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The Future of U.S. Health Care Spending

April 18, 2014 Comments off

The Future of U.S. Health Care Spending
Source: Brookings Institution

For several decades health spending in the United States rose much faster than other spending. Forecasters predicted the health sector, already 17% of GDP, would soon exceed 20 to 25% of GDP, driving out other necessary public and private spending. However, in recent years health spending growth dropped dramatically and surprisingly, to a record slow pace for the fourth straight year in 2012. It is not clear why this turn around occurred or how long it will last.

On Friday, April 11th the Engelberg Center for Health Care Reform at Brookings brought together several experts to discuss three questions that will also be addressed in a forthcoming series of Brookings papers. The discussion and papers address the causes of the slowdown and the likelihood it will continue; its impact on federal and state budgets, and private spending; and identify reforms that will ensure slow cost growth while improving health.

Papers presented:

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Student Loan Safety Nets: Estimating the Costs and Benefits of Income-Based Repayment

April 17, 2014 Comments off

Student Loan Safety Nets: Estimating the Costs and Benefits of Income-Based Repayment
Source: Brookings Institution

The plight of underemployed college graduates struggling to make their student loan payments has received a great deal of media attention throughout the recent economic recession. The primary safety net available to borrowers of federal loans facing unaffordable monthly payments is income-based repayment, in which borrowers make monthly payments based on their earnings rather than a traditional schedule of flat payments.

The importance of these programs is widely recognized. How much these programs will cost and how the benefits will be distributed among borrowers, however, is not well understood— in large part because these costs and benefits will be realized over multiple decades. Without this knowledge, it is difficult to know whether these programs are meeting the goal of effectively and efficiently protecting borrowers without creating significant unintended consequences.

This report seeks to fill that gap by providing some of the first detailed evidence about the predicted costs and benefits of existing income-based repayment programs. Authors Beth Akers and Matthew Chingos develop an empirical framework for understanding the costs and benefits of these programs and use simulation methods to apply this framework to a nationally representative sample of bachelor’s degree recipients. These methods cannot accurately estimate the overall cost of the programs, but they provide fairly robust estimates of the relative cost of different program components, and of the share of benefits received by different groups of borrowers.

Perspectives on Health Care Spending Growth

April 16, 2014 Comments off

Perspectives on Health Care Spending Growth
Source: Brookings Institution

The evolution of health care spending has important implications for many aspects of our economy. As highlighted by this conference, the trajectory of health spending growth is a central determinant of the outlook for federal and state budgets and for workers’ take-home pay. Health spending also affects other key economic variables, including measured productivity and prices. Further, the coming demographic change has important implications for both the level and financing of health spending. For these reasons, the question of what drives health spending growth is a subject that has received much attention from researchers and policymakers, although, as I hope to show in this background paper, much remains to be learned.

Offshore Oil and Gas Governance in the Arctic: A Leadership Role for the U.S.

April 15, 2014 Comments off

Offshore Oil and Gas Governance in the Arctic: A Leadership Role for the U.S.
Source: Brookings Institution

The Arctic is changing and increasingly drawing the world’s interest, with the potential for vast reserves of offshore oil and gas constituting arguably the most attractive, yet challenging prospect in the region.

As the U.S. prepares to assume chairmanship of the Arctic Council in 2015, this policy brief is designed to inform the legislative and executive branches of the U.S. Government of the current state of oil and gas governance in the Arctic, and to address the following questions:

  • How can the U.S. elevate the Arctic region as a priority national interest?
  • How can the U.S. lead in strengthening offshore oil and gas governance in the Arctic?

Maps: Tax Indicators in Your County

April 11, 2014 Comments off

Maps: Tax Indicators in Your County
Source: Brookings Institution

Tax season is winding down, and many of us are scrambling to submit our returns to the IRS this week. But do you know how your tax return compares to others from around the country?

Earlier this year, Brookings released a series of interactive tax maps that break down major taxes and credits by individual U.S. county.

The Political Economy of Discretionary Spending: Evidence from the American Recovery and Reinvestment Act

April 5, 2014 Comments off

The Political Economy of Discretionary Spending: Evidence from the American Recovery and Reinvestment Act
Source: Brookings Institution

Members of Congress don’t appear to have successfully used their influence to send stimulus-funded projects to their districts, but targeting areas with high local unemployment rates did not play much of a role either.

