Browsing by Subject "Moral hazard"

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Education, labor, and health disparities of racial and sexual minorities
(2020-06-25) Delhommer, Scott Michael; Murphy, Richard J., Ph. D.; Trejo, Stephen J., 1959-; Oettinger, Gerald; Black, Sandra; Vogl, Tom
The three chapters of this dissertation explore the applied economics of inequality in educational attainment, labor market outcomes, and sexual health for racial and sexual minorities. In the first chapter, I explore the role of same-race teachers reducing gaps in minority education, presenting the first evidence that matching high school students with same-race teachers improves the students’ college outcomes. To address endogenous sorting of students and teachers, I use detailed Texas administrative data on classroom assignment, exploiting variation in student and teacher race within the same course, year, and school, eliminating 99% of observed same-race sorting. Race-matching raises minority students’ course performance as well as improves longer-term outcomes like high school graduation, college enrollment, and major choice. My second chapter examines how public policy can reduce labor market inequality across sexual orientation. I present the first quasi-experimental research examining the effect of both local and state anti-discrimination laws on sexual orientation on the labor supply and wages of lesbian, gay, and bisexual workers. To do so, I use American Community Survey data on household composition to infer sexual orientation and combine this with a unique panel dataset on local anti-discrimination laws. Using variation in law implementation across localities over time, I find these laws significantly reduce inequalities in the labor supply and wages across sexual orientation for both men and women. The last chapter explores the moral hazard and health inequality implications of a life-saving HIV prevention drug, PrEP, for gay men. We document the first evidence of PrEP on aggregate STD and HIV infections. Using the pre-treatment variation in the gay male population, we show that male STD rates were parallel in states with high and low gay population before the introduction of PrEP and begin to diverge afterwards. However, HIV infections were consistently downwardly trending before PrEP with no break at the introduction of PrEP, making inference of the effect of PrEP on HIV infections difficult. Specifically, we show that one additional male PrEP user increases male chlamydia infections by 0.55 cases, male gonorrhea infections by 0.61 cases, and male syphilis infections by 0.03 cases.
Essays on health and labor economics
(2021-12-03) Eilam, Nir; Angelucci, Manuela; Geruso, Michael; Trejo, Stephen; Cunningham, Scott
The three chapters of this dissertation explore different aspects of labor and health economics. My first chapter explores moral hazard in the context of a popular recent medical innovation called PrEP. PrEP is a drug introduced in 2012 that essentially eliminates the risk of contracting HIV. Since its introduction, it has become popular among gay men, who are responsible for the majority of HIV infections. Given the reduced risk of contracting HIV, users might be more likely to engage in risky sexual behaviors that might lead to increases in other STIs. In this paper, we examine this empirically. In our main specification, we proxy for PrEP use in a given state using the predetermined share of the population that is gay in that state, a measure that is highly predictive of PrEP use. We then exploit this pre-treatment cross-state variation in the concentration of gay men to estimate difference-in-difference and triple-difference event studies. We estimate that one additional male PrEP user increases male chlamydia, gonorrhea and syphilis cases by 0.66, 0.51, and 0.04, respectively. Counterfactual distributions suggest that male STI rates would have been between 17.9% and 25.6% lower in the absence of PrEP. This paper adds to the literature on moral hazard by examining the behavioral response to a medical innovation that is cheap, accessible, and confers substantial reduction in risk that is highly salient to users. In addition, it informs an open question regarding the increases in STIs in recent years. In my second chapter I explore the effect of extreme weather on migration in the United States. Extreme weather has become more frequent and intense over the past few decades. Its effect on migration in developed countries has been understudied. Given that the United States population has been historically highly mobile, direct and indirect effects of extreme weather could catalyze people to migrate. I test this empirically by exploiting spatial and temporal variation in extreme weather (temperature, precipitation and natural disasters) at the county level over 6 decades (1950-2010). A non-parametric estimation yields an inverted U-shape relationship between temperature and net-migration, where decades in which the temperature was further away from the 50-60 temperature bin exhibit lower net-migration; the effect is strongest at the extreme temperature bins. Specifically, one additional day in a year (averaged over a decade) with temperature above 90 decreases net migration by approximately 1.33 migrants per 100 population. Incidences of natural disasters and increased precipitation are also associated with decreased net-migration. I find that the effect is strongest for younger people, and I find no effect for old people. I also find that the magnitude of the relationship is not stronger for agriculture-dependent counties. This result is important as migration could mitigate the detrimental effects of climate change in the developed world. In addition, it suggests that future increase in extreme weather could entail a migration response that will affect different markets, which should be taken into account when considering the general equilibrium effects of climate change. In my third chapter I explore the labor market effects of a generous child allowance policy in Israel. Child allowances are generous in both eligibility and value and are one of the largest social welfare programs in Israel. Although prevalent in developed countries, research on the effect of universal child allowances on labor outcomes has been scarce. I aim to fill this gap by examining the effect on labor outcomes of a policy that drastically reduced child allowances in Israel during the years 2002-2005 in varying degrees of intensity, depending on parity. Employing several difference-in-differences analyses, I find that the policy increased the labor force participation of young women by 6.6% from baseline; I find no effect on working hours. I also find that younger and more educated women were more responsive. This paper informs policy makers in designing cash transfer programs in general and child benefits programs in particular.