I haven't Posted. Reason? ALMas "Ayudandoles Lograr Mas"

All right, all right!  I know, I haven't posted on anything related to economics and health or education for a while.

Or like two months...

But it's only because school started and I'm working on a new project!  It's economics related and education related!

It is my baby, and the only program in my life so far--that if I start, I will be happy.

Here are a few details:

The organization, called ALMas ("Ayudandoles Lograr Mas") would gather bilingual Spanish-speakers on the University of Chicago's campus to provide pre-school ELL students (or students the school describes as academically at risk given their familial, language, and income background) of hispanic/latino descent with extra educational enrichment a focus on literacy development and access to academically and educationally rich environments of college mentors and role-models.  The program would most likely take place within a HeadStart program attached to a public school.

I've also had the honor and pleasure to meet with Molly Thayer, Director of Literacy for the UChicago's Urban Education Institute (UEI), and she gave me the UEI's commitment to train students/volunteers participating in my club to administer and teach according to the UEI’s comprehensive STEP education evaluation for students in prek-3rd grade--so that members and I can now move forward crafting an actual curriculum and materials list and exercises for the pilot-program.  Of course, we are still in the planning stages of the program with curriculum development at the forefront of our efforts right now.

And just as exciting, I just spoke with Lucy Hall, UChicago's Jumpstart Program Coordinator, and she's agreed to share with me Jumpstart's curriculum and lesson plans, as well as committed to train the core group of my volunteers on how to work within a pre-school environment with children, how to administer a structured lesson plan, and provided acces to DePaul University's Jumpstart that works with ELL students of Latino descent.

ALSO, GUESS WHAT?!  I MET DR. EUGENE GARCIA, the same researcher that I've referenced in the previous post! He was excited about my plan and introduced me to some heavy hitters within the education community working on early childhood development for Latino children.

Slowly, things are coming together to provide an environment for young DLL latino students to grow intellectually, socially, and academically through literacy development and mentorship.

The Case for Early Childhood Education Programs for Latino Migrant Students

[All quoted text--the indented text--come from this research paper, Latinos and Early Education: An Account of Diversity and Family Involvement by Cuellar, Rodriquez, and Garcia of Arizona State University (Word Document).  Highlighted text are other references of information.]

Latino immigration brings the United States both amazing economic benefits, like complementing our labor force and creating jobs for Americans, and tricky public policy problems, especially within  the American public education system that struggles to appropriately respond to a new, rapid influx of non-English proficient students and their academic struggles and large (yet decreasing) high school drop out rates.

States like California are finding it difficult to cope and adapt with this influx of immigrant children, whose households are generally low-income (58%) and uneducated with "only 9.5% of young Hispanic children had a mother with a college degree."  But our public education system has to adapt and change according to these children's needs simply because

Latino children are the fastest growing segment of the U.S. population; their families vary greatly, they often attend poor quality schools, and are likely to not achieve educationally as much as children from other ethnic groups.  This is in part related to the poor quality of the schools that Latino children often attend.

And most importantly and unfortunately--these students--a high proportion of them are not English proficient:

In a report using ECLS-K—the Early Childhood Longitudinal Study-Kindergarten Class of 1998-99, a nationally representative database that includes standardized test scores for children starting in kindergarten through the 5^th grade, Galindo & Reardon (2006) found that half of Hispanic kindergarteners are classified as language minority students and that 30% at the beginning of Kindergarten are not considered English proficient.  This is an important fact, because English language proficiency has been documented to be a key determinant of educational success (Gandara, Rumberger, Maxwell-Jolly, & Callahan, 2003; Reardon & Galindo, 2006).

This isn't necessarily surprising considering 

Most young children of Hispanic descent come from immigrant families.  In the year 2000, 64% of these children were either immigrants themselves (first generation Americans) or were US-born children-of-immigrants (second generation American).  Of these 64%, most (88%) fit the latter category (Hernandez, 2006).

How do we continue to change the tide and increase the academic success for our fastest growing population group?  We must continue, as the authors in Cuellar, Rodriquez, and Garcia state, developing programs that teach and prepare immigrant parents not only to become but how to become involved in their children's cognitive, linguistic and therefore academic development from the beginning--between ages 0-3.  And where parents find it extra difficult to provide structure for their children and develop their abilities in the formative years, we need directed and targeted afterschool programs that focus on reading comprehension and English literacy for this relatively poor and weak-English speaking student population (I'll have a post on afterschool programs later, with statistical tables and stuff!  Wuhoo!).

We need programs that integrate the partnership between non-profits, community, and family networks--programs like the following are great:

1.  Project FLAME (Family Literacy:  Aprendiendo, Mejorando, Educando)

Based at the University of Illinois-Chicago, Project FLAME particularly focuses on improving parent involvement and academic achievemnt of "children of limited English proficient parents" teaching parents

what types of books are appropriate for the age of their children, and are encouraged to reach out in the community to access literacy materials and create at home literacy centers.  Parents are also provided with English as a second language courses and encouraged to engage in reading and writing activities with their children. Through workshops in the program parents learn the value of interacting with their children in activities such as talking, singing, and playing.  The program emphasizes on talking with children about books.  In order to improve parent-school communication, parents learn about what schools expect from their children academically and are encouraged to volunteer in their children’s classroom.  

