Reagan A. Baughman

Productivity and wage effects of “family‐friendly” fringe benefits

Family‐supportive employment benefits have become increasingly popular in recent years as an employer response to the increasing labor force participation of women, and the consequent need to balance work and family life. Economic theory predicts that these types of fringe benefits could at least partially pay for themselves through a combination of increased productivity and lower wages. A survey of 120 employers in an upstate New York county provides data on benefits packages and outcome measures that are used to test this hypothesis. We find that employers who offer flexible sick leave and child care assistance experience measurable reductions in turnover. Employers who offer benefits like flexible scheduling policies and child care also appear to offset part of the cost of these benefits by paying lower entry‐level wages than do their competitors.

Did Expanding the EITC Promote Motherhood

During the 1990’s the Earned Income Tax Credit (EITC) emerged as a primary means of providing income support for low-income families in the United States. In an effort to keep the program well targeted, the credit largely restricts eligibility to tax filers with children. One potentially unintended consequence of this design is that it might encourage childbearing. We raise the question of whether the EITC, through its generous benefits to families with children, actually increases fertility. We approach this topic for three reasons. The first is to expand upon an existing literature of economic incentives and fertility using the EITC expansion as a large exogenous variation in the price of childbearing. Findings in the welfare literature are inconclusive (Robert A. Moffitt, 1998), and the income tax literature typically finds small, but statistically significant effects of the income-tax system on fertility behavior (e.g., Leslie A. Whittington et al., 1990). Second, declining fertility rates in many Western counties raise the general issue of whether the tax system can be used as a tool for encouraging fertility. Finally, by considering the link between the EITC and fertility, we question a common, yet untested, assumption in the literature on the EITC and the labor supply of single parents: that the presence of a child is exogenous to the value of the EITC.

Slippery When Wet: The Effects of Local Alcohol Access Laws on Highway Safety

Using detailed panel data on local alcohol policy changes in Texas, this paper tests whether the effect of these changes on alcohol-related accidents depends on whether the policy change involves where the alcohol is consumed and the type of alcohol consumed. After controlling for both county and year fixed effects, we find evidence that: (i) the sale of beer and wine may actually decrease expected accidents; and (ii) the sale of higher alcohol-content liquor may present greater risk to highway safety than the sale of just beer and wine.

How Well Can We Track Cohabitation Using the SIPP?: A Consideration of Direct and Inferred Measures *

Cohabitation is an alternative to marriage and to living independently for an increasing number of Americans. Despite this fact, research exploring links between living arrangements and economic behavior is limited by a lack of data that explicitly identify cohabiting couples. To aid researchers in using the Survey of Income and Program Participations (SIPP) rich data for cohabitation issues, our paper considers direct and inferred measures of cohabitation. Our findings suggest that: (1) the best inferred measures in pre-1996 SIPP depends upon a researchers goals and (2) that the SIPP counts a larger number of cohabiting couples than the widely-used CPS.

LABOR MOBILITY OF THE DIRECT CARE WORKFORCE: IMPLICATIONS FOR THE PROVISION OF LONG-TERM CARE

This study provides the first comprehensive analysis of the dynamics of labor supply of direct care workers, the lower-skill nursing workers who provide the bulk of long-term care for the elderly in the USA. Our estimates from the 1996 and 2001 panels of the Survey of Income and Program Participation (SIPP) show that the mean (median) duration of employment spells for the same direct care employer is only 9.7 (5.0) months. We find that fewer than one-third of direct care workers leave a job to take another job in the direct care field. There is also little indication of upward mobility in the health sector; direct care workers are approximately equally likely to transition to working as Registered Nurses as they are to working in household service jobs. Additionally, the rate at which spells end in work-limiting disability (5.4%) is very high compared with rates in similar occupations. We estimate duration models of direct care job spell length and find that, after correcting for the endogenous relationship between wages and tenure, wages appear to have a modest effect in preventing turnover; this effect is concentrated among the shortest spells.

Differential impacts of public health insurance expansions at the local level

Dramatic expansions in public health insurance eligibility for U.S. children have only modestly reduced the aggregate number of uninsured at the national level. This paper shows that Medicaid and SCHIP expansions had different impacts on child health insurance coverage patterns based upon local labor market characteristics. Metropolitan areas with high levels of unemployment were most likely to have seen improvements in overall insurance coverage for children between 1990 and 2001. Areas with greater fractions of employment in services, retail or wholesale trade were more likely to have experienced increases in public coverage but not overall coverage rates.

Worker preferences, sorting and aggregate patterns of health insurance coverage

To assess the performance of the employment-based health insurance system, it is necessary to understand how well workers sort into jobs that offer their desired mix of cash wages relative to benefits. However, few studies directly measure the extent of sorting. We quantify the prevalence of mismatches between workers’ preferences and firms’ insurance offerings by considering two types of mismatch: (1) workers who appear to desire coverage through their employer, but work for firms that do not offer coverage, and; (2) workers who appear not to desire coverage through their employer, but work for firms that offer coverage. Most workers (79.6%) enjoy labor market matches that appear consistent with their preferences. The remaining 20.4% of workers appear to be mismatched. For most of these mismatches, the primary consequence is lower wages than would be earned if individuals were better matched in the labor market. However, a minority of the identified mismatches appear to be “involuntarily uninsured” workers who would gain insurance if they were to find a better match. Extrapolating from the analysis sample, these involuntarily uninsured workers and their uninsured dependents may represent up to one in six uninsured individuals in the United States.

The effect of Medicaid wage pass-through programs on the wages of direct care workers.

Background:Despite growing demand for nursing and home health care as the US population ages, compensation levels in the low-skill nursing labor market that provides the bulk of long-term care remain quite low. The challenge facing providers of long-term care is that Medicaid reimbursement rates for nursing home and home health care severely restrict the wage growth that is necessary to attract workers, resulting in high turnover and labor shortages. Almost half of US states have responded by enacting “pass-through” provisions in their Medicaid programs, channeling additional long-term care funding directly to compensation of lower-skill nursing workers. Objectives:We test the effect of Medicaid wage pass-through programs on hourly wages for direct care workers. Research Design:We estimate several specifications of wage models using employment data from the 1996 and 2001 panels of the Survey of Income and Program Participation for nursing, home health, and personal care aides. The effect of pass-through programs is identified by an indicator variable for states with programs; 20 states adopted pass-throughs during the sample period. Results:Workers in states with pass-through programs earn as much as 12% more per hour than workers in other states after those programs are implemented. Conclusions:Medicaid wage pass-through programs appear to be a viable policy option for raising compensation levels of direct care workers, with an eye toward improving recruitment and retention in long-term care settings.

Coverage, Utilization, and Health Outcomes of the State Children's Health Insurance Program

This paper uses data from the National Survey of Americas Families (1997–2002) to explore the links between eligibility for the State Childrens Health Insurance Program (SCHIP), health insurance coverage, medical care utilization, and health outcomes. We find that SCHIP significantly increased health insurance coverage rates for American children between 1997 and 2002, with most of the gains in coverage for older children. Higher coverage rates translated into increased utilization of the types of medical care that would be expected to improve childrens health, such as well-child doctor visits. The effects of SCHIP eligibility expansions on health outcomes, however, are relatively small.