Permanent Income and the Black-White Test Score Gap

Analysts often examine the black-white test score gap conditional on family income. Typically only a current income measure is available. We argue that the gap conditional on permanent income is of greater interest, and we describe a method for identifying this gap using an auxiliary data set to estimate the relationship between current and permanent income. Current income explains only about half as much of the black-white test score gap as does permanent income, and the remaining gap in math achievement among families with the same permanent income is only 0.2 to 0.3 standard deviations in two commonly used data sets. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in 3rd grade shrinks below 0.15 standard deviations, less than half of what is found with their controls.

Gasoline Prices, Fuel Economy, and the Energy Paradox

It is often asserted that consumers purchasing automobiles or other goods and services underweight the costs of gasoline or other "add-ons." We test this hypothesis in the US automobile market by examining the effects of time series variation in gasoline price expectations on the prices and market shares of vehicles with different fuel economy ratings. When gas prices rise, demand for high fuel economy vehicles increases, pushing up their relative prices. Market share changes - increased production of high fuel economy vehicles and scrappage of low fuel economy vehicles - attenuate these price changes. Intuitively, the less that equilibrium vehicle prices and shares respond to changes in expected gasoline prices, the less that consumers appear to value gasoline costs. We estimate a nested logit discrete choice model using a remarkable dataset that includes market shares, characteristics, expected usage, and transaction price microdata for all new and used vehicles available between 1999 and 2008. To address simultaneity bias, we introduce a new instrument for used vehicle market shares, based on the fact that gasoline prices cause variation in new vehicle shares that then persists over time as the vehicles move through resale markets. Our results show that US auto consumers are willing to pay just $0.61 to reduce expected discounted gas expenditures by$1. We incorporate the estimated parameters into a new discrete choice approach to behavioral welfare analysis, which suggests with caution that a paternalistic energy efficiency policy could generate welfare gains of $3.6 billion per year.Princeton s Industrial Relations Section, Harvard s Energy Technology Innovation Policy group, and the Harvard University Center for the Envi- ronment

Military Retention Incentives: Evidence from the Air Force Selective Reenlistment Bonus

The limited lateral entry and rigid pay structure for U.S. military personnel present challenges in retaining skilled individuals who have attractive options in the civilian labor market. One tool the services use to address this challenge is the Selective Reenlistment Bonus (SRB), which offers eligible personnel with particular skills a substantial cash bonus upon reenlistment. However, the sequential nature of the bonus offer and reenlistment process limits the ability to adjust manpower quickly, raising interest in research that estimates the effect of the SRB on retention. While this literature has acknowledged challenges including potential endogeneity of bonus levels, attrition, and reenlistment eligibility, many studies do not address these concerns adequately. This paper uses a comprehensive panel data set on Air Force enlisted personnel to estimate the effect of the SRB on retention rates. We exploit variation in bonus levels within skill groups, control for civilian labor market conditions, and model reenlistment eligibility to avoid common assumptions that lead to biased impact estimates. We find substantial heterogeneity in the effect of the bonus, with the largest effects on first-term service members and those whose skills have not historically received a substantial bonus. We also find evidence that the bonus affects the timing of reenlistment decisions in addition to their frequency

Neuroprotective effect of mild hypothermia in patients undergoing coronary artery surgery with cardiopulmonary bypass: Five-year follow-up of a randomized trial

ObjectiveIn a randomized trial of 223 patients undergoing coronary artery surgery with cardiopulmonary bypass, we have reported a neuroprotective effect of mild hypothermia. To determine whether the beneficial effect of mild hypothermia was long-lasting, we repeated the psychometric tests in 131 patients after 5 years.MethodsPatients were cooled to 32°C during aortic crossclamping and then randomized to rewarming to either 34°C or 37°C, with no further rewarming until arrival in intensive care unit. Cognitive function was measured preoperatively and 1 week and 5 years postoperatively with a battery of 11 psychometric tests interrogating verbal memory, attention, and psychomotor speed and dexterity.ResultsPatients who had greater cognitive decline 1 week after surgery showed poorer performance 5 years later. The magnitude of cognitive decline over 5 years was modest. The incidence of deficits defined as a 1 standard deviation [SD] decline in at least 1 of 3 factors was not different between temperature groups. Fewer patients in the hypothermic group had deficits that persisted over the 5 years, but this difference did not attain statistical significance (RR = 0.64, P = .16).ConclusionsThe effect of surgery on cognitive function observed early after surgery is an important predictor of cognitive performance 5 years later. Although there was evidence of a neuroprotective effect of mild hypothermia early after surgery in the original cohort, the results after 5 years were inconclusive. In general, the magnitude of cognitive changes over 5 years was modest. We believe that further trials investigating the efficacy of mild hypothermia in patients having cardiac surgery are warranted

Military Retention Incentives: Evidence from the Air Force Selective Reenlistment Bonus