2.  Parent Institute for Quality Education (PIQE)

The fundamental premise of PIQE is that low-income, recently immigrated parents to the United States need information about the dynamics of the U.S. educational system, about how to collaborate with the school and teachers, and about how to assist their children at home (PIQE, 2007).  PIQE offers this information through a program that consists of eight ninety-minute sessions in which a range of topics are discussed, including home–school collaboration, the home, motivation, and self-esteem, communication and discipline, academic standards, how the school functions, and the road to university (Chrispeels & Rivero, 2001; Chrispeels, Gonzales, & Arellano, 2004; Golan & Peterson, 2002).

What's most exciting about this program is

data from a performance evaluation that focused on the children of parents that graduated from the PIQE program in San Diego suggest that PIQE has had a bearing on school persistence, reduced the dropout rate, and increased college enrollment (Chrispeels & González, 2004; Chrispeels, Gonzales, & Arellano, 2004; Vidano & Sahafi, 2004).

3.  Home Instruction for Parents of Preschool Youngsters (HIPPY)

[HIPPY is] a free, 2-year, home-based early intervention program for 4-and 5-year-old children.  In the U.S., it is intended to provide educational enrichment to at-risk children[of limited English proficiency--aka English Language Learners (ELL)] from poor and immigrant families , increase school readiness, and foster parent involvement in their children's education

The 30-week HIPPY curriculum is an explicit, direct, instructional program.  The lessons are designed to develop a child's skills in three major areas: language development, problem solving, and sensory and perceptual discrimination 

Taught with a curriculum administered in Spanish, children enrolled in HIPPY for pre-school and kindergarten outperformed their peers in a study with a control group of students enrolled in an early childhood school that wasn't HIPPY.

Conclusion and Questions:

While we focus on teaching parents how to become involved in their children's education--specifically within the immigrant and Spanish-speaking latino community--as well providing these students the opportunity to attend higher quality schools, we must focus on pushing these children into early childhood education programs.

How do we provide these extra bilingual services at a reasonable cost?  And should we propose afterschool academic enrichment programs specifically targeted to children of lower socioeconomic statuses (SES)?  I think so.  But where do we find the funding if we don't already have it?  And what programs exist now that provide these services, and what are their affects?

I'll look into it.  This is a developing issue that I'm just beginning to explore.  But I have a somewhat personal stake in this, considering I myself am latino.  I was just fortunate enough to have two educated, motivated immigrant parents from Nicaragua who came to the United States with nothing but a dream to succeed--and ultimately for me to succeed.

I've seen the dearth of ambition caused by a dearth of opportunity within the latino-community ghettos--and I've even temporarily attended the poor quality and overcrowded schools many latino children from low SES attend.

I see myself in a lot of these latino children, I do.  And I see my parents in them as well.  If it weren't for my mother who pushed me to read when I was younger, who read to me every night, who ensured my English proficiency was high; if it weren't for the quality pre-k and kindergarten I attended in a private school in Minnesota; if it weren't for the successful acculturation to the "American" way of life and belief and pursuit of education; if it weren't for teachers who took time afterschool until 4pm to help me go over math problems and homework when I almost failed---I would never have been able to attend the University of Chicago, one of the nation's premier universities.

These children deserve better from us as a nation of collective gratitude and paying-it-forward.  They deserve to know they can do not what I've been able to do...but better.

Poverty in the United States

I'm working on my next post, and it's going to be about after-school programs and their affects on academically at-risk children with a particular focus on latino migrant children.  However, it's slowly becoming more and more detailed and complicated.  There's quite a bit of research here.  And I'd like to make it a substantive post.

In the meantime, here's this amazing piece by Paul Tough of the New York Times on urban poverty in the United States, the deepest soft-spot for President Obama.

[What we know now about poverty and how to truly reverse it (it's going to take not just money, but a lot of concentrated, directed money)]:

Americans know how to use their government to remediate a certain kind of poverty. If a family does not have enough food to eat or money to survive, we know how to issue food stamps or cut a check. But when children are growing up in a home without the kind of stability and support and order that they need to succeed in life, Americans don’t always know — and certainly don’t always agree — on what we want the government to do. We generally agree that we want the government to help increase opportunity and social mobility. But we don’t like the idea of the government meddling in the home lives of private families. And so we’re in a dilemma: the biggest factor holding back social mobility for poor children may be one we don’t have a good strategy to solve — and it may be one we don’t feel comfortable even addressing at all.

What [we] need more than anything else is an antipoverty strategy that is much more comprehensive and ambitious than what exists there today, an approach that focuses on improving outcomes for children from birth through adolescence.

[Most importantly, however:]

Obama laid out an ambitious agenda [as candidate] to do just that [fight urban poverty]. At its center was a proposal to expand the work of Geoffrey Canada and his organization, the Harlem Children’s Zone, which takes an intensive and comprehensive approach to child development in a 97-block high-poverty neighborhood in central Harlem, providing poor children with not just high-quality charter schools but also parenting programs, preschools, a medical clinic, a farmers’ market, family counseling and help with college applications. 

To reduce poverty, and provide our children with the futures they deserve--we need a 360 degree plan.  Yes, it's going to be huge.  It's going to be liberal.  It's going to be a lot of government.  But we need to do it because no one else can or will.

