Kathryn H. Anderson

The Retirement-Health Nexus: A New Measure of an Old Puzzle

Traditional empirical models of retirement which use a self-assessed health measure have often found that the wage rate has a surprisingly small effect on retirement. Using both a self-reported health measure and one not based on self-report (subsequent mortality experience) in a more general reduced-form joint-demand framework, we test the importance of the interaction effects of health and retirement. Our findings are consistent with a joint determination of health and retirement. The wage elasticity using either health measure is about equal to that found in a single-equation model when a mortality measure is used, but all three elasticities are five times greater than one found using self-reported health in a traditional single-equation model.

The Cost of Corruption in Higher Education

Corruption was symptomatic of business and government interactions in Russia and other countries of the former Soviet Union before and during the economic transition of the 1990s. Corruption is difficult to quantify, but the perception of corruption is quantifiable. Nations can even be arranged along a hierarchy by the degree to which they are perceived as being corrupt, for instance, in their business practices or in the administration of public responsibilities. Based on the Transparency International Corruption Perceptions Index for 2005, a world map (see online appendix fig. A1) shows how pervasive corruption remains in the public sector. According to this index, countries in the former USSR region, including Central Asia and the Caucasus, were among the most corrupt countries in the world in 2005. With the breakup of the USSR and decentralization, ministries and local governments operated more independently than under the planned economy. The central government’s enforcement mechanisms weakened, and rent-seeking (using administrative position for personal gain) activity was not as effectively monitored as under central planning. The result, at least in the earliest years of independence, was an increase in overall corruption and inefficiency at many levels of government and administration, and the education sector was not immune from these forces (Shleifer and Vishny 1993; Shleifer and Treisman 2005). Ministry of Education officials began to demand bribes for accreditation and procurement. Administrators demanded bribes for admission, housing, book rental, grades, exams, and transcripts. Teachers demanded bribes for admission, grades and exams, and book purchases. Anecdotal evidence suggests that the level of education corruption in the USSR was lower than in other sectors. The “fairness” of the system, particularly to children of proletarian origins and minorities, was manifest as a philosophy. During the economic transition, the central authority in education broke

Do Retirement Dreams Come True? The Effect of Unanticipated Events on Retirement Plans.

Analyzing data from the Retirement History Study, the authors find that the retirement plans of male workers aged 58–63 in 1969 were significantly affected by unanticipated events over the next decade. Specifically, unanticipated increases in Social Security wealth induced retirement earlier than originally planned, as did deterioration in personal health, whereas the recession of the 1970s tended to delay retirement. This evidence that policy changes do affect retirement behavior in systematic ways provides support for the decision by Congress to defer until the turn of the century the application of several important provisions of the 1983 amendments to the Social Security Act.

The Effect of Creaming on Placement Rates under the Job Training Partnership Act.

The authors investigate the degree to which “creaming”—nonrandom selection of participants—in Job Training Partnership Act (JTPA) Title II-A programs is responsible for the high placement rates in those programs. An analysis of data from Tennessee JTPA agencies, in conjunction with Current Population Survey data, shows that creaming does take place, especially through non-selection of those handicapped by poor education or poor health. The extent of creaming, however, is not as large as some critics have suggested: the 71 % placement rate in Tennessee would fall only to about 62% if participants were randomly selected from among the economically disadvantaged population eligible for training. In contrast, targeting only high school dropouts for training—which would have the virtue of serving a group with particularly large barriers to employment—would reduce success rates by nearly one-quarter.

The importance of the measure of health in empirical estimates of the labor supply of older men

Abstract When a more objective measure of health is used, economic variables previously masked by self-reported health measures are found to significantly affect work effort of older men. This may explain differences in results of previous studies even when the same empirical specifications are used.

Work and Health after Retirement: A Competing Risks Model with Semiparametric Unobserved Heterogeneity

Competing risks models recognize that there may be more than one exit from a given state, but they make the strong assumption that there is no correlation between unobserved heterogeneity components in each state. Here, a competing risks model that uses a semiparametric method of estimation and controls for the correlation between unobserved heterogeneity components in each state is compared with a traditional competing risks model of exit from retirement. The unobservable heterogeneity components of the competing risks are insignificantly positively correlated and the effects of policy-relevant variables are changed somewhat. Copyright 1989 by MIT Press.

Adoption of Innovations in Higher Education

An original survey of 238 colleges and universities in the United States identifies the date of adoption of 30 innovations in curriculum, classrooms, student life, libraries, computing, and finances. On average, about 26 years elapse from adoption by the first percentile institution to adoption by the median institution. Library and computing innovations are adopted twice as fast as curriculum and classroom innovations. Financial innovations are adopted most slowly. Hazard models for the timing of adoption of the innovations identify attributes of institutions that tend to adopt particular innovations earlier.

Expenditures on services for persons with acquired immunodeficiency syndrome under a Medicaid home and community-based waiver program. Are selection effects important?

OBJECTIVES In 1990, the state of Florida implemented an acquired immunodeficiency syndrome (AIDS)-specific Medicaid waiver program to provide home and community-based services to AIDS patients as an alternative to institutional care. The program is available to Medicaid beneficiaries with AIDS who are at risk of institutionalization. This study examines whether the waiver option was effective in reducing Medicaid expenditures per beneficiary during its first 2 years of operation. METHODS The authors used Medicaid claims data and county information on the availability of health services to model the selection of the waiver option by AIDS patients and then to estimate the effect of the waiver on expenditures controlling for nonrandom program selection. RESULTS The results indicate that the selection model is highly significant, but that the influence of nonrandom selection on the estimation of the program effects is negligible. More importantly, the regression results indicate that persons with AIDS who use waiver services incur monthly Medicaid expenditures that are on average 22% to 27% lower than otherwise similar nonparticipants. CONCLUSIONS These results, based on the first 2 years that Project AIDS Care was operational, suggest that home and community-based care for AIDS patients results in lower expenditures per beneficiary.

INVESTING IN HEALTH: THE LONG-TERM IMPACT OF HEAD START ON SMOKING

Head Start is a comprehensive, early childhood development program designed to augment the human capital and health capital levels of disadvantaged children. Grossmans (1972) health capital model suggests that early investments of this type should have lasting effects on health outcomes. This research evaluates the impact of Head Start on long-term health by comparing health outcome and behavioral indicators of adults who attended Head Start with those of siblings who did not. The results suggest that there are long-term health benefits from participation in Head Start and that these benefits result from lifestyle changes.

Testing the relationship between work and health: A bivariate hazard model

Abstract A bivariate hazard model which allows the hazards to be correlated shows that decisions about work and health are significantly related. Failure to take the correlation into account will cause selectivity bias.