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Report
Implications of Increasing College Attainment for Aging in General Equilibrium
We develop and calibrate an overlapping generations general equilibrium model of the U.S. economy with heterogeneous consumers who face idiosyncratic earnings and health risk to study the implications of exogenous trends in increasing college attainment, decreasing fertility, and increasing longevity between 2005 and 2100. While all three trends contribute to a higher old age dependency ratio, increasing college attainment has different macroeconomic implications because it increases labor productivity. Decreasing fertility and increasing longevity require the government to increase the ...
Discussion Paper
A Comparison of Living Standards Across the States of America
While a large body of literature has examined how welfare, or living standards, vary across countries, very little is known about how welfare varies within a given country. This note summarizes and discusses the analysis and results in Falcettoni and Nygaard (2020), where we seek to fill this gap in the context of the United States.
Working Paper
A Comparison of Living Standards Across the States of America
We use an expected utility framework to examine how living standards vary across the United States and how each state's living standards have evolved over time. Our welfare measure accounts for cross-state variations in mortality, consumption, education, inequality, and cost of living. We find that per capita income is a good indicator of living standards, with a correlation of 0.80 across states. Living standards in most states, however, appear closer to those in the richest states than their difference in per capita income would suggest. Whereas high-income states benefit from higher life ...
Discussion Paper
Acts of Congress and COVID-19: A Literature Review on the Impact of Increased Unemployment Insurance Benefits and Stimulus Checks
Congress passed the first COVID-19 relief package for businesses and individuals in March 2020, when the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted, providing, among other things, one-time stimulus checks for individuals, extended unemployment insurance (UI) benefits, relief for state and local governments, liability protection, and the Paycheck Protection Program for small-business loan forgiveness.
Report
Macroeconomic Effects of Medicare
This paper develops an overlapping generations model to study the macroeconomic effects of an unexpected elimination of Medicare. We ?nd that a large share of the elderly respond by substituting Medicaid for Medicare. Consequently, the government saves only 46 cents for every dollar cut in Medicare spending. We argue that a comparison of steady states is insufficient to evaluate the welfare effects of the reform. In particular, we ?nd lower ex-ante welfare gains from eliminating Medicare when we account for the costs of transition. Lastly, we ?nd that a majority of the current population ...