(M)oral Hazard?

Would you go to the dentist more often if it were free? Observational data is here used to analyze the impact of full-coverage insurance on dental care utilization using different identification strategies. The challenge of assessing the bite of moral hazard without an experimental study design is to separate it from adverse selection, as agents act on private and generally unobservable information. By utilizing a quasi-experimental feature of the insurance scheme the moral hazard effect is identified on observables, and by having access to an instrument the effect is identified with IV. Moral hazard is assessed using both difference-in-differences and cross-sectional estimations.Asymmetric information; Moral Hazard; Health Insurance; Porpensity Score Matching; IV

Information Updating and Insurance Dropout: Evidence from Dental Insurance

Micro data from a dental insurance natural experiment is used to analyze why agents opt out of insurance. The purpose is to relate the dropout decision to new information on risk, acquired by the policy holder and the insurer. The results show that agents tend to leave the insurance when reclassified into higher premium classes, or when experiencing unexpectedly low dental care utilization within the insurance. They are more responsive to higher premiums than to lower expected utilization. The results show updating on dental risk to be asymmetric, giving agents and insurer partly different information sets. Higher premiums are viewed as higher prices of insurance rather than fair risk reassessments. Agents do not take the insurer's information fully into account, even though it is public. The decision is also based on old information.Asymmetric Information; Adverse Selection; Learning; Health Insurance

The effect of maternal nutrition during mid- to late- pregnancy on ewe and lamb behaviour and the association with lamb survival : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Animal Science at Massey University, Palmerston North, New Zealand

Lambing percentage in New Zealand has increased by almost 30% in the last 20 years. This increase is associated with a greater percentage of twin- and triplet-born lambs which have lower survival rates than singletons. The behaviour of the ewe and her lambs has been associated with lamb survival, however, relevant data on the effect of ewe mid-pregnancy body condition score (BCS) and nutrition on ewe and lamb behaviour under New Zealand pastoral farming conditions is scarce. This research included seven experiments investigating the effects of feeding ewes, with a BCS of 2.0 to 3.0 at mid-pregnancy, either ad libitum or only sufficient to meet pregnancy maintenance requirements from mid- to very late-pregnancy, on ewe and lamb behaviour at 3 to 24 hours after birth. The association between behaviour and lamb survival was also investigated. Observations on ewe and lamb behavioural were conducted at tagging (3 to 18 hours after birth) and in a triangle pen test at approximately 12 or 24 hours after birth. The effects of ewe mid-pregnancy BCS and feeding on behaviour were somewhat inconsistent across experiments, possibly due to variations in the timing and length of feeding treatments. Feeding ewes ad libitum in comparison to pregnancy maintenance requirements did not consistently improve the maternal behaviour score (MBS) of the ewe. This is not surprising as neither of the feeding treatment groups were nutritionally restricting. There was some evidence to suggest that lambs born to ewes offered the pregnancy maintenance diet exhibited a greater need, possibly due to a weaker ewe-lamb bond than lambs born to ewes on the ad lib treatment. This need was characterised in twins, in chapter four, by greater low-pitched bleating rates and decreased time to contact, suck and follow the dam. Similar, but inconsistent results were reported in other chapters. Further, when investigating the relationship between behaviour and survival, it was found that twin-born lambs with the greater need (followed their dam more quickly) were more likely to die. The opposite relationship was found in triplet-born lambs, which may be a reflection of greater competition for milk within triplet-litters compared to twin-litters. Thus, in both twin- and triplet-born lambs following behaviour is an indicator of mortality. The practical use of this behaviour as a tool to predict lamb survival is limited

Putting teenagers on the pill: the consequences of subsidized contraception

This paper investigates the consequences of a series of Swedish policy changes beginning in 1989 where different regions started subsidizing the birth control pill. The reforms were significant and applied to all types of oral contraceptives. My identification strategy takes advantage of the fact that the reforms were implemented successively over time and targeted specific cohorts of young women, in particular teenagers. This generates plausibly exogenous variation in access to the subsidy. The paper first demonstrates that access significantly increased pill use. Using regional, temporal, and cohort variation in access, I then go on to examine the impact on abortions. The estimates show that the subsidy significantly decreased the abortion rate by about 8 percent. Furthermore, long-term access decreased the likelihood of teenage childbearing by about 20 percent. However, there is no significant effect on labor supply, marriage, educational attainment or welfare take-up.Natural experiment; abortions; teenage childbearing; labor supply

One size fits all? The effects of teacher cognitive and non-cognitive abilities on student achievement

