Three essays in public economics
By: by Kirk Michael Moore
Published: 2009
Language: eng
Number of pages: 97
Description: This dissertation consists of three essays in public economics. The first essay examines the effect of unemployment duration and potential unemployment insurance benefits on consumption as measured by food expenditures. I find a significant drop in food expenditures of 0.5 percent per week when an individual is unemployed. With an average 15.5 week unemployment duration in my sample, this decline in food consumption is economically significant with consumption falling by roughly 8 percent. For the average unemployed person, a 10 percentage-point increase in the potential replacement rate increases weekly consumption by 3.3 percent during an unemployment spell. My calibration of optimal unemployment insurance models suggests that current levels of unemployment benefits are optimal if the degree of relative risk aversion is near 4.0. The second essay studies changes in prescription drug insurance coverage and the welfare gains from the reduction in out of pocket spending risk associated with the introduction of Medicare Part D in 2006. For every two newly insured individuals participating in Part D, the government subsidizes three individuals who were previously covered by other sources including a 33 percent crowd out of employer provided coverage.

Previously uninsured individuals value the reduction in out of pocket risk associated with enrolling in Part D at $224 annually. The aggregate social welfare gain from reducing out of pocket risk for Part D enrollees is approximately $1.3 billion compared to the $8.5 billion social cost of financing. The third essay studies the effect of Army National Guard enlistment bonuses for non-prior service recruits. Recently, the use of American military reserve forces in combat has increased dramatically resulting in increased recruitment efforts as well. Using administrative ANG data, we find that increasing the size of bonuses has a statistically significant but economically small effect on the ANG's overall enlistments and number of high quality enlistees. Individual-level regression results suggest that a doubling of the average bonus size (from roughly $12,500 to $25,000) would only increase the military's share of high quality enlistees by 5.0 percentage points but would be somewhat more effective during times of bad economic conditions.
Notes: "April 2009."

Thesis (Ph.D., Dept. of Economics)--Harvard University, 2009.

Includes bibliographical references.