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Premature death of a breadwinner can have devastating financial consequences on surviving dependents. This study investigates the role of life insurance in mitigating the long-run financial consequences of spousal mortality. Using the Health and Retirement Study, we examine individuals whose spouses died during or soon after his or her peak earnings years. After controlling for socioeconomic status, we find that sizable lumpsum life insurance payouts do not significantly influence spousal well-being. (JEL D31, G22,I31,J32,J33,J38), I. INTRODUCTION Death of a breadwinner can have catastrophic financial consequences for surviving dependents. In the United States, there are high rates of widow poverty with one in five widows [...]

Health insurance reform in Massachusetts lowered the cost of both pregnancy (by increased coverage of pregnancy-related medical events) and pregnancy prevention (by increasing access to reliable contraception). We empirically examine fertility responses and find no overall effect from increased coverage due to the Massachusetts reform. This finding, however, masks substantial heterogeneity. For married women aged 20 to 34--with high latent fertility and pregnancy wantedness--fertility increased by approximately 1%. For unmarried women in the same age range--for whom pregnancies are typically unwanted--fertility declined by 8%. (JEL 113,118, J13), I. INTRODUCTION Although the Patient Protection and Affordable Care Act (ACA) of 2010 is the first successful attempt in the United States to provide near-universal health insurance coverage at the [...]

Using data from a university, we analyze a policy designed to increase employer-sponsored life insurance. The university increased basic life insurance holdings, which nudged employees with supplemental coverage to have more life insurance. In large part due to inertia, the nudge increased life insurance holdings one-for-one for those who could have undone it. Additionally, we find that expanding coverage options significantly increased total life insurance holdings for new hires who were not subject to inertia. These policy changes reduced uninsured vulnerabilities for two-thirds of employees. Our findings have important policy implications for addressing widespread disparities in life insurance coverage. (JEL D31, G22, D03, J32, J33, J38, H20), I. INTRODUCTION Life insurance ownership is at a 50-year low and sales have declined 45% since the mid-1980s (Prudential 2013; Seism 2014). Large disparities exist between life insurance holdings and [...]

Some goods are consumed not just for their intrinsic utility but also for the impression their consumption has on others. We analyze the market for such a commodity--diamonds. We collect data on price and other attributes from the inventories of three large online retailers of diamonds. We find that people are willing to pay premiums upward of 18% for a diamond that is one-half carat rather than slightly less than a half carat and between 5% and 10% for a one-carat rather than a slightly less than one-carat stone. Since a major portion of larger gem-quality diamonds are used for engagement rings, such an outcome is consistent with Bernheim's model of conformism, where individuals try to conform to a single standard of behavior that is often established at a focal point. In this case, prospective grooms signal their desirability as a mate by the size of the diamond engagement ring they give their fiancees. (JEL A1, D4), I. INTRODUCTION Diamonds have long intrigued economists. Adam Smith and the classical economists asked why diamonds, which have so little value in use, have such high value in exchange. It [...]

Medicaid has played a vital role in the significant increase in Supplemental Security Income (SSI) program's number of participants. Utilization of two-stage least squares showed that the increase in Medicaid expenditure has resulted to a sharp rise in SSI participation among adults with low permanent incomes. Data showed that 20% of the 1.1 million growth registered in the number of participants from 1987 to 1993 can be attributed to the increase in Medicaid expenditure.

I assess the impact of losing public health insurance on labor market decisions of women by examining a series of Medicaid eligibility expansions targeted toward young children. These targeted expansions severed the historical tie between AFDC and Medicaid eligibility. The reforms allowed a mother's earnings to increase without losing public health insurance for her young children. Increasing the income limit for Medicaid resulted in a decrease in AFDC participation and an increase in labor force participation among these women. The effects were large for ever married women, and negligible for never married women., I. INTRODUCTION The United States welfare system for single-parent families with children offers four main benefits: cash assistance through Aid to Families with Dependent Children (AFDC), health insurance coverage through [...]

Several welfare programs in the United States restrict eligibility to single-parent families. This paper asks whether eliminating this restriction for Medicaid encourages marriage. I identify Medicaid's effect through a series of health insurance reforms that were passed in the 1980s and 1990s targeting young children. These reforms were associated with an increase in the probability of marriage of 1.7 percentage points. While the expansions offered some incentives to become married, they also created other incentives to become divorced (known as the 'independence effect'). After controlling for the outflows from marriage due to the independence effect, the estimated effect increases by 10 percent., I. Introduction In the United States, the Medicaid program provides public health insurance for poor, eligible families. Although the program varies across states, in all instances Medicaid furnishes a basic [...]

The way in which high marginal tax rates affect the living wage laws to increase the disposable income of low-income families is estimated. Estimates of the effect of high marginal tax rates on the effectiveness of living wage laws in reducing poverty rates and poverty gaps are provided.

AARON S. YELOWITZ [*] This article assesses the importance of receiving supplemental health insurance on participation in Supplemental Security Income (SSI) for the elderly. The implementation of the Qualified Medicare [...]

The impact of the availability of Medicaid on decisions regarding health insurance for the aged is examined in detail.