Welcome from the Director
The Center for Health Economics & Policy Studies (CHEPS) is an interdisciplinary research center that supports impactful, policy relevant scholarship in the areas of health economics and social policy analysis. Housed in the College of Arts & Letters, CHEPS brings together faculty and graduate students engaged in complementary research in the areas of national defense policy, economic demography, the economics of crime and punishment, and the economics of risky health behaviors. Read more>>
CHEPS 2021 Pioneering Research
COVID-19 School Closures, Remote Work, and Maternal Labor Supply
The dramatic increase in employment among married women in the United States is among the most striking and transformational labor market trends of the past century. Bolstered by social change, wage gains, time-saving advancements in household technology, increasing control over fertility, and steep increases in college attendance, married women entered the labor force in droves during the 20th century. While only 10% of married women were employed in 1930, by 1990, that rate was 68%. However, over the past 30 years, married women’s employment and earnings have stagnated far short of equality with those of men.
Many explanations have been put forth for the stagnation of married women’s relative labor supply, including rising expenses associated with childcare, lack of policy support for working parents, and the inflexibility of traditional jobs. Research has also documented the persistence of women’s primary role in household labor and parenting tasks. There is evidence that motherhood induces lower labor force participation and better female labor market opportunities lead to lower fertility, suggesting women still face a strong push-and-pull trade-off between family and career.
The COVID-19 pandemic provides a unique opportunity to gain insight into the competing factors underlying observed trends in married women’s labor supply. Pandemic-related K-12 school closures have generated a rare chance to study a supply-side shock to married women’s labor force participation and, more broadly, the labor market costs of changes in caregiving demands. Changes in in-person instruction resulted first in a sudden and dramatic increase (when schools closed) and then a decrease (when schools reopened) in the opportunity cost of women’s time in the labor market. Preliminary results show that K-12 school reopenings positively affect the labor supply of married women with school-aged children, increasing both employment and (conditional) work hours in non-education sectors. However, there is no evidence of effects of school reopenings on the employment or hours of unmarried mothers, women without children, or married custodial fathers.
Teenage Suicides, Bullying, and Pandemic-Related Schooling Policies
While many remember their high school years fondly as a time filled with learning, friendships, and team sports, many adolescents’ high school experiences are filled with negative peer interactions, often in the form of bullying. Stress, anxiety, and mental health disorders can lead young people to engage in self-harm. Suicide is the second leading cause of death among teenagers.
Prior research by Benjamin Hansen and Matthew Lang (published in the Economics of Education Review) found evidence that teenage suicides may be linked to the school environment.
They show that teen suicides are strongly correlated with the school year calendar, peaking in the months that students return to school, with troughs observed in the summer months and in December. They find no such suicide pattern among young adults ages 19-to-25. Hansen and Lang posited that negative peer interactions (i.e., in-school bullying) may have played a role in explaining why teenage suicides seem to be positively correlated with in-school instruction.
The COVID-19 pandemic drastically changed in-person schooling in ways that could have affected teenagers’ mental health. On the one hand, removing beneficial in-school learning and socializing experiences may have had adverse psychological impacts on teens. On the other hand, greater family engagement, enhanced monitoring by parents, and limited opportunities for in-person bullying may have improved their mental health.
A new study by Hansen, Lang, Schaller, and Sabia uses the COVID-19 pandemic to explore how COVID-19, and its effects on in-person schooling, affected teenage suicides. Preliminary evidence suggests that in sharp contrast to the pre-COVID-19 era, suicide rates decreased dramatically in March, April, and May 2020. This was precisely the time when much of the country was locked down under stay-at-home orders, and schools were closed throughout the country. Using SafeGraph point-of-interest (POI) data, Hansen et al. will further explore whether differences in schools’ 2020 reopening policies affected teenage suicides.
Robotics, Employment, and Crime
Increased robotics and greater automation have generated important productivity gains for society. However, as is the case with any new technological innovation, laborers that are substitutes for such new capital may be adversely impacted, while those that are complements may see employment and wage gains. Recent research by Acemoglu and Restrepo (2020), published in the Journal of Political Economy, suggests that, on net, there is evidence of employment losses due to expanded robotics. These authors find that each additional robot per thousand workers reduces the employment-to-population ratio by 0.2 percentage points and wages by 0.4%. These adverse effects appear to be larger for less educated and less-skilled individuals. This finding suggests that such workers are substitutes for robots.
