This Tuesday 12-1pm Andrew Foerster Economist at the Kansas City Fed will speak on “Optimal Monetary Policy Regime Switches.” Dr. Foerster gained some notoriety for his 2014 Macro Bulletin on the The Asymmetric Effects of Uncertainty on Employment. This analysis of how market volatility affects employment growth underlies what the Wall Street Journal Real Time Economics call the Fear Gauge (Figure 1 below). As reported in a 2014 Kansas City Fed’s Macro Bulletin Foerster’s finds an asymmetric response of firms to uncertainty as measured by the VIX (Figure 2). When uncertainty increases firms slow hiring, but after the VIX returns to normal levels firms are slow to return to previous hiring rates. This means a spike in the VIX can have significant and long lasting negative impact on employment. His results suggest that the spike in the CBOE “fear” index triggered by the 2010 Euro crisis led to a cumulative lost 400,000 jobs while the 2011-12 U.S. debt ceiling crisis cost even more jobs. Without these jumps in CBOE volatility index the U.S. economy would have added almost about 16,000 more per month from 2010 to 2013 or a total of 600,000 jobs, suggesting this uncertainty slowed the slowed the U.S. recover from the 2008 Global Financial Crisis.
Andrew Simons, PhD candidate at Cornell University will discuss alternative approaches to managing Ethiopia’s Productive Safety Net Program. As discussed in the World Bank’s Catching Hope video (below) this innovative cash transfer program pays farmers to improve local infrastructure in the off-season. Focusing on groundwater renewal and reforestation in rural Ethiopia this program reduces poverty even as it promotes sustainable development. More recently these transfer and conservation programs are credited with helping attenuate the impacts of a severe drought some compare to the 1984.
Simons’s research focuses on how funding and administrative control affect program outcomes. When communities have more control Simons finds they are more “pro-poor” directing more assistance “to underprivileged groups with lower wage earnings potential (e.g., teenage girls vs. teenage boys, adult women vs. adult men, elderly vs. working age adults).” However, these pro-poor programs do not significantly lower overall poverty rates unless the program is fully funded. Moreover, simulations indicate fully funded programs reduce poverty whether they are administered locally or not. “The major policy takeaway,” argues Simons “is that the financial scale of the safety net program is more important to poverty reduction than the locus of control over implementation.” Simon’s research was supported by the National Science Foundation through Cornell University’s Food Systems and Poverty Reduction Integrative Graduate Education and Research Traineeship program. Andrew Simon’s paper is available here or on his webpage www.andrewmsimons.com.
ANDREW M. SIMONS What is the Optimal Locus of Control for Social Assistance Programs?: Evidence from Ethiopia
Date: Tuesday, Febuary 9 Time: 4:00 PM- 5:15 PM Lincoln Center Location: LL 802 Rose Hill Location: Hughes Hall 212
So, you want a PhD? Economics is among the top in terms of “high meaning*” and expected salary. Of course hard working multi-disciplinary economists like Thomas Piketty also become wealthy writing interesting books that combine meticulous research (hundreds of years of French tax records) the literature of the landed classes (Balzac, Jane Austin..) with original insights culled from economics, sociology and history. Even at 700 pages, Capital in the 21st Century is a good read and an better listen using online data and Figures). *”High Meaning” is the % of respondents who feel they “make the world a better place.”
