American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Front Matter i vii http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.i 10.1257/pol.3.4.i American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Personal Retirement Accounts and Saving EmmaAguilaRAND, Santa Monica, CA 1 24 Aging populations are leading countries worldwide to social security reforms. Many countries are moving from pay-as-you-go to personal retirement account (PRA) systems because of their financial sustainability and positive impact on private savings. PRA systems boost private savings at a macro level by converting a government liability into financial wealth managed by private fund managers. However, at a micro level, changes in retirement wealth affect individuals' saving and consumption patterns through their working lives. Retirement wealth increased for lower-income workers after Mexico introduced PRAs, crowding out saving, increasing consumption, and offsetting some of the PRA effect on private savings. (JEL D14, E21, H55, J26, O16) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.1 10.1257/pol.3.4.1 http://www.aeaweb.org/aej/pol/data/2008-0176_data.zip http://www.aeaweb.org/aej/pol/app/2008-0176_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii Thomas C.BuchmuellerU MI JohnDiNardoU MI Robert G.VallettaFederal Reserve Bank of San Francisco 25 51 We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii's Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. Relying on a variation of the classical Fisher permutation test applied across states, we find that Hawaii's law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on exempt part-time workers. (JEL G22, I18, J23, J32) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.25 10.1257/pol.3.4.25 http://www.aeaweb.org/aej/pol/app/2009-0154_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Capital Income Taxes with Heterogeneous Discount Rates PeterDiamondMIT JohannesSpinnewijnLondon School of Economics and Political Science 52 76 With heterogeneity in both skills and discount factors, the Atkinson- Stiglitz theorem that savings should not be taxed does not hold. In a model with heterogeneity of preferences at each earnings level, introducing a savings tax on high earners or a savings subsidy on low earners increases welfare, regardless of the correlation between ability and discount factor. Extending Emmanuel Saez (2002), a uniform savings tax increases welfare if that correlation is sufficiently high. Key for the results is that types who value future consumption less are more tempted by a lower paid job. Some optimal tax results and empirical evidence are presented. (JEL D14, H21, H24) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.52 10.1257/pol.3.4.52 http://www.aeaweb.org/aej/pol/data/2010-0118_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Medicare Part D and the Financial Protection of the Elderly Gary V.EngelhardtSyracuse U JonathanGruberMIT 77 102 We examine the impact of the expansion of public prescription-drug insurance coverage from Medicare Part D and find evidence of substantial crowd-out. Using the 2002–2007 waves of the Medical Expenditure Panel Survey, we estimate the extension of Part D benefits resulted in 75 percent crowd-out of both prescription-drug insurance coverage and expenditures of those 65 and older. Part D is associated with sizeable reductions in out-of-pocket spending, much of which has accrued to a small proportion of the elderly. On average, we estimate a welfare gain from Part D comparable to the deadweight cost of program financing. (JEL H51, I18, J14) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.77 10.1257/pol.3.4.77 http://www.aeaweb.org/aej/pol/data/2010-0224_data.zip http://www.aeaweb.org/aej/pol/app/2010-0224_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article How Do 401(k)s Affect Saving? Evidence from Changes in 401(k) Eligibility Alexander M.GelberU PA 103 22 This paper investigates the effect of 401(k) eligibility on saving. To address the possibility that eligibility correlates across individuals with their unobserved tastes for saving, I examine a change in eligibility: some individuals are initially ineligible for their 401(k) but become eligible when they have worked at their firm long enough. I find that eligibility raises 401(k) balances. Other financial assets and net worth respond insignificantly to eligibility, but the confidence intervals do not rule out substantial responses. In response to eligibility, IRA assets increase, consistent with a "crowd-in" hypothesis, and accumulation of cars decreases.(JEL D14, E21, J26) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.103 10.1257/pol.3.4.103 http://www.aeaweb.org/aej/pol/data/2009-0165_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Did Bankruptcy Reform Cause Mortgage Defaults to Rise? WenliLiFederal Reserve Bank and Philadelphia Michelle J.WhiteU CA, San Diego NingZhuShanghai Advanced Institute of Finance, Shanghai Jiao Tong U 123 47 Homeowners in financial distress can use bankruptcy to avoid defaulting on their mortgages, since filing loosens their budget constraints. But the 2005 bankruptcy reform made bankruptcy less favorable to homeowners and therefore caused mortgage defaults to rise. We test this relationship and find that the reform caused prime and subprime mortgage default rates to rise by 23% and 14%, respectively. Default rates rose even more for homeowners who were particularly negatively affected by the reform. We calculate that bankruptcy reform caused mortgage default rates to rise by one percentage point even before the start of the financial crisis. (JEL D14, G01, G21, K35) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.123 10.1257/pol.3.4.123 http://www.aeaweb.org/aej/pol/data/2010-0080_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes PhilipOreopoulosU Toronto and Canadian Institute for Advanced Research 148 71 Thousands of randomly manipulated resumes were sent in response to online job postings in Toronto to investigate why immigrants, allowed in based on skill, struggle in the labor market. The study finds substantial discrimination across a variety of occupations towards applicants with foreign experience or those with Indian, Pakistani, Chinese, and Greek names compared with English names. Listing language fluency, multinational firm experience, education from highly selective schools, or active extracurricular activities had no diminishing effect. Recruiters justify this behavior based on language skill concerns but fail to fully account for offsetting features when listed. (JEL J15, J24, J61) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.148 10.1257/pol.3.4.148 http://www.aeaweb.org/aej/pol/data/2009-0150_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 3 4 November 2011 http://www.aeaweb.org/issue.php?journal=POL&volume=3&issue=4 Journal Article Just Keep My Money! Supporting Tax-Time Savings with US Savings Bonds PeterTufanoU Oxford 172 200 This paper reports the results of a 2007 experiment testing whether specific process simplification can foster increased take-up rates for savings products, particularly by low-to-moderate income (LMI) households. Tax refund recipients at certain H&R Block tax preparation offices were given the option to purchase US Savings Bonds with their tax refunds, augmenting the tax-site savings options offered by H&R Block. Those who received the savings bond offer were substantially more likely to purchase a savings product on-site than those who didn't, even after controlling for client demographics. Much of this take-up was directed at intra-family gifting, or asset building on behalf of children. (JEL D14, H24) http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.172 10.1257/pol.3.4.172 http://www.aeaweb.org/aej/pol/data/2008-0166_data.zip http://www.aeaweb.org/aej/pol/app/2008-0166_app.pdf