The COVID-19 pandemic has reshaped the U.S. economy in a number of ways, including by accelerating the use of robots as part of firms’ production processes. According to the Association for Advancing Automation, orders of industrial robots rose by 37%. Interestingly, robot penetration is not constrained to one particular sector. While the automotive industry is best known for utilizing robots, non-automotive firms are expanding their orders of industrial robots at much higher rates.
CHEPS researchers have begun exploring the beneficial impacts of robotics expansion, including on firm productivity, as well as adverse spillover effects of robotics onto workers who were substitutes for robots. In particular, CHEPS RAs, at the direction of Drs. Joe Sabia and Yang Liang are using data from the American Community Survey, the FBI’s Uniform Crime Reports, and the International Federation of Robotics to study how robot penetration affects low-skilled workers’ labor market outcomes, health, and the likelihood of engaging in criminal behavior (which can be affected by local labor market opportunities). The project has provided opportunities for MA student Cooper Smiley, and undergraduate student Evan Kim to develop and sharpen their coding and applied econometrics skills.
Do the Effects of E-Cigarette Taxes Spillover to Alcohol?
Over the past decade, the use of e-cigarettes and other electronic nicotine delivery systems (ENDS) has been rising dramatically, especially among teenagers and young adults. Alarmed by this trend, policymakers have responded with aggressive regulation attempting to curb the use of ENDS among youths. Between 2010 and 2019, ten states and two large counties adopted ENDS taxes. A National Bureau of Economic Research (NBER) working paper (also released as a CHEPS working paper) finds that ENDS taxes reduce youth ENDS consumption but also finds strong evidence of economic substitution between cigarettes and ENDS for young adults. These unintended substitution effects of ENDS taxation may more than fully offset any public health gains.
But are there other spillover effects of ENDS taxes that are necessary to understand before forming a complete judgment on whether such laws would pass a cost-benefit analysis? CHEPS scholars have joined forces with leading tobacco researchers (Michael Pesko at Georgia State University and Catherine Maclean at Temple University) to explore the spillover effects on youth and young adult binge drinking and alcohol-related behaviors.
The team is exploring this issue using several datasets, including the Youth Risk Behavior Surveillance System (YRBS) data, Behavioral Risk Factor Surveillance System (BRFSS), the National Survey on Drug Use and Health (NSDUH), and the National Highway Traffic Safety Administration’s (NHTSA) Fatality Analysis Reporting System (FARS). The authors use differences-in-differences and event study approaches to try to identify the causal impact of e-cigarette taxes on youth and young adult e-cigarette use, binge drinking, and drinking-and-driving behaviors.
Preliminary evidence suggests that increases in ENDS taxes are associated with declines in youth and young adult e-cigarette use and binge drinking. These findings are consistent with the hypothesis that e-cigarettes and (heavier use of) alcohol are complementary risky behaviors. However, we also note that curbing e-cigarette use via taxes comes at a cost: reducing e-cigarette use among cigarette users who may be using e-cigarettes as a means of smoking cessation.
Trade expansion profoundly influenced the US labor market over the last two decades on employment and wages. However, it is less clear how trade expansion affects workers’ safety and health. Workplace injuries are prevalent and expansive. According to the National Safety Council, US workers experience about 2.8 million workplace injuries annually, costing 206 billion dollars in wage and productivity losses, medical expenditures, and administrative expenses. Particularly, the manufacturing workers have long been suffering from higher than national average workplace injury rates.
This study examines the effect of exports on worker safety and health in the US. Utilizing foreign countries’ unilateral liberalization to capture demand shocks on US exports, the results suggest that a $1,000 increase in exports per worker decreased the workplace injury rate by a significant 0.7%, which implies an annual reduction of about 55,000 injuries among manufacturing workers. The reduction in injuries is more salient among establishments with lower injury rates, indicating an increase in inequality of working conditions. The improvement in working conditions might come from more investment in advanced equipment and better compliance with safety and health regulations. Overall, the estimates imply that the export expansion during the late 1990s and early 2000s were associated with an annual reduction of about 55,000 injuries among manufacturing workers, accounting for a cost saving of about 3.83 billion dollars per year.
After decades of supporting free trade and open markets, in 2018 the US government enacted several waves of tariff increases on specific products and countries. Import tariffs increased from 2.6% to 21.6% on more than 12,000 products covering $550 billion (23.1%) of annual US imports. In response, trade partners imposed retaliatory tariffs on US exports. These countermeasures increased tariffs from 7.3% to 20.4% on 8,073 export products covering $127 billion (8.2%) of annual US exports. This return to protection is unprecedented in the post-war era because of the sizes of the countries involved and the magnitudes of the tariff increases.
