Long-term population projections: Scenarios of low or rebounding fertility.

The size of the human population is projected to peak in the 21st century. But quantitative projections past 2100 are rare, and none quantify the possibility of a rebound from low fertility to replacement-level fertility. Moreover, the most recent long-term deterministic projections were published a decade ago; since then there has been further global fertility decline. Here we provide updated long-term cohort-component population projections and extend the set of scenarios in the literature to include scenarios in which future fertility (a) stays below replacement or (b) recovers and increases. We also characterize old-age dependency ratios. We show that any stable, long-run size of the world population would persistently depend on when an increase towards replacement fertility begins. Without such an increase, the 400-year span when more than 2 billion people were alive would be a brief spike in history. Indeed, four-fifths of all births-past, present, and future-would have already happened.

What Difference Does a Health Plan Make? Evidence from Random Plan Assignment in Medicaid.

Exploiting the random assignment of Medicaid beneficiaries to managed care plans, we find substantial plan-specific spending effects despite plans having identical cost sharing. Enrollment in the lowest-spending plan reduces spending by at least 25%-primarily through quantity reductions-relative to enrollment in the highest-spending plan. Rather than reducing "wasteful" spending, lower-spending plans broadly reduce medical service provision-including the provision of low-cost, high-value care-and worsen beneficiary satisfaction and health. Consumer demand follows spending: a 10 percent increase in plan-specific spending is associated with a 40 percent increase in market share. These facts have implications for the government's contracting problem and program cost growth.

The Two-Margin Problem in Insurance Markets.

Insurance markets often feature consumer sorting along both an extensive margin (whether to buy) and an intensive margin (which plan to buy). We present a new graphical theoretical framework that extends a workhorse model to incorporate both selection margins simultaneously. A key insight from our framework is that policies aimed at addressing one margin of selection often involve an economically meaningful trade-off on the other margin in terms of prices, enrollment, and welfare. Using data from Massachusetts, we illustrate these trade-offs in an empirical sufficient statistics approach that is tightly linked to the graphical framework we develop.

Research Note: Intergenerational Transmission Is Not Sufficient for Positive Long-Term Population Growth.

All leading long-term global population projections agree on continuing fertility decline, resulting in a rate of population size growth that will continue to decline toward zero and would eventually turn negative. However, scholarly and popular arguments have suggested that because fertility transmits intergenerationally (i.e., higher fertility parents tend to have higher fertility children) and is heterogeneous within a population, long-term population growth must eventually be positive, as high-fertility groups come to dominate the population. In this research note, we show that intergenerational transmission of fertility is not sufficient for positive long-term population growth, for empirical and theoretical reasons. First, because transmission is imperfect, the combination of transmission rates and fertility rates may be quantitatively insufficient for long-term population growth: higher fertility parents may nevertheless produce too few children who retain higher fertility preferences. Second, today even higher fertility subpopulations show declining fertility rates, which may eventually fall below replacement (and in some populations already are). Therefore, although different models of fertility transmission across generations reach different conclusions, depopulation is likely under any model if, in the future, even higher fertility subpopulations prefer and achieve below-replacement fertility. These results highlight the plausibility of long-term global depopulation and the importance of understanding the possible consequences of depopulation.

Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients.

Medicare pricing is known to indirectly influence provider prices and care provision for non-Medicare patients; however, Medicare's regulatory externalities beyond fee-setting are less well understood. We study how physicians' outpatient surgery choices for non-Medicare patients responded to Medicare removing a ban on ambulatory surgery center (ASC) use for a specific procedure. Following the rule change, surgeons began reallocating both Medicare and commercially insured patients to ASCs. Specifically, physicians became 70% more likely to use ASCs for the policy-targeted procedure among their non-Medicare patients. These novel findings demonstrate that Medicare rulemaking affects physician behavior beyond the program's statutory scope.

Inversions in US Presidential Elections: 1836-2016.

Inversions-in which the popular vote winner loses the election-have occurred in four US presidential races. We show that rather than being statistical flukes, inversions have been ex ante likely since the early 1800s. In elections yielding a popular vote margin within 1 point (one-eighth of presidential elections), about 40 percent will be inversions in expectation. We show this conditional probability is remarkably stable across historical periods-despite differences in which groups voted, which states existed, and which parties participated. Our findings imply that the United States has experienced so few inversions merely because there have been so few elections (and fewer close elections).

Upcoding: Evidence from Medicare on Squishy Risk Adjustment.

In most US health insurance markets, plans face strong incentives to "upcode" the patient diagnoses they report to the regulator, as these affect the risk-adjusted payments plans receive. We show that enrollees in private Medicare plans generate 6% to 16% higher diagnosis-based risk scores than they would under fee-for-service Medicare, where diagnoses do not affect most provider payments. Our estimates imply that upcoding generates billions in excess public spending and significant distortions to firm and consumer behavior. We show that coding intensity increases with vertical integration, suggesting a principal-agent problem faced by insurers, who desire more intense coding from the providers with whom they contract.

Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges.

We study insurers' use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consumer types. A minority of consumers, identifiable by demand for particular classes of prescription drugs, are predictably unprofitable. We then show that contract features relating to these drugs are distorted in a manner consistent with multidimensional screening. The empirical findings support a long theoretical literature examining how insurance contracts offered in equilibrium can fail to optimally trade off risk protection and moral hazard.

Do Larger Health Insurance Subsidies Benefit Patients or Producers? Evidence from Medicare Advantage.

A central question in the debate over privatized Medicare is whether increased government payments to private Medicare Advantage (MA) plans generate lower premiums for consumers or higher profits for producers. Using difference­in­differences variation brought about by a sharp legislative change, we find that MA insurers pass through 45 percent of increased payments in lower premiums and an additional 9 percent in more generous benefits. We show that advantageous selection into MA cannot explain this incomplete pass­through. Instead, our evidence suggests that market power is important, with premium pass­through rates of 13 percent in the least competitive markets and 74 percent in the most competitive.

Sanitation, Disease Externalities and Anaemia: Evidence From Nepal.

Anaemia impairs physical and cognitive development in children and reduces human capital accumulation. The prior economics literature has focused on the role of inadequate nutrition in causing anaemia. This article is the first to show that sanitation, a public good, significantly contributes to preventing anaemia. We identify effects by exploiting rapid and differential improvement in sanitation across regions of Nepal between 2006 and 2011. Within regions over time, cohorts of children exposed to better community sanitation developed higher haemoglobin levels. Our results highlight a previously undocumented externality of open defaecation, which is today practiced by over a billion people worldwide.

Neighborhood Sanitation and Infant Mortality.

In this paper, we shed new light on a long-standing puzzle: in India, Muslim children are substantially more likely than Hindu children to survive to their first birthday, even though Indian Muslims have lower wealth, consumption, educational attainment, and access to state services. Contrary to the prior literature, we show that the observed mortality advantage accrues not to Muslim households themselves but rather to their neighbors, who are also likely to be Muslim. Investigating mechanisms, we provide a collage of evidence suggesting externalities due to poor sanitation are a channel linking the religious composition of neighborhoods to infant mortality.

Demand heterogeneity in insurance markets: Implications for equity and efficiency.

In many markets insurers are barred from price discrimination based on consumer characteristics like age, gender, and medical history. In this paper, I build on a recent literature to show why such policies are inefficient if consumers differ in their willingness-to-pay for insurance conditional on the insured losses they generate. Using administrative claims data, I then show that this type of demand heterogeneity is empirically relevant in a consumer health plan setting. Younger and older consumers and men and women reveal strikingly different demand for health insurance, conditional on their objective medical spending risk. This implies that these groups must face different prices so as to sort themselves efficiently across insurance contracts. The theoretical and empirical analysis highlights a fundamental trade-off between equity and efficiency that is unique to selection markets.

Tradeoffs in the design of health plan payment systems: Fit, power and balance.

In many markets, including the new U.S. Marketplaces, health insurance plans are paid by risk-adjusted capitation, sometimes combined with reinsurance and other payment mechanisms. This paper proposes a framework for evaluating the de facto insurer incentives embedded in these complex payment systems. We discuss fit, power and balance, each of which addresses a distinct market failure in health insurance. We implement empirical metrics of fit, power, and balance in a study of Marketplace payment systems. Using data similar to that used to develop the Marketplace risk adjustment scheme, we quantify tradeoffs among the three classes of incentives. We show that an essential tradeoff arises between the goals of limiting costs and limiting cream skimming because risk adjustment, which is aimed at discouraging cream-skimming, weakens cost control incentives in practice. A simple reinsurance system scores better on our measures of fit, power and balance than the risk adjustment scheme in use in the Marketplaces.

Black-white disparities in life expectancy: how much can the standard SES variables explain?

This article quantifies the extent to which socioeconomic and demographic characteristics can account for black-white disparities in life expectancy in the United States. Although many studies have investigated the linkages between race, socioeconomic status, and mortality, this article is the first to measure how much of the life expectancy gap remains after differences in mortality are purged of the compositional differences in socioeconomic characteristics between blacks and whites. The decomposition is facilitated by a reweighting technique that creates counterfactual estimation samples in which the distribution of income, education, employment and occupation, marital status, and other theoretically relevant variables among blacks is made to match the distribution of these variables among whites. For males, 80% of the black-white gap in life expectancy at age 1 can be accounted for by differences in socioeconomic and demographic characteristics. For females, 70% percent of the gap is accounted for. Labor force participation, occupation, and (among women only) marital status have almost no additional power to explain the black-white disparity in life expectancy after precise measures for income and education are controlled for.