In December 2006 the SEC issued rules that require enhanced disclosure of perquisites to managers of public U.S. firms. We find that the new disclosures had a significant effect of on shareholder value and perk practices. Firms that disclose perks for the first time in response to the rules experience significantly negative returns around the disclosure date. These firms respond to the negative returns by decreasing perk levels in the subsequent year. Firms that were already disclosing perks before the rule ratchet-up the level of perks in the subsequent year. Further, using data collected under the new disclosure regime, the level of perks is higher in firms that have fewer growth opportunities, larger amounts of free cash flow, managers with more power over the board of directors, and in firms that operate in more concentrated industries.
{"title":"The Economic Consequences of Perk Disclosure","authors":"Yaniv Grinstein, David R. Weinbaum, Nir Yehuda","doi":"10.2139/ssrn.1108707","DOIUrl":"https://doi.org/10.2139/ssrn.1108707","url":null,"abstract":"In December 2006 the SEC issued rules that require enhanced disclosure of perquisites to managers of public U.S. firms. We find that the new disclosures had a significant effect of on shareholder value and perk practices. Firms that disclose perks for the first time in response to the rules experience significantly negative returns around the disclosure date. These firms respond to the negative returns by decreasing perk levels in the subsequent year. Firms that were already disclosing perks before the rule ratchet-up the level of perks in the subsequent year. Further, using data collected under the new disclosure regime, the level of perks is higher in firms that have fewer growth opportunities, larger amounts of free cash flow, managers with more power over the board of directors, and in firms that operate in more concentrated industries.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"126 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75818688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
After the failure of Roosevelt’s National Industrial Recovery Act, the Fair Labor Standards Act succeeded in bringing hourly workweek limitations, minimum wage guarantees, and overtime assurance to America’s workers. However, from its inception, several categories were exempt from these protections, and those categories have grown and changed over the years. One such category, present since the original FLSA, is the so-called “white collar” or “EAP” exemption. This provision exempts full-time salaried executive, administrative, and professional employees from the FLSA’s overtime and minimum wage provisions. These EAP exemptions have undergone numerous developments and changes in their eighty-year history, most recently with rulemaking initiated by former President Obama in 2014 and undertaken by the Department of Labor. This most recent update was supposed to take effect in December of 2016, but a Texas judge issued a nationwide injunction suspending the rule’s effective date. With the rule on hold and a new administration and Department of Labor taking the reins, the future of these “white collar” exemptions is uncertain. The new Department of Labor could leave the exemption in its pre-update 2004 form, defend the rule’s validity at the appellate court level, or undertake a new rulemaking process. Whichever course the new administration chooses will have widespread implications for workers and employers alike. This note reviews the history and development of these “white-collar” exemptions, analyzes the reasoning and purpose behind them, and discusses their future under the new administration.
{"title":"Consigned to Purgatory: The Uncertain Fate of the 2016 Overtime Exemption Rule","authors":"Z. Weisman","doi":"10.2139/SSRN.2953928","DOIUrl":"https://doi.org/10.2139/SSRN.2953928","url":null,"abstract":"After the failure of Roosevelt’s National Industrial Recovery Act, the Fair Labor Standards Act succeeded in bringing hourly workweek limitations, minimum wage guarantees, and overtime assurance to America’s workers. However, from its inception, several categories were exempt from these protections, and those categories have grown and changed over the years. One such category, present since the original FLSA, is the so-called “white collar” or “EAP” exemption. This provision exempts full-time salaried executive, administrative, and professional employees from the FLSA’s overtime and minimum wage provisions. These EAP exemptions have undergone numerous developments and changes in their eighty-year history, most recently with rulemaking initiated by former President Obama in 2014 and undertaken by the Department of Labor. This most recent update was supposed to take effect in December of 2016, but a Texas judge issued a nationwide injunction suspending the rule’s effective date. With the rule on hold and a new administration and Department of Labor taking the reins, the future of these “white collar” exemptions is uncertain. The new Department of Labor could leave the exemption in its pre-update 2004 form, defend the rule’s validity at the appellate court level, or undertake a new rulemaking process. Whichever course the new administration chooses will have widespread implications for workers and employers alike. This note reviews the history and development of these “white-collar” exemptions, analyzes the reasoning and purpose behind them, and discusses their future under the new administration.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"95 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2017-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83928315","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Under traditional defined benefit pension plans, annual contributions are set at a uniform percentage of pay to fund accruing benefits. That normal cost rate masks wide variation in the cost of individual benefits, generating an extensive and non-transparent pattern of cross-subsidization. We provide a comprehensive analysis of cross-subsidies in employer contributions across all entry and exit ages. The gains and losses of winners and losers must add up to zero, and we explain why they do not in some previous work, which claims that nearly all teachers are winners in the California Teachers Retirement System. To the contrary, we find about two-thirds of all entrants are losers. The losers earn benefits with an average annual employer cost of 0.8 percent of pay, vs. 5.7 percent for the winners. In effect, this is a system of widely varying, but non-transparent employer matches to the employee contribution, unlike a retirement account plan with a uniform match.
