated with local unemployment rates and self reported disability rates but spatial differences in claimant rates for incapacity benefits were even greater a decade ago this paper describes the extent of this claimant rate convergence and discusses possible explanations for it mcvicar d 2008 hart 2 merthyr tydfil easington 16 10 mcvicar d la liste des demandeurs des prestations d incapacite en grande bretagne a l echelle loc

choice under uncertainty a model of applications for the social security disability insurance program abstract not all people with health problems are disabled some individuals with severe physical or mental impairments such as blindness or limb amputation continue to hold jobs and generally function satisfactorily they constitute however a group of potentially disabled individuals who might apply and qualify for disability insurance or other disability related benifits if they were to lose their jobs or to decide that employment offered an inadequate financial or non pecuniary reward thus disability or a health related inability to work is more than a medical problem but involves motivational and attitudinal factors we specify a model of the application process which we model as choice under uncertainty about approval of an application for disability insurance we specify the possible outcomes to the choice process of an individual in which the probability of acceptance for disability insurance is a key consideration we then estimate a joint model of labor supply and application to the disability insurance program based on the 1972 survey we then compare our results to the observed time series applications process since 1976 lastly we estimate the sensitivity of the application process to the probability of acceptance and the level of benifits

a natural experiment on sick pay cuts sickness absence and labor costs abstract this study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs german federal law reduced the legal obligation of german employers to provide 100 continued wage pay for up to six weeks per sickness episode in 1996 statutory sick pay was decreased to 80 of foregone gross wages within the reform s target group private sector employees this measure increased the proportion of employees having zero days of absence between 6 and 8 quantile regression estimates indicate that employees with up to 5 5 annual absence days reduced their days of absence by about 12 extended analyses suggest that in industries that enforced the cut behavioral effects were about twice as large we show that the direct labor cost savings effect stemming from the cut in replacement levels clearly exceeds the indirect effect due to the decrease in absenteeism our calculations about the total decrease in labor costs are very much in line with official data which suggest that total employer provided sick pay decreased by 6 7 or 1 7 billion per year

the chronology and intellectual trajectory of american entrepreneurship education 1876 1999 abstract since the first entrepreneurship class held in 1947 the academic discipline of entrepreneurship s growth is described using a chronology of three domains courses supplemental infrastructures and publications a 100 item chronology of entrepreneurship education in the usa from 1876 through 1999 is offered and analyzed the major findings are 1 in the usa the field has reached maturity and 2 growth is likely outside business schools and outside the usa the major problems include a glut of journals a narrowing focus on top tier publications potential american stagnation and a shortage of faculty overall exacerbated by a shortage of phd programs

long term and spillover effects of health shocks on employment and income abstract we use matching combined with difference in differences to identify the causal effects of sudden illness represented by acute hospitalizations on employment and income up to six years after the health shock using linked dutch hospital and tax register data an acute hospital admission lowers the employment probability by seven percentage points and results in a 5 percent loss of personal income two years after the shock there is no subsequent recovery in either employment or income there are large spillover effects household income falls by 50 percent more than the income of the disabled person

how financial incentives induce disability insurance recipients to return to work using a local randomized experiment that arises from a sharp discontinuity in disability insurance di policy in norway we provide transparent and credible identification of how financial incentives induce di recipients to return to work we find that many di recipients have considerable capacity to work that can be effectively induced by providing financial work incentives we further show that providing work incentives to di recipients may both increase their disposable income and reduce program costs our findings also suggest that targeted policies may be the most effective in encouraging di recipients to return to work

examining the formation of human capital in entrepreneurship a meta analysis of entrepreneurship education outcomes abstract effective human capital formation through the medium of entrepreneurship education and training eet is of increasing concern for governments as eet is growing rapidly across the world unfortunately there is a lack of consistent evidence showing that eet helps to create more or better entrepreneurs we undertake the first quantitative review of the literature and in the context of human capital theory find that there is indeed support for the value of eet based on 42 independent samples n 16 657 we find a significant relationship between eet and entrepreneurship related human capital assets r w 217 and entrepreneurship outcomes r w 159 the relationship between eet and entrepreneurship outcomes is stronger for academic focused eet interventions r w 238 than for training focused eet interventions r w 151 we find evidence of heterogeneity in many of our correlations and recommend that future studies examine potential moderators to more clearly delineate eet effect sizes we also find a number of methodological weaknesses among the studies analyzed and that those studies with lower methodological rigor are overstating the effect of eet recommendations to improve the quality of future work in the field are provided