What You Need to Know about H-1B Visas

April 2, 2014 Comments off

What You Need to Know about H-1B Visas
Source: Brookings Institution

Starting today, April 1, the United States Citizenship and Immigration Services is accepting applications for the limited number (85,000) of H-1B Visas, the temporary visa that allows U.S. employers to hire foreign workers in specialty positions that require at least a bachelor’s degree. Twenty thousand of the visas are set aside for foreign nationals who hold master’s degrees or higher from U.S. universities. Once the cap is reached and if there are more applications submitted than visas available, USCIS will conduct a lottery on April 7. The process is first-come, first-served.

Neil Ruiz (@neil_ruiz), Jill Wilson (@JillHWilson) and Jonathan Rothwell (@jtrothwell), analysts and associate fellows in the Brookings Metropolitan Policy Program, have written numerous articles and commentary on the application process (the “race to the cap”), its flaws and how it could be improved to better help workers and the economy. A collection of this analysis appears below…

Effects of Unconventional Monetary Policy on Financial Institutions

April 2, 2014 Comments off

Effects of Unconventional Monetary Policy on Financial Institutions
Source: Brookings Institution

The unconventional monetary policies that the Federal Reserve has pursued since 2008 – pushing short-term interest rates to zero, promising to keep them there for a long time and buying trillions of dollars in bonds in its quantitative easing – have not resulted in life insurers becoming riskier despite the widespread belief to the contrary.

The Political Economy of Discretionary Spending: Evidence from the American Recovery and Reinvestment Act

April 1, 2014 Comments off

The Political Economy of Discretionary Spending: Evidence from the American Recovery and Reinvestment Act
Source: Brookings Institution

Members of Congress don’t appear to have successfully used their influence to send stimulus-funded projects to their districts, but targeting areas with high local unemployment rates did not play much of a role either.

Are the Long-Term Unemployed on the Margins of the Labor Market?

April 1, 2014 Comments off

Are the Long-Term Unemployed on the Margins of the Labor Market?
Source: Brookings Institution

The short-term unemployment rate is a much stronger predictor of inflation and real wage growth than the overall unemployment rate in the U.S. Even in good times, the long-term unemployed are on the margins of the labor market, with diminished job prospects and high labor force withdrawal rates, and as a result they exert little pressure on wage growth or inflation.

EITC Expansion Would Strengthen Credit for Childless Workers

March 28, 2014 Comments off

EITC Expansion Would Strengthen Credit for Childless Workers
Source: Brookings Institution

For low-income working families, the Earned Income Tax Credit (EITC) is one of the nation’s most effective tools for reducing inequality and alleviating poverty. However, as President Obama pointed out in his State of the Union address, “It doesn’t do enough for…workers who don’t have kids.” In fact, given the modest provision for childless workers (which begins to phase out at just 55 percent of full-time, minimum wage earnings), a childless worker making poverty-level wages would actually be taxed into poverty under current tax law.

With the release of the president’s budget for fiscal year 2015, the administration provided details for how it would go about expanding the EITC to bolster the credit for workers without qualifying children. The administration’s proposal joins others from officials in both the House of Representatives and the Senate aimed at strengthening the EITC for childless workers and, in turn, its work incentive and poverty alleviation effects. These proposals include Representative Richard Neal’s Earned Income Tax Credit Improvement and Simplification Act of 2013 and the Working Families Tax Relief Act of 2013 introduced by Senators Sherrod Brown and Richard Durbin.

To better understand each of these proposals’ impact on low-wage workers at the state level and across the nation’s 100 largest metro areas, we used our MetroTax model to assess the effects of each expansion scenario, based on 2012 American Community Survey microdata and Tax Year 2012 tax law.

Unlocking Spectrum Value through Improved Allocation, Assignment and Adjudication of Spectrum Rights

March 26, 2014 Comments off

Unlocking Spectrum Value through Improved Allocation, Assignment and Adjudication of Spectrum Rights
Source: Brookings Institution

Technological developments have continued to increase the importance of radio spectrum, with citizens, companies, and government users increasing their use of wireless-enabled services of all kinds, from smartphone apps to satellite navigation. Since technology places limits on the coexistence of multiple radio systems, usage rights must be allocated among various competing uses.