{"title":"Cross-Subsidization of Teacher Pension Normal Cost: The Case of CalSTRS","authors":"Robert M. Costrell, Josh B. McGee","doi":"10.2139/SSRN.2857239","DOIUrl":"https://doi.org/10.2139/SSRN.2857239","url":null,"abstract":"Under traditional defined benefit pension plans, annual contributions are set at a uniform percentage of pay to fund accruing benefits. That normal cost rate masks wide variation in the cost of individual benefits, generating an extensive and non-transparent pattern of cross-subsidization. We provide a comprehensive analysis of cross-subsidies in employer contributions across all entry and exit ages. The gains and losses of winners and losers must add up to zero, and we explain why they do not in some previous work, which claims that nearly all teachers are winners in the California Teachers Retirement System. To the contrary, we find about two-thirds of all entrants are losers. The losers earn benefits with an average annual employer cost of 0.8 percent of pay, vs. 5.7 percent for the winners. In effect, this is a system of widely varying, but non-transparent employer matches to the employee contribution, unlike a retirement account plan with a uniform match.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"2677 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74848873","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite the fact that the Internal Revenue Service (“IRS”) is overburdened and struggling to meet the needs of taxpayers, Congress continues to add to IRS responsibilities in areas that appear far removed from the agency’s core revenue raising function. The Affordable Care Act (“ACA”) is a commonly cited example of the non-revenue raising regulatory roles the IRS is increasingly asked to play, to the criticism of many. After providing an historical overview of the IRS’s involvement in health care regulation, the article provides a partial defense of the expanded role that the IRS has been given as a result of the ACA. The article concludes that much of the IRS’s involvement in health care regulation appears not only defensible, but efficient. For better or for worse, there is no better system for processing payments to or from a large number of taxpayers than the federal income tax system. Additionally, the use of excise taxes to shape taxpayer behavior appears to offer the best of both worlds: a powerful incentive that requires very few enforcement resources. The article concludes, however, that significant burden could be removed from the IRS by modifying or removing the IRS’s substantive rulemaking authority with respect to health care matters, deferring instead to other federal agencies, such as the Department of Health and Human Services, that have particular health policy expertise.