assessing the effect of public policy on worker absenteeism we analyze the effect of economic incentives on worker absenteeism using panel data on work absence for 1990 and 1991 with a sample of 1 396 swedish blue collar workers during this period sweden implemented major reforms of both its national income replacement program for short term sickness and income taxes both affected the worker s cost of missing work our econometric model allows for state dependent dynamic behavior and control for unobserved heterogeneity the latter proves to be an important consideration we find that the cost of being absent significantly affects work absence behavior

the perception and efficiency of labour supply choices by pigeons hunter and davison 1982 observed how pigeons supplied labor by pecking on discs connected to devices allowing access to food both the devices and the forces needed to depress the discs were varied widely this paper models the pigeons choice problems as a neo classical type of labor allocation problem it estimates the paths containing the least effortful allocations of pecks for given total rates of access to food and compares the subjects actual choices for proximity to the efficient choices the estimated efficiency levels are high supporting the neo classical model also shown is that the neo classical model predicts that the subjects behavior should be consistent with the melioration model of choice an alternative model of choice advocated by some psychologists copyright 1992 by royal economic society

demand curves for animal consumers results are reported from experiments showing that both income compensated and ordinary uncompensated demand curves for nonhuman consumers are negatively sloped essential commodities are determined to be gross complements while nonessential goods are independent or gross substitutes the experiments extend the concepts underlying value theory to nonhumans and provide a basis for intensive experimental investigations of additional aspects of the theory

social security disability insurance applications awards and lifetime income flows this article provides new evidence about the impact of social security disability insurance on male labor force participation decisions based on estimates from a structural model of applications awards and state contingent lifetime income flows the lifetime framework makes it possible to consider long term opportunity costs associated with early labor force withdrawal and the disincentive to applications resulting from the statutory waiting period before benefits may be received estimation techniques account for the self selected nature of the pool of applicants when predicting the individual specific probability of acceptance and the opportunity costs of applying

entrepreneurship education in the nineties abstract bringing entrepreneurship education into the community support infrastructure poses one of the more important economic development issue for the 1990s aspart of the new strategy for job creation entrepreneurship education holds promise as an integral component in a community s venture support system along with incubators innovation centers technology transfer offices science parks and venture capital operations since new venture success is foremost a function of entrepreneurial knowledge and know how entrepreneurship education may be the most promising of these economic development mechanisms unfortunately it may be the most difficult to implement generally the extent and nature of education required by modern aspiring entrepreneurs is not well understood many would see entrepreneurship education as strictly an add on to current education in management or engineering such is the option of minimal use the real promise or entrepreneurship education will be realized when it is strategically organized for economic development and job creation this article traces the recent history of entrepreneurship education before proceeding to deal with a number of questions facing those who would use entrepreneurship education as part of a modern economic development strategy 1 1 why is entrepreneurship education important 2 2 how should it be distinguished from related programs 3 3 how will success be measured 4 4 who will be the students 5 5 how will the subject be taught 6 6 what will be the curriculum 7 7 who will be the teachers

panel estimates of the determinants of british regional male incapacity benefits rolls 1998 2006 this article explores the determinants of the proportion of the working age male population claiming incapacity benefits ib across the 11 british government office regions for the period 1998 to 2006 three different approaches are adopted to modelling register dynamics first treating ib stocks as if they were trend stationary albeit with persistence and estimating reduced form models for their logs second treating ib stocks as if they were nonstationary and examining their long run determinants plus short run equilibrium reversion properties third focusing on the determinants of gross inflows and outflows that together drive ib stocks given the nature of the data no approach is ideal yet the models provide reasonably robust evidence that labour market changes specifically falling unemployment rates and rising real earnings have contributed to falling male ib stocks over the period

disability transfers and the work decision of older men the potential causal relationship between the availability and generosity of disability transfers and the nonparticipation rates of older men is often asserted and much studied parsons 1980 haveman and wolfe 1984 leonard 1986 however estimates of the magnitude of this linkage vary widely the growth in transfer availability and generosity has been credited with from 30 to 100 percent of the significant post 1960 fall in older male participation rates the disparity in these research results stems primarily from 1 alternative sources of data that differentially constrain estimation of relevant expected wage and transfer incomes 2 specifications that are unable to distinguish income transfer from labor market effects and 3 reliance on measures of health status that are endogenous to the work leisure decision this study seeks to narrow the range of estimates by addressing each of these issues our utility maximization model of work status choice assumes that workers who differ in health status choose between the mutually exclusive options of working at the wage offered for their characteristics and accepting public or private disability transfers because the income flows in the two options are censored they are estimated using switching regression techniques as expectations conditional on exogenous individual characteristics hence accounting for the potentially endogenous process that separates wage earners from transfer recipients the marginal utilities of income from the two sources are allowed to differ because of stigma effects in the estimation we adjust the choice based nature of our sample employ longitudinal earnings data to measure expected changes in as distinct from the expected level of income in the two options and use a separately estimated latent health status measure largely purged of its endogeneity with the participation decision

