Essays in Public Economics

TitleEssays in Public Economics
Publication TypeThesis
Year of Publication2019
AuthorsBrown, JHedrich
Academic DepartmentEconomics
UniversityPrinceton University

This dissertation consists of three chapters in public economics. A common theme throughout is the use of empirical methods to evaluate public policies or programs. The first chapter studies the unintended impact of public pre-K for 4-year-olds on private child care for infants and toddlers. Private facilities often care for children from infancy through pre-K. A public option for older children could therefore affect availability, prices, or quality of care for younger children. I use administrative data on private facilities and implement a neighborhood-level difference-in-differences design leveraging spatial variation in the locations of new sites during New York City's 2014 Universal Pre-K expansion. I find the pre-K program reduced the availability of center-based care for children under age 2, and the decline occurred entirely in the poorest areas. Furthermore, new public pre-K sites caused an increase in inspection violations and public complaints at nearby day care centers, suggesting decreases in quality due to the increased competition. The second chapter estimates the effect of the Own Your Future” information campaign on long-term care planning behaviors. Using Health and Retirement Study data and a difference-in-differences design leveraging staggered campaign adoption by twenty-five states over five years, I find an increase in long-term care insurance coverage of one percentage point, or ten percent, concentrated among high-asset individuals. A back-of-the-envelope calculation indicates present-value Medicaid savings of $400 million. I also find campaign-induced increases in life insurance coverage and self-reported probabilities of leaving a large bequest. The third chapter considers a change to the standard mandated benefits model to account for imperfect information. When individuals do not know about the benefit, it is equivalent to a payroll tax, increasing deadweight loss. On the other hand, if workers are unaware of benefits until they need them, moral hazard is reduced, lowering program cost and therefore the implicit tax. I establish empirically that many workers are unaware of Temporary Disability Insurance and apply an updated model to this benefit that incorporates this tradeoff. I find that under most plausible parameter assumptions, an awareness campaign would reduce deadweight loss.

Citation Key10420