尽管美国国税局(“IRS”)负担过重，难以满足纳税人的需求，但国会继续在与该机构的核心增税职能相去甚远的领域增加国税局的责任。《平价医疗法案》(Affordable Care Act，简称“ACA”)是一个经常被引用的例子，说明国税局越来越多地被要求发挥非增加收入的监管作用，这招致了许多人的批评。在提供了国税局参与医疗保健监管的历史概述之后，本文为ACA赋予国税局的扩大角色提供了部分辩护。这篇文章的结论是，美国国税局在医疗保健监管方面的大部分介入似乎不仅是合理的，而且是有效的。不管是好是坏，没有比联邦所得税系统更好的系统来处理大量纳税人的付款或付款。此外，使用消费税来塑造纳税人的行为似乎提供了两全其美的效果:一种强大的激励，只需要很少的执法资源。然而，文章的结论是，通过修改或取消国税局在卫生保健事务方面的实质性规则制定权力，将重大负担从国税局身上移走，而将其移交给其他联邦机构，如卫生与公众服务部，这些机构具有特殊的卫生政策专长。
{"title":"A Partial Defense of the IRS as Health Care Agency","authors":"Amy B. Monahan","doi":"10.7916/CJTL.V7I1.2837","DOIUrl":"https://doi.org/10.7916/CJTL.V7I1.2837","url":null,"abstract":"Despite the fact that the Internal Revenue Service (“IRS”) is overburdened and struggling to meet the needs of taxpayers, Congress continues to add to IRS responsibilities in areas that appear far removed from the agency’s core revenue raising function. The Affordable Care Act (“ACA”) is a commonly cited example of the non-revenue raising regulatory roles the IRS is increasingly asked to play, to the criticism of many. After providing an historical overview of the IRS’s involvement in health care regulation, the article provides a partial defense of the expanded role that the IRS has been given as a result of the ACA. The article concludes that much of the IRS’s involvement in health care regulation appears not only defensible, but efficient. For better or for worse, there is no better system for processing payments to or from a large number of taxpayers than the federal income tax system. Additionally, the use of excise taxes to shape taxpayer behavior appears to offer the best of both worlds: a powerful incentive that requires very few enforcement resources. The article concludes, however, that significant burden could be removed from the IRS by modifying or removing the IRS’s substantive rulemaking authority with respect to health care matters, deferring instead to other federal agencies, such as the Department of Health and Human Services, that have particular health policy expertise.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"28 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85320853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Florian Heiss, D. McFadden, J. Winter, Amelie Wuppermann, Bo Zhou
Consumers' health plan choices are highly persistent even though optimal plans change over time. This paper separates two sources of inertia, inattention to plan choice and switching costs. We develop a panel data model with separate attention and choice stages, linked by heterogeneity in acuity, i.e., the ability and willingness to make diligent choices. Using data from Medicare Part D, we find that inattention is an important source of inertia but switching costs also play a role, particularly for low-acuity individuals. Separating the two stages and allowing for heterogeneity is crucial for counterfactual simulations of interventions that reduce inertia.
{"title":"Inattention and Switching Costs as Sources of Inertia in Medicare Part D","authors":"Florian Heiss, D. McFadden, J. Winter, Amelie Wuppermann, Bo Zhou","doi":"10.1257/AER.20170471","DOIUrl":"https://doi.org/10.1257/AER.20170471","url":null,"abstract":"Consumers' health plan choices are highly persistent even though optimal plans change over time. This paper separates two sources of inertia, inattention to plan choice and switching costs. We develop a panel data model with separate attention and choice stages, linked by heterogeneity in acuity, i.e., the ability and willingness to make diligent choices. Using data from Medicare Part D, we find that inattention is an important source of inertia but switching costs also play a role, particularly for low-acuity individuals. Separating the two stages and allowing for heterogeneity is crucial for counterfactual simulations of interventions that reduce inertia.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87789206","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
While health care cost inflation slowed during the past few years, it has started to pick up again, and policy makers have good cause for concern about future increases in health care spending. Moreover, even if future increases moderate, policy makers rightly worry about the already high levels of U.S. spending. The need for effective cost containment strategies in health care persists, even though the Affordable Care Act appears to have had some success at containing health care costs.Health care spending reforms can focus on physician and hospital practices or on patient behavior, and popular reform proposals include both approaches. For example, rather than paying physicians and hospitals in terms of the quantity of care that they provide and encouraging the provision of too much care, private insurers and government programs are turning more and more to forms of reimbursement that are based on the quality of care delivered. Insurers often adjust physicians’ compensation based on whether they screen their patients for cancer or high cholesterol, administer recommended immunizations, or achieve good control of blood sugar levels for their patients with diabetes. The Affordable Care Act addresses patient behavior by requiring insurers to cover important kinds of preventive care for free. That way, people will not be discouraged for financial reasons from seeking early care that can keep them healthier and avoid the need for hospitalizations and other expensive treatments.In this article, I consider an increasingly common strategy that insurers use to influence patient behavior — giving people more “skin in the game.” When medical treatment can be obtained at very low cost, people may be too quick to seek it when they feel sick, visiting their physicians when they would do just as well by staying home. Hence, insurers have raised deductibles and co-payments and shifted the costs of care to patients in other ways in the hope that people will become more conscious of the costs of their care. Although concerns about patients seeking too much care are important, common strategies for giving patients more skin in the game have been poorly conceived. There is room for skin-in-the-game strategies to contain high health care spending, but only when they are properly designed.