We need not just focus on quality schools, but the environment in which the children in these schools live in.  Why don't we get that?

As Obama said, we have to heal entire communities.  Sure, we can continue debating the question, "Where does personal responsibility end and government intervention end?"

Or, we can do something.  It's hard to be personally responsible when no one cares.

Children and Health Focus

With the advice from my economics mentor, Anya Samak, I'm going to focus this blog into a Health Economics blog with a particular emphasis on children, education, and their health.

I'm also going to translate health economics literature/research into digestible and quotable blog posts, while providing the public quick references, evidence, and new knowledge gained from the most recent research--or research I find really interesting.

I'll also try to post interesting and up to date news articles I come across relating to health, youth development and education, as well as asking questions and expressing my own opinion and ideas.

Let's see what happens.

Thanks Anya, for the recommendation.  I think this could be something really cool.

Quality Assurance Assessment Program: Michigan FY2012

Here's a little table I had to make for my internship at CHRT this summer.  I did a lot of research on this, spoke a lot of state budget officials, and hopefully it's mostly right.

For the "Revenues Collected to Date," I got that information from successfully submitting a Freedom of Information Act (FOIA) request!  :]  That was cool.

Michigan's Provider Tax Structure FY2012:

(Click picture to enlarge)

International Bribery: Economically Uncool

I came across this recommended read in the New Yorker about international bribery and the arguable role it plays in economic development within nations:

Without bribes, the argument goes, it takes much longer to do anything, and you end up with less economic activity—fewer Walmarts, less trade. Seen this way, bribes grease not just palms but the very wheels of commerce...

... 

[However,] for the firms paying the bribes, corruption is costly—not just monetarily but also in terms of time and uncertainty, since bribery requires bargaining and monitoring. Kaufmann and Wei show that businesses that paid more bribes spent more time dealing with government officials, not less, and that their cost of capital was higher, not lower. Far from greasing the wheels of commerce, bribery tends to throw sand in them."

So bribery is bad.  Who knew?  How do we combat it for sustainable economic development internationally?  Get as many countries as possible to take a stance together against corruption-facilitating practices:

Bans on bribery work best when they’re widespread; otherwise, companies start to feel competitive pressure to bribe. The problem today is that some of the biggest players in the global market, like India, don’t have laws against foreign bribery, while others, like China and Russia, have laws but little or no enforcement. A recent study by Transparency International found that Chinese and Russian companies—which, in 2010, invested a whopping hundred and twenty billion dollars abroad—were the most likely to pay bribes. It’s no wonder that there have been recent calls to roll back, or even repeal, the F.C.P.A [Foreign Corruption Practices Act]. But weakening it would only lead to an arms race of graft. The smarter strategy is to use what leverage we have—including things like membership in the O.E.C.D.—to get countries to adopt a standard [against corruption].   

We should persuade others to join us there.

But an interesting question arises.  If individuals and firms bribe to engage in business instead of going through official channels, wouldn't that mean that bribes (as perceived by the firm) must be less costly?  Or else, why would the firm dabble in bribery if it doesn't receive a higher return from engaging in business through official channels?

Taxes: Are They Really "Too" Progressive?

[Before we continue, I'm not entirely sure if this tax model I will reference includes cash transfers from local, state, and federal programs to individuals.  That would reduce the effective tax rate for the individuals receiving them.  And, on the graphic you'll see below, income doesn't seem to include cash transfers.]

Now, I agree our tax code is hugely flawed.  Our tax base is small, with large tax loopholes (which are tax expenditures!) available largely for the wealthy individual and business.  That's a fact.

Read Showdown at Gucci Gulch: Lawmakers, Lobbyists, and the Unlikely Triumph of Tax Reform.

As I was saying, though, when you include all taxes--local, state, and federal taxes--the idea that the poor don't pay taxes, and that the taxes in the United States are extremely progressive seems uncertain and potentially flat out wrong (again, I say that as I look for information otherwise).  From the Economist:

The fact of the matter is that the American tax code as a whole is almost perfectly flat. The bottom 20% of earners make 3% of the income and pay 2% of the taxes; the middle 20% make 11% and pay 10%; and the top 1% make 21% and pay 22%.

 Now, look at this interesting graphic from Citizens for Tax Justice:

Taxes don't seem all that progressive now.  The conventional wisdom reasons that poorer folk still have to pay local and state taxes, which takes up larger chunks of their income compared to their much wealthier fellow Americans, who can also avoid a lot taxes through tax-sheltered accounts and other financial tools widely available to wealthier Americans.

The tax code seems to be progressive at first, and then becomes regressive. It's essentially flat.

Who really pays taxes, and at what rate?

It’s often claimed that the richest Americans pay a disproportionate share of taxes while those in the bottom half pay nothing. These claims ignore the many taxes that most Americans are subject to — federal payroll taxes, federal excise taxes, state and local taxes — and focus instead on just one tax, the federal personal income tax. The other taxes are mostly regressive, meaning they take a larger share of income from a poor or middle-income family than they take from a rich family.

Let's just get the facts straight, people.

