Economic Development

The President's Proposed Standard Deduction for Health Insurance: Evaluation and Recommendations

The President's Proposed Standard Deduction for Health Insurance: Evaluation and Recommendations
National Tax Journal, Sep 2007, Vol. 60 Issue 3, p433-454, 22p.

Burman, L.E., Furman, J., Leiserson, G. & Williams Jr, R.C.

The President's proposal to replace the current exclusion of employer-paid health insurance premiums with a standard deduction for qualifying health insurance would level the playing field for employment-based coverage and private plans but would risk the loss of insurance for many workers, threaten existing risk- sharing pools, and unfairly favor the wealthy. This paper evaluates the President's plan, suggests changes that would improve it, and assesses alternatives that would address the plan's shortcomings and improve its likelihood of expanding coverage to many families who now lack insurance.

Welfare Program Performance

Welfare Program Performance
American Review of Public Administration, March, Vol. 37 Issue 1, p65-90, 26p.

Ratcliffe, C. & Nightingale, D.S. & Sharkey, P.

Public agencies are increasingly expected to track their performance according to established criteria--to be held accountable for the expenditure of public funds and show that funds are being used to achieve intended outcomes. This analysis of South Carolina's Family Independence welfare program examines counties' performance on five employment-related outcomes: employment rate, employment entry rate, employment retention rate. earnings gain rate, and earned income closure rate. Counties' performance is statistically analyzed, adjusting for variation in external factors (e.g., labor market conditions and caseload characteristics) that influence program performance but that are outside the control of county program staff. This analysis shows that external factors influence employment-related performance, suggesting that states may want to vary counties' goals based on external factors, rather than expecting all counties to meet the same performance level. This analysis provides an example of how agencies can apply statistical analysis to measure, track, and analyze program performance.

Financial Performance and Outreach: A Global Analysis of Leading Microbanks

Financial Performance and Outreach: A Global Analysis of Leading Microbanks
Economic Journal, February 2007, Vol. 117, Issue 517, pp. F107-F133

Morduch, J., Cull, R. & Demirguc-Kunt, A.

Microfinance promises to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates but, so far, relatively few earn profits. We examine why this promise remains unmet. We explore patterns of profitability, loan repayment, and cost reduction with unusually high-quality data on 124 institutions in 49 countries. The evidence shows the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. Raising fees to very high levels does not ensure greater profitability and the benefits of cost-cutting diminish when serving better-off customers.

Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?

Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?
Journal of Policy Analysis & Management, Spring 2007, Vol. 26 Issue 2, p257-280, 24p.

Ellen, I.G., Schwartz, A.E., Voicu, I. & Schill, M.H.

Few communities welcome federally subsidized rental housing, with one of the most commonly voiced fears being reductions in property values. Yet there is little empirical evidence that subsidized housing depresses neighborhood property values. This paper estimates and compares the neighborhood impacts of a broad range of federally subsidized rental housing programs, using rich data for New York City and a difference-in-difference specification of a hedonic regression model. We find that federally subsidized developments have not typically led to reductions in property values and have, in fact, led to increases in some cases. Impacts are highly sensitive to scale, though patterns vary across programs.

Two Wrongs Do Not Make a Right

Two Wrongs Do Not Make a Right
National Tax Journal, Sep 2006, Vol. 59 Issue 3, p491-508, 18p.

Furman, J.

This paper analyzes proposals to remedy tax-induced distortions in health care by using new tax incentives and retaining all of the existing distortionary tax incentives. In the process of remedying some distortions, this approach magnifies others--most notably increasing the total tax preference for health care. The paper considers two examples--the Bush administration's FY 2007 budget proposal and a plan by Cogan, Hubbard and Kessler (2005)--and shows that both could result in higher health spending and reduced welfare. Finally, the paper discusses the circumstances in which tax incentives could be warranted to remedy market failures in health insurance.

Gasoline Prices, Interest Rates, and the 2008 Election

Gasoline Prices, Interest Rates, and the 2008 Election
The New York Observer June

Moss, M.

Forget immigration, global warning, Donald Rumsfeld and abortion rights.

The hot issues of today will quickly fade away if the current surge in gasoline prices and home-mortgage rates continues unabated. And all indications are that both the price of gas and the cost of borrowing are moving in one direction only: north.


Is Retirement Being Remade? Developments in Labor Market Patterns at Older Ages

Is Retirement Being Remade? Developments in Labor Market Patterns at Older Ages
Managing Retirement Payouts edited by John Amerikis and Olivia Mitchell.

Chan, S.

As Baby Boomers make the transition into their 60s, they have focused policymakers and the media's attention onto how this generation will manage the retirement phase of its lifetime. This volume acknowledges that many, though not all, in this older cohort have accumulated substantial assets, so for them, the question is what will they do with what they have?

We offer a detailed exploration of how people entering retirement will deploy their accumulated assets in the near and long term, so to best meet their myriad spending, investment, and other objectives. The book offers readers an invaluable study of emerging issues regarding assets and expectations on the verge of retirement, including uncertainty regarding life expectancy and morbidity. It is composed of chapters from a distinguished set of authors including a Nobel Laureate and a wonderful mix of academics and practitioners from the legal, financial, and economic fields.



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