Douglas O. Staiger

Instrumental Variables Regression with Weak Instruments

This paper develops asymptotic distribution theory for instrumental variable regression when the partial correlation between the instruments and a single included endogenous variable is weak, here modeled as local to zero. Asymptotic representations are provided for various instrumental variable statistics, including the two-stage least squares (TSLS) and limited information maximum- likelihood (LIML) estimators and their t-statistics. The asymptotic distributions are found to provide good approximations to sampling distributions with just 20 observations per instrument. Even in large samples, TSLS can be badly biased, but LIML is, in many cases, approximately median unbiased. The theory suggests concrete quantitative guidelines for applied work. These guidelines help to interpret Angrist and Kruegers (1991) estimates of the returns to education: whereas TSLS estimates with many instruments approach the OLS estimate of 6%, the more reliable LIML and TSLS estimates with fewer instruments fall between 8% and 10%, with a typical confidence interval of (6%, 14%).

The Recent Surge In Nurse Employment: Causes And Implications

Registered nurse (RN) employment has increased during the current recession, and we may soon see an end to the decade-long nurse shortage. This would give hospitals welcome relief and an opportunity to strengthen the nurse workforce by addressing issues associated with an increasingly older and foreign-born workforce. The recent increase in employment is also improving projections of the future supply of RNs, yet large shortages are still expected in the next decade. Until nursing education capacity is increased, future imbalances in the nurse labor market will be unavoidable.

The Promise and Pitfalls of Using Imprecise School Accountability Measures

In recent years, most states have constructed elaborate accountability systems using school-level test scores. However, because the median elementary school contains only 69 children per grade level, such measures are quite imprecise. We evaluate the implications for school accountability systems. For instance, rewards or sanctions for schools with scores at either extreme primarily affect small schools and provide weak incentives to large ones. Nevertheless, we conclude that accountability systems may be worthwhile. Even in states with aggressive financial incentives, the marginal reward to schools for raising student performance is a small fraction of the potential labor market value for students.

Hospital-level racial disparities in acute myocardial infarction treatment and outcomes

Background:Previous studies have documented racial disparities in treatment of acute myocardial infarction (AMI) among Medicare beneficiaries. However, the extent to which unobserved differences between hospitals explains some of these differences is unknown. Objective:The objective of this study was to determine whether the observed racial treatment disparities for AMI narrow when analyses account for differences in where blacks and whites are hospitalized. Research Design:Retrospective observational cohort study using Medicare claims and medical record review. Subjects:This study included 130,709 white and 8286 black Medicare patients treated in 4690 hospitals in 50 US states for confirmed AMI in 1994 and 1995. Measures:Measures in this study were receipt of reperfusion, aspirin, and smoking cessation counseling during hospitalization; prescription of aspirin, angiotensin-converting enzyme inhibitor, and beta-blocker at hospital discharge; receipt of cardiac catheterization, percutaneous coronary intervention (PCI), or bypass surgery (CABG) within 30 days of AMI; and 30-day and 1-year mortality. Results:Within-hospital analyses narrowed or erased black–white disparities for medical treatments received during the acute hospitalization, widened black–white disparities for follow-up surgical treatments, and augmented the survival advantage among blacks. These findings indicate that, on average, blacks went to hospitals that had lower rates of evidence-based medical treatments, higher rates of cardiac procedures, and worse risk-adjusted mortality after AMI. Conclusions:Incorporating the hospital effect altered the findings of racial disparity analyses in AMI and explained more of the disparities than race. A policy of targeted hospital-level interventions may be required for success of national efforts to reduce disparities.

Mortality After Acute Myocardial Infarction in Hospitals That Disproportionately Treat Black Patients

Background— African Americans are more likely to be seen by physicians with less clinical training or to be treated at hospitals with longer average times to acute reperfusion therapies. Less is known about differences in health outcomes. This report compares risk-adjusted mortality after acute myocardial infarction (AMI) between US hospitals with high and low fractions of elderly black AMI patients. Methods and Results— A prospective cohort study was performed for fee-for-service Medicare patients hospitalized for AMI during 1997 to 2001 (n=1 136 736). Hospitals (n=4289) were classified into approximate deciles depending on the extent to which the hospital served the black population. Decile 1 (12.5% of AMI patients) included hospitals without any black AMI admissions during 1997 to 2001. Decile 10 (10% of AMI patients) included hospitals with the highest fraction of black AMI patients (33.6%). The main outcome measures were 90-day and 30-day mortality after AMI. Patients admitted to hospitals disproportionately serving blacks experienced no greater level of morbidities or severity of the infarction, yet hospitals in decile 10 experienced a risk-adjusted 90-day mortality rate of 23.7% (95% CI 23.2% to 24.2%) compared with 20.1% (95% CI 19.7% to 20.4%) in decile 1 hospitals. Differences in outcomes between hospitals were not explained by income, hospital ownership status, hospital volume, census region, urban status, or hospital surgical treatment intensity. Conclusions— Risk-adjusted mortality after AMI is significantly higher in US hospitals that disproportionately serve blacks. A reduction in overall mortality at these hospitals could dramatically reduce black-white disparities in healthcare outcomes.

How Hospital Ownership Affects Access to Care for the Uninsured

This article addresses the effect of hospital ownership on the delivery of service to uninsured patients. It compares the volume of uninsured patients treated in for-profit and nonprofit hospitals by regarding hospital ownership and service as endogenous. Instrumental variable estimates are used to predict the percentage of patients who are uninsured, controlling for hospital ownership and service. The study shows that when for-profit and nonprofit hospitals are located in the same area, they serve an equivalent number of uninsured patients, but for-profit hospitals indirectly avoid the uninsured by locating more often in better-insured areas.

Volatility in School Test Scores: Implications for Test-Based Accountability Systems

B y the spring of 2000, forty states had begun using student test scores to rate school performance. Twenty states have gone a step further and are attaching explicit monetary rewards or sanctions to a schools test performance. For example, California planned to spend

Abortion Legalization and Child Living Circumstances: Who is the “Marginal Child”?

677 million on teacher incentives in 2001, providing bonuses of up to

Productivity Spillovers in Health Care: Evidence from the Treatment of Heart Attacks

25,000 to teachers in schools with the largest test score gains. We highlight an under-appreciated weakness of school accountability systems—the volatility of test score measures—and explore the implications of that volatility for the design of school accountability systems. The imprecision of test score measures arises from two sources. The first is sampling variation, which is a particularly striking problem in elementary schools. With the average elementary school containing only sixty-eight students per grade level, the amount of variation stemming from the idiosyncrasies of the particular sample of students being tested is often large relative to the total amount of variation observed between schools. The second arises from one-time factors that are not sensitive to the size of the sample; for example, a dog barking in the playground on the day of the test, a severe flu season, a disruptive student in a class, or favorable chemistry between a group of students and their teacher. Both small samples and other one-time factors can add considerable volatility to test score measures.

Teen Motherhood and Abortion Access

We examine the impact of increased abortion availability on the average living standards of children through a selection effect. Would the marginal child who was not born have grown up in different circumstances than the average child? We use variation in the timing of abortion legalization across states to answer this question. Cohorts born after legalized abortion experienced a significant reduction in a number of adverse outcomes. We find that the marginal child would have been 40–60 percent more likely to live in a single-parent family, to live in poverty, to receive welfare, and to die as an infant.