Now, if we include both local and state cash transfers, but only federal taxes (including federal excise taxes), we have a very progressive tax system, according to the Congressional Budget Office, which Greg Mankiw references:

Because transfer payments are, in effect, the opposite of taxes, it makes sense to look not just at taxes paid, but at taxes paid minus transfers received.  For 2009, the most recent year available, here are taxes less transfers as a percentage of market income (income that households earned from their work and savings):

Bottom quintile: -301 percent
Second quintile: -42 percent
Middle quintile: -5 percent
Fourth quintile: 10 percent
Highest quintile: 22 percent

Top one percent: 28 percent

The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned.

But then he notes,

Update: A reader points out the CBO's transfer data includes state and local transfers, but the tax data includes only federal taxes.  If state and local taxes were included, or if state and local transfers were excluded, the middle quintile might well turn positive, though the CBO does not provide the data to establish that conclusion definitively.

Side note: I SAW THIS FIRST, AND I SHOULD HAVE E-MAILED HIM!  UNFAIR!  Gosh darn it.


Boom.

Family Income and the Health of Children: The Poor Get Sicker and Sicker

If there was any question whether income and education affect health outcomes...well, there isn't one now.  Or at least there shouldn't be, after the hallmark study "Economic Status and Health in Childhood: The Origins of the Gradient" by Case et al.

She and her team of researchers found:

Immediately apparent in the left panel of Figure 3.1 (graph shown below) is the inverse relationship between family income and children’s health status for children of all ages. The correlation becomes progressively more negative with age—a phenomenon that holds throughout childhood and adulthood (note the change in scale between the panels). This steepening of the gradient with age is observed until roughly age 65, a result consistent with the findings of other researchers. The results for the PSID [Panel Study of Income Dynamics] are similar to those for the NHIS [National Health Interview Survey].

...on average, children’s health becomes poorer with age and...the differences in the health of wealthier and poorer children become more pronounced with age. 

Family income is not only a strong predictor of a child's health status at any given age, but it also seems to determine whether children face negative health outcomes that increase in severity as they age.

Being poor means that as children grow older, not only do they experience higher percentages of worse health outcomes, but their health status worsen over time--meaning the health gap between wealthier and poorer children only grows over time.

Family income really determines a child's health from beginning to end.  Income's protective power over children's health cannot be underestimated.

As Case et al conclude:

...income is itself protective of children’s health, or is correlated with things that are protective of children’s health. Perhaps both.

But what about parental education?  That has to have some positive effect on children's health outcomes, considering that education tends to lead to higher incomes, right?

The addition of parents’ educational attainment to the set of controls has a large effect on the estimated income coefficients, reducing them by roughly a third for all ages relative to results using Controls 1. However, the gradients remain large and highly significant. Even with controls for parents’ educations, a doubling of household income is associated with an increase in the probability that a child is in excellent or very good health of 4.0 percent (for ages 0-3), 4.9 percent (ages 4-8), 5.9 percent (ages 9-12) and 7.2 percent (ages 13-17).

... 

Although adding controls for education does not eliminate the effects of income, the coefficients on parents’ educations are large and significant. Children living with a mother with a high school degree are reported to be in better health than those whose mothers have not finished high school (the omitted category here). Children whose mothers have more than a high school degree are reported to be in even better health. A similar pattern is seen with respect to fathers’educations.

So while parental education does improve the health of children, income still dominates when it comes to improving a child's health outcomes.

(Click to enlarge the graphs!)

I have more to expand upon.  The paper also covers children and chronic conditions.

Healthcare Inflation vs. US Inflation vs. Unemployment

US Health Care Inflation Rate data by YCharts

The darker shaded area indicates the recent recession.

The recession seems to have caused both the healthcare inflation rate and the US Core inflation rate to just about converge.  Which would have been nice, slowing down the growth of health care prices to a rate below or at inflation.  Except for the recession part.

Because when people are losing their jobs and losing their healthcare coverage, people tend to be unable to afford going to the doctor--and attempt to do without medical services they need.  That's not good.

Illuminated Insight on Competition

I read this free snippet--and found it breathtaking--from Edward Conard's book Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong:

"Competition simply evolves and grows more intense over time."

Competition naturally affects how firms interact within the market to compete for market shares.  It forces them to bear larger amounts of risk--risk of failing if they don't innovate and change--and in turn this forces them to shift any risk they can away from themselves onto others: employees.  Like the development of the 401(K) plan.  Like Conard says, we can blame the corporations, but that's useless.

We have to blame competition.  It creates more risk.

And who likes to play with a lot of risk?

A super cool chart from the book:

Our productivity levels per worker have been much higher than any of our Western European counterparts because of our unprecedented improvements and developments in Information Technologies and the internet.  Why?  I'll have to keep reading, but so far, it's riveting.

This book is amazing, and it's an economics gold-mine.  If you like economics, you better get this book.  I'm getting it, shortly after I read a lot more about public health and a few other books on my list this summer.

This Summer: Intern at CHRT

As some may or may not know, I'm interning this Summer at the Center for Healthcare Research and Transformation (CHRT).

And guess who I got to meet?  Helen Levy and Thomas Buchmueller!  Both former economists on the Council of Economic Advisers to the President!

And right now they're both working with CHRT to do an economic analysis of the impact of the Medicaid expansion on Michigan!

Exciting times to be an intern at CHRT, especially as an undergraduate.  Don't know the extent of my work, but regardless, it's cool.

