Research

Peer-Reviewed Academic Publications

Cortnie Shupe (2023). "Public Health Insurance and Medical Spending: The Incidence of the ACA Medicaid Expansion". Journal of Policy Analysis and Management, https://doi.org/10.1002/pam.22435 

Abstract

This paper examines the incidence of the cost burden associated with expanding public health insurance to low-income adults in the context of the Affordable Care Act. Using data from the Medical Expenditures Panel Survey (MEPS), I exploit exogenous variation in Medicaid eligibility rules across states, income groups and time. I find that public insurance eligibility reduced mean out-of-pocket spending by 19.6 percent among targeted households, but it did not causally increase total expenditures among beneficiaries. Rather, Medicaid expansion shifted the burden of payment from eligible households and private insurance (21.5 percent reduction) to taxpayers in the form of public insurance (46.6 percent increase). The efficiency of these public funds can be summarized by a mean Marginal Value of Public Funds of 0.70 in the full sample, 0.99 among households with at least one pre-existing condition, and 1.26 in states with an above-median number of public hospitals. 

Bartels, Charlotte and Cortnie Shupe (2022). “Drivers of Participation Elasticities across Europe: Gender or Earner Role within the Household?” International Tax and Public Finance, https://doi.org/10.1007/s10797-021-09711-z.

Abstract

We compute participation tax rates across the EU and find that work disincentives inherent in tax-benefit systems largely depend on household composition and the individual’s earner role within the household. We then estimate participation elasticities using an IV Group estimator that enables us to investigate the responsiveness of individuals to work incentives. We contribute to the literature on heterogeneous elasticities by providing estimates for different socioeconomic groups by country, gender and earner role within the household. Our results show an average elasticity of 0.08 for men and of 0.14 for women as well as a high degree of heterogeneity across countries. The commonly cited difference in elasticities between men and women stems predominantly from the earner role of the individual within the household and nearly disappears once we control for this factor. 

Settele, Sonja and Cortnie Shupe (2021). "Lives or Livelihoods? Perceived Trade-Offs and Policy Views," The Economic Journal 132 (643): 1150-1178, https://doi.org/10.1093/ej/ueab077.  

Abstract


We study the role of perceived trade-offs between human lives and economic benefits in shaping policy views. In an online experiment with a representative sample from the US conducted during the early Covid-19 pandemic, we provide randomized information on the medium-run costs of restricting economic activity to mitigate infections. A one standard deviation lower perceived economic cost of lockdowns increases support by about twice as much as having a Covid at-risk condition, and by half as much as being a Democrat. Varying projected health benefits has a similar effect. Personal exposure to health risks reduces people’s responsiveness to cost-benefit considerations.

Fedorets, Alexandra and Cortnie Shupe (2021). “Great Expectations: Reservation Wages and the German Minimum Wage Reform,” Journal of Economic Behavior and Organization 183: 397-419.

Abstract

This paper is the first causal study using quasi-experimental methods to identify the effect of minimum wages on reservation wages. We combine data from the German Socio-Economic Panel with a natural experiment to identify an increase of 13.8 percent in wage acceptance thresholds among the unemployed at the low end of the distribution. The introduction of a high-impact minimum wage in Germany in 2015 shifted both reservation wages and observed wages in a similar magnitude. However, after the initial period, job seekers readjusted their expectations downward by 2016, indicating learning on the job market. Our findings suggest that minimum wages do not necessarily result in higher labor force participation in the short run, as the unemployed adjust their reservation wages accordingly.

Neumark, David and Cortnie Shupe (2019). “Declining Teen Employment: Minimum Wages, Returns to Schooling, and Immigration.” , Labour Economics 59 : 49-69.

Abstract

We explore the decline in teen employment in the United States since 2000, which was sharpest for 16–17 year-olds. We consider three main explanatory factors: a rising minimum wage that could reduce employment opportunities for teens and potentially increase the value of investing in schooling; rising returns to schooling; and increasing competition from immigrants that, like the minimum wage, could reduce employment opportunities and possibly also raise the returns to human capital investment. We find that, among these factors, higher minimum wages are the predominant factor explaining changes in the schooling and workforce behavior of 16–17 year-olds since 2000. The employment decline arises from a combination of a lower likelihood of being both employed and enrolled in school, and a higher likelihood of being enrolled in school only (not employed). These effects are consistent with the minimum wage leading students to increase their focus on schooling to meet a higher productivity standard for jobs with a higher minimum wage.


