2011 Theses Doctoral

Essays in Applied Microeconomics

Henriques, Alice Murray

This dissertation consists of three essays in applied microeconomics. The first chapter looks at whether the Social Security claiming behavior of husbands respond to the presence of Social Security spouse and survivor benefits paid to wives based on his earnings record. I separately estimate the claiming response to incentives for each of the three types of Social Security benefits: retired worker, spousal, and survivor. This approach departs from the previous literature, which estimates behavioral responses to household incentives. I begin by documenting that failure to maximize household Social Security wealth results in a financial burden borne primarily by the wife. I next estimate husbands' behavioral response to Social Security benefit incentives, with my focus exclusively upon incentives due to the actuarial adjustment from delayed claiming. Variation in incentives comes from rule changes to the Social Security benefit calculation, in addition to the age difference between spouses and the relative strength of the wife's labor force history. I find while husbands are responsive to their own benefit incentives, they are barely responsive to household, spousal, and survivor benefit incentives. A variety of robustness checks looking at segments of the population predicted to be more responsive to incentives provide very similar results to main specification. The second chapter examines the incidence of health insurance coverage for displaced workers during the periods preceding and subsequent to job displacement. Most individuals lose health insurance coverage upon job separation. There is concern that individuals are unable to recover insurance coverage following separation. I find within 18 months following job loss the level of health insurance coverage returns to pre-displacement level. Furthermore, I find that obtaining insurance coverage upon reemployment does not impact wages. The third chapter first examines how much of the fall in poverty among elderly women can be attributed to changes in the distributions of age, marital status, and education of elderly women using the Current Population Survey. Increased educational attainment has put tremendous downward pressure on the poverty rate driven primarily by the shift of high school dropouts to those with a high school diploma. I also find poverty would be slightly lower in the absence of changes to the age distribution and no direct impact on poverty levels due to the changes in distribution of marital status. I also investigate the role of both labor force participation and marital status over the life-cycle on old age outcomes using survey data matched to administrative earnings records from the Census Bureau. I find even after controlling for Social Security and marital status over prime-age years, lifetime earnings and labor force experience still has a significant impact on poverty incidence of elderly women. Projecting poverty for cohorts who have not reached old age, I find increased wages and LFP over the life-cycle places large downward pressure on predicted poverty. Marital status over the life-cycle exerts its own negative impact on poverty.