Time-inconsistency and Welfare Program Participation: Evidence from the NLSY

We empirically implement a dynamic structural model of labor supply and welfare program participation for agents with potentially time-inconsistent preferences. Using panel data on the choices of single women with children from the NLSY 1979, we provide estimates of the degree of time-inconsistency, and of its influence on the welfare take-up decision. With these estimates, we conduct counterfactual experiments to quantify the utility loss stemming from the inability to commit to future decisions, and the potential utility gains from commitment mechanisms such as welfare time limits and work requirements.Time inconsistent preferences, Welfare reform, Labor supply

Time-Inconsistency and Welfare Program Participation: Evidence from the NLSY

We empirically implement a dynamic structural model of labor supply and welfare program participation for never-married mothers with potentially time-inconsistent preferences. Using panel data on the choices of single women with children from the NLSY 1979, we provide estimates of the degree of time-inconsistency, and of its influence on the welfare take-up decision. With these estimates, we conduct counterfactual experiments to quantify the utility loss stemming from the inability to commit to future decisions, and the potential utility gains from commitment mechanisms such as welfare time limits and work requirements.

IR-improved Soft-wall AdS/QCD Model for Baryons

We construct an infrared-improved soft-wall AdS/QCD model for baryons by considering the infrared-modified 5D conformal mass and Yukawa coupling of the bulk baryon field. The model is also built by taking into account the parity-doublet pattern for the excited baryons. When taking the bulk vacuum structure of the meson field to be the one obtained consistently in the infrared-improved soft-wall AdS/QCD model for mesons, we arrive at a consistent prediction for the baryon mass spectrum in even and odd parity. The prediction shows a remarkable agreement with the experimental data. We also perform a calculation for the $\rho(a_1)$ meson-nucleon coupling constant and obtain a consistent result in comparison with the experimental data and many other models.Comment: 12 pages, 4 tables, 1 figure, to be published in PL

Sources of Advantageous Selection: Evidence from the Medigap Insurance Market

We provide strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, we find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage are, on average, about $4,000 less than for those without. But, if we condition on health, expenditures for seniors on Medigap are about$2,000 more. These two findings can only be reconciled if those with less health expenditure risk are more likely to purchase Medigap, implying advantageous selection. By combining the MCBS and the Health and Retirement Study (HRS), we investigate the sources of this advantageous selection. These include income, education, longevity expectations and financial planing horizons, as well as cognitive ability. Once we condition on all these factors, seniors with higher expected medical expenditure are indeed more likely to purchase Medigap. Surprisingly, risk preferences do not appear to be a source of advantageous selection. But cognitive ability emerges as a particularly important factor, consistent with a view that many senior citizens have difficulty understanding Medicare and Medigap rules.