In this paper, Professor Zhao and his coauthors construct a unified objective measure of health status: the frailty index. Using this index, they propose and estimate a stochastic process for health dynamics over the life cycle accounting for mortality bias. Their health measure and dynamic process can be used to study the evolution of health over the life cycle and its economic implications.
Building on this work, Professor Zhao and his coauthors are currently working on a project that explores the evolution of health inequality over the life cycle and its implication for lifetime earnings inequality.
Recent PhD graduate Fei Zou has published “Does Early Retirement Really Benefit Women?” in the Journal of Economic Behavior and Organization.
This paper grew out of Fei’s PhD dissertation completed at UConn (2019) under the supervision of Professor Kai Zhao. It is a joint work with Dr. Hyun Lee (former UConn faculty), and Professor Zhao.
In this paper, the authors quantitatively evaluate the welfare consequences of China’s gender-specific mandatory retirement policy using a calibrated overlapping generations model with heterogeneous agents and incomplete markets. They find that while it is intended to relieve women from work earlier and to provide them with more years of public pensions benefits than men, early mandatory retirement reduces welfare for women.
The published version of this paper can be found at:
Professor Zhao’s paper “Rising Wealth Inequality: Intergenerational Links, Entrepreneurship, and the Decline in Interest Rate” has been accepted for publication in Journal of Monetary Economics. In this paper, Professor Zhao and his coauthor investigate the causes of rising wealth inequality in the United States.
Professor Agüero and Professor Zhao have received CLAS Summer Funding for their research projects, respectively. Professor Agüero’s project will conduct an experimental intervention providing information about college scholarships to disadvantaged high school students in Peru to motivate their study efforts during the Covid-19 pandemic. The project has also received the approval of the Ministry of Education.
Professor Zhao received funding for his project titled “Health Inequality over the Life Cycle and Its Implications for Economic Well-Being”. In this project, Professor Zhao and his coauthors examine the relationship between health inequality and lifetime earnings inequality, paying close attention to the role of Social Security Disability Insurance (SSDI) in facilitating the tradeoff between health and economic well-being.
Aaron Cooke, a 2018 PhD graduate of the UConn Department of Economics, recently became the Chief Economist for Macroeconomic Policy at the Council of Economic Advisers (CEA).
The CEA, an agency within the Executive Office of the President, is charged with offering the President objective economic advice on the formulation of both domestic and international economic policy.
Aaron earned his PhD degree from the Department of Economics in 2018, specializing in macroeconomics and public policy. His PhD dissertation, “Three Essays on Wealth and Income Inequality”, studied the causes of U.S. wealth and income inequality, and was completed under the supervision of Professor Kai Zhao.
Prior to joining the CEA, Aaron was an economist at the Office of Management and Budget.
Professor Zhao’s paper “Household Saving, Financial Constraints, and the Current Account in China” has been accepted for publication in the International Economic Review.
In this paper, Professor Zhao and his coauthor find that the rise and fall in China’s current account surplus was largely due to (1) the rising household saving driven by the decline in family insurance coupled with inadequate public insurance, and (2) the variation in financial constraints facing the Chinese firms.
International Economic Review publishes cutting edge papers in many areas of economics, including econometrics, economic theory, macro, and applied economics. It is considered one of the leading journals in economics in the world (Engemann and Wall, 2009).
Congratulations to Economics faculty members Michele Baggio and Kai (Jackie) Zhao, who have received promotion to tenured Associate Professor, and to Steven Lanza, promoted to Associate Professor in Residence!
The UConn Board of Trustees approved the promotions, effective August 23rd, at the Board meeting on Wednesday, April 24th.
Professor Zhao’s paper “The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics” has been accepted for publication in the Journal of Monetary Economics, a top macro journal.
In this article, Professor Zhao and his coauthor find that the combination of the risks faced by the elderly and the deterioration of family insurance due to the one-child policy is an important cause of the increase in China’s saving rate since 1980. This paper is the first major paper growing out of their research agenda on the Chinese economy and its implications for the rest of the world.
An article by Professor Zhao and his coauthor Ayse Imrohoroglu (USC Marshall) has been posted on VoxChina.org, an independent, non-partisan and nonprofit platform recently initiated by Princeton together with a group of scholars from other institutions including UPenn and CUHK (Shenzhen).
In this article, they discuss their research on the determinants of the Chinese saving rates. They focus on the paper “The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics”, in which they find that the combination of the risks faced by the elderly and the deterioration of family insurance due to the one-child policy is an important cause of the increase in China’s saving rate since 1980. This paper is the first major paper growing out of their research agenda on the Chinese economy and its implications for the rest of the world.
Professor Kai Zhao has had his paper titled “Social Insurance, Private Health Insurance and Individual Welfare” accepted for publication in the Journal of Economic Dynamics and Control. In this paper, he develops a quantitative dynamic general equilibrium model to evaluate social insurance policies. The main findings of the paper are that means tested social insurance does not only distort saving and labor supply decisions, but also has a large crowding out effect on the demand for private health insurance. However, despite the distorting effects, the net welfare consequence of eliminating social insurance is still negative. In addition, this paper finds that the existence of social insurance as a last resort is a quantitatively important reason why many Americans choose to be uninsured.
Professor Zhao and his coauthor Ayse Imrohoroglu (USC Marshall) have their paper titled “Intergenerational Transfers and China’s Social Security Reform” accepted for publication in the Journal of the Economics of Ageing. This paper grew out of their research agenda on the Chinese economy and its implications for the rest of the world. In it, they find that a model with two-sided altruism is preferred to a standard pure life-cycle model for studying social security reforms in China due to the prevalence of intergenerational links. They show that the implications of several reforms are quantitatively different from what have been found in existing studies using pure life-cycle models.