{"title":"Controlling Health Care Spending: More Patient 'Skin in the Game?'","authors":"D. Orentlicher","doi":"10.18060/3911.0019","DOIUrl":"https://doi.org/10.18060/3911.0019","url":null,"abstract":"While health care cost inflation slowed during the past few years, it has started to pick up again, and policy makers have good cause for concern about future increases in health care spending. Moreover, even if future increases moderate, policy makers rightly worry about the already high levels of U.S. spending. The need for effective cost containment strategies in health care persists, even though the Affordable Care Act appears to have had some success at containing health care costs.Health care spending reforms can focus on physician and hospital practices or on patient behavior, and popular reform proposals include both approaches. For example, rather than paying physicians and hospitals in terms of the quantity of care that they provide and encouraging the provision of too much care, private insurers and government programs are turning more and more to forms of reimbursement that are based on the quality of care delivered. Insurers often adjust physicians’ compensation based on whether they screen their patients for cancer or high cholesterol, administer recommended immunizations, or achieve good control of blood sugar levels for their patients with diabetes. The Affordable Care Act addresses patient behavior by requiring insurers to cover important kinds of preventive care for free. That way, people will not be discouraged for financial reasons from seeking early care that can keep them healthier and avoid the need for hospitalizations and other expensive treatments.In this article, I consider an increasingly common strategy that insurers use to influence patient behavior — giving people more “skin in the game.” When medical treatment can be obtained at very low cost, people may be too quick to seek it when they feel sick, visiting their physicians when they would do just as well by staying home. Hence, insurers have raised deductibles and co-payments and shifted the costs of care to patients in other ways in the hope that people will become more conscious of the costs of their care. Although concerns about patients seeking too much care are important, common strategies for giving patients more skin in the game have been poorly conceived. There is room for skin-in-the-game strategies to contain high health care spending, but only when they are properly designed.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"17 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72888520","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Financial researchers agree that allocating money to employer stock in a 401(k) plan is a poor strategy, yet many employees do so. Not only does this investment strategy bear unrewarded idiosyncratic risk, but it also correlates employees' retirement portfolios with their human capital. I find evidence that social conformity contributes to this selection. Specifically, the percentage allocated to company stock by employees in the 401(k) plan is positively related to both the net open-market purchases of company stock by management and the percentage of the defined benefits plan invested in company stock. Surprisingly, the allocation to company stock in 401(k) plans increases with investment in employee stock ownership plans (ESOPs), which are a dominant substitute since they often offer stock at a discount. Lastly, I provide additional support for the social conformity hypothesis through interaction tests. The relationship between employees and management is influenced by geographic dispersion and trust within the firm -- two factors that alter group cohesion and, in turn, social conformity.