Income Inequality: Bad Consequences :[

Bloomberg:

"University of Ottawa economist Miles Corak makes the strongest case yet that inequality and mobility are intertwined—the more unequal a society is, the greater the likelihood that children will remain in the same economic standing as their parents."

...

 "'When difficult decisions need to be made,” Pearson says, “the already diminishing resources for individuals at the bottom are the first to go.'"

...

[Most importantly] :

 "'The strong tie between family background and the chance of success runs counter to what we commonly understand as the American Dream,” Corak says."

We're letting the American Dream slip away.   In a sense, we can measure the American dream by the strength of the positive relationship between economic mobility and the gini-coefficient.  The more intense the relationship, the closer we are to losing what makes America exceptional.

 

Unemployment, Labor Force, and Economic Recovery

Interesting piece of information in Bloomberg Businessweek today:

Size of the labor force. If more people are unemployed, that’s bad. But if the number of people in the overall labor force—including those with and without jobs—increases as well, it indicates people who had given up looking are being drawn back into the job search. The labor force grew by 642,000 people from April to May. It rose again in June, but by only 156,000.

What does this mean for unemployment numbers?  Well, the labor force participation rate partially measures optimism within the labor market.  During prolonged recessions and economic downturns, more individuals drop out of the labor force because they are able to find less jobs since employers are either keeping the amount of employees constant or laying them off while attempting to increase productivity.  We would see a negative growth rate in the labor force.  We can reasonably assume people are becoming discouraged--less optimistic--about finding employment.

During a sustained recovery, if people are optimistic about employment prospects, we should expect a positive growth rate in the labor force.  As in, people that were out of the labor force are coming back in, looking for work again.  I bet there are some more complicated variables here, but let's keep this conversation simple.

What does this mean for unemployment during economic recovery immediately and over the long-run after a recovery?

We would expect an uptick in unemployment immediately, as more people join the labor force, because they're more optimistic about finding a job.  This is a good sign.  Then we would expect a gradual decline in unemployment, assuming recovery is consistent.

So I don't think it's unusual that unemployment is stuck at 8.2% at the moment while there is job growth, albeit slow growth.  But this just means that the rate at which people are joining back in looking for work is greater than the rate at which the economy is producing jobs, at the moment.  That's a good sign, though.

A growing labor force is better than a decreasing labor force.  It's a sign of optimism.  Let's hope the recovery continues and fuels more optimism and jobs.

A good point to note, however, is:

The all-in jobs misery number. This category, known as U-6 among economists, includes the unemployed and the underemployed, such as those working part-time jobs even though they’d like full-time work, and those who have given up looking for work. The U-6 number has held steady at just under 15 percent for the past five months; it rose slightly, to 14.9 percent, in June. That’s not good; consumers need to feel confident in their full-time employment before they loosen the purse strings. The U-6 number is down from a year earlier, when it was 16.2 percent.

U-6 includes those underemployed and those who have stopped looking for work.  The U-6 number has held constant, potentially meaning the labor force hasn't actually grown because discouraged people became optimistic--but that younger laborers probably entered the market after graduating, therefore increasing the labor workforce (May and June are prime graduation months for college students).  

BUT: the constant rate could result from those who stopped looking for work just swooped into the underemployed category.  It's not necessarily good, but that does mean more jobs are available.  This still means individuals who stopped looking for work began looking for work again--and maybe found work (it's just not full-time, what they would have preferred).

Serious Moral Hazard: The Consequences of Mandated Insurance in all Markets

So this is just a commentary, but I think it's an important exercise in judgement analysis.

Peter Coy, my boy at Bloomberg Businessweek, just made the case that we shouldn't just be mandated to by health insurance, but we should be mandated to buy all types of insurance, because:

The logic of getting everyone to jump into the risk pool is powerful: Left to their own devices, many people will choose to go uncovered against fire, flood, car crashes, and cancer. Then, if something bad happens, they throw themselves on the mercy of society. The cruel solution would be to let them live (or die) on the streets. To our societal credit, we are unwilling to do this. A coverage mandate at least ensures that people who create the risks will bear the costs, on average, over time.

At first sight, it seems unquestionably obvious: let's get everyone to buy all types of insurance.  That way, we don't have to face that moral dilemma of asking ourselves, "Well, should I let that person I don't know just die, lose his home, and have the guilt of conscience that I refused to help another family, with kids, in need?"

I mean, our federal and state governments collectively already make us buy tons of insurance:

States require drivers to carry liability insurance. Your state government also provides you with—and charges you for—insurance against losing your job. The federal government mandates flood insurance for anyone living in a flood plain who has a federally insured mortgage. Social Security is mandatory insurance against a penniless old age, and the premiums are deducted from your paycheck, whether you like it or not.  

Great idea, then, right?  Maybe not.  What would happen if we were all covered for our potential mistakes or natural hazards?  Would we stop caring about where we move, ignoring "tornado alley" and building there anyway because, heck, you're covered, right?  Or flood alley?  Or earthquake alley?


More people may be harmed.  Because the perceived danger of living in a dangerous environment has decreased in risk, and therefore price.  This may then actually incentivize more individuals to live in the exact place where they initially try hardest to avoid: dangerous environments that increase their chances of major harm and reckless decisions.  And death.  Let's not forget death.  Why?  Because the financial risk is gone!