Teachers are increasingly being drawn from the lower parts of the general ability distribution, but it is not clear how this affects student achievement. We track the position of entering teachers in population-wide cognitive and non-cognitive ability distributions using school grades and draft records from Swedish registers. The impact on student achievement caused by the position of teachers in these ability distributions is estimated using matched student-teacher data. On average, teachers’ cognitive and non-cognitive social interactive abilities do not have a positive effect on student performance. However, social interactive ability turns out to be important for low aptitude students, whilst the reverse holds for cognitive abilities. In fact, while high performing students benefit from high cognitive teachers, being matched to such a teacher can even be detrimental to their lower performing peers. Hence, the lower abilities among teachers may hurt some students, whereas others may even benefit. High cognitive and non-cognitive abilities thus need not necessarily translate into teacher quality. Instead, these heterogeneities highlight the importance of the student-teacher matching process.Cognitive and non-cognitive ability; teacher quality; student achievement

Education policy and early fertility: Lessons from an expansion of upper secondary schooling

This paper studies effects of education policy on early fertility. We study a major educational reform in Sweden in which vocational tracks in upper secondary school were prolonged from two to three years and the curricula were made more academic. Our identification strategy takes advantage of cross-regional and cross-time variation in the implementation of a pilot scheme preceding the reform in which several municipalities evaluated the new policy. The empirical analysis draws on rich population micro data. We find that women who enrolled in the new program were significantly less likely to give birth early in life and that this effect is driven by women with higher opportunity costs of child rearing. There is however no statistically significant effect on mens fertility decisions. Our results suggest that the social benefits of changes in education policy may extend beyond those usually claimed.Schooling reform; teenage childbearing; fertility

Incentives for Clinical Trials

Who gains from more information on the quality of pharmaceutical drugs? Are there incentives for voluntary post-approval clinical trials among pharmaceutical companies? Contrary to popular belief, this paper shows that it is not in the consumer interest that clinical evidence establishing the relative effectiveness within a class of drugs are produced. Pharmaceutical companies, on the other hand, do benefit: the elimination of uncertainty regarding quality increases expected product differentiation, thereby raising prices for both high-quality and low-quality drugs, to the disadvantage of consumers. Still there is no unique equilibrium where the market provides clinical trials. If the costs of carrying out clinical trials are small, in relative terms, there will be a coordination problem between firms, as firms will want a rival firm to carry the cost. If the costs are large they will be prohibitive. Legislation that obligates entering firms to carry out post-approval trials is beneficial for firms if it solves the coordination problem, but is otherwise harmful. Legislation is never in the interest of consumers.Quality uncertainty; Symmetric information; Pharmaceutical market; Clinical trials

Education policy and early fertility: lessons from an expansion of upper secondary schooling

This paper studies effects of education policy on early fertility. We study a major educational reform in Sweden in which vocational tracks in upper secondary school were prolonged from two to three years and the curricula were made more academic. Our identification strategy takes advantage of cross-regional and cross-time variation in the implementation of a pilot scheme preceding the reform in which several municipalities evaluated the new policy. The empirical analysis draws on rich population micro data. We find that women who enrolled in the new program were significantly less likely to give birth early in life and that this effect is driven by women with higher opportunity costs of child rearing. There is however no statistically significant effect on men’s fertility decisions. Our results suggest that the social benefits of changes in education policy may extend beyond those usually claimed.Schooling reform; teenage childbearing; fertility

Family size and child outcomes: Is there really no trade-off?

Recent empirical work questions the negative relationship between family size and children’s attainments proposed by theoretical work and supported by a large empirical literature. We use twin births as an exogenous source of variation in family size in an unusually rich dataset where it is possible to separately look at intermediate and long run outcomes. We find little evidence of a causal effect on long term outcomes such as years of schooling and earnings, and studies that do not take selection effects into account are likely to overstate the effects. We do, however, find a small but significant negative impact of family size on grades in compulsory and secondary school.Family size; twin births; education; earnings

One Size Fits All? The Effects of Teacher Cognitive and Non-cognitive Abilities on Student

Teachers are increasingly being drawn from the lower parts of the general ability distribution, but it is not clear how this affects student achievement. We track the position of entering teachers in population-wide cognitive and non-cognitive ability distributions using school grades and draft records from Swedish registers. The impact on student achievement caused by the position of teachers in these ability distributions is estimated using matched student-teacher data. On average, teachers’ cognitive and non-cognitive social interactive abilities do not have a positive effect on student performance. However, social interactive ability turns out to be important for low aptitude students, whilst the reverse holds for cognitive abilities. In fact, while high performing students benefit from high cognitive teachers, being matched to such a teacher can even be detrimental to their lower performing peers. Hence, the lower abilities among teachers may hurt some students, whereas others may even benefit. High cognitive and non-cognitive abilities thus need not necessarily translate into teacher quality. Instead, these heterogeneities highlight the importance of the studentteacher matching process.Cognitive and non-cognitive ability; Teacher quality: Student achievement