The Pile

A fair number of new papers (well, new to me, at least) come over the transom every week. If they look interesting, I add them to the pile, where they often lie for quite some time unread. I thought that if I kept track here of some of the more interesting additions to the pile that I might be more likely to get back to them sooner.

(1) “Discrediting Workers: How Credit Reports are Distorting the Job Market, Prolonging Unemployment, and Denying Equal Opportunity to Workers” (pdf) by Shawn Fremstad, for Demos.

Shawn is my CEPR colleague (where he is director of the Inclusive Economy Initiative). His new paper for Demos reports that “a majority of employers now use credit reports for some or all hiring decisions” even though “research shows that negative information in credit reports has no correlation to job performance.” As a result, employers engage in “discriminatory hiring and firing decisions that deny equal opportunity to workers.”

(2) “Not Your Father’s Health Insurance: Discount Medical Plans and the Health Care Crisis” (pdf) by Colin Gordon, for The Iowa Policy Project.

This report from the Iowa Policy Project focuses on the national trend toward “discount medical plans” in place of standard employer-provided health insurance plans. Most of these discount medical plans “offer some combination of discounts on ancillary medical services and access to group or ‘preferred provider’ rates on conventional (doctor and hospital) medical services.”


The real value of discount cards is unclear –and obscured by the industry‘s marketing structure and billing practices. But given a typical annual cost of about $400/year, plan subscription would only begin to pay off after an accumulation of over $2,000 in medical expenses. Much beyond that, especially in the event of catastrophic expenses, discounts would either make little difference or disappear upon failure to pay at time of service. Because they offer little benefit for those with light medical expenses and no security for those with substantial expenses, the likelihood that discount medical plans ‘pay off’ for health consumers is slim.

I tend to think of these medical discount plans as the equivalent of sub-prime health insurance, and am glad to see the Iowa Policy Project on the case.

(3) “Labor Laws and Innovation” (pdf) by Viral Acharya (New York University), Ramin Baghai (London Business School), and Krishnamurthy Subramanian (Emory University).

A lot of the mainstream economics literature treats protective labor-market institutions (minimum wage, unions, employer protection legislation, etc.) pretty harshly. This academic paper, however, uses both cross-country and US-specific data to show that: “innovation and economic growth are fostered by stringent laws governing dismissal of employees, especially in the more innovation-intensive sectors.” How? Probably by improving “the so-called ‘internal governance’ of firms by effectively lengthening the horizon of employees and indirectly inducing the top management to provide better incentives to employees by investing for the long run.”

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