Low down

Kevin Lewis

May 28, 2019

The effects of income on health: New evidence from the Earned Income Tax Credit
Otto Lenhart
Review of Economics of the Household, June 2019, Pages 377–410


This study examines the relationship between income and health by using an expansion of the Earned Income Tax Credit (EITC), which increased benefits to households with at least two children, as a source of exogenous variations of earnings. The paper adds to previous work by: (1) estimating treatment effects on the treated using simulated EITC benefits and longitudinal data; (2) testing whether health effects vary across the three different parts of the EITC schedule; (3) examining the role of food expenditures and health insurance as potential mechanisms. The study finds that income improves the likelihood of affected heads of households reporting to be in excellent or very good health by 6.9 to 8.9 percentage points. The effects are largest in the plateau phase of the EITC schedule, where previous researchers have identified pure income effects of the program. The results are robust to several additional specifications, including a semi-parametric DD model and specifications that account for the potential endogeneity of sample. When examining potential channels underlying the relationship between income and health, I find that affected households increase their food expenditures by 10.5 to 20.3 percent and are 1.52 percent more likely to have health insurance coverage.

Association Between State Minimum Wages and Suicide Rates in the U.S.
Alex Gertner, Jason Rotter & Paul Shafer
American Journal of Preventive Medicine, May 2019, Pages 648-654

Methods: A retrospective panel data study was conducted. In 2018, linear regression models with state fixed effects were used to estimate the relationship between changes in state minimum wages and suicide rates for all 50U.S. states between 2006 and 2016. Models controlled for time-varying state characteristics that could be associated with changes in minimum wages and suicide rates.

Results: There were approximately 432,000 deaths by suicide in the study period. A one-dollar increase in the real minimum wage was associated on average with a 1.9% decrease in the annual state suicide rate in adjusted analyses. This negative association was most consistent in years since 2011. An annual decrease of 1.9% in the suicide rate during the study period would have resulted in roughly 8,000 fewer deaths by suicide. Analyses by race and sex did not reveal substantial variation in the association between minimum wages and suicides.

Does Gentrification Displace Poor Children? New Evidence from New York City Medicaid Data
Kacie Dragan, Ingrid Ellen & Sherry Glied
NBER Working Paper, May 2019


The pace of gentrification has accelerated in cities across the country since 2000, and many observers fear it is displacing low-income populations from their homes and communities. We offer new evidence about the consequences of gentrification on mobility, building and neighborhood conditions, using longitudinal New York City Medicaid records from January 2009 to December 2015 to track the movement of a cohort of low-income children over seven years, during a period of rapid gentrification in the city. We leverage building-level data to examine children in market rate housing separately from those in subsidized housing. We find no evidence that gentrification is associated with meaningful changes in mobility rates over the seven-year period. It is associated with slightly longer distance moves. As for changes in neighborhood conditions, we find that children who start out in a gentrifying area experience larger improvements in some aspects of their residential environment than their counterparts who start out in persistently low-socioeconomic status areas. This effect is driven by families who stay in neighborhoods as they gentrify; we observe few differences in the characteristics of destination neighborhoods among families who move, though we find modest evidence that children moving from gentrifying areas move to lower-quality buildings.

Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures Neighbor Effects
John List, Fatemeh Momeni & Yves Zenou
University of Chicago Working Paper, May 2019


We estimate the direct and spillover effects of a large-scale early childhood intervention on the educational attainment of over 2,000 disadvantaged children in the United States. We show that failing to account for spillover effects results in a severe underestimation of the impact. The intervention induced positive direct effects on test scores of children assigned to the treatment groups. We document large spillover effects on both treatment and control children who live near treated children. On average, spillover effects increase a child's non-cognitive (cognitive) scores by about 1.2 (0.6 to 0.7) standard deviations. The spillover effects are localized, decreasing with the spatial distance to treated neighbors. Our evidence suggests the spillover effect on non-cognitive scores are likely to operate through the child's social network. Alternatively, parental investment is an important channel through which cognitive spillover effects operate. We view our results as speaking to several literatures, perhaps most importantly the role of public programs and neighborhoods on human capital formation at an early age.

