Lessons Learned in Crisis: Pandemics, Recessions, Reforms, and Racial Inequalities
Paper Session
Saturday, Jan. 8, 2022 12:15 PM - 2:15 PM (EST)
- Chair: Leonard Wantchekon, Princeton University
Optimally Targeting Interventions in Networks during a Pandemic: Theory and Evidence from the Networks of Nursing Homes in the United States
Abstract
This study develops an economic model for a social planner who prioritizes health over short-term wealth accumulation during a pandemic. Agents are connected through a weighted undirected network of contacts, and the planner's objective is to determine the policy that contains the spread of infection below a tolerable incidence level, and that maximizes the present discounted value of real income, in that order of priority. The optimal unique policy depends both on the configuration of the contact network and the tolerable infection incidence. Comparative statics analyses are conducted: (i) they reveal the tradeoff between the economic cost of the pandemic and the infection incidence allowed; and (ii) they suggest a correlation between different measures of network centrality and individual lockdown probability with the correlation increasing with the tolerable infection incidence level. Using unique data on the networks of nursing and long-term homes in the U.S., we calibrate our model at the state level and estimate the tolerable COVID-19 infection incidence level. We find that laissez-faire (more tolerance to the virus spread) pandemic policy is associated with an increased number of deaths in nursing homes and higher state GDP growth. In terms of the death count, laissez-faire is more harmful to nursing homes than more peripheral in the networks, those located in deprived counties, and those who work for a profit. We also find that U.S. states with a Republican governor have a higher level of tolerable incidence, but policies tend to converge with high death count.The Economics of Pandemics for Subsistence Workers
Abstract
We develop a simple heterogeneous-agent model to highlight how pandemics affect occupational choice and welfare of subsistence workers. We show that while the risk of contracting the disease deters economic activities, relatively poorer households will keep participating to outside labor activities in spite of this risk. We show how various levels of enforcement of confinement legislation can affect occupational choices and welfare. Simulations are provided to quantify some of the model implications. These findings suggest that the fight against pandemics using containment measures can only be effective if it is combined with other policies that mitigate the opportunity cost of outside activities.Obamacare and Ethnic Disparity in Access to Care
Abstract
The US has a large disparity in access to health care by ethnicity. This paper evaluates the impact of the ACA on the access to care gap between White and African-American seniors in the early years of the ACA. It uses a fuzzy difference in discontinuity to analyze the causal impact of the ACA. Our analysis suggests that the ACA has increased the proportion of Blacks who could see a doctor by 36% while there was no effect for the White majority. African-American have seen a non-statistically significant reduction in their delay of care for cost reasons while Whites have an increase. Concerning access to continuity care, African-Americans report being more able to afford prescription medicine and specialist as a result of the implementation of the ACA. This effect occurs in the opposite direction for Whites. While the ACA seems to have hurt access to health care services for Whites, our results suggest that it may have reduced the level of inequality in the access to health care services.Impact of Great Recession Bank Failures on Use of Financial Services among Racial/Ethnic and Income Groups
Abstract
Using individual level data from the 2013, 2015 and 2017 Unbanked and Underbanked Household surveys, we examine the effect of the magnitude of bank failures in the 2008-2011 period on individuals’ use of financial services. We find the intensity of bank failure to reduce the probability of owning a bank account and increase the probability of being unbanked. Such adverse effects are most pronounced on minorities, specifically on middle and high-income blacks and Hispanics. We find that high-income blacks and Hispanics are 4.5 and 3.1 percentage points more likely to be underbanked relative to low-income individuals. In addition, middle and high-income Hispanics are 2.6 and 4.7 percentage points less likely to be fully banked. These effects on individuals’ personal finance choice underscore the need for policy actions to forestall bank failures.Discussant(s)
Belinda Archibong
,
Barnard College
Francis Annan
,
Georgia State University
Andinet Woldemichael
,
African Development Bank
Samuel Asare
,
American Cancer Society
Karim Nchare
,
African School of Economics and Princeton University
JEL Classifications
- H1 - Structure and Scope of Government
- I1 - Health