entrepreneurial exit as a critical component of the entrepreneurial process theoretical development abstract by demonstrating the importance of entrepreneurial exit to the entrepreneur the firm the industry and the economy i contend that our understanding of the entrepreneurial process is incomplete without the inclusion of entrepreneurial exit i define entrepreneurial exit and demonstrate how this conceptualization provides concepts that are unique from those addressed by researchers in other domains thus outlining a space for it within the literature in each phase of the entrepreneurial process i explore the development of an exit strategy reasons for exit and options for exit

does privatisation of vocational rehabilitation improve labour market opportunities evidence from a field experiment in sweden this paper analyses if privatisation of vocational rehabilitation can improve labour market opportunities for individuals on long term sickness absence we use a field experiment performed by the p

tests of competing theories of consumer choice and the representative consumer hypothesis tests of competing theories of consumer choice and the representative consumer hypothesis in this paper the authors estimate demand functions for individual agents they test if commonly used functions are consisten t with the data and if parameters are the same across subjects the y examine decision rules based on random choice psychological and bi ological models of choice and utility functions commonly employed in the economics literature a generalized minimum needs hypothesis per forms well across experimental conditions and individual subjects st atistically significant differences in tastes across subjects were id entified in the data copyright 1987 by royal economic society

the rise in the disability rolls and the decline in unemployment between 1984 and 2001 the share of nonelderly adults receiving social security disability insurance income di rose by 60 percent to 5 3 million beneficiaries rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency declining demand for less skilled workers and an unforeseen increase in the earnings replacement rate we estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984 lowering measured u s unemployment by one half a percentage point steady state calculations augur a further 40 percent increase in the rate of di receipt

the employment effect of stricter rules for eligibility for di evidence from a natural experiment in sweden we study the effect of a reform of the swedish disability insurance di program whereby the special eligibility rules for workers in the age group 60 to 64 were abolished first we use a differences in differences approach to study changes in the disability take up as compared to the age group 55 to 59 then we use a similar approach to study to what extent the employment effect of the reform is crowded out by an increase in the utilization of the sickpay insurance si and or the unemployment insurance ui in an extended analysis we study the effect of firm closure on employment and the utilization of different labor market insurance programs in different age groups before and after the reform

the rise and fall of disability insurance enrollment in the netherlands as recently as 15 years ago the high level of disability insurance di enrollment was considered to be one of the major social and economic problems of the netherlands indeed the netherlands was characterized as the country with the most out of control disability program of oecd countries but since about 2002 the netherlands has seen a spectacular decline in its disability insurance enrollment rate radical reforms to the dutch di system were implemented over the period 1996 to 2006 we cluster these reforms in three broad categories 1 reducing the incentives of employers to move workers to disability 2 increased gatekeeping and 3 tightening disability eligibility criteria while enhancing worker incentives the reforms appear to have been very effective since 2002 yearly di inflow rates dropped from 1 5 percent in 2001 to about 0 5 percent of the insured population in 2012 we argue that particularly the interaction of employer incentives and formal employer obligations has contributed to the substantial decrease in di inflow on the downside however it seems workers with bad health have sorted into temporary employment without employers bearing the financial responsibility of their benefit costs

disability capacity for work and the business cycle an international perspective important policy issues arise from the high and growing number of people claiming disability benefits for reasons of incapacity for work in oecd countries economic conditions play an important part in explaining both the stock of disability benefit claimants and inflows to and outflows from that stock employing a variety of cross country and country specific household panel data sets as well as administrative data we find strong evidence that local variations in unemployment have an important explanatory role for disability benefit receipt with higher total enrolments lower outflows from rolls and often higher inflows into disability rolls in regions and periods of above average unemployment in understanding the nature of the cyclical fluctuations and trends in disability it is important to distinguish between work disability and health disability the former is likely to be influenced by economic conditions and welfare programmes while the latter evolves in a slower fashion with medical technology and demographic changes there is little evidence of health disability being related to the business cycle so cyclical variations are driven by work disability the rise in unemployment due to the current global economic crisis is expected to increase the number of disability insurance claimants

