Job Market Paper

Is the Cure Worse than the Disease? Unintended Consequences of Fraud Reduction in Transfer Programs
April 2015

Abstract: Many U.S. safety net programs involve in-kind transfers, which are used in order to both alter consumption patterns among recipients and limit take-up by ineligibles. However, in the absence of its own network of providers, the government must rely on private vendors to serve as its agents in rendering transfers, giving rise to two types of agency problems: (1) vendors may refuse to participate in government programs, leaving needy people unserved or (2) vendors may engage in fraud in order to increase their payoff from participation. A separate issue arises when government intervention in private markets causes general equilibrium effects on third parties.
          This paper examines attempts to reduce vendor fraud in the Supplemental Nutrition Program for Women, Infants, and Children (WIC) using data on the staggered rollout of a fraud reduction program in Texas. Vendors were required to move to an electronic payment system that allowed regulators to more easily verify reimbursement claims. I show that the program was effective in reducing fraud, but also that it increased vendor non-participation, leading to a reduction in WIC take-up among eligible women. I also show that the fraud reduction program increased prices paid by non-WIC shoppers by 9%. Overall, I estimate a net reduction in social welfare associated with the reform of 3-4% of the value of benefits received. My results indicate that the effectiveness of policies intended to alter consumption patterns among welfare recipients depend crucially on the incentives of providers and that enforcement measures interact with these incentives.

Working Papers

Do Insurers Risk-Select Against Each Other? Evidence from Medicaid and Implications for Health Reform
joint with Ilyana Kuziemko and Maya Rossin-Slater, August 2014
Also available as: NBER Working Paper #19198

Abstract: Increasingly in U.S. public insurance programs, the state finances competing, capitated health plans rather than using a fee-for-service (FFS) model. We study how high- and low-cost infants (blacks and Hispanics, respectively) are affected by the transition from FFS to Medicaid Managed Care (MMC). We find that black-Hispanic health disparities widen-e.g. black mortality increases by 12% while Hispanic mortality decreases by 22-and care worsens for blacks. Additionally, black birth rates fall. We present a model of risk-selection in which capitation incentivizes competing plans to offer better care to low-cost clients to retain them in future periods.

The Impact of the Fracking Boom on Infant Health: Evidence from Detailed Location Data on Wells and Infants
joint with Janet Currie and Michael Greenstone, Sept. 2014

-- Press coverage: Bloomberg

Does the EITC Reduce Birth Spacing? A New Look at the Effects of Wage Subsidies on Fertility
April 2015

Abstract: The value of mother's labor market time is thought to play an important role in childbearing. Therefore, wage subsidies like the Earned Income Tax Credit (EITC) may impact fertility among low-income households. Existing literature finds no effect of the EITC on completed fertility, however. In this article, I consider whether the EITC affects a different fertility outcome: birth spacing. If there are economies of scale in childrearing, mothers may reduce space between births to minimize time spent out of the labor market. Close spacing is thought to be detrimental to child health and educational outcomes.
          To identify the effects of the EITC, I use a novel regression discontinuity design (RD) in first child's birth month around the end of the year. Children born before the end of the year can be claimed as dependents on that year's tax returns, substantially increasing EITC eligibility for first time parents. My design incorporates recent evidence that first time EITC eligibility functions as an information shock for many recipients. I find that EITC receipt decreases time to second child by 3-4%. Effects are concentrated among single mothers (19% decrease), whereas I find no effects for married mothers or on completed fertility. My findings suggest there may be unintended negative effects of welfare-to-work policies on children in single parent households.

Long Run Effects of Medicaid Managed Care: Evidence from Texas Public Schools
Joint with Ilyana Kuziemko and Maya Rossin-Slater

Effects of a Race Specific Shock to Class Size: Evidence from NYC
Joint with Doug Almond and Ajin Lee

Fetal Origins of Lifetime Health
Joint with Douglas Almond and Janet Currie, The Encyclopedia of Health Economics, Anthony Culyer, Editor, Elsevier Inc., March 2014.

How Will Baby Boomer Retirements Affect Teacher Labor Markets?
Joint with Daniel Aaronson, Economic Perspectives, 33(4): October 2009