NEP: New Economics Papers Unemployment, Inequality and Poverty 2010-02-05

NEP: New Economics Papers
Unemployment, Inequality and Poverty

Edited by:	Maximo Rossi
	University of the Republic
Issue date:	2010-02-05
Papers:	2

Note: Access to full contents may be restricted.
NEP is sponsored by SUNY Oswego.

In this issue we have:

1. Global Wage Inequality and the International Flow of Migrants
   Mark R. Rosenzweig
2. Medicare Part D and the Financial Protection of the Elderly
   Gary V. Engelhardt; Jonathan Gruber

Contents.

1. Global Wage Inequality and the International Flow of Migrants

   Date:	2010-01
   By:	Mark R. Rosenzweig (Economic Growth Center, Yale University)
   URL:	http://d.repec.org/n?u=RePEc:egc:wpaper:983&r=ltv
   A framework for understanding the determinants in the variation in the pricing of skills across countries and the model underlying the Mincer specification of wages that is used widely to estimate the relationship between schooling and wages are described. A method for identifying skill prices and for testing the Mincer model, using wages and the human capital attributes of workers located around the world, is discussed. A global wage equation that nests the Mincer specification is estimated that provides skill price estimates for 140 countries. The estimates reject the Mincer model. The skill price estimates indicate that variation in skill prices dominates the cross-country variation in schooling levels or rates of return to schooling in accounting for the global inequality in the earnings of workers worldwide. Variation in skill prices and GDP across countries has opposite and significant effects on the number and quality of migrants to the United States.
   Keywords:	wage, skill price, international migration, inequality
   JEL:	J31

2. Medicare Part D and the Financial Protection of the Elderly

   Date:	2009-10
   By:	Gary V. Engelhardt Jonathan Gruber
   URL:	http://d.repec.org/n?u=RePEc:crr:crrwps:wp2009-24&r=ltv
   We examine the impact of the expansion of public prescription prescription-drug insurance coverage from Medicare Part D has had on the elderly and find evidence of substantial crowd-out. Using detailed data from the 2002-6 waves of the Medical Expenditure Panel Survey (MEPS), we estimate that the extension of Part D benefits resulted in 75% crowd-out of prescription drug insurance coverage and 33%-50% crowd-out of prescription drug expenditures of those 65 and older. Part D is associated with relatively small reductions in out-of-pocket spending. This suggests that the welfare gain from protecting the elderly from out-of-pocket spending risk through Part D has been small.

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