Boettner

A large and growing literature shows that attention-increasing interventions, such as reminders and planning prompts, can promote important behaviors. Our project develops a method to investigate whether people value attention-increasing tools rationally. We characterize how the demand for attention improvements must vary with the pecuniary incentive to be attentive and develop quantitative tests of rational inattention. In our first round of data collection, we deployed this method in two experiments.

The overall aim of this pilot project that utilizes data from the Mature Adults Cohort of the Malawi Longitudinal Study of Families and Health, MLSFH-MAC)1 is to understand social interactions about aging and non-communicable diseases (NCDs) in low-income countries (LICs), identify social processes affecting health-knowledge and health-seeking behavior related to NCDs, and provide evidence that will inform innovative intervention designs that leverage social dynamics to reduce NCD risk through sustained behavioral changes and linkages-to-care for older people in a LICs context.

This project will extend the prevailing framework to show how to compute the optimal capital income tax when the Atkinson–Stiglitz conditions fail. Specifically, we show how to estimate a key sufficient statistic for between-income preference heterogeneity which governs optimal capital tax rates. When this statistic happens to be zero, the Atkinson–Stiglitz result obtains, but more generally, this statistic allows for the calculation of the optimal non-zero capital income tax.

The federal government is facing intense financial pressure as the Medicare program approaches insolvency in 2026 due to an aging population. In this project, we examine the value generated by a cornerstone Medicare program, Medicare Advantage, the private plan option that has rapidly expanded to cover over 22 million beneficiaries.

Mounting evidence has documented that default retirement saving policies significantly increase both retirement savings (Madrian and Shea, 2001) and total savings (Chetty et al. 2009). One key question that remains unanswered is where the increased savings come from. It can be either from reduced consumption or from increased debt. If individuals save more by budgeting their pre-retirement consumption, the default policies effectively promote lifetime individual welfare by smoothing their income over time.

The project will expand data to be collected under an existing PARC Administrative Supplement (AS) for investigating Alzheimer’s Disease and Related Dementia (ADRD) in a context different from current HRS International Sister Studies. The PARC AS will cover adding the Harmonized Cognitive Assessment Protocol (HCAP) for 1000 respondents to the ongoing Chilean Social Protection Survey (SPS). The Quartet project will cover 250 additional respondents. The SPS is a stratified random national longitudinal sample of ~20,000 adults 18+ years old originating in 2002, with six follow-ups.

Numerous models have been proposed to explain why people offered access to pension plans tend to adhere to defaults when included as part of a retirement system design (Carroll et al. 2009; Bernheim et al. 2015; Goldin and Reck, 2017). Our work seeks to explore how people respond to alternative default policies, and also how default polices could be designed to achieve social optima.

It has long been recognized that cognitive skills are important determinants of labor market success (Becker (1964); Griliches (1977)), but there is increasing evidence that noncognitive skills also play a salient role. For example, Heckman et al. (2010) analyze direct measures of both cognitive and noncognitive skills that were gathered as part of the Perry Preschool Program evaluation. They find that the ability to plan and to exert self-control significantly affect lifetime earnings and employment outcomes for males.

Long-term care costs are increasing globally, but especially in China where economic development and family planning policies have resulted in rapid population aging. In 2015, one in five older persons aged 65+ globally lived in China, while in 2050 one in four elderly–over 370 million people–will be Chinese. China’s old age dependency ratio was 13% in 2015, but will be close to 50% by mid-century (United Nations, 2015). The need for long-term care services in China is already large and will continue growing rapidly in the future.

Many of our most consequential decisions are influenced by the taxes we face. When comparing different options for retirement savings, for example, individuals must account for potentially different tax consequences of different savings options. When considering two employment opportunities in different states, workers must compare not only the wage and benefits packages, but also the different tax rates. When deciding whether or not to work an extra shift, workers must consider how much of the extra wage will make it to their pockets post-tax.