disability insurance benefits and labor supply a critical input for assessing the optimal size of disability insurance programs is the elasticity of labor force participation with respect to the generosity of benefits unfortunately this parameter has been difficult to estimate in the context of the u s disability insurance program since all workers face an identical benefits schedule i surmount this problem by studying the experience of canada which operates two distinct disability insurance programs for quebec and for the rest of canada the latter program raised its benefits by 36 percent in january 1987 whereas benefits in quebec were constant i find a sizable labor supply response to the policy change my central estimates imply an elasticity of labor force nonparticipation with respect to disability insurance benefits of 0 28 0 36

how basic are behavioral biases evidence from capuchin monkey trading behavior behavioral economics has demonstrated systematic decision making biases in both lab and field data do these biases extend across contexts cultures or even species we investigate this question by introducing fiat currency and trade to a colony of capuchin monkeys and recovering their preferences over a range of goods and gambles we show that capuchins react rationally to both price and wealth shocks but display several hallmark biases when faced with gambles including reference dependence and loss aversion given our capuchins inexperience with money and trade these results suggest that loss aversion extends beyond humans and may be innate rather than learned

the effect of implicit contracts on the movement of wages over the business cycle evidence from micro data in this paper we address the question of whether wages are affected by labor market conditions in a manner more consistent with a contract approach than with a standard spot market model from a simple implicit contract model we derive implications about the links between wages and past labor market conditions using individual data from the current population survey and the panel study of income dynamics we find that an implicit contract model with costless mobility describes these links better than either a simple spot market model or an implicit contract model with costly mobility

integrating retirement and permanent disability in ndc pension schemes abstractin this article we develop a theoretical basis for integrating retirement and permanent disability using a generic nonfinancial defined contribution framework the methodology we use relies on a multistate overlapping generations model that includes the so called survivor dividend currently this feature can only be found in the swedish defined contribution dc scheme the results achieved in the numerical example we present endorse the fact that the model works well special attention is given to the assumptions made about mortality rates for disabled people and disability incidence rates which largely determine the contribution rate assigned to disability the model could be of interest to policymakers because after some adaptations it could be implemented without too much difficulty and would uncover the real cost of disability and minimize the risk of disability insurance being used as a vote buying mechanism

disability retirement and unemployment substitute pathways for labour force exit an empirical test for the case of germany this paper studies the determinants of disability retirement and unemployment of older workers two labour market phenomena which the german public discussion combines under the label of early retirement the implicit assumption that these two mechanisms are exchangeable pathways into permanent retirement is tested using panel data the transition rates from employment into disability retirement and into unemploymentare estimated and compared statistical tests reject the hypothesis that disability retirement and unemployment are substitutes

the health and earnings of rejected disability insurance applicants applicants for social security disability benefits who fail to pass the medical screening form a natural control group for beneficiaries data drawn from the 1972 and 1978 surveys of the disabled done for the social security administration show that fewer than 50 percent of rejected male applicants work typical earnings of those that do are less than 59 percent of median earnings for other men their age these data cast doubt on recent econometric work that suggests that the disincentive effects of the social security disability program have been substantial copyright 1989 by american economic association

does medicare save lives health insurance characteristics shift at age 65 as most people become eligible for medicare we measure the impacts of these changes on patients who are admitted to hospitals through emergency departments for conditions with similar admission rates on weekdays and weekends the age profiles of admissions and comorbidities for these patients are smooth at age 65 suggesting that the severity of illness is similar on either side of the medicare threshold in contrast the number of procedures performed in hospitals and total list charges exhibit small but statistically significant discontinuities implying that patients over 65 receive more services we estimate a nearly 1 percentage point drop in 7 day mortality for patients at age 65 equivalent to a 20 reduction in deaths for this severely ill patient group the mortality gap persists for at least 9 months after admission

