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Relationships among Health, Education and Inequality

Paper Session

Sunday, Jan. 5, 2020 8:00 AM - 10:00 AM (PDT)

Marriott Marquis, Grand Ballroom 11
Hosted By: National Economic Association
  • Chair: Andria Smythe, Howard University

State Mental Health Insurance Parity Laws and College Educational Outcomes

Keisha Solomon
Johns Hopkins University


In the U.S., mental illness is widespread. In 2016, 18.3 percent of American adults experienced some form of mental illness. However, the majority of individuals with mental illness do not receive any treatment. Historically, insurance coverage for mental healthcare has been less generous than general healthcare coverage. To address unequal treatment of mental healthcare coverage, numerous U.S. states have implemented laws that compel private insurers to cover mental healthcare services at ‘parity’ with general healthcare services. In this study, I examine the effect of the state-level full parity mental illness law implementation on mental illness among college-aged individuals and human capital accumulation in college. It is important to consider spill-overs to these educational outcomes, as previous research shows that mental illness impedes college performance. I utilize administrative data on completed suicides and grade point average, and survey data on reported mental illness days and decision to drop-out of college between 1998 and 2008 in differences-in-differences (DD) analysis to uncover causal effects of state-level parity laws. Following the passage of a state-level full parity law, I find that the suicide rate reduces, the propensity to report any poor mental health day reduces, college GPA increases, and the propensity to drop out of college does not change.

The Relationship between Student Debt and Health

Gerald Eric Daniels Jr.
Howard University
Venoo Kakar
San Francisco State University


Previous research suggests that financial strain can be both a cause and a consequence of poor health. In recent years, there is evidence of a large and looming student debt crisis in the United States. This study explores the relationship between health status and financial strain from student debt. We utilize recent Survey of Consumer Finances data, two-stage probit, and instrumental variable techniques to explore the causal relationship between health status and financial strain from student debt. Further, we explore this causal relationship for a variety of demographic characteristics including gender, racial, and socio-economic attributes. The results from this study suggest that this bi-directional relationship in the short-run will likely have an adverse effect on young households in the long-run. Our study contributes to the growing literature on the effects of student debt for US households.

Do Ethnic Enclaves Protect Foreign-Born Women from Intimate Partner Violence?

Rebecca Hsu
Howard University
Shoshana Grossbard
San Diego State University
Alexander Henke
Howard University


The effect of immigrants locating in ethnic enclaves on their labor market opportunities is a contested topic. These opportunities can also affect the incidence of domestic violence because the decision to leave an abuser depends on whether victims can support themselves without the abuser’s income. Additionally, the social dynamics of an ethnic enclave may promote or deter violence irrespective of labor market opportunities. We study a sample of nearly 6,000 women in California and find that living in a county with high concentration of the respondent’s ethnicity is negatively associated with experiences of domestic violence.

Is Spending on Schools Valuable and Efficient? A National Study of the Capitalization of School Spending and Local Taxