After a small decline, the number of uninsured persons in the United States is on the rise again, at over 41 million (Center on Budget and Policy Priorities, 2002). This increase is likely to spur efforts to cover the uninsured through legislative action. Given the failure of the most recent attempt at massive insurance expansions (David Cutler and Gruber, 2002), the likely approach is through incremental reforms. At the same time, there remains a fundamental conflict between the right and the left over the appropriate form that such incremental reforms should take. The left advocates additional expansions of the public-insurance safety net, for example, to parents of children already publicly insured. The right advocates subsidizing the purchase of private insurance through the tax code. In recent years, a number of analyses, both inside and outside of government, have studied the impact of these types of reforms (e.g., John Holahan et al., 1999; Gruber and Larry Levitt, 2000; Mark McClellan, 2000). These analyses have largely talked past each other, however, as there is little agreement on the "right" criteria on which to evaluate incremental reforms. Should we be concerned solely with the number of persons newly insured? What about the extent of displacement of other forms of insurance coverage, or "crowdout"? And what about the types of uninsured covered; should we count equally a low-cost child who is newly insured and a high-cost older person? In this paper, I lay out the issues surrounding the criteria along which alternative approaches to reform can be evaluated. I then present microsimulation estimates of the impacts of three types of reforms: tax credits for individual purchase of nongroup insurance, expansions of public insurance to children and parents, and expansion of public insurance to all adults. I use the results from these simulations to contrast these reforms using the various criteria developed here.

One of the most striking trends in the behavior of youth in the United States during the 1990's has been the increased incidence of smoking. After steadily declining over the previous 15 years, youth smoking began to rise precipitously in 1992. By 1997, smoking by teenagers in the United States had risen by one-third from its 1991 trough, before declining again somewhat in 1998 and 1999. This trend is particularly striking in light of the continuing steady decline in adult smoking in the United States. This striking time trend has motivated substantial public-policy interest in youth smoking, highlighted by the recent unsuccessful attempt of the Clinton Administration to pass a comprehensive tobacco-regulation bill that had the ostensible main pulpose of reducing youth smoking. This public-policy interest arises out of concern that youth are not appropriately recognizing the long-run implications of their smoking decisions. Indeed, young smokers clearly underestimate the likelihood that they will still be smoking in their early twenties and beyond. For example, among high-school seniors who smoke, 56 percent say that they will not be smoking five years later, but only 31 percent of them have in fact quit five years hence. Moreover, among those who smoke more than one pack per day, the smoking rate five years later among those who stated that they would not be smoking (74 percent) is actually higher than the smoking rate among those who stated that they would be smoking (72 percent) (Department of Health and Human Services, 1994). If youth smoking leads to adult smoking, particularly in a manner that is underappreciated by the youth smokers themselves, it can have drastic implications for the health of the U.S. population. Smoking-related illness is the leading preventable cause of death in the United States, and smokers on average live from 6.5 (males) to 5.7 (females) fewer years, relative to those who have never smoked (David Cutler et al., 1999). The notion that this increase in youth smoking will lead to a rise in adult smoking is supported by the fact that 75 percent of smokers begin before their 19th birthday (Gruber and Jonathan Zinman, 2001). But this fact does not prove that the curTent upswing in youth smoking will lead to higher long-run adult smoking rates, as it is difficult to distinguish causality from these intertemporal colTelations; smoking later in life may not be a consequence of youth smoking for adults in the past, but rather smoking at both points in life may simply arise from intertemporal correlation in tastes for this activity. In this paper, I first discuss the causes of the rise in youth smoking in the 1990's, then provide some evidence to help causally assess its long-run implications for smoking in the United States and the health of the U.S. population.

A critical input for assessing the optimal size of disability insurance programs is the elasticity of labor force participation with respect to the generosity of benefits. Unfortunately, this parameter has been difficult to estimate in the context of the U.S. disability insurance program since all workers face an identical benefits schedule. I surmount this problem by studying the experience of Canada, which operates two distinct disability insurance programs: for Quebec and for the rest of Canada. The latter program raised its benefits by 36 percent in January 1987, whereas benefits in Quebec were constant. I find a sizable labor supply response to the policy change; my central estimates imply an elasticity of labor force nonparticipation with respect to disability insurance benefits of 0.28–0.36.

We assess the relationship between the racial diversity of medical providers and racial health disparities in the use of preventive care and in patient outcomes. We use unique data from the Military Health System, where we observe providers as patients so that we can identify their race, and where moves across bases change exposure to provider race in a plausibly exogenous fashion. We consider patients with four chronic, deadly, but manageable illnesses, where the relationship with the provider may have the most direct impact on health. We find striking evidence that provider racial diversity leads to reduced disparities in maintenance of preventive care and mortality.

A critical question for Social Security policy is how program incentives affect retirement behavior. We use the Health and Retirement Survey (HRS) to examine the impact of Social Security incentives on male retirement. We implement forward-looking models whereby individuals consider the incentives to work in all future years. We find that forward-looking incentive measures for Social Security are significant determinants of retirement. We also find that private pension incentives have roughly similar effects. Our findings suggest that Social Security policies that increase the incentives to work at older ages can significantly reduce the labor force exit rate of older workers.

Recently economists have begun to consider the causes and consequences of religious participation. An unanswered question in this literature is the effect upon individuals of changes in the opportunity cost of religious participation. In this paper we identify a policy-driven change in the opportunity cost of religious participation based on state laws that prohibit retail activity on Sunday, known as “blue laws.” Many states have repealed these laws in recent years, raising the opportunity cost of religious participation. We use a variety of data sets to show that when a state repeals its blue laws religious attendance falls and that church donations and spending fall as well. These results do not seem to be driven by declines in religiosity prior to the law change, nor do we see comparable declines in membership in or giving to nonreligious organizations after a state repeals its laws. We then assess the effects of changes in these laws on drinking and drug use behavior in the NLSY. We find that repealing blue laws leads to an increase in drinking and drug use and that this increase is found only among the initially religious individuals who were affected by the blue laws. The effect is economically significant; for example, the gap in heavy drinking between religious and nonreligious individuals falls by about half after the laws are repealed.

Public health systems are dominant in much of the world but often face fiscal constraints that lead to rationing of care. As a result, private sector healthcare providers could in theory beneficially supplement public systems, but evaluating the benefits of private alternatives has been challenging. We evaluate a private supplement to the free public health system for one of the world’s deadliest health problems, diabetes. We estimate enormous impacts of the private supplement, increasing the share of those treated who are under control by 69%. This effect arises through both improved treatment compliance and health behavior. We find diabetes complications fall in the short run, and that the net costs of this intervention are one-third of the gross costs. The returns to private care do not appear to reflect more productive delivery but rather more attachment to medical care, offering lessons for improving the public system.

Previous research on unemployment insurance (UI) has emphasized the program's effect on individual search behavior. This state‐contingent income may also reduce the labor supply of family members during the unemployment spell. We investigate this question within the context of wives' labor supply responses to their husbands' unemployment spells. We find strong “crowdout” of this form of family self‐insurance; our estimates imply that for each dollar of UI receipt wives earn up to 73 cents less. The reduction in spousal hours of work is over 40% as large as previous estimates of the effect of UI on search time of husbands.

This article concerns the following items: 1) Decline in labour-force participation; 2) Social Security benefit accrual and the implicit tax on work; 3) The importance of the early-retirement age; 4) The implicit tax on work and labour-force participation; etc.