disability earnings income and consumption using longitudinal data for the period 1968 2005 for a sample of male household heads we determine the prevalence of disability during the working years and examine how the extent of disability affects a range of outcomes including earnings income and consumption we have seven main findings first disability rates are high we divide the disabled along two dimensions based on the persistence and severity of their work limiting condition we estimate that a person reaching age 56 has a 53 percent chance of having been disabled at least once during his working years and a 19 percent chance that he has begun a chronic and severe disability second the economic consequences of disability are frequently profound ten years after disability onset a person with a chronic and severe disability on average experiences a 68 percent decline in earnings a 32 percent decline in after tax income a 22 percent decline in food and housing consumption and a 21 percent decline in food consumption third the various economic consequences differ sharply across disability groups the outcome declines for those with a chronic and severe disability are often more than twice as large as those for the average disabled fourth our findings show the partial and incomplete roles that individual savings family support and social insurance play in reducing the consumption drop that follows disability only about half of this most disabled group reports receiving social security disability insurance or supplemental security income fifth we find a noticeable fall in earnings and income prior to the onset of a reported disability consumption also falls somewhat suggesting that future disability is partially but incompletely predictable in the short run sixth time use and detailed consumption data further indicate that disability is associated with a decline in well being seventh the quantities we have estimated combined with elasticities from the literature allow us to examine the optimality of current compensation for the disabled we find that the current compensation for our most disabled group appears to be lower than is optimal

unemployment insurance takeup rates and the after tax value of benefits the recent decline in the unemployment insurance ui takeup rate has puzzled researchers using administrative data with accurate information on the potential level and duration of benefits we examine whether a separating employee receives ui we find a strong positive effect of the benefit level on takeup and smaller effects of the potential duration and the tax treatment of benefits simulations indicate that the recent inclusion of ui in the income tax base can account for most of the previously unexplained decline in ui receipt

can social security explain trends in labor force participation of older men in the united states after a long decline the labor force participation rate lfpr of older men in the united states leveled off in the 1980s and began to increase in the late 1990s we examine how changes in social security rules affected these trends we attribute only a small portion of the decline from the 1960s 80s to the increasing generosity of social security over this period increases in the full retirement age and the delayed retirement credit explain one quarter to one half of the recent increase in the lfpr increasing educational attainment and increasing lfpr of married women also contributed to the recent rise

disability insurance rejection rates and the labor supply of older workers abstract we investigate the effects of trying to mitigate moral hazard in the disability insurance di program by raising the stringency of the screening process for applicants we do so by studying a dramatic increase in rejection rates for the di program in the late 1970s which varied substantially across the us states we find that each 10 rise in denial rates led to a statistically significant 2 8 fall in labor force non participation among 45 64 year old males we also find that the denial rate increases effectively targeted their incentive effects to more able individuals according to an anthropometric measure of disability

assessing the effect of payroll taxes on formal employment the case of the 2012 tax reform in colombia in 2013 colombia implemented a tax reform that reduced payroll taxes by a total of 13 5 percentage points of wages this paper evaluates the effects of this component of the 2012 colombian tax reform on firms formal employment and average wages we construct a panel of firms based on their employees administrative records to account for the endogeneity of the treatment we use an instrumental variables technique that exploits the exogenous variation from the decisions of firms that are similar to each other in several dimensions but belong to different economic sectors based on our preferred specification we estimate a positive and significant increase in formal employment as a result of the implementation of the reform of approximately 213 000 jobs in existing pre reform firms in the long run these effects will increase to more than 600 000 jobs the effect of the reform on the average wages paid by firms was also found to be positive for some sizes of firms but the overall effect in the short run is rather small

distinguishing income from substitution effects in disability insurance a set of studies conducted over the last 15 years has produced a near consensus that the social security disability insurance system ssdi has substantial disincentive effects on the labor supply of near elderly males diminishing labor force participation increasing the sensitivity of labor force exit decisions to adverse economic shocks and encouraging those nearing retirement to claim disability benefits and subsequently transfer into the social security retirement program yet efforts by the social security administration ssa to encourage labor supply among the disabled by removing the work disincentives built into ssdi have been almost entirely unsuccessful most notably in 1999 congress authorized the ticket to work program which provides an array of inducements for current ssdi beneficiaries to take up employment including permitting a trial work period of up to nine months providing 7 75 years of ongoing medicare eligibility following return to work and providing three years of automatic benefit reinstatement when claimants workplace earnings fall below a threshold level each of these steps reduces the implicit tax placed on labor supply by the ssdi program despite these lures fewer than 1 400 0 01 percent of the 12 2 million tickets issued to date have led to successful workforce integration autor and duggan 2006

