Medicare cost growth has been slowing down, and according to research published in the New England Journal of Medicine there may be more going on here than just a temporary reaction to the recession.  This is just one analysis of course, but if it pans out, if it marks the beginning of a sustained trend, the implications for the budget debates would be huge.

If Medicare cost growth tapers off, this would address the most pressing issue for those who are concerned (in good faith at least) about the long-term US budget picture.  “Deficit doves,” who are careful to state that we need to increase deficits in the short-term to deal with the recession’s aftermath, will tell you that in the long run the problem is not spending in general, or entitlements (the long-term gap in Social Security funding is estimated to be about 0.6 percent of GDP), or even demographics (the aging of the population will inevitably mean more spending on programs for the elderly, but this trend levels off after a certain period; it’s predictable and manageable).  The very core of their case for long-term debt anxiety is the belief that healthcare costs (and by extension Medicare costs) will rise much faster than GDP for the foreseeable future.

But this means that a large part of the debate has been driven by what we think will happen to healthcare costs decades and decades into the future.  That’s not to say that we should simply wave away problems if they’re based on long-term projections, but we do need to keep it all in perspective.  In this vein, Karl Smith picks up the story on Medicare costs and delivers a bracing inoculation against the “think of the children!” disease that afflicts so many policymakers: continue reading…

Randall Wray has been engaged in a back-and-forth with John Carney of CNBC.  Their latest exchange touched on the question of the “real” economic burdens of Social Security (distinct from issues of affordability).  Wray responds:

“John Carney agrees with me that supporting our elderly is not an ‘affordability’ problem, but he claims that I fail to see the ‘real’ burden—the dependency ratios and all that. Actually I’ve been writing about that since the early 1990s. The ‘real’ burden is the only thing that matters.

Here’s just a short list of easily accessible things I’ve written at www.levy.org:

The Case Against Intergenerational Accounting: The Accounting Campaign Against Social Security and Medicare [2009]

Global Demographic Trends and Provisioning for the Future [2006]

The Burden of Aging [2006]

Social Security’s 70th Anniversary [2005]

Killing Social Security Softly with Faux Kindness [2001]

More Pain, No Gain [1999]

Does Social Security Need Saving? [1999]

… There are two important issues here. continue reading…

It’s difficult to know where to begin with this post from Casey Mulligan (the comments are definitely worth reading). He starts off by implying that those who might want to characterize the recession as involving “a lack of hiring” are simply misled by the nature of aggregate data on hiring and separations. He goes on to say this is due to the fact that turnover rates (and therefore hiring and separations) for younger people are higher throughout the business cycle than for older workers. He links to this 2010 Brookings paper by Michael Elsby, Bart Hobijn and Aysegul Sahin. Unfortunately for Mulligan’s point, the authors have this to say:

Measures of unemployment flows for different labor force groups yield an important message on the sources of the disparate trends in unemployment across those groups: higher levels and greater cyclical sensitivity of joblessness among young, low-skilled, and minority workers, both in this and in previous downturns, are driven predominantly by differences in rates of entry into unemployment between these groups and others. In sharp contrast, a striking feature of unemployment exit rates is a remarkable uniformity in their cyclical behavior across labor force groups—the declines in outflow rates during this and prior recessions are truly an aggregate phenomenon.[p.3]

While Mulligan states, correctly, that “[e]stimated job separations among employees ages 25-54 were 33 percent greater in 2009 than they were in 2007,” he stumbles into trouble by asserting that “the low employment rates for young people since 2007 are almost entirely explained by low hiring rates.” While the latter statement is true, it is also true, and conspicuously absent from Mulligan’s piece, that hiring rates fell as much for older workers as for younger workers. Figure 8 of the Elsby, Hobijn and Sahin paper clearly shows this dynamic: hiring has dropped precipitously for all age groups since 2007, while separations increased by much more for older workers and remains higher than the 2007 level.

Given the plunge in hiring detailed in the paper Mulligan refers to, what is one to make of this argument:

Before the recession began, quits were by far the most common type of separation; now the number of quits about equals the number of layoffs.

Perhaps the decline in quits is a signal of what’s ailing the economy, although I view it largely as a consequence of the unemployment insurance system. A person who quits his or her job is not eligible for unemployment insurance. As a result, calling a job separation a “quit” rather than a “layoff” results in the loss of unemployment benefits.

For some strange reason, Mulligan chooses to focus on separations, rather than unemployment inflows, and then blames unemployment insurance for this trend (Casey-watchers will have seen this coming a mile away). Of course, separations includes people who leave one job to go to another job. Separation trends from quits and layoffs are reported in Figure 11 in the Elsby, Hobijn and Sahin paper (see below), which I guess is where Mulligan got that trend. Interestingly, that same figure also shows inflows into unemployment from layoffs and quits, which paint a somewhat different picture than the one Mulligan wants us to see: continue reading…

[The following is from Joel Perlmann, Senior Scholar and Director of the Immigration, Ethnicity, and Social Structure program at the Levy Institute]

In the summer of 1967, just after the Six-Day War brought the West Bank and Gaza Strip under Israel’s control, the Israeli Central Bureau of Statistics conducted a census of the occupied territories. The resulting seven volumes of reports provide the earliest detailed description of this population, including crucial data about respondents’ 1948 refugee status.

In recent decades, these volumes of tables — over 300 tables in all — have received little or no attention from historians of the occupation, not least because it is not easy to use the reports in print form and in any case the volumes are not widely available even in good research libraries.

The Levy Economics Institute of Bard College is making the contents of these volumes available in machine-readable form for the first time, free of charge to anyone with access to the internet.  The tables can be downloaded in Excel format for intensive research.

Many tables provide information cross-tabulated with several social characteristics at once (for example, education or occupation cross-tabulated with age, gender and refugee status) and presented for small geographic locales as well sub-totaled for regions.

Also, in conjunction with the Palestinian Authority’s censuses of 1997 and 2007 these tables help provide an understanding of trends over 40 years.   We hope that the data can be exploited by researchers interested in a fuller understanding of the social history of the Palestinian people in the West Bank and Gaza Strip.

For an overview of our project and to access the hundreds of tables contained in the 1967 Census database, go to http://www.levyinstitute.org/palestinian-census/