{"title":"Does Social Conformity Influence Portfolio Choice? Evidence from 401(K) Allocations","authors":"Charles Favreau","doi":"10.2139/ssrn.2832271","DOIUrl":"https://doi.org/10.2139/ssrn.2832271","url":null,"abstract":"Financial researchers agree that allocating money to employer stock in a 401(k) plan is a poor strategy, yet many employees do so. Not only does this investment strategy bear unrewarded idiosyncratic risk, but it also correlates employees' retirement portfolios with their human capital. I find evidence that social conformity contributes to this selection. Specifically, the percentage allocated to company stock by employees in the 401(k) plan is positively related to both the net open-market purchases of company stock by management and the percentage of the defined benefits plan invested in company stock. Surprisingly, the allocation to company stock in 401(k) plans increases with investment in employee stock ownership plans (ESOPs), which are a dominant substitute since they often offer stock at a discount. Lastly, I provide additional support for the social conformity hypothesis through interaction tests. The relationship between employees and management is influenced by geographic dispersion and trust within the firm -- two factors that alter group cohesion and, in turn, social conformity.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"23 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82527411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The dramatic shift from traditional pension plans to participantdirected 401(k) plans has increased the decision-making responsibility of individual investors for their own retirement planning. With this shift comes increasing evidence that investors are making poor decisions in choosing how much to save for retirement and in selecting among their investment options. Studies question the value of efforts to improve these decisions through regulatory reforms or investor education. This article posits that deficiencies in workplace retirement savings cannot be adequately addressed until the reasons for poor investment decisions are better understood. We report the results of an exploratory study that asked subjects to complete a simulated retirement investment task and collected information about their financial knowledge and preferences. The study enabled us to measure financial literacy and evaluate its relationship to retirement investment decision-making. In line with existing research, we found a strong relationship between financial literacy and successful retirement investing. Our results suggest, however, that the relevant understanding in this context is not about math so much as it is a basic knowledge of the relative costs and benefits of the major investment categories. Finally, we present results suggesting that financial literacy is separate from investment preferences - specifically, that tolerance for risk is a separate and highly predictive variable in estimating retirement planning success. Our research suggests that individual employees are likely to lack the skills necessary to support the current regulatory model of participant-directed retirement investing. The structure and regulation of retirement plans ought to take this fact seriously. We explore the potential for investor education and professional advice, respectively, to overcome the limitations of individualized choice.
{"title":"Investor Financial Literacy in the Workplace","authors":"Jill E. Fisch, Tess Wilkinson‐Ryan, Krin Irvine","doi":"10.2139/ssrn.2865884","DOIUrl":"https://doi.org/10.2139/ssrn.2865884","url":null,"abstract":"The dramatic shift from traditional pension plans to participantdirected 401(k) plans has increased the decision-making responsibility of individual investors for their own retirement planning. With this shift comes increasing evidence that investors are making poor decisions in choosing how much to save for retirement and in selecting among their investment options. Studies question the value of efforts to improve these decisions through regulatory reforms or investor education. This article posits that deficiencies in workplace retirement savings cannot be adequately addressed until the reasons for poor investment decisions are better understood. We report the results of an exploratory study that asked subjects to complete a simulated retirement investment task and collected information about their financial knowledge and preferences. The study enabled us to measure financial literacy and evaluate its relationship to retirement investment decision-making. In line with existing research, we found a strong relationship between financial literacy and successful retirement investing. Our results suggest, however, that the relevant understanding in this context is not about math so much as it is a basic knowledge of the relative costs and benefits of the major investment categories. Finally, we present results suggesting that financial literacy is separate from investment preferences - specifically, that tolerance for risk is a separate and highly predictive variable in estimating retirement planning success. Our research suggests that individual employees are likely to lack the skills necessary to support the current regulatory model of participant-directed retirement investing. The structure and regulation of retirement plans ought to take this fact seriously. We explore the potential for investor education and professional advice, respectively, to overcome the limitations of individualized choice.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"32 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81616322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Older adults are at elevated risk of reducing labor supply due to poor health, partly because of high rates of symptoms that may be alleviated by medical marijuana. Yet, surprisingly little is known about how this group responds to medical marijuana laws (MMLs). We quantify the effects of state medical marijuana laws on the health and labor supply of adults age 51 and older, focusing on the 55 percent with one or more medical conditions with symptoms that may respond to medical marijuana. We use longitudinal data from the Health and Retirement Study to estimate event study and differences-in-differences regression models. Three principle findings emerge from our analysis. First, active state medical marijuana laws lead to lower pain and better self-assessed health among older adults. Second, state medical marijuana laws lead to increases in older adult labor supply, with effects concentrated on the intensive margin. Third, the effects of MMLs are largest among older adults with a health condition that would qualify for legal medical marijuana use under current state laws. Findings highlight the role of health policy in supporting work among older adults and the importance of including older adults in assessments of state medical marijuana laws.