disability policy and the labor market evidence from a natural experiment in canada 1998 2006 abstract this paper examines the effect of changes in two key parameters in disability policy a the earnings that disability insurance beneficiaries are allowed to earn without losing their disability benefits and b automatic reinstatement where beneficiaries can have benefits reinstated without re application and re testing for disability determination we examine the effects of these policy changes on the probability of employment for disability beneficiaries as well as the flows onto and off the disability rolls we obtain our estimates using a difference in difference strategy that exploits the unique structure of disability insurance arrangements in canada namely that there are two programs one that covers individuals in the province of quebec and one in the rest of canada our preferred estimates indicate that the introduction of the allowable earnings change increased the propensity of disability beneficiaries to work but we do not find that the earnings exemption had an effect on the flows on to or off the disability rolls in contrast we find that the introduction of the automatic reinstatement policy did not have an effect on any of the outcomes we examine

the evolution of medical spending risk how has the economic risk of health spending changed over time for u s households we describe trends in aggregate health spending in the united states and how private insurance markets and public insurance programs have changed over time we then present evidence from consumer expenditure survey microdata on how the distribution of household spending on health that is out of pocket payments for medical care plus the household s share of health insurance premiums has changed over time this distribution has shifted up over time households spend more on medical care and insurance than they used to but for the purposes of measuring change in risk it is not the mean but the dispersion of this distribution that is of interest we consider two measures of dispersion that serve as proxies for household risk the standard deviation of the distribution of household health spending and the ratio of the 90th percentile of spending to the median the so called 90 50 gap we find surprisingly that neither has increased despite the rapid rise in aggregate health spending this conclusion holds true for broad subgroups of the population for example the nonelderly as a group but not for some narrowly defined subgroups for example low income families with children we next consider how much risk households should face from the perspective of economic efficiency household risk may not have changed much over the past several decades but do we have any evidence that this level represents either too much or too little risk finally we discuss implications for public policy in particular for current debates over expanding health insurance coverage to the uninsured

lame ducks and local fiscal policy quasi experimental evidence from portugal i use the introduction of mayoral term limits in portugal to identify how an exogenous variation in eligibility for office affects policy decisions relying on a quasi experimental difference in differences approach i find that term limited incumbents pursue more conservative fiscal policies than those who are eligible for re election heterogeneous effects show that the treatment effects primarily reflect the behaviour of right leaning term limited incumbents results are in line with a model in which right leaning officeholders try to maintain a good reputation by pleasing an electorate prone to redistribution while they are eligible but adopt policies closer to their true preferences when term limited

self screening in targeted public transfer programs the self screening properties of initial eligibility determination a mechanism often under the control of the administrators of targeted transfer programs are derived and the use of this mechanism in the social security disability insurance system is explored empirically an increase in the rigor of initial eligibility screening may discourage potential applicants because they are unaware of appeal prospects and because the eligibility decision delay is lengthened as denied applicants are forced to appeal their claims in the disability program a 10 percent increase in the initial denial rate induces a 4 percent decrease in applications self selection is nonperverse

disability transfers self reported health and the labor force attachment of older men evidence from the historical record we use trends in self reported disability to gauge the impact of the growth of disability transfer programs on the labor force attachment of older working aged men our tabulations suggest that between 1949 and 1987 about half of the 4 9 percentage point drop in the labor force participation of men aged 45 54 and between one quarter and one third of the 19 9 point drop among men aged 55 64 represented a movement of men out of the labor force and onto the rolls of transfer programs targeted at the disabled since the expansion of transfer programs represents only one of the forces behind this movement these figures represent upper bounds on the impact of such programs on work force attachment

incarceration and racial inequality in men s employment to estimate employment population ratios for black and white men with an adjustment for incarceration a factor overlooked by most research on employment inequality the authors combine data from sur

economic aspects of optimal disability benefits this paper analyzes optimal disability and retirement or welfare benefits with imperfect disability evaluation with some able workers judged disabled and some disabled workers judged able thus the levels of both disability and retirement benefits affect labor supply with anyone not working eligible for retirement benefits we analyze the optimal structure of benefits for a given disability screening mechanism and briefly consider the problem of optimal evaluations of disability evidence in the united states there is an overlap in eligibility for disability and retirement portions of social security more generally welfare is sometimes available to people denied disability benefits