And Coy fundamentally makes an argument about finances.  People avoid buying insurance because it's too costly.  So, if we reduce the percieved cost, what's not to attract more demand of riskier living environments?


Decisions that used to cost more, like living in a flood zone, tornado alley, eating high-fat foods--now all cost less because he's paid a premium for protection against the negative consequences they bring forth: death.  And depending upon the estimate, each human American life is worth about $10 million.  So, looks like we've just lost that and more.


Unless, of course, they all die, and then we don't have reckless people raising premiums of insurance, and we leave only the risk-averse individuals alive.  But that's not necessarily equitable.  And it is a huge leap.  But that's the point.  To show that ensuring all people for everything is a huge, inequitable leap that borderlines fanatical and betrays our moral sentiments to help our fellow man.

The ACA Individual "Tax" Date: Why it Matters

A not-so-small and controversial mandate exists within the Affordable Care Act (ACA).  It has libertarians up in arms and liberals up in hopes.  It’s the ACA’s individual mandate—or tax individuals would have to pay for not purchasing health insurance.  While the mandate seems radical, it’s not—and it will probably lower your healthcare premiums!  The idea of our government strongly encouraging us to buy insurance isn’t new.  We have to buy car insurance if we own a car.  People generally don’t complain about that, because they want to be reimbursed if someone damages their car—imagine if someone who didn’t have car insurance hit you.

Yes.  The individual mandate is key to lowering your insurance premiums.  Hey, it's working in Massachussetts!

The conventional reasoning behind the individual mandate is straight forward.  Individuals who are more likely to be sick (high-risk consumers) are precisely those that apply for and enroll into health insurance plans.  This is called adverse selection.  These are individuals that recognize they will probably need care that is either long-term, intensive, or both—and therefore high cost.  Without insurance, they would likely be unable to pay for their out-of-pocket, and, recognizing their situation, also purchase health insurance.  To the insurer, however, high-risk consumers are expensive and expect to pay more for their coverage.

Individuals who are less likely to get sick (low-risk consumers)—usually the young and single—tend to avoid purchasing health insurance because they can reasonably assume their chances of needing expensive, intensive, and long-term care are very low (in fact, one in three young American between 18-34 did not purchase health insurance).  This tends to also reflect the fact that younger adults within the labor force are relatively poorer compared to their middle-aged or older counterparts that have worked 20+ years and have accumulated wealth and higher incomes over time.  Just as the low-risk individuals recognize their low chances of needing expensive care, so do insurers.  Insurers expect to pay significantly less for their coverage compared to their high-risk counterparts.  They are cheaper to insure.

So what does this have to do with ACA’s individual mandate? 

Insurance companies calculate premiums based upon the total cost they expect to pay to insure all their customers who have purchased health insurance.  For simplicity, we add together the expected cost of insuring high-risk consumers with the expected cost of insuring low-risk consumers.  This is the expected total cost of insuring all consumers.  To calculate the premium each consumer must pay, we divide the total cost by the number of consumers in total (high-risk + low-risk).  The premium is therefore an average price that high and low risk consumers pay. 

The low-risk pay more in premiums than what they receive, and that “left over” care provides for high-risk, who pay less in premiums than what they receive in care.   So, the low-risk consumers pay for the high-risk consumers’ “extra care. “ (This gets a little more complicated when we add in that companies also have to make a profit, but here we will assume the company is just breaking even in its commitments to cover its consumers.)

But what happens when the low-risk are relatively low-income young laborers who have decided health insurance is an unnecessary extra cost they want to avoid?  This means the average premium rises, because there are less low-risk consumers and less “left over” care for the high-risk.  Consequently, insurers raise their premiums to make up for that lost “left over” care. 

The individual mandate requires all (with few exceptions) consumers to purchase health insurance and therefore drive the average premium down. 

The mandate protects against this adverse selection.  And it protects against upward spiraling costs.

However, one of the major arguments against the Healthcare bill has been that the mandate is too weak!

            “The adverse selection death spiral

The problem, as PwC points out, is that the individual mandate is too weak. “While the new market rules [regarding pre-existing conditions] are implemented in full in [2014], the individual coverage requirement is…phased in gradually.’”

Michigan: Supply and Demand of Primary Care Medical Residents and Specialists

2008-2012 National Resident Match Program Results for Michigan.


Medical Students (UME) Matched to their Residency Specialization (Graduate Medical School).

Michigan:

UME Students Matched to Primary Care Residencies for GME:

	Years
Resident Type	2008	2009	2010	2011	2012	Grand Total
General Practitioner
Sum of Quota	94	94	99	111	109	507
Sum of Matched	83	83	86	98	99	449
Internal Medicine
Sum of Quota	153	157	182	168	190	850
Sum of Matched	153	157	181	168	190	849
Obstetrics-Gynecology
Sum of Quota	47	48	53	52	52	252
Sum of Matched	47	48	53	52	52	252
Pediatrics
Sum of Quota	91	95	110	109	103	508
Sum of Matched	90	94	107	104	103	498
Total Sum of Quota	385	394	444	440	454	2117
Total Sum of Matched	373	382	427	422	444	2048

UME Students Matched to Specialist Residencies for GME:

	Years
Resident Type	2008	2009	2010	2011	2012	Grand Total
Non-Primary Care Providers
Sum of Quota	521	553	580	606	596	2856
Sum of Matched	480	522	536	557	542	2637
Total Sum of Quota	521	553	580	606	596	2856
Total Sum of Matched	480	522	536	557	542	2637

Do you see a shortage?


