Knowledge that Transforms

We examine how a key provision of the Affordable Care Act—the expansion of Medicaid eligibility—affected health insurance coverage, access to care, and labor market transitions of unemployed workers. Comparing trends in states that implemented the Medicaid expansion to those that did not, we find that the expansion substantially increased insurance coverage and improved access to health care among unemployed workers. We then test whether the expansion affected transitions from unemployment to employment or out of the labor force. We find no meaningful statistical evidence in support of moral hazard effects that reduce job finding or labor force attachment.

A growing literature uses random assignment of cases to judges to examine criminal sentencing. To extend this line of work, we directly examine how judicial “harshness” varies with the seriousness of criminal conviction. Using a model that respects the mix of cases and the noise produced by small caseloads, we find that case severity is best viewed as an endogenous outcome of bargaining. We also find that harsher judges have a higher share of cases failing to reach a plea bargain, but perhaps surprisingly, there is little evidence that large jumps in expected incarceration lead to differential plea bargain outcomes.

We are pleased to introduce this volume of papers, all of which were presented at a conference in honor of JohnDiNardo held in Ann Arbor, Michigan, in September 2018. After battling leukemia for close to a decade, John left us on August 26, 2017, at the age of 56. The conference was an opportunity for colleagues, coauthors, students, and friends to celebrate John’s life and academic achievements. The proud son of Italian immigrants, John was born and raised in Allen Park, Michigan. He spent most of his academic career at his alma mater, the University of Michigan, where he earned an undergraduate degree and a masters of public policy. After completing his PhD at Princeton in 1990, John spent a year at the RAND Corporation before joining the faculty at the University of California, Irvine, in 1991. He moved back to Michigan in 2001, where he spent the remainder of his career. At this point, convention calls for a discussion of the main research contributions of the scholar being honored, followed by a summary of the contributed papers. However, following convention is not what best describes John DiNardo’s life and career. Armed with a trademark irreverence, a

Central to the welfare analysis of income transfer programs is the deadweight loss associated with possible reforms. To aid analytical tractability, its measurement typically requires specifying a simplified model of behavior. We employ a complementary “decomposition” approach that compares the behavioral and mechanical components of a policy’s total impact on the government budget to study the deadweight loss of two unemployment insurance policies. Experimental and quasi-experimental estimates using state administrative data show that increasing the weekly benefit is more efficient (with a fiscal externality of 53 cents per dollar of mechanical transferred income) than reducing the program’s implicit earnings tax.

We explore workers’ valuation of job flexibility using a field experiment conducted on a Chinese job board. Our experimental job ads differ randomly in offering jobs that are flexible regarding when (time flexibility) or where (place flexibility) one works and in offering different salaries. Application rates are higher for flexible jobs conditional on the salary offered, providing evidence that workers value job flexibility. Moreover, under some plausible conditions our evidence is informative about job seekers’ willingness to pay for flexible jobs of the types offered in the experiment and points to fairly high valuation of the most flexible jobs.

Joseph Altonji is one of the pioneers of modern labor economics. To mark Joe’s sixty-fifth birthday and honor his illustrious career, a conference was held at his alma mater and employer, Yale University, on September 7–8, 2018. This special issue contains seven of the papers presented by former students, coauthors, and colleagues. Joe has been central to the empirical revolution that has brought vast amounts of individual-level data to some of the most important questions ofbothmicroandmacroeconomics.His seminal breakthroughshave changed thewaywe think aboutnumerous topics, including the studyof consumption behavior and labor supply over time, intrafamily insurance, discrimination, wage determination and learning, school choice and school quality, returns to higher education, and the stochastic process of income. The hallmark of all thiswork is a thoughtful combination of theory anddata, the development ofnewempiricalmethods, thediscoveryofnovel identificationstrategies, and extreme care with extensive robustness checks and attention to data details. Early on in his career Joe was one of the first to develop our understanding of the relationship between intratemporal and intertemporal allocations and the implication this distinction has on estimating elasticities. These

Covariate-adjusted cross-sectional comparisons show that Medicaid patients have worse health outcomes than other patients. We evaluate the validity of this research design for estimating the causal effect of Medicaid on mortality. Even after controlling for common covariates, Medicaid patients have worse preoperative health and lower socioeconomic status than privately insured patients. Controlling for additional variables shrinks the mortality differences but still does not eliminate imbalance in other predetermined variables. These results can be explained by fairly weak assumptions about unmeasured confounders. We conclude that cross-sectional observational methods do not produce valid causal estimates of Medicaid’s mortality effects.

We study how firms’ personnel practices react to labor market regulation. While a company is compelled to comply with a new law, what is the ripple effect of the change on existing personnel policies and practices? We provide evidence using passage of the Age Discrimination in Employment Act and nearly two decades of administrative data from a large US firm. In line with theory, we find a weakening of long-term implicit incentives and movement toward pay for performance. Furthermore, the data are consistent with the firm carefully managing its personnel practices according to economic principles to preserve incentives for employees.

We combine extremely granular information on the location and timing of homicides with a number of large administrative educational data sets from Brazil to estimate the effect of exposure to homicides around schools, around students’ residences, and on their way to school. We show that violence has a detrimental effect on both school attendance and standardized test scores and that it increases the dropout rates of students substantially. We use exceptionally rich information from student- and parent-background questionnaires to investigate the effect of violence on aspirations and attitudes toward education. We find that boys systematically report lower educational aspiration.

We study the impacts of a major reform to vocational secondary education that aimed to move beyond the trade-off between providing occupational skills and closing off academic opportunities. Norway’s Reform 94 integrated more general education into the vocational track, offered vocational students a pathway to college, and increased access to apprenticeships. We identify reform impacts through a difference-in-discontinuity research design applied to linked population registries. The reform substantially increased initial vocational enrollment, but with divergent consequences by gender. Overall, the reform succeeded at improving social mobility, particularly for disadvantaged men, but it somewhat exacerbated the gender gap in adult earnings.