experimental economics reply more than in any particular method of inquiry i think the hallmark of science is to be found in a constructively skeptical attitude toward knowledge the more fundamental are the concepts and assumptions of a science the easier it is to take them for granted and to abandon this skepticism in this spirit ronald heiner 1985 is correct in emphasizing that the knowledge obtained from the study of the performance of experimental markets is only as secure as the classical preference model used to induce prespecified value structures on the agents in such markets if the purpose of an experiment is to test a theory for example supply and demand and the theory is not falsified by the test this in no way supports any premise of the theory which was also a premise of the experimental design when we falsify a theory the implication is that one or more of its assumptions about the behavior of economic agents maximization of expected utility commonly shared homogeneous expectations risk aversion zero subjective costs of transacting etc is in question and the immediate task is to modify the suspected behavioral assumptions of the original theory other assumptions such as that agents have well defined preferences or know the probability distribution from which other agent values were drawn are not brought into question by the experiment because the experimental design reproduced or should have the environment posited by the theory being tested when testing formal market theories in this way we should always be aware of the fact that we are studying behavior within the context of our representations of the economic environment if any of these representations is wrong then our studies have only increased our self knowledge not our knowledge of things natural economic processes if we are to increase our knowledge of things then our ultimate aim should aspire to more than discovering that the behavioral department of economics university of arizona tucson az 85721 1 the principal contribution of popper s falsificationist methodology is i believe the influential attempt to develop a formal logic of skeptical inquiry that the attempt has failed in the sense that it has produced no defensible codified set of procedures that yield a science of scientific method happily it would appear that all such attempts will fail should not detract from the disciplinary value of the falsificationist perspective in approaching scientific questions its value to the experimentalist is to force him to ask how can i design an experiment with the property that the set of potentially observable outcomes can be partitioned into those that are consistent with one or a given theory and those that are consistent with other theory ies or inconsistent with the given theory that experimental life is such that his effort is about as likely to fail as to succeed by no means detracts from the value of the exercise its value to the theorist if he will just forgo the career advancing primeval incentive to publish yet another technically tractable extension of the existing theory literature is to force him to ask how can i model this question so as to suggest as martin shubik would say a do able experiment and so as to yield observable implications that do not exhaust the set of possible outcomes that this effort will often fail does not detract from the value of the exercise having said this i would not want to leave the impression that experiments that are fishing expeditions in the laboratory to see what will happen are of no value seeing what happens can be essential in defining an analyticalempirical research program similarly when a theorist builds as buz brock would say castles in the air this is not necessarily useless for it may lead to more operational forms of theory we should impute some nonzero probability to the proposition that feyerabend s anything goes posture is right but at this stage i think it has become pretty obvious where our professional weaknesses are concentrated economists while spouting the rhetoric donald mcclosky 1983 of the falsificationist are in fact verificationist to the core we all do it we take a proposition conjecture or theory then search for supportive historical or empirical examples as everyone ought to know seek and ye are likely to find whether one is a keynesian or a supply sider what is not sufficiently appreciated is that this verificationist grubbing is a prescientific exercise in which one asks whether there is any supporting evidence and how difficult it is to find if there is none or if it is pretty hard to uncover it suggests abandonment in the prescientific womb

sick of being unemployed interactions between unemployment and sickness insurance this paper examines the incentive effects of interactions between unemployment insurance ui and sickness insurance si two important components of sweden s social insurance system the main topic is how the sickness report rate among the unemployed is affected by i the limit of 300 workdays for ui benefits and ii the difference in maximum compensation between ui and si benefits results obtained by duration analysis suggest that sick reports increase as the ui benefit expiration date approaches there is also evidence of an incentive effect on the sick report rate because si offers higher compensation than ui

greater wage inequality reduces average hours of work i argue that rising inequality in offered wages lowers average working hours if labour supply is concave in wages a decrease in the working hours of low paid workers is greater than an increase in working hours of high paid workers furthermore due to low market opportunities some low paid workers may leave the labour force using cps morg data for prime age men i find evidence in support of this explanation i establish empirically the concavity of the labour supply and find evidence that after controlling for the average wage wage inequality has a negative effect on labour supply

two questions about european unemployment a general equilibrium search model makes layoff costs affect the aggregate unemployment rate in ways that depend on equilibrium proportions of frictional and structural unemployment that in turn depend on the generosity of government unemployment benefits and skill losses among newly displaced workers the model explains how before the 1970s lower flows into unemployment gave europe lower unemployment rates than the united states and also how after 1980 higher durations have kept unemployment rates in europe persistently higher than in the united states these outcomes arise from the way europe s higher firing costs and more generous unemployment compensation make its unemployment rate respond to bigger skill losses among newly displaced workers those bigger skill losses also explain why u s workers have experienced more earnings volatility since 1980 and why especially among older workers hazard rates of gaining employment in europe now fall sharply with increases in the duration of unemployment