Currently, the management of the wireless spectrum in the United States (and in many other countries) is heavily constrained by government regulation. That makes it difficult for spectrum players—whether they are wireless service providers, citizens using unlicensed devices, or government users—to reach mutually agreeable, efficiency-enhancing agreements through direct negotiation with one another.

This Hamilton Project discussion paper describes the importance of moving toward a more economically efficient system for managing the use of wireless spectrum, and proposes concrete policy steps to move us closer to such a system.

Public Pension Reform Series

March 25, 2014 Comments off

Public Pension Reform Series
Source: Brookings Institution

Improving Public Pensions: Balancing Competing Priorities by Patten Priestley Mahler, Chingos, and Whitehurst makes a significant contribution to the public pension discourse by providing policymakers and stakeholders with a framework for evaluating proposed reforms to pension systems – even in light of the frequently competing objectives of such systems. The authors begin by defining three essential goals of a pension system: to provide adequate retirement security; to ensure fiscal sustainability; and to maintain/improve public-sector workforce productivity. By analyzing the performance of various pension system designs against these three goals, the authors conclude that a collective defined-contribution plan is best suited to meet the complex objectives of a pension system.

The collective defined-contribution approach to pension reform combines many of the advantages of the defined-benefit plan currently favored in the public sector with those of the defined-contribution plan prevalent in the private sector.

Whereas Improving Public Pensions provides a means by which to evaluate proposed reforms, and identifies an ideal pension plan, Pension Politics: Public Employee Retirement System Reform in Four States by Patrick McGuinn provides actionable policy recommendations for those states that are looking to enact such reforms. McGuinn examines recent pension reform efforts in four states with diverse political climates. Two of the states (Utah and Rhode Island) succeeded in passing significant structural changes to their pension systems, while the others (New Jersey and Illinois) enacted more limited, less innovative changes. McGuinn highlights what activities have and have not been successful in producing meaningful reform, and details a number of recommendations for other states seeking to successfully improve their underfunded pension systems.

The Wealthy-Hand-to-Mouth

March 24, 2014 Comments off

The Wealthy-Hand-to-Mouth
Source: Brookings Institution

About one-third of American households – around 38 million – live hand-to-mouth, although a majority of them are not technically poor because they have assets, albeit illiquid ones, and they respond to stimulus policies in much the same way as those with no assets.

2014 Brown Center Report on American Education: How Well Are American Students Learning?

March 20, 2014 Comments off

2014 Brown Center Report on American Education: How Well Are American Students Learning?
Source: Brookings Intitution

This year’s Brown Center Report on American Education represents the third installment of volume three and the 13th issue overall since the publication began in 2000. Three studies are presented. All three revisit a topic that has been investigated in a previous Brown Center Report. The topics warrant attention again because they are back in the public spotlight.

Part I summarizes the recent controversy involving the Programme for International Student Assessment (PISA) and its treatment of Shanghai-China. The PISA is a test given to 15-year-olds every three years in math, reading, and science. Sixty-five national and subnational jurisdictions participated in the 2012 PISA. When the scores were released in December 2013, no one was surprised that Shanghai-China scored at the top in all subjects. But what has been overlooked by most observers—and completely ignored by the authorities running PISA—is that Shanghai’s population of 15-year-olds is sifted and shaped in ways that make its scores incomparable to those of any other participant.

Part II is on homework, updating a study presented in the 2003 Brown Center Report. That study was conducted at a time when homework was on the covers of several popular magazines. The charge then was that the typical student’s homework load was getting out of control. The 2003 study examined the best evidence on students’ homework burden and found the charge to be an exaggeration.

Part III is on the Common Core State Standards (CCSS). Forty-five states have signed on to the Common Core and are busy implementing the standards. How is it going? Admittedly, the Common Core era is only in the early stages—new tests and accountability systems based on the standards are a couple of years away—but states have had three or four years under the standards. Sufficient time has elapsed to offer an early progress report.

mHealth in China and the United States: How Mobile Technology is Transforming Health Care in the World’s Two Largest Economies

March 20, 2014 Comments off

mHealth in China and the United States: How Mobile Technology is Transforming Health Care in the World’s Two Largest Economies
Source: Brookings Institution

Health care represents a major challenge for many countries as rising health care costs, aging populations, access disparities and chronic illnesses threaten traditional health care systems. Mobile technology can help address these issues, argue Darrell West, Joshua Bleiberg, and a number of academics with the China Academy of Telecommunication Research of MIIT, by boosting productivity, aiding communications, encouraging better health data collection, and analysis and helping providers improve affordability access and treatment.

