The Affordable Care Act (ACA) has provided millions of Americans with medical insurance but may have led to an increase in retirement among older individuals who are utilizing the newly available coverage options as a substitute for employer‐provided insurance. Using data from the American Community Survey from 2009–2016, this hypothesis is tested by estimating the effect of the premium subsidies and Medicaid expansions of the ACA on retirement transitions for the non‐Medicare eligible cohort of older Americans aged 55–64. Research results indicate a 2% and 8% decrease in labor force participation resulting from the premium subsidies and Medicaid expansions, respectively. Slightly larger estimates are found among a subgroup of adult couples. The study also finds suggestive evidence of crowd‐out of employer‐sponsored insurance by subsidized marketplace plans but finds no such effects from the Medicaid expansions.
PhD student Zhonghui Zhang has had his paper “Mahalanobis Metric Based Clustering for Fixed Effects Model” accepted for publication in Sankhya B: The Indian Journal of Statistics, a statistics journal considered similar in rank to The Econometrics Journal.
The article shows that the native-born children of Middle Eastern North African (MENA) immigrants in the United States acquire more education and achieve higher salary incomes than both non-MENA whites and blacks, but falter on employment outcomes as a whole. Interestingly, second-generation Iranians and Yemenis acquire more education than both whites and blacks, but also have the highest unemployment rates.
Dominic Albino, a fourth-year graduate student in the department, and co-authors Seth Frey and Paul Williams have had their paper, “Synergistic Information Processing Encrypts Strategic Reasoning in Poker,” accepted for publication in the journal Cognitive Science.
To win at poker, players must exploit public signals from opponents, but using those signals usually makes the player’s own strategy vulnerable. The paper uses 1.75 million hands of online poker data to show that winning players successfully encrypt their strategy, using their own cards like the private key in public key cryptography. By doing so, they are able to solve the problem of exploiting others while remaining protected themselves and turn uncertainty, usually considered a liability, into an advantage.
Annually the Defense Acquisition University (DAU) holds a research paper competition. This year first-prize (making it a “Hirsh Prize Recipient”) was awarded to the paper “Calculating Return on Investment for US Department of Defense Modeling and Simulation,” authored by, among others, William E. Waite, a UConn 2nd year PhD student. The paper will be presented during the DAU Acquisition Community Symposium on Tuesday 12 April 2011, and published in April’s edition of Defense Acquisition Research Journal.
Within any complex organization there exists a need to measure and monitor the effectiveness of expenditures; that is, there is a ubiquitous necessity to monitor how well agents allocate limited resources between the many potential projects they are presented, within a specific institutional context. Such measurement is particularly challenging for institutions (or, in situations) where a market mechanism for pricing different outcomes is not available. The United States Department of Defense (US-DoD) is one such institution.
Each year, the US-DoD allocates billions of dollars to external contractors, as well as internal departments, to pursue modeling-and-simulation (M&S) projects. The benefits of these initiatives are generally not monetary – or easily convertible to a specific monetary value. Rather, the desired results are seen in measures of increased readiness of the country’s armed forces, better trained individuals, improvements in procedures or approaches that result in fewer human casualties during combat missions, and the like. Given the nature of these benefits, it is not surprising that measuring the “return-on-investment” (ROI) of a US-DoD M&S project presents government officials with a formidable challenge.
In “Calculating Return on Investment for US Department of Defense Modeling and Simulation,” the authors provide a systematic methodology to approach address this particular challenge. By utilizing a decision analysis framework based on the economic principle of utility maximization, the authors create a framework in which the US-DoD can obtain ROI-like results for ranking and evaluating projects, which can then be used in resource allocation decisions and analysis.
Current PhD student Catalina Granda-Carvajal (advisor Prof. Zimmermann) has recently published an article in the International Economic Journal. The last issue of this journal features a selection of the papers presented at the conference ‘Shadow Economy, Tax Policy and the Labor Markets in an International Comparison: Options for Economic Policy.’ This conference was held in Germany at the University of Potsdam last April, where Granda-Carvajal participated with the paper entitled ‘The Unofficial Economy and the Business Cycle: A Test for Theories.’ In this paper, she attempts to establish how the features of the business cycle vary across countries with the size of the unofficial sector. Granda-Carvajal confirms that countries with a large shadow economy exhibit higher volatility in major macroeconomic variables such as output, consumption and investment. Also, she shows that unemployment tends to be more countercyclical, while employment and hours behave as more procyclical the smaller is the unofficial economy. She concludes that much more needs to be done in order to understand the implications of shadow activities on macroeconomic performance, as standard models of the shadow economy do not imply such behavior for aggregate variables.
Current Ph.D. student Marina-Selini Katsaiti (IDEAS) and recent graduates Philip Shaw (IDEAS) and Marius Jurgilas (IDEAS), all advised by Christian Zimmermann (IDEAS), will publish a paper entitled “Corruption and Growth Under Weak Identification” in the journal Economic Inquiry. This paper reviews the recent literature in econometrics that focuses on identification and statistical inference when a researcher has weakly correlated instruments variables. In light of this recent theoretical work in econometrics, it analyses a highly influential article in economics and finds that the original results of this article are misleading. It then updates the original analysis and shows that there is no relationship between corruption and economic growth or investment, which is contrary to the results of the original article. The paper also suggests that the problem of weak instruments in the corruption literature may not be isolated to a single article but instead the entire empirical literature that tries to find a causal link between corruption and economic growth or investment. The paper contributes also to the literature by demonstrating how researchers can “deal” with the problem of weak identification.
Economics PhD student Brian Volz, advised by Thomas Miceli, has been a fan of baseball his entire life and spent much of his free time as an undergraduate playing baseball. As a graduate student at UConn he has been lucky enough to incorporate his favorite leisure activity into his study of labor economics.
His paper “Minority Status and Managerial Survival in Major League Baseball” was recently accepted for publication in the Journal of Sports Economics. The paper began as a project for one of his PhD field courses and was expanded and revised over the past two years into an economics department working paper and eventually a journal submission. The paper was motivated by the relatively small number of minority managers in a league with a relatively large percentage of minority players. The paper examines the impact of minority status on the survival of Major League Baseball managers in order to determine if discrimination in managerial retention is to blame for the lack of minority managers. In order to answer this question data envelopment analysis, which he was introduced to in Professor Ray‘s (IDEAS) Productivity Analysis course, and survival time analysis are applied to performance and survival data from the 1985 to 2006 baseball seasons. It is shown that when controlling for performance and personal characteristics minorities are on average 9.6% points more likely to return the following season. Additionally, it is shown that winning percentage has no impact on managerial survival when the efficiency of the manager is controlled for.