the impact of economic conditions on participation in disability programs evidence from the coal boom and bust abstract we examine the impact of the coal boom of the 1970 s and the coal bust of the 1980 s on disability program participation these shocks provide clear evidence that as the value of labor market participation increases disability program participation falls for the disability insurance program the elasticity of payments with respect to local earnings is between 0 3 and 0 4 and for supplemental security income the elasticity is between 0 4 and 0 7 consistent with a model where qualifying for disability programs is costly the relationship between economic conditions and program participation is much stronger for permanent than for transitory economic shocks

screening disability insurance applications this paper investigates the effects of stricter screening of disability insurance applications a large scale experiment was setup where in two of the 26 dutch regions case workers of the disability insurance administration were instructed to screen applications more stringently the empirical results show that stricter screening reduces long term sickness absenteeism and disability insurance applications we find evidence for direct effects of stricter screening on work resumption during the period of sickness absence and for self screening by potential disability insurance applicants stricter screening seems to improve targeting efficiency without inducing negative spillover effects to the inflow into unemployment insurance the costs of stricter screening are only a small fraction of the monetary benefits

the impact of stricter criteria for disability insurance on labor force participation this paper studies the effect of a large scale policy change in the austrian disability insurance program which tightened eligibility criteria for men above a certain age using administrative data on the universe of austrian private sector employees the results of difference in difference regressions suggest a substantial and statistically significant decline in disability enrollment of 6 to 7 4 percentage points and an increase in employment of 1 6 to 3 4 percentage points the policy change had important spillover effects into the unemployment and sickness insurance program specifically the share of individuals receiving unemployment benefits increased by 3 5 to 3 9 percentage points and the share receiving sickness insurance benefits by roughly 0 7 percentage points

asset accumulation and labor force participation of disability insurance applicants abstract this paper provides empirical evidence of the existence of forward looking asset accumulation behavior among disability insurance applicants previously examined only in the theoretical literature using panel data from the rand health and retirement study i show that rejected applicants for social security disability insurance ssdi possess significantly more assets than accepted applicants immediately prior to application and exhibit lower attachment to the labor force these empirical results are consistent with the theoretical prediction in diamond and mirrlees 1978 and golosov and tsyvinski 2006 that certain individuals with high unwillingness to work maximize utility by planning in advance for their future disability insurance application because the existing empirical literature on disability insurance does not account for this intertemporal channel it may underestimate the total work disincentive effect of ssdi

disability screening and labor supply evidence from south africa yet research that examines the poverty reduction and labor supply effects of disability programs has taken place exclu sively in developed countries with relatively low unemployment and high labor force participa tion rates in developing countries with high unemployment rates the disincentive effect of cash transfers on labor supply has often been assumed to be economically insignificant anne case and angus deaton 1998 in this paper i provide initial evidence on and draw attention to the effect of the south africa disability grant dg program on labor supply in the context of a policy change in disability screening i use a difference in differences estimator to assess the effect of a change toward a less intensive dis ability screening on labor force nonparticipation for older individuals if screening for disability benefit programs were perfect the supply of disability benefits would be independent of labor supply decisions and only those unable to work due to health con ditions would receive benefits however the dis ability screening process is imperfect because it is in practice difficult to determine whether a person is able to work which is the typical test of eligibility for disability benefit programs recent evidence suggests that the work disincen tive effects of disability benefits are expected to

immigration and inequality immigration is often viewed as a proximate cause of the rising wage gap between highand low skilled workers nevertheless there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect and over the precise magnitudes involved this paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality focusing on evidence from cross city comparisons in the u s while some researchers have claimed that a cross city research design is inherently flawed i argue that the evidence from cross city comparisons is remarkably consistent with recent findings based on aggregate time series data in particular cross city and aggregate time series comparisons provide support for three key conclusions 1 workers with below high school education are perfect substitutes for those with a high school education 2 high school equivalent and college equivalent workers are imperfect substitutes with an elasticity of substitution on the order of 2 3 within education groups immigrants and natives are imperfect substitutes together these results imply that the average impacts of recent immigrant inflows on the relative wages of u s natives are small the effects on overall wage inequality including natives and immigrants are larger reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives even so immigration accounts for a small share 5 of the increase in u s wage inequality between 1980 and 2000