Jeffrey Clemens

In the Shadow of a Giant: Medicare's Influence on Private Physician Payments

We analyze Medicare’s influence on private insurers’ payments for physicians’ services. Using a large administrative change in reimbursements for surgical versus medical care, we find that private prices follow Medicare’s lead. A

Opium in Afghanistan: Prospects for the Success of Source Country Drug Control Policies

1.00 increase in Medicare’s fees increases corresponding private prices by

The rise of the states: U.S. fiscal decentralization in the postwar period

1.16. A second set of Medicare fee changes, which generates area-specific payment shocks, has a similar effect on private reimbursements. Medicare’s influence is strongest in areas with concentrated insurers and competitive physician markets, consistent with insurer-doctor bargaining. By echoing Medicare’s pricing changes, these payment spillovers amplify Medicare’s impact on specialty choice and other welfare-relevant aspects of physician practices.

Tax Reform and Incentives to Encourage Owner-Occupied Housing: Analysis of the President's Tax Reform Panel Recommendation to Convert the Mortgage Interest Deduction to a Tax Credit

Recent estimates suggest that in 2007, Afghan opiate production accounted for about 93 percent of the world’s total. This article presents a framework for estimating the potential for source country drug control policies to reduce this production. It contains a first pass at estimating the potential for policy to shift the supply of opium upward, as well as a range of supply and demand elasticities. The estimates suggest that meager reductions in production can be expected through alternative development programs alone (reductions are less than 6.5 percent in all but one of the specifications presented). They also suggest that substantial increases in crop eradication would be needed to achieve even moderate reductions in production (reductions range from 3.0 percent to 19.4 percent for various specifications). The results also imply that, all else being equal, the cessation of crop eradication would result in only modest increases in opiate production (with estimates ranging from 1.6 percent to 9.6 percent).

Evaluating Economic Warfare: Lessons from Efforts to Suppress the Afghan Opium Trade

article i nfo Article history: One of the most dramatic changes in the fiscal federalism landscape during the postwar period has been the rapid growth in state budgets, which almost tripled as a share of GDP and doubled as a share of government spending between 1952 and 2006. We argue that the greater role of states cannot be easily explained by changes in Tiebout forces of fiscal competition, such as mobility and voting patterns, and are not accounted for by demographic or income trends. Rather, we demonstrate that much of the growth in state budgets has been driven by changes in intergovernmental interactions. Restricted federal grants to states have increased, and federal policy and legal constraints have also mandated or heavily incentivized state own-source spending, particularly in the areas of education, health and public welfare. These outside pressures moderate the forces of fiscal competition and must be taken into account when assessing the implications of observed revenue and spending patterns.

Redistribution through Minimum Wage Regulation: An Analysis of Program Linkages and Budgetary Spillovers

Public policy designed to encourage home ownership has operated primarily through the federal income tax system in the United States. With multiple incentives for home-ownership, the income tax system is the main tool by which the federal government encourages families to become home-owners and accumulate wealth in the form of real estate. Recent policy debate over reform of the tax system has questioned whether a mainstay of this system, the mortgage interest deduction (MID), is the best way to accomplish the stated objective. Last year the Presidents Advisory Panel on Federal Tax Reform recommended converting the MID into a 15% tax credit subject to regional caps related to median house prices, touching off a vigorous public debate on the importance of the MID. The purpose of this paper is to examine economic implications of that recommendation. We model how switching from the MID to a credit would affect housing finance choices between debt and equity and show how these changes would have changed the tax benefits for various households. Furthermore, we simulate the number of mortgage originations in 2004 (the most recent year which data is available) that would have been subject to the caps in the Panels recommendation, and we identify the specific urban housing markets that would have been most severely affected. Finally, we conclude with policy discussion of the proposed credit alternative.

THE SHORT‐RUN EMPLOYMENT EFFECTS OF RECENT MINIMUM WAGE CHANGES: EVIDENCE FROM THE AMERICAN COMMUNITY SURVEY

In the mid-2000s, U.S. anti-opium policy intensified with a goal of reducing the resources available to Afghan insurgents. To achieve this objective, I show that opium suppression efforts must accurately distinguish between insurgent and non-insurgent suppliers. The required level of accuracy will be particularly high if demand for opium is inelastic and if the insurgents’ initial market share is large. Empirically, I show that demand for Afghan opium is relatively inelastic, that the market share of Taliban-heavy areas is large, and that enforcement has primarily impacted non-Taliban territory. Consequently, anti-opium efforts have significantly increased the drug-trade resources flowing to the Taliban.

Implications of Medicaid Financing Reform for State Government Budgets

Program linkages and budgetary spillovers can significantly complicate efforts to project a policy change’s effects. I illustrate this point in the context of recent increases in the federal minimum wage. Previous analysis finds that these particular minimum wage increases had significant effects on employment. Employment declines were sufficiently large that the average earnings of targeted individuals declined. Payroll tax revenues, thus, also fell. I find that transfers to affected individuals through programs including unemployment insurance, food stamp benefits, and cash welfare assistance changed little. These programs, thus, offset relatively little of the earnings declines experienced by individuals who lost employment. I discuss how this broad range of spillovers matters for assessing the relevant minimum wage change’s welfare implications.

Innovation and Uncertainty in the Medical Industry: Evidence from the Case of Myriad Genetics, Inc.

This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015. As of 2015, we estimate that relatively large minimum wage increases (defined as those exceeding

Repeal of the Medicare Sustainable Growth Rate: Direct and Indirect Consequences

1) reduced employment among low‐skilled population groups by just over 1 percentage point. Smaller minimum wage increases, as well as increases linked to inflation indexation provisions, appear to have had much smaller (and possibly positive) effects on employment over our sample period. The estimates thus raise the potential importance of nonlinearities in the minimum wages effects, which are consistent with standard models of the labor market. (JEL H11, J08, J23)