|Rank||Major||Degree Type||Early Career Pay||Mid-Career Pay||% High Meaning|
|1||Electrical & Computer Engineering (ECE)||PhD||102000||142000||0.61|
|2||Computer Engineering (CE)||PhD||111000||139000||0.61|
|4||Biomedical Engineering (BME)||PhD||86800||137000||0.84|
|6 (tie)||Electrical Engineering (EE)||PhD||102000||133000||0.69|
|6 (tie)||Organic Chemistry||PhD||79000||133000||0.61|
|8||Computer Science (CS) & Engineering||PhD||104000||132000||0.74|
|11||Computer Science (CS)||PhD||112000||129000||0.63|
|13 (tie)||Mechanical Engineering (ME)||PhD||87800||125000||0.66|
|15 (tie)||Aerospace Engineering||PhD||93300||123000||0.52|
Source: PayScale Human Capital (2015). Highest Paying PhD Majors by Potential Salary: www.payscale.com/college-salary-report/majors-that-pay-you-back/phd
In a study just published in Social Science & Medicine, a research team led by Michael Palmer at the University of Melbourne and including Fordham’s Dr. Sophie Mitra and Daniel Mont and Nora Groce both of University College London evaluates the impact of a health insurance program targeted at children under age six in Vietnam.
Public health insurance programs are growing popular in low and middle-income countries. In general, their aim is to enhance financial protection and equity related to health care. Health insurance programs targeted at children are not very common and it is important to evaluate their impacts. If they improve the health of children, such programs could have lifelong benefits in terms of improved wellbeing and productivity. These programs are smaller than universal health insurance programs (for the entire population) and may be more feasible to adopt as countries try to expand health insurance coverage.
Countries such as the Philippines, Taiwan and Vietnam have introduced child-targeted health insurance programs. Vietnam’s public health insurance program has a long history dating back to 1986. Its program targeted at children under age six was implemented in 2005. This paper evaluates the impact of this program on children’s health care utilization (total, public and private services) and on health expenditures at the household level.
The authors use a sample of children from three cross-sections of the Vietnam Household Living Standard Survey (2006, 2008 and 2010). This paper overcomes some estimation problems and biases found in previous studies. The authors apply a fuzzy Regression Discontinuity (RD) design to a large unrestricted sample of children, which helps address heterogeneity.
Results show that the child health insurance program for children under age six increases the probability of inpatient visits by 6.8% and of outpatient visits by 21.7%. This is illustrated in the Figure 1 below, with a higher predicted probability of inpatient or outpatient visit for children under age six. The impact of insurance on health expenditures is not statistically significant, which suggests that the policy was not successful at significantly providing financial protection.
The authors do not find any evidence of substitution of public for private health care, which suggests that barriers to entry exist at covered public care facilities. This could be due to a variety of factors, including long queues and lack of trust in public health care. Results for substitution effect point out the significance of engaging the private sector, as it is major source of health care in Vietnam as well as in many African and Asian countries. Possible reforms include scaling up efforts to register of private health care providers into the health insurance system and the improvement of standards (both administrative and health care) of the public health care system.
Overall, the results of this paper suggest that in Vietnam, the child health insurance program for children under age six was successful at improving children’s health care access for both inpatient and outpatient services. This evidence is significant for policy makers in other LMIC’s.
Palmer, Michael and Mitra, Sophie and Mont, Daniel and Groce, Nora, The Impact of Health Insurance for Children Under Age 6 in Vietnam: A Regression Discontinuity Approach (October 20, 2014). Palmer, M., Mitra, S. et al., The impact of health insurance for children under age 6 in Vietnam: A regression discontinuity approach, Social Science & Medicine (2014), Forthcoming. Available at
http://ssrn.com/abstract=2512608 or http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2512608
Juan Guerra Salas: Senior Economist, Central Bank of Chile
Brandon Pecarro: Congressional Research Service
Brandon Vick: University of Indiana in Pennsylvania
Yumna Omar: UNDP
Helena Keefe: Fairfield University
Michael Gallagher: Saint Bonaventure University
Rossen Trendailov: St. Thomas Acquinas College
Michael Mebane: MSCI*
*A high profile emerging markets consulting firm in
New York (see careers.msci.com)
Previous International Development Placements
Marcelo L Fluer: United Nations ECLA and DESA
Elitza Mileva: Economist, World Bank Indonesia
Maria Davalos: Senior Economist, World Bank
Peter Jacobs: Human Sciences Research Council, South Africa
Samir Gadio: Head of Africa Strategy, Standard Bank