The limited lateral entry and rigid pay structure for U.S. military personnel present challenges in retaining skilled individuals who have attractive options in the civilian labor market. One tool the services use to address this challenge is the Selective Reenlistment Bonus (SRB), which offers eligible personnel with particular skills a substantial cash bonus upon reenlistment. However, the sequential nature of the bonus offer and reenlistment process limits the ability to adjust manpower quickly, raising interest in research that estimates the effect of the SRB on retention. While this literature has acknowledged challenges including potential endogeneity of bonus levels, attrition, and reenlistment eligibility, many studies do not address these concerns adequately. This paper uses a comprehensive panel data set on Air Force enlisted personnel to estimate the effect of the SRB on retention rates. We exploit variation in bonus levels within skill groups, control for civilian labor market conditions, and model reenlistment eligibility to avoid common assumptions that lead to biased impact estimates. We find substantial heterogeneity in the effect of the bonus, with the largest effects on first-term service members and those whose skills have not historically received a substantial bonus. We also find evidence that the bonus affects the timing of reenlistment decisions in addition to their frequency

Military Personnel Retention, Bonuses, and Civilian Labor Market Conditions

The rigid pay structure for U.S. military personnel creates a challenge for retaining highly skilled individuals. Service members’ base pay depends only on rank and time in uniformed service, and with rigid promotion requirements, personnel who have attractive options in the civilian labor market high-demand skills are unlikely to receive a competitive pay offer in the military. One tool the services use to address this challenge is the elective Reenlistment Bonus (SRB), which offers eligible personnel classified in particular skill groups a substantial cash bonus upon reenlistment. By adjusting bonus levels for each skill group, the military can potentially retain sufficient personnel to meet its needs, much like the way that private employers would adjust salaries based on skill. Given that bonus amounts may be changed in response to civilian labor market conditions, this analysis will control for detailed information on the civilian unemployment rate and averages wages, matched as closely as possible to each service member’s location and career specialty. Simplifying assumptions about the reenlistment process will be relaxed by integrating the eligibility criteria into the econometric model. In particular, retention will be modeled as dependent on factors that may influence reenlistment eligibility in addition to factors that may influence reenlistment conditional on eligibility. The work will also explore other implications of bonus policies. Understanding the relative impact of bonuses on high-ability versus low ability personnel (as measured by standardized test scores) would provide insights into potential unintended consequences of bonuses. This research is applicable to military and civilian institutions. In addition to the proposed research, the applicant has conducted internal analysis for the Air Force that addresses similar questions and took some of the analytic steps proposed above. The proposed work would broaden the potential application of these methods to other military organizations

Permanent Income and the Black-White Test Score Gap

Analysts often examine the black-white test score gap conditional on family income. Typically only a current income measure is available. We argue that the gap conditional on permanent income is of greater interest, and we describe a method for identifying this gap using an auxiliary data set to estimate the relationship between current and permanent income. Current income explains only about half as much of the black-white test score gap as does permanent income, and the remaining gap in math achievement among families with the same permanent income is only 0.2 to 0.3 standard deviations in the CNLSY and ECLS samples. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in 3rd grade shrinks below 0.15 SDs, less than half of what is found with their controls

Permanent Income and the Black-White Test Score Gap

Analysts often examine the black-white test score gap conditional on family income. Typically only a current income measure is available. We argue that the gap conditional on permanent income is of greater interest, and we describe a method for identifying this gap using an auxiliary data set to estimate the relationship between current and permanent income. Current income explains only about half as much of the black-white test score gap as does permanent income, and the remaining gap in math achievement among families with the same permanent income is only 0.2 to 0.3 standard deviations in the CNLSY and ECLS samples. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in 3rd grade shrinks below 0.15 SDs, less than half of what is found with their controls

Permanent Income and the Black-White Test Score Gap

Analysts often examine the black-white test score gap conditional on family income. Theoretically, we are interested in the gap conditional on permanent income, but typically only a current income measure is available. We develop methods for identifying the gap conditional on permanent income, using an auxiliary data set to estimate the reliability of current income. Current income explains only about half as much of the black-white test score gap as does permanent income, and the remaining gap in math achievement among families with the same permanent income is only 0.2 to 0.3 standard deviations in the CNLSY and ECLS samples. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in 3rd grade shrinks to less than 0.2 SDs, around half of what is found with their controls

Permanent Income and the Black-White Test Score Gap

Analysts often examine the black-white test score gap conditional on family income. Typically only a current income measure is available. We argue that the gap conditional on permanent income is of greater interest, and we describe a method for identifying this gap using an auxiliary data set to estimate the relationship between current and permanent income. Current income explains only about half as much of the black-white test score gap as does permanent income, and the remaining gap in math achievement among families with the same permanent income is only 0.2 to 0.3 standard deviations in the CNLSY and ECLS samples. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in 3rd grade shrinks below 0.15 SDs, less than half of what is found with their controls.Labor Economics