Working Papers 

Where to Go After the Hospital: How Cost-Sharing and the Family Affect Post-Acute Care (JMP) (FULL TEXT)

This paper studies the relationship between patient cost-sharing and the demand for care after hospital stays (post-acute care), and how this relationship is mediated by non-medical custodial care needs and the presence of the family. Using plausibly exogenous variation in the number of free skilled nursing facility (SNF) days at hospital discharge, I first show that higher cost-sharing for SNFs leads to substitution away from SNFs to home health and routine discharges with no care. Moreover, for those who are already in an SNF, discharges rise sharply when cost-sharing begins. I further document that people with families are less likely to use SNFs, while people with custodial care needs are more likely to use SNFs. I use these findings to motivate a dynamic structural model that begins at hospital discharge and follows the patient through further discharge decisions at different post-acute settings. Using the model, I explore the implications of alternative cost-sharing structures. I find that eliminating the non-linearity in SNF copay can generate large Medicare savings at small costs to the patients. Medicare subsidizing custodial care at home enhances patient welfare substantially for individuals without family, at no additional cost to Medicare. For patients with families, the same policy, while still beneficial to the patient, will increase Medicare costs substantially, resulting in a net zero effect overall. 

Of Opinionated Bosses and Yes Men, with Suraj Prasad (conditionally accepted, Journal of Economic Behavior and Organization) (FULL TEXT)

We develop a theory of opinionated bosses – this is where a boss reveals her opinions to a worker who is tasked with gathering information. When the worker gathers information across multiple tasks, which he views as substitutes, selectively revealing opinions to the worker on one task redirects his effort across tasks. The cost is that the worker becomes a yes man. We show that i) being opinionated can go hand in hand with weaker opinions, ii) the organization can have inefficiently high levels of conformity and initiative co-existing side by side, and that iii) opinions improve the tradeoff between insurance and incentives when the worker is risk averse.

Migration and Long-Term Care (submitted) (FULL TEXT) 

This paper studies how informal long-term care responsibilities towards parents affect people’s migration decisions over the life-cycle. I first show that adult children are less likely to move out of their home location when their parents’ health deteriorates, and the magnitudes of these effects are heterogeneous in a way consistent with care provision motives. However, such data patterns may not fully capture the impact of parental health on migration, as forward-looking individuals facing increasing moving costs over their lifetime may choose not to leave home or to return before their parents’ health needs arise. To fully quantify the effect of long-term care provision on life-cycle migration, I build a dynamic model that combines migration and long-term care decisions. Estimating my model using data from Australia, which allows both informal care provision and rich information on wages to be observed, I find that shutting down the informal care channel results in a 20% increase in the proportion of people who ever leave their home location and a more modest 5.% decrease in return migration. These effects are larger for those who are more likely to provide care.

How Labor-Market Policies Affect Informal Care Provision by ‘Sandwiched’ Parents: Evidence from the 2009 EITC Expansion, with Yang Wang (submitted) (FULL TEXT) 

Working parents caring for both children and aging family members—the “sandwiched generation”—face competing demands on their time. We examine whether a labor market incentive can inadvertently crowd out informal adult care among these caregivers. Using American Time Use Survey data and a difference-in-differences design, we exploit the 2009 Earned Income Tax Credit (EITC) expansion for families with three or more children as a natural experiment to assess its impact on informal care provided to older adults. We find that this policy led to a significant decline in informal care for older adults by mothers with older children (ages 11–17), particularly care related to instrumental activities of daily living (IADLs). This decline was also evident in the care provided to both parents and spouses. Notably, mothers did not reduce the time they spent on childcare, suggesting that care for older adults was more responsive to the policy than childcare. The reduction in care for older adults appears to be driven by increased labor supply among these mothers, and we find no similar changes for fathers. Our findings illustrate how labor supply incentives can crowd out informal caregiving for older adults, highlighting the need for policies that help working families balance work and care responsibilities.

How does Medicare Advantage affect Healthcare Providers? Evidence From the Home Health Industry (FULL TEXT)

In this paper, I document that home health agencies receive less revenue per patient and per visit from Medicare Advantage (MA) plans than traditional Medicare. Moreover, using policy-induced plausibly exogenous variations in the monthly payment MA plans receive from the government in different counties to instrument for MA penetration (the share of Medicare beneficiaries that are on MA plans), I find that an increase in MA penetration leads to a reduction in the number of home health agencies, which is mainly driven by a decline in the number of entrants. Further analysis reveals that an increase in MA penetration also leads to a reduction in the number of home health users, with the decrease coming from those who are admitted from the community rather than post-acute admits, suggesting that MA plans may be better at reducing waste in the use of home health services.