The project responds to the debate of trade policies and contributes to the literature by exploiting the sudden tariff changes to empirically identify the causal effect of the US-China trade war through both countries’ retaliatory tariffs. Specifically, the paper studies the effect of the US-China trade war on the survival of Chinese exporters in the short run. Utilizing a novel data set with detailed information on firms’ registration status and export portfolio, researchers are able to link firm survival data with firm-level tariff exposures. Results suggest that Trump tariffs on Chinese products significantly lead Chinese exporters to exit the market. For a 1 percentage point rise in the Trump tariff exposure, the probability of firm exit increases by 0.5 to 0.9 percentage points. We also test the heterogeneous effects across a wide array of firm characteristics, such as firm ownership, firm size, firm age, and the initial export portfolio. Particularly, this exiting effect has mainly concentrated among foreign-invested enterprises owned by Hong Kong, Macau, or Taiwan investors.
Giving birth as a teenager is associated with increases in the risk of dropping out of high school and living in poverty. Additionally, children born to teenage mothers struggle cognitively and economically compared to children born to older mothers. Although the U.S. adolescent fertility rate has declined substantially since 2007, it is still higher than any other developed country. A recent prominent paper published in the American Journal of Public Health in 2017 found that a $1 increase in the minimum wage leads to roughly 5000 fewer adolescent births annually. Taken at face value, these results suggest that raising the minimum wage could substantially reduce the public costs of teenage childbearing, which are estimated to be $9.4 billion per year.
In a National Bureau of Economic Research (NBER) working paper released in Fall 2021, Dr. Daniel Rees, Joseph Sabia, and second-year master’s student Rebecca Margolit further examined these claims by replicating the results found in the prominent paper and contributed to the literature by adding more data to the investigation, employing state-of-the-art econometric techniques, and thoroughly exploring the mechanisms through which the minimum wage could have impacted teen fertility such as the minimum wage’s impact on the teen marriage rate, abortion rate, and sexual behavior.
These authors used data from a variety of data sources, including the National Vital Statistics Natality data, the Youth Risk Behavior Surveys, the Centers for Disease Control and Prevention Abortion Surveillance Data, and the Guttmacher Institute Abortion Data. They employed difference-in-differences and event-study analyses to try to isolate the causal impact of raising the minimum wage on teenage fertility. In contrast to the original study, CHEPS authors find little evidence that minimum wages are related to reductions in teenage childbearing. Additionally, they find that minimum wage increases are not associated with changes in teenage sexual behaviors, including contraception use, abstinence, the number of sex partners, or abortion.
Between 2010 and 2019, 18 states and District of Columbia had enacted recreational marijuana laws (RMLs), allowing individuals over 21 years old to legally purchase, possess, or cultivate cannabis without a doctor’s prescription. Public health officials from organizations such as the American Medical Association and American Public Health Association worry that the legalization of recreational marijuana will de-stigmatize the act of smoking and thereby undermine the decades-long achievements of public health efforts in reducing cigarette smoking rates. One piece of evidence used to support this hypothesis is the fact that co-consumption of marijuana and tobacco, often as “blunts,” has increased in recent years among American adults. Considering that tobacco is the leading cause of preventable death in the United States, if RMLs lead to increased tobacco use, the public health costs of such laws could be substantial.
A January 2022 National Bureau of Economic Research (NBER) working paper released by Dhaval Save, Michael Pesko, Serena Phillips, CHEPS Assistant Director Yang Liang, and Joseph Sabia is the first to comprehensively examine the impact of RMLs on adult tobacco use. Using four national datasets and both dynamic difference-in-differences and discrete time hazard approaches, the authors find little support for the hypothesis that the legalization of recreational marijuana increased adult tobacco use. On the contrary, results show that RML adoption is associated with a small, lagged decline in adult tobacco use, consistent with the hypothesis that marijuana and tobacco are substitutes. These results suggest that there may be potentially large tobacco-related public health gains from the legalization of recreational marijuana.
In the past decade, a series of high-profile mass shootings throughout the United States has haunted the nation’s collective conscience. Despite the low odds of experiencing a mass shooting in person, the indirect costs of such high salient crime, through inflicting fear and anxiety and leading to behavioral changes, may be far larger than the direct costs. In this study, we investigate a novel perspective of the indirect costs – how mass shootings change consumer’s daily choices using precise longitudinal foot traffic data. This paper utilizes close-to-random variation on time and geographical location of mass shooting events to estimate the causal impacts. Our preliminary findings suggest that there is a significant and negative impact of this extremely salient crime on consumer behavior. Consumers respond to not only mass shootings occurring in their local areas but also those located far away from their commuting zones.
This paper adds to the policy debates on the cost of crime to society. Unlike most homicides that receive little attention from the public, mass shootings are extremely salient, which can induce changes in people’s perception of safety and their daily routines even if they are not direct victims. The indirect costs of crime are likely much larger than the direct costs (e.g., response costs of police and the Criminal Justice System), as argued in Becker et al. (2004). While the direct costs are routinely evaluated, the assessment of indirect costs, including those to non-victims, is rare and substantially more difficult. In this paper, we aim to fill the gap by studying the indirect cost of mass shootings to businesses through consumer behavior change. Measuring this indirect cost is crucial for businesses, city planners, and policymakers, as it will provide a guide on the optimal investment into crime prevention.
Examining the indirect cost of mass shootings also contributes to the long-standing debate on gun policy. Even though this study is not able to provide new information regarding effective gun policy, the large indirect cost of mass shootings to society, especially businesses, could bring more attention to the issue of gun violence and serves as an important input for pressing policy discussion around gun policy.
During the 84 years since the U.S. Supreme Court ruled that minimum wage laws were constitutional (West Coast Hotel Co. v. Parrish, 300 U.S. 379, 1937), prominent advocates of minimum wage increases — from Presidents Franklin D. Roosevelt through Joseph R. Biden — have consistently touted their potential to reduce poverty. Indeed, poverty reduction has been a central argument in support of the Raise the Wage Act of 2021, which would more than double the Federal minimum wage from $7.25 to $15 per hour by June 2025 (U.S. Senate Bill S.53).
Using data from the Current Population Survey over the period 1983-2019 and a dynamic difference-in-differences approach, Richard Burkhauser, Drew McNichols, and Joseph Sabia find little support for the hypothesis that minimum wage increases reduce poverty over this 37-year period. The precision of our preferred dynamic difference-in-differences estimates are such that, with 95 percent confidence, we can reject long-run poverty elasticities with respect to the minimum wage less than -0.131 for non-elderly individuals. This means that our statistical estimate of 0 allows us to say (with 95 percent confidence) that a 10 percent increase in the minimum wage would not reduce the probability that an individual lives in poverty by 1.31 percent or more. There are two reasons for our result: minimum wage increases cause adverse employment effects for some low-skilled poor and near-poor workers, offsetting income gains to others, and many individuals in poor and near poor families do not work sufficient hours to be substantially helped by a minimum wage increase.
Finally, we find that the Raise the Wage Act of 2021, which would raise the Federal minimum wage to $15 per hour, is an inefficient means of delivering income to the working poor. We find that less than 8 percent of those who earn a wage such that they would be directly impacted by a $15 minimum wage live in poor families. Approximately two-thirds live in families with incomes over two times the poverty line, and nearly half live in families with incomes over three times the poverty line. In summary, our findings provide little compelling evidence that raising the minimum wage will be an effective or target efficient policy tool for alleviating poverty.
CHEPS Researchers are in the late stages of assessing the efficacy of so-called vertical identification laws (VILs) under which minors (under age 21) receive drivers licenses (or state identification cards) that are vertically oriented, unlike the horizontally oriented cards that are issued to adults of legal drinking (and now smoking) age. The purpose of these laws is to reduce the costs to retailers of determining whether a potential buyer is below the minimum legal purchasing age for alcohol and tobacco products (now age 21 nationwide). This project contributes both to CHEPS’ continued interest in the economics of youth risky behavior and, likely, public health at large, considering the large annual social costs associated with underage alcohol consumption.
Colorado enacted the first VIL in 1994, and by 2019, every state (and the District of Columbia) had enacted a VIL. CHEPS MA student Russell Leonard and Joseph Sabia will evaluate nearly 30 years of data from the state and national Youth Risky Behavior Surveys (YRBS) –and use newly-developed differences-in-differences estimators—to explore the impact of VIL enactment on teenage drinking and smoking behavior.
The YRBS survey asks high school students a series of questions related to risky behaviors such as substance use and sexual behavior and has two versions which ask the same questions. The national YRBS is conducted by the CDC with a smaller sample of students designed to be nationally representative, while the state YRBS is overseen by the CDC but administered by state public health departments to a much larger sample of students. While the state YRBS is initially designed to be representative at the state level, it can be meaningfully reweighted to be nationally representative. By looking at both versions of the YRBS, we can draw conclusions on the effectiveness of VILs from a sample of hundreds of thousands of teenagers over the course of nearly three decades.
Preliminary findings suggest that state VILs have been less effective than many policymakers hoped in curbing underage tobacco and alcohol consumption.