What may lie behind these results of physician shortages within Michigan?  Basic economic intuition could say the barriers to entry within the medical field limit the supply of doctors.  By barriers to entry, I mean the high cost of medical school and residency.


Or, we could explain excess demand from untaxed healthcare fringe benefits that drive up the total demand of healthcare--and therefore doctors--at a faster rate than our current medical education system can accredit and train the necessary doctors to reach that demand.


But we also run into a few snags.  Bigger academic and research hospitals usually don't face shortages.  There could also be regional differences: rural hospitals may find it harder to compete for physicians in the National Residency Matching Program (NRMP)--which I'll discuss a little later--and be left with no doctors left to fill their positions after they've been taken by bigger research hospitals or urban hospitals with more prestigious residency programs.


I don't know.  I'll have to look into this a little more.  


Interesting to think about, no?

Healthy Lifestyles in School: Investment in Human Capital

Healthy Living: A Student’s Key to Success

The physical and mental bodies of the human are inextricably combined.  If the physical body is neglected, the mental will lag; if the mental body is slow, so will be the physical.  Each relies upon one another and must function together in synergy for optimal output.  To perform at this optimal, mental level and simultaneously prevent mental decay, however, the body requires adequate nourishment and structured, routine exercise.

This is why it is critical that students in school—pre-school, high school, college, and further—maintain their physical and mental bodies healthy: eating balanced diets and exercising regularly.  Students who do this will excel academically, which in turn will lead them to success beyond school.  Exercise and good eating habits in school increase students’ mental ability and self-confidence.  In turn, these benefits increase their human capital, which will be critical in their abilities in finding great paying, less stressful careers, and avoid poverty and long-term health issues.  Therefore, exercise and good eating habits in school lead students to long and prosperous futures.  Conversely, students who are incapable or refuse to maintain their physical body and health risk sabotaging their futures.   

Let us look first at the benefits of exercise and healthy eating habits with respect to the human body and the brain.  Researchers have recently discovered that “exercise affects the function of thirty-three different genes in the hippocampus [region of the brain], which plays a key role in mood, memory, and learning” (Conniff, 2).   It actually produces “new brain cells, new and enhanced connections between existing cells, new blood vessel for energy supply, and increased production of enzymes for putting glucose and other nutrients to work” which consequently helps prevent Type 2 Diabetes, which currently, negatively affects an alarmingly high rate of children in the United States and their learning capabilities in the classroom (Conniff, 2).  Exercise essentially provides the brain an environment in which it can grow in its capability to absorb information and process it faster.  So, if students exercise, they will invariably think faster and better.  This means success in the classroom.  And that means success beyond it.

Maybe the most important, however, is exercise and healthy eating habits help students fight depression, obesity, and Type 2 diabetes—which all link together.  Currently, one in three children in the United States is overweight or obese, and Type 2 diabetes and depression is increasingly being reported among children and adolescents who are obese (Gavin, CDC: “Overweight and Obesity).  This is a major obstacle impeding these students’ abilities to succeed in school, because they—our obese and overweight students—experience “immediate health consequences” of which some are “psychosocial” becoming “targets of early and systematic social discrimination” (CDC: O and O).   This psychological “stress of social stigmatization can cause low self-esteem which, in turn, can hinder academic and social functioning” (CDC: O and O).  Overweight and obese students are more likely to be depressed, self-deprecating, and therefore more academically at risk because they are constantly stigmatized because of their weight and feel resentment towards their bodies becoming anti-social and consequently more inclined to miss and drop out of school (Basch).

More alarming is the recent discovery that “adolescents with Type 2 diabetes have diminished cognitive performance and brain Abnormalities” (Adolescents: NYU).  In fact, adolescents with type 2 diabetes not only “had significant reductions in performance on tests that measure overall intellectual functioning, memory, and spelling…but [they] also had clear abnormalities in the integrity of the white matter in their brains” (Adolescents: NYU).   The consequences of an unhealthy lifestyle are dire with respect to students’ abilities to perform in school and beyond.  Their brains are physically destroyed.  It's a bit  difficult to ask a student to succeed in the classroom when that student's brain is literally handicapped.

The main causes of obesity, which increases children’s’ chances of suffering from depression and Type 2 Diabetes, are bad eating habits and sedentary lifestyles.  Thankfully, exercise and a balanced diet provide an effective solution.  Exercise “helps prevent and alleviate depression,” working as well as “pharmaceutical anti-depressants” by releasing endorphins in the brain; the effects of this chemical release are also dose-dependent: “the more you exercise, the better you feel” (Conniff, 2).  And students who lead healthy lifestyles balanced with routine exercise and a mixed diet of vegetables, fruits, and lean meats significantly decrease their chances of developing diabetes.  In fact, lifting weights only three days a week “decreases blood-glucose levels and improves insulin sensitivity” (Health Bulletin, 36). 

They also maintain healthy weights and socially great looking bodies.   They are slimmer, fitter, and more attractive in the general social atmosphere.  This is a superficial, yet important, solution exercise and healthy dieting provides in the fight against the systematic social discrimination that overweight and obese students may face in school that negatively affect their educational achievement—and the fight against depression and dropout rates.  Essentially, exercise and balanced dieting not only promote smarter, more confident students, but they also help prevent students from becoming overweight, depressed, and keep students in school. 