The Perry Preschoolers at Late Midlife: A Study in Design-Specific Inference
James Heckman & Ganesh Karapakula
University of Chicago Working Paper, May 2019


This paper presents the first analysis of the life course outcomes through late midlife (around age 55) for the participants of the iconic Perry Preschool Project, an experimental high-quality preschool program for disadvantaged African-American children in the 1960s. We discuss the design of the experiment, compromises in and adjustments to the randomization protocol, and the extent of knowledge about departures from the initial random assignment. We account for these factors in developing conservative small-sample hypothesis tests that use approximate worst-case (least favorable) randomization null distributions. We examine how our new methods compare with standard inferential methods, which ignore essential features of the experimental setup. Widely used procedures produce misleading inferences about treatment effects. Our design-specific inferential approach can be applied to analyze a variety of compromised social and economic experiments, including those using re-randomization designs. Despite the conservative nature of our statistical tests, we find long-term treatment effects on crime, employment, health, cognitive and non-cognitive skills, and other outcomes of the Perry participants. Treatment effects are especially strong for males. Improvements in childhood home environments and parental attachment appear to be an important source of the long-term benefits of the program.

The Local Aggregate Effects of Minimum Wage Increases
Daniel Cooper, María José Luengo-Prado & Jonathan Parker
NBER Working Paper, April 2019


Using variation in minimum wages across cities and controlling for differences in business-cycle factors and long-run local economic trends, we find that following minimum wage increases, both prices and nominal spending rise modestly. These gains are larger for certain sub-categories of goods such as food away from home and in locations where low-wage workers are a larger share of employment. Further, minimum wage increases are associated with reduced total debt among households with low credit scores, higher auto debt, and increased access to credit.

Higher Wages, Less Gym Time? The Effects of Minimum Wages on Time Use
Otto Lenhart
Southern Economic Journal, forthcoming


This study examines the effects of minimum wages on time use. Analyzing data from the American Time Use Survey from 2003 to 2017, I investigate the role of time allocated toward exercise and other health‐enhancing activities as a potential mechanism underlying the link between minimum wages and health. The study finds that a $1 increase in minimum wages is associated with reductions in exercising and total personal health time by 13 and 20 minutes during the week, respectively. This decline in health time is fully reallocated toward additional leisure time. The results are largely driven by males and employed individuals.

Effects Of Alternative Food Voucher Delivery Strategies On Nutrition Among Low-Income Adults
Sanjay Basu et al.
Health Affairs, April 2019, Pages 577-584


Nutrition assistance programs are the subject of ongoing policy debates. Two proposals remain uninformed by existing evidence: whether restricting benefits to allow only fruit and vegetable purchases improves overall dietary intake, and whether more frequent distribution of benefits (weekly versus monthly) induces more fruit and vegetable consumption and less purchasing of calorie-dense foods. In a community-based trial, we randomly assigned participants to receive food vouchers that differed in what foods could be purchased (fruit and vegetables only or any foods) and in distribution schedule (in weekly or monthly installments, holding total monthly value constant). The use of vouchers for fruit and vegetables only did not yield significantly greater improvements than the unrestricted voucher did in terms of fruit and vegetable consumption or Healthy Eating Index (HEI) score. Weekly vouchers also failed to yield significantly greater improvements than monthly vouchers did. Proposed policies to make assistance more restricted or more frequent, while holding benefit value constant, might not improve nutrition among low-income Americans.

Crowdsourcing Financial Information to Change Spending Behavior
Francesco D'Acunto, Alberto Rossi & Michael Weber
University of Chicago Working Paper, February 2019


We document five effects of providing individuals with crowdsourced spending information about their peers (individuals with similar characteristics) through a FinTech app. First, users who spend more than their peers reduce their spending significantly, whereas users who spend less keep constant or increase their spending. Second, users' distance from their peers' spending affects the reaction monotonically in both directions. Third, users' reaction is asymmetric – spending cuts are three times as large as increases. Fourth, lower-income users react more than others. Fifth, discretionary spending drives the reaction in both directions and especially cash withdrawals, which are commonly used for incidental expenses and anonymous transactions. We argue Bayesian updating, peer pressure, or the fact that bad news looms more than (equally-sized) good news cannot alone explain all these facts.

Pediatric Blood Lead Levels Within New York City Public Versus Private Housing, 2003–2017
Jacqueline Chiofalo et al.
American Journal of Public Health, June 2019, Pages 906-911

Methods: We examined electronic medical records for BLLs among 4693 children receiving care at a multisite Federally Qualified Health Center during 2003 to 2017. We plotted home addresses against city housing data to assess BLL differences between children living in public housing and private housing.

Results: Only 0.25% of children residing in public housing had BLLs exceeding the upper reference limit of 5 micrograms per deciliter, as compared with 2.76% of children residing in private housing. After adjustment for age, gender, and race/ethnicity, public housing was associated with 92% lower odds of having a BLL of 5 micrograms per deciliter or above (odds ratio [OR] = 0.08; 95% confidence interval [CI] = 0.02, 0.33; P = .001). Decreases in BLLs were observed in both public and private housing over time.

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