The B.E. Journal of Economic Analysis & Policy

Published by De Gruyter

Volume 21 Issue 4

October 2021

Issue of The B.E. Journal of Economic Analysis & Policy

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Contents
Journal Overview

Publicly Available October 28, 2021

Frontmatter

Page range: i-ii

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Research Articles

July 8, 2021

Can Contingency Fee Reforms Improve Maternal & Infant Health? Evidence from Nevada

Philip DeCicca, Natalie Malak

Page range: 1185-1215

Abstract

Contingency fee laws are intended to reduce the amount of defensive medicine practiced by physicians, but their impact on such behavior is theoretically ambiguous. While nearly half of all states have adopted some type of contingency fee laws, very little empirical evidence exists with respect to related impacts, and no rigorous studies examine their potential impacts on health. We examine the impact of a particular contingency fee reform that occurred in Nevada in 2004 using synthetic control methods. Consistent with our expectations, we find a systematic increase in the C-section rate of less-educated mothers in Nevada after implementation of the reform. However, we find no systematic effect on infant mortality, suggesting that contingency reforms contribute to an increase in defensive medicine without a corresponding improvement in health.

Open Access July 19, 2021

Decomposing Employment Trends of Disabled Workers

Pierre Koning, Heike Vethaak

Page range: 1217-1255

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Abstract

This paper estimates Age–Period–Cohort models on employment rates of Dutch Disability Insurance (DI) applicants. We find that the substantial decrease in employment between 1999 and 2013 is explained by year-of-application cohort effects and that period effects are negligible. In turn, application cohort effects partly stem from increasing shares of applicants without permanent contracts. Changes in application cohort effects are largely confined to the years following two DI reforms that increased self-screening among workers. We next analyze changes in employment rates of awarded and rejected applicants and follow a Difference-in-Differences approach. Assuming common compositional cohort effects, we infer negligible effects of changes in benefit conditions.

August 24, 2021

Gender Differences in the Returns to Education over Time for Married Couples

Nikki Brendemuehl, Nicholas A. Jolly

Page range: 1257-1288

Abstract

Using US Census data from 1960 to 2000 and American Community Survey data from 2010, this paper analyzes gender differences in the return to education for married couples. Results from this analysis show that the return to schooling has increased over time for both genders; however, the relative return to schooling for females has fallen since the 1990s. In 2010, married women who are under age 35 and are in the top 20 percent of the income distribution had lower returns to schooling compared to men. These results are consistent with several demographic shifts that occurred during the last half of the 20th century.

September 6, 2021

Mandatory Minimum Reforms, Sentencing, and Racial-Ethnic Disparities

Terry-Ann Craigie, Mariyana Zapryanova

Page range: 1289-1318

Abstract

Over the last 20 years, numerous states and the federal government enacted mandatory minimum reforms, especially for drug offenses. Yet little is known about how effective these reforms have been at the state-level in lowering drug sentences. Using quasi-experimental methods and administrative data, this study evaluates the impact of state-level mandatory minimum reforms on drug sentences and their concomitant racial-ethnic disparities. We find that state-level mandatory minimum reforms do not lower drug sentences in general or change racial-ethnic disparities statistically significantly. These findings suggest that the profound racial-ethnic bias sparked by state-level mandatory minimums are not fully ameliorated by subsequent state-level reforms.

October 21, 2021

Medicaid, Earnings, and Heterogeneous Treatment Effects: Evidence from the Oregon Health Insurance Experiment

Krieg Tidemann

Page range: 1319-1345

Abstract

The Medicaid and labor supply empirical literature offers competing conclusions of zero effects and significant reductions in earnings. However, zero effects are only theoretically consistent with the earnings distribution’s extremes. Medicaid participants with positive pre-treatment labor supply should unequivocally decrease earnings. This paper clarifies the literature’s ambiguity by combining quantile regression with data from the Oregon Health Insurance Experiment. The distributional impacts imply that zero effects are not universally representative of Medicaid households. The annual earnings impact of Medicaid participation ranges between increases of $1400 to deceases of $3120 for single adults. Pre-existing mental illness or health constraints on work account for counterintuitive positive earnings impacts. By demonstrating that sample compositional differences determine whether Medicaid’s labor supply impact is zero or negative, this paper offers a reconciliation to the range of existing estimates in the empirical literature.

October 8, 2021

Costs of Sales Forces, Substitution between Competing Products, and Vertical Integration Decisions

Chung-Hui Chou

Page range: 1347-1372

Abstract

This paper analyzes duopolistic firms’ vertical integration decisions with considering costs of sales forces and sales delegation under vertical integration. The main contribution of our research is showing that full vertical integration (separation) is more common when competing products are highly (weakly) substitutable. Second, contrary to conventional wisdom, an asymmetric vertical structure may not only be an equilibrium outcome but may also be optimal for consumers’ surplus in spite of yielding higher retail prices than those arising under full vertical integration. We also examine the impacts of vertical structures on welfare which have vertical merger policy relevance. First, when products are weakly substitutable, keeping vertical merger costs low may induce full vertical integration to be an equilibrium outcome which optimizes consumers’ surplus and social welfare simultaneously. Second, imposing a vertical merger tax increasing with substitution between products on firms may induce firms’ vertical integration decisions to be optimal for social welfare.

Open Access October 1, 2021

Access to Banking and the Role of Inequality and the Financial Crisis

Mauro Caselli, Babak Somekh

Page range: 1373-1410

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Abstract

We study access to banking and how it is related to banks’ rate of return on investments and the distribution of income. We develop our empirical framework through a theoretical supply-side model of bank deposit services with a consumer population heterogeneous in income. We use this model to show how decreases in the interest rate margin and higher income disparities lead to an increase in the proportion of unbanked. Using localized US household data from 2009, 2011, 2013 and 2015 we find strong empirical evidence for the predictions of the model. We then structurally estimate our model to estimate the value of having a checking account relative to alternative financial services and to quantify the effects of actual changes in the interest rate margin and the distribution of income that occurred in the aftermath of the 2008 financial crisis.

Letter

August 4, 2021

Do Siblings Reduce Children’s Dietary Quality in China?

Qundi Feng, Qinying He

Page range: 1411-1419

Abstract

Using data from the China Health and Nutrition Survey, we examine the effect of the number of siblings on dietary quality with a sample of 2–12-year-old children in China. We use instrumental variables to address the potential endogeneity of the number of siblings. We show that the effect of the number of siblings on children’s dietary quality is significantly negative. Child dietary diversity score will decrease by 0.274 with one more siblings. In terms of children’s nutrition, the intake of fat and protein also significantly decrease. A robustness check using the fixed effects models also validates our findings that child quantity–quality trade-off is apparent in Chinese families.

About this journal

Objective
The B.E. Journal of Economic Analysis & Policy (BEJEAP) welcomes submissions that employ microeconomics to analyze issues in organizational economics, consumer behavior, and public policy. Articles submitted to BEJEAP can come in two formats: research papers and letters. Authors should bring to their analysis whatever microeconomic theoretical, experimental or econometric tools are helpful. We publish both empirical work and applied theory (though not more abstract forms of applied theory), and our aim is to disseminate papers that have practical implications for public policy, organizational or individual decision making.

Topics

Design of organizations and institutions
Industrial organization
Health economics
Public finance
Labour Economics
Economics of education, family, development, law, or the environment
Effects of domestic and international policy

Article formats
Research Papers, Letters

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