Burauel, Patrick, Marco Caliendo, Markus M. Grabka, Cosima Obst, Malte Preuss, Carsten Schröder, and Cortnie Shupe (2019). "The Impact of the German Minimum Wage on Individual Wages and Monthly Earnings."  Journal of Economics and Statistics, DOI: https://doi.org/10.1515/jbnst-2018-0077.

Abstract

This paper evaluates the impact of the introduction of a statutory minimum wage in Germany on the hourly wages and monthly earnings of workers targeted by the reform. We first provide detailed descriptive evidence of changes to the wage structure in particular at the bottom of the distribution and distinguish between trends for socially insured, regularly employed, and marginally employed workers. In the causal analysis, we then employ a difference-in-difference-in-differences (DDD) strategy to identify the extent to which these changes in wages and earnings can be attributed to the minimum wage introduction. We find that the minimum wage introduction can account for hourly wage growth in the order of ca. 6.5% or 0.50 euros/hour and an increase in monthly earnings of 6.6% or 53 euros/month. Despite finding wage growth at the bottom of the distribution, the paper documents widespread non-compliance with the mandated wage floor of 8.50 euros/hour.


Selected Policy Publications

Shupe, Cortnie and Fulford, Scott and Li, Greta, Consumer Use of Buy Now, Pay Later Insights from the CFPB Making Ends Meet Survey (March 2, 2023). Consumer Financial Protection Bureau Office of Research Reports Series No. 01, 2023, Available at SSRN: https://ssrn.com/abstract=4399626 

Abstract

This report explores the consumer financial profiles of Buy Now, Pay Later (BNPL) borrowers using the Bureau’s Making Ends Meet survey and its association with credit bureau data. While many BNPL borrowers who we observed used the product without any noticeable indications of financial stress, BNPL borrowers were, on average, much more likely to be highly indebted, revolve on their credit cards, have delinquencies in traditional credit products, and use high-interest financial services such as payday, pawn, and overdraft compared to non-BNPL borrowers. BNPL borrowers had higher credit card utilization rates and lower credit scores. However, many differences between BNPL borrowers and non-borrowers pre-date BNPL use. Further, contrary to the widespread misconception, BNPL borrowers generally have access to traditional forms of credit. In fact, they were more likely to borrow using credit and retail cards, personal loans, student debt, and auto loans compared to non-BNPL borrowers. Finally, the report estimates that a majority of BNPL borrowers would face credit card interest rates between 19 and 23 percent annually if they had chosen to make their purchase using a credit card. 


Fulford, Scott and Cortnie Shupe, Consumer use of payday, auto title, and pawn loans: Insights from the Making Ends Meet Survey (May 2021). Consumer Financial Protection Bureau Office of Research Reports Series: https://files.consumerfinance.gov/f/documents/cfpb_consumer-use-of-payday-auto_title-pawn_loans_research-brief_2021-05.pdf

Fulford, Scott and Cortnie Shupe, Consumer Finances during the Pandemic (December 2021) Consumer Financial Protection Bureau Office of Research Reports Series Nr. 2021-3:  https://www.consumerfinance.gov/about-us/blog/making-ends-meet-series-consumer-finances-during-pandemic/

Abstract

Despite a massive increase in unemployment starting in March 2020, consumers’ average financial situation improved in the first several months of the pandemic and continued to improve through June 2021. We use three waves of the Bureau’s Making Ends Meet survey and its association with credit bureau data to understand how consumers have managed during the pandemic. We find that pandemic assistance policies such as expanded unemployment insurance and loan flexibilities are responsible for many of these improvements. Consumers were much more likely to face a significant reduction in income during the pandemic than before. But unemployment insurance kept consumers with income drops from facing financial hardship. Consumers who did receive pandemic-related flexibilities generally faced financial hardship. But some pandemic-related flexibilities and forbearance programs failed to reach many consumers facing hardship. Most pandemic polices—including extended unemployment insurance, eviction moratoria, and mortgage and student loan flexibilities—have recently ended or will end soon. Our results suggest these programs helped protect consumers during the pandemic, so their expiration may lead to increased consumer distress unless the economic recovery is strong and equitable enough to make up for the loss of protections.