{"title":"The Effect of Medical Marijuana Laws on the Health and Labor Supply of Older Adults: Evidence from the Health and Retirement Study","authors":"L. Nicholas, C. MacLean","doi":"10.1002/PAM.22122","DOIUrl":"https://doi.org/10.1002/PAM.22122","url":null,"abstract":"Older adults are at elevated risk of reducing labor supply due to poor health, partly because of high rates of symptoms that may be alleviated by medical marijuana. Yet, surprisingly little is known about how this group responds to medical marijuana laws (MMLs). We quantify the effects of state medical marijuana laws on the health and labor supply of adults age 51 and older, focusing on the 55 percent with one or more medical conditions with symptoms that may respond to medical marijuana. We use longitudinal data from the Health and Retirement Study to estimate event study and differences-in-differences regression models. Three principle findings emerge from our analysis. First, active state medical marijuana laws lead to lower pain and better self-assessed health among older adults. Second, state medical marijuana laws lead to increases in older adult labor supply, with effects concentrated on the intensive margin. Third, the effects of MMLs are largest among older adults with a health condition that would qualify for legal medical marijuana use under current state laws. Findings highlight the role of health policy in supporting work among older adults and the importance of including older adults in assessments of state medical marijuana laws.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"42 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77314638","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Matthew S. Rutledge, Geoffrey T. Sanzenbacher, C. Crawford
Disabled veterans are less likely to work today than in the past; between 1995 and 2014, the percent of veterans who were working while receiving disability compensation from the Department of Veterans Affairs (VA) dropped from 62 percent to 49 percent. This drop has led the VA – which liberalized the list of health conditions that qualify veterans for benefits in the early 2000s – to face the same concern as the Social Security Administration: that the proportion of individuals receiving disability income who could work, but do not, has grown. Using the Current Population Survey’s Veterans Supplement, this paper finds that employment and labor force participation rates have fallen for disabled veterans only modestly more than for non-disabled veterans. Adjusting for the rapid aging of the disabled veteran population reduces the gap in labor market activity between disabled and non-disabled veterans by 40-70 percent. Although the share of veterans with disability ratings of 50 percent or greater (indicating severe disability) has increased, the most-disabled veterans have not reduced their labor market activity – if anything, their labor supply has actually increased. The results suggest that the decline in employment and labor force participation of disabled veterans is largely a function of age and the increased prevalence of severe disability and not a changing propensity for work. This finding should alleviate concerns that the Veteran’s Administration disability system is discouraging employment any differently than in the past.
{"title":"The Labor Supply of Disabled Veterans: 1995-2014","authors":"Matthew S. Rutledge, Geoffrey T. Sanzenbacher, C. Crawford","doi":"10.2139/ssrn.2832158","DOIUrl":"https://doi.org/10.2139/ssrn.2832158","url":null,"abstract":"Disabled veterans are less likely to work today than in the past; between 1995 and 2014, the percent of veterans who were working while receiving disability compensation from the Department of Veterans Affairs (VA) dropped from 62 percent to 49 percent. This drop has led the VA – which liberalized the list of health conditions that qualify veterans for benefits in the early 2000s – to face the same concern as the Social Security Administration: that the proportion of individuals receiving disability income who could work, but do not, has grown. Using the Current Population Survey’s Veterans Supplement, this paper finds that employment and labor force participation rates have fallen for disabled veterans only modestly more than for non-disabled veterans. Adjusting for the rapid aging of the disabled veteran population reduces the gap in labor market activity between disabled and non-disabled veterans by 40-70 percent. Although the share of veterans with disability ratings of 50 percent or greater (indicating severe disability) has increased, the most-disabled veterans have not reduced their labor market activity – if anything, their labor supply has actually increased. The results suggest that the decline in employment and labor force participation of disabled veterans is largely a function of age and the increased prevalence of severe disability and not a changing propensity for work. This finding should alleviate concerns that the Veteran’s Administration disability system is discouraging employment any differently than in the past.","PeriodicalId":76903,"journal":{"name":"Employee benefits journal","volume":"41 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85279641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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