IEI Insight: Less regulation of dentists can mean better oral health

This IEI Insight is provided by Maddi McConnaughhay, a Gail Werner-Robertson Fellow and author of a forthcoming paper on the impact of occupational licensing on dental health.

Occupational licensing impacts more than just the legal side of different practices in the United States. It has a significant impact on access to these services, along with control of the labor markets. This can have devastating impacts of the lives of the people in the United States as a side effect of the control of quality in care.

Occupational licensing is put in place to ensure the quality and safety of dental practices, but in the long-term it shrinks the labor market for dentists. Due to the decrease in the supply of labor, patients see an increase in the price paid for dental work. These economic effects have a significant negative impact on the dental health of the nation. States with more rigorous licensing regulations suffer from worse healthcare because it is not as easily attainable.

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IEI Insight: Common measure of income inequality seriously flawed

This IEI Insight is provided by Madelyn McGlynn, a Gail Werner-Robertson Fellow and author of a forthcoming paper on income inequality and the Gini Index.

Income inequality in America is growing quickly. Between the Occupy Wall Street phenomenon and presidential candidates debating solutions, this fact has started to creep into the popular consciousness and has sparked much concern. Income inequality is growing and this can be demonstrated mathematically. But what does that analysis really tell us?

According to Federal Reserve Chairman Janet Yellen, since 1973 the top ten percent of American incomes increased by about 30 percent. The bottom 50 percent of workers’ real income only rose by about five percent. This difference is significant, changes the dynamics of the American economy, and this inequality is not getting any better. Many studies have attempted to determine why this is happening. Researchers tend to conclude that income inequality is exacerbated by gaps in education, an aging labor force, and the presence of concentrated populations.

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IEI Insight: The (regulated) flow of alcohol in Nebraska

This IEI Insight is provided by Luke Buffington, a Gail Werner-Robertson Fellow and author of forthcoming papers on Nebraska liquor regulations and public choice challenges in education policy.

Following the end of prohibition in 1933 every state instituted some form of what has come to be known as the three-tier system for alcohol distribution. The system requires that all alcohol must go through a state-licensed, independent, third party distributor between the producer and the retail location. This has been combined with franchise laws, which give distributors in many states — including Nebraska — exclusive local contracts with producers that are very difficult to terminate. This legal regime certainly has some benefits, but it also has economic costs.

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IEI Insight: Time is right for school choice in Nebraska

This IEI Insight is provided by Clara Jace, a Gail Werner-Robertson Fellow and author of a forthcoming paper on Nebraska education policy.

It is a truth universally acknowledged that parents desire the absolute best for their children. This fundamental part of the American Dream is at the heart of the most recent strides made towards increased school choice for each American family, regardless of race, socioeconomic status, or the neighborhood they call home. The urgency of expanding school choice has not become sufficiently mainstream though. As a nation, the United States falls short on both educational achievement and the amount of school choice when compared to the rest of the world.

School choice expert Caroline Hoxby has conducted an analysis on the feasible increase in school productivity, as measured by national test scores (NAEP points) per thousand dollars of pupil spending. Hoxby’s conclusion is compelling: “if choice were simply to restore productivity to its 1970–71 level, then the average student in the United States would be scoring at an advanced level where fewer than 10 percent of students now score.”

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IEI Insight: Anticipation, not content, of Fed announcements may be driving markets

This IEI Insight is provided by Ryan Coughlin, a Gail Werner-Robertson Fellow and author of a forthcoming paper analyzing the effect of Federal Reserve announcements on market activity.

Previous research has shown that “surprise” portions of macroeconomic announcements have significant effects on financial markets. Further, the magnitudes of announcement effects are influenced by governmental monetary policy. Macroeconomic announcement effects follow a simple pattern: if the economy, as measured by the data in the announcement, is better than anticipated by the market consensus, equity prices are likely to trend upward for the day and bond prices are likely to head lower for the day. In other words, a macroeconomic announcement effect is the market’s reaction to incorporate unexpected historical data. However, the previous research on announcement effects was completed prior to the most recent economic downturn and the unprecedented Federal Reserve monetary policy that stemmed from it. After the implementation of monetary policies such as quantitative easing and near-zero interest rates, macroeconomic announcement effects differed from the conclusions of previous research.

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IEI Insight: Who pays for a higher minimum wage?

This week’s IEI Insight is provided by Renato Morais, a Gail Werner-Robertson Fellow and author of a forthcoming paper on the Nebraska minimum wage.

When we think of increasing the minimum wage, many people believe it is going to help the workers most in need — that it is going to provide them a “living wage.” But who needs more help: those workers who already have a job but earn a low wage, or those who do not have a job at all? A minimum wage increase does not help the worst off of the worst off. It does not even help all of the minimum wage earners.

Who earns the minimum wage? Half of minimum wage employees are between the ages of 16 and 24. Of these, 79 percent are part-time high school students, college students, and entry-level workers — they are not the primary breadwinners of their household. Their average family income is $65,900, and only 22 percent of them live at or below the poverty line. The other half of workers earning the minimum wage — those 25 and older — have an average family income of $42,500, and only a quarter of them live at or below the poverty line. Thus, raising the minimum wage only “helps” a tiny portion of those who the public believes it is intended to help.

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IEI Insight: Employment Support is Good Medicine for Autistic Individuals

This week’s IEI Insight is provided by Joe Kreienkamp, a Gail Werner-Robertson Fellow and co-author of a forthcoming paper on autism spectrum disorders and employment.

The Centers for Disease Control and Prevention identify autism spectrum disorder (ASD) as the fastest growing developmental disability in the United States. Affecting 1 in 42 males and 1 in 189 females, ASD is five times more prevalent in boys than girls. The “developmental disability that can cause significant social, communication and behavioral challenges” can be problematic for individuals and their families.

There are both opportunity costs and financial costs of supporting an autistic individual. In a study conducted by JAMA Pediatrics, the national cost of supporting children with ASD was $61 billion dollars. For adults, the cost was $175 billion per year. As one study indicated, “the cost of supporting an individual with an ASD and intellectual disability during his or her lifespan was $2.4 million in the United States. The cost of supporting an individual with an ASD without intellectual disability was $1.4 million in the United States.” Furthermore, most families who support an autistic child must forfeit one parent’s income to support the child.

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