Economics

Credit is Not a Right

Credit is Not a Right

Gershman, John and Jonathan Morduch.
01/01/2011

Is credit a human right? Muhammad Yunus, the most visible leader of a global movement to provide microcredit to world’s poor, says it should be. NYU’s John Gershman and FAI’s Jonathan Morduch disagree. In their new paper, Credit is Not a Right, they ask whether a rights-based approach to microcredit will in fact be effective in making quality, affordable credit more available to poor families – and, more importantly, whether it is a constructive step in terms of the broader goal of global poverty reduction. Jonathan Morduch argues his case in this video.

Economics of children's environmental health

Economics of children's environmental health
Mt Sinai J Med. 2011 Jan-Feb;78(1):98-106

Trasande L
01/01/2011

Economic analyses are increasingly appearing in the children's environmental-health literature. In this review, an illustrative selection of articles that represent cost analyses, cost-effectiveness analyses, and cost-benefit analyses is analyzed for the relative merits of each approach. Cost analyses remain the dominant approach due to lack of available data. Cost-effectiveness and cost-benefit analyses in this area face challenges presented by estimation of costs of environmental interventions, whose costs are likely to decrease with further technological innovation. Benefits are also more difficult to quantify economically and can only be partially alleviated through willingness-to-pay approaches. Nevertheless, economic analyses in children's environmental health are highly informative and important informants to public-health and policy practice. Further attention and training in their appropriate use are needed.

Borrowing to Save

Borrowing to Save
Journal of Globalization and Development 102 (2), December 2010.

Jonathan Morduch
12/01/2010

Poor families often borrow even when they have savings sufficient to cover the loan. The practice is costly relative to drawing down one’s own savings, and it seems particularly puzzling in poor communities.  The families themselves explain that it is easier to repay a moneylender than to “repay” oneself, an explanation in line with recent findings in behavioral economics.  In this context, high interest rates on loans can help instill discipline.  While workable, the mechanism is hardly optimal; options could be improved through access to a contractual saving device that helps savers rebuild assets after a major withdrawal.

At Rope’s End: Single Women Mothers, Wealth and Asset Accumulation in the United States

At Rope’s End: Single Women Mothers, Wealth and Asset Accumulation in the United States

Mariko Chang, PhD and C. Nicole Mason, PhD
10/01/2010

A commissioned report for the Opportunity Series of the Women of Color Policy Network, this report examines the economic security and vulnerability of single mothers through the lens of wealth and asset accumulation as opposed to income and employment.

The American Single Mother

The American Single Mother

Women of Color Policy Network
10/01/2010

Across race and age groups, education is the single greatest predictor of single-motherhood in America. This policy brief offers a profile of the American single woman mother, contemporary population trends, and the economic security of this growing demographic. See also our full report "At Ropes End: Single Women Mothers, Wealth and Asset Accumulation in the United States.

Income and Poverty in Communities of Color

Income and Poverty in Communities of Color

Women of Color Policy Network
09/01/2010

The U.S. Census Bureau’s recent statistics on income highlight the need for increased social supports for working families, the allocation of additional funds to create quality jobs with good wages, and the development of bold and targeted policies to help individuals and groups disproportionately impacted by the recession recover.

Microfinance Games

Microfinance Games
American Economic Journal: Applied Economics 2(3): 60-95, July 2010.

Gine, Xavier, Pamela Jakiela, Dean Karlan, and Jonathan Morduch
07/01/2010

Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts benefit borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse. 

Hospital Performance, the Local Economy, and the Local Workforce: Findings from a US National Longitudinal Study

Hospital Performance, the Local Economy, and the Local Workforce: Findings from a US National Longitudinal Study
PLoS Med 7(6): e1000297. doi:10.1371/journal.pmed.1000297

Blustein, J., Borden, W.B., Valentine, M.
06/29/2010

Abstract

Background: Pay-for-performance is an increasingly popular approach to improving health care quality, and the US government will soon implement pay-for-performance in hospitals nationwide. Yet hospital capacity to perform (and

improve performance) likely depends on local resources. In this study, we quantify the association between hospital performance and local economic and human resources, and describe possible implications of pay-for-performance for socioeconomic equity.

Methods and Findings: We applied county-level measures of local economic and workforce resources to a national sample of US hospitals (n = 2,705), during the period 2004–2007. We analyzed performance for two common cardiac conditions (acute myocardial infarction [AMI] and heart failure [HF]), using process-of-care measures from the Hospital Quality Alliance [HQA], and isolated temporal trends and the contributions of individual resource dimensions on performance, using multivariable mixed models. Performance scores were translated into net scores for hospitals using the Performance Assessment Model, which has been suggested as a basis for reimbursement under Medicare’s ‘‘Value-Based Purchasing’’ program. Our analyses showed that hospital performance is substantially associated with local economic and workforce resources. For example, for HF in 2004, hospitals located in counties with longstanding poverty had mean HQA composite scores of 73.0, compared with a mean of 84.1 for hospitals in counties without longstanding poverty (p,0.001). Hospitals located in counties in the lowest quartile with respect to college graduates in the workforce had mean HQA composite scores of 76.7, compared with a mean of 86.2 for hospitals in the highest quartile (p,0.001). Performance on AMI measures showed similar patterns. Performance improved generally over the study period. Nevertheless, by 2007—4 years after public reporting began—hospitals in locationally disadvantaged areas still lagged behind their locationally advantaged counterparts. This lag translated into substantially lower net scores under the Performance Assessment Model for hospital reimbursement.

Conclusions: Hospital performance on clinical process measures is associated with the quantity and quality of local economic and human resources. Medicare’s hospital pay-for-performance program may exacerbate inequalities across regions, if implemented as currently proposed. Policymakers in the US and beyond may need to take into consideration the balance between greater efficiency through pay-for-performance and socioeconomic equity.

Please see later in the article for the Editors’ Summary.

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