In particular, China and the United States provide strong examples of recent developments and emerging opportunities in mobile health, or mHealth. In order to best leverage these advances, China and the United States must change operations and policy practice in order to facilitate the growth of the mHealth sector and ultimately capture the benefits of mobile technology in healthcare, these scholars assert.

The authors suggest four ideas that policymakers can extol and undertake to speed the development and adoption of mHealth:

1. Mobile devices offer the potential to improve affordability of health care by lowering disparities based on geography and income. Policymakers should encourage the use and adoption of cellphones, smartphones, and tablets in medical care;

2. Public officials should reimburse health providers who offer consultations, diagnoses, and treatment through remote monitoring devices and other types of mobile technologies;

3. Mobile phones aid the patient experience by providing a means to deliver medical reminders and diagnostic information to patients and physicians. Reminders via text messages or mobile phones can encourage patients to take medication at the suggested time and dosage, and this will improve the quality of patient care;

4. mHealth helps policymakers by encouraging better health data collection and analysis. Figuring out what works and doesn’t work is one of the biggest challenges in health care.

The Plummeting Labor Market Fortunes of Teens and Young Adults

March 19, 2014 Comments off

The Plummeting Labor Market Fortunes of Teens and Young Adults
Source: Brookings Institution

Employment prospects for teens and young adults in the nation’s 100 largest metropolitan areas plummeted between 2000 and 2011. On a number of measures—employment rates, labor force underutilization, unemployment, and year-round joblessness—teens and young adults fared poorly, and sometimes disastrously. This report provides a number of strategies to reduce youth joblessness and labor force underutilization.

Teen Births Are Falling: What’s Going On?

March 14, 2014 Comments off

Teen Births Are Falling: What’s Going On?
Source: Brookings Institution

The United States has experienced a remarkable 52 percent decline in teen childbearing since 1991. Understanding the causes of this decline are important for developing subsequent policies to continue this trend. This decline can be distinguished by two periods. Teen births fell at a rate of 2.5 percent per year between 1991 and 2008; that rate tripled to 7.5 percent per year between 2008 and 2012. We investigate these two periods separately.

Cuba’s New Real Estate Market

February 27, 2014 Comments off

Cuba’s New Real Estate Market
Source: Brookings Institution

In November 2011, the Cuban government legalized residential real estate transactions as part of its ongoing economic reform process. Homes are no longer just assets to be passed on to heirs but can be made liquid, expanding economic freedom for the 84 percent of Cubans who own their own homes.

In “Cuba’s New Real Estate Market,” Phil Peters relies on interviews with market participants and government officials to examine the development of the nascent real estate market, outline its complex processes, and discuss the role of foreign nationals. He argues that the reform helps to address a critical housing shortage, advances private property rights, and repeals the requirement that emigrants forfeit their property to the government upon leaving the island.

Implementing Technology to Improve Public Highway Performance: A Leapfrog Technology from the Private Sector Is Going To Be Necessary

February 24, 2014 Comments off

Implementing Technology to Improve Public Highway Performance: A Leapfrog Technology from the Private Sector Is Going To Be Necessary
Source: Brookings Institution

While the government is looking to mandate private sector auto technology – vehicle-to-vehicle (v2v) communication – it is doing little to allow technology that would improve the nation’s public highways, according to a new paper by Clifford Winston, Searle Freedom Trust Fellow at Brookings and Fred Mannering at Purdue University published in The Economics of Transportation.

Winston and Mannering compare the nation’s highways to a blocked artery of the U.S. economy, noting that the indispensable road system is valued at $3 trillion, with 75 percent of goods transported on roads by truck and 93 percent of all commutes by cars and busses. The private-sector auto industry has implemented substantial technological improvement in terms of performance, safety and comfort, whereas technological improvements on highways have been meager, they write.

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