Keeping students in school is a major component of living and maintaining a healthy lifestyle.  It raises their human capital, and “Human capital creates opportunities” (Wheelan 147).  Students who succeed throughout elementary, middle, and high school are more likely to attend college and become skilled workers—and this is critical.  “College graduates earned an average of 40 percent more than high school graduates at the beginning of the 1980s; now they earn 80 percent more” (Wheelan 142).  Skilled and educated workers with college degrees in the United States have always earned more than their high school graduate counterparts—especially compared against their un-graduated high school peers.  And this not changing anytime soon: “Our economy is evolving in ways that favor skilled workers” (Wheelan 142).  Technology has replaced low-skilled labor at an increasing rate, as we no longer need gas station attendants who repeat repetitive tasks that require little to no education at all and pay very little. 

In fact, with the global economy of the present and future, “international trade puts low-skilled [American] workers with other low-skilled workers around the globe” (Wheelan 142).  The economics is fundamental.  Enterprises prefer to hire cheaper labor in Vietnam and China that will do the same menial tasks for pennies on the dollar versus the minimum wage in the United States.  High-skilled, college educated workers are better off because they have the technical and skilled knowledge necessary to build “Boeing airplanes” while the unskilled do not.  Plus, low-skilled workers are in large supply, depressing wages; skilled works are in short supply and high demand in America’s technological and service economy, increasing wages.

With all this in mind, if a healthy lifestyle in school can help ensure students avoid poverty and live financially successful and stable lives in the future, then it must be a priority for America’s youth to maintain their health because it is an investment in their human capital--their human potential and opportunity for success.

And with final regards to documented proof of increased performance via healthy dieting, according to a study testing 4,589 fifth-graders in Nova Scotia, students who “ate an adequate amount of fruit, vegetables, protein, fiber and other components of a healthy diet were significantly less likely to fail a literacy test” (Healthy Diet: Reuters).  The study’s researchers adjusted for gender, parental education and income, and school—and the results were the same across the board: students who ate better consistently throughout the day performed better on the literacy test they administered.  The study also found that “eating plenty of fruit and vegetables, and getting fewer calories from fat, was also associated with a lower risk of failing the test” (Healthy Diet: Reuters).

Nourishing and exercising the body provides students the mental fortitude and adeptness to succeed in the classroom to succeed beyond.  An unhealthy body produces an unhealthy mind and sabotages students’ futures in school.  Overall, however, the main point is this: “healthier students are better learners” (Basch).  And it is well known that better learners tend to be well off in the long-term financially in the good economic times—and the bad.  Like now. 

But there are various obstacles our youth face impeding them from investing in their health.  These barriers are mainly socio-economic ones.  Household income; neighborhood education; health culture; geographical location (food desserts and food prices); and incentives within schools  either encouraging or discouraging healthy behavior; and neighborhood levels of violence/safety.  

So then what types of policies can we employ to help encourage and allow our students to live healthier lifestyles?

This is the leading question that will I will focus on as time continues.

Bibliography

"Adolescents With Type 2 Diabetes Have Diminished Cognitive Performance and Brain Abnormalities." New York University Langone Medical Center: Communications and Public Affairs. NYU Langone Medical Center, 2 August 2010. Web. 26 Dec 2010.  http://communications.med.nyu.edu/news/2010/adolescents-with-type-2-diabetes-have-diminished-cognitive-performance-and-brain-abnormali>.

Basch, Charles E. Healthier Students Are Better Learners: A Missing Link in School Reforms to Close the Achievement Gap. March 2010. Columbia University Press, Research Initiative of the Campaign for Educational Equity: Equity Matters: Research Review No.6. http://www.equitycampaign.org/i/a/document/12557_EquityMattersVol6_Web03082010.pdf

Conniff, Richard. "Yes, You Were Born to Run." Mens Health Magazine 16 April 2008: 2. Web. 26 Dec 2010. <http://www.menshealth.com/fitness/biology-running>.

"Diabetes Public Health Resource: Prevent Diabetes." Centers for Disease Control and Prevention. National Center for Chronic Disease Prevention and Health Promotion, Division of Diabetes Translation, 4 June 2010. Web. 26 Dec 2010. <http://www.cdc.gov/diabetes/consumer/prevent.htm>.

Gavin, L., MD, Mary. "KidsHealth from Nemours." Overweight and Obesity. The Nemours Foundation, February 2009. Web. 26 Dec 2010. 

"Health Bulletin: The end of the iron age?" Men's Health Magazine. August 2008: 36. Print.

"Healthy Diet Means Better School Performance." Reuters. Reuters Prints, 14 April 2008. Web. 26 Dec 2010. <http://www.reuters.com/assets/print?aid=USTON47353620080414>.

"Overweight and Obesity: Childhood Overweight and Obesity." Centers for Disease Control and Prevention. N.p., 20 October 2009. Web. 26 Dec 2010. <http://www.cdc.gov/obesity/childhood/consequences.html>.

Wheelan, Charlie. Naked Economics: Undressing the Dismal Science. 2nd. New York, N.Y.: W. W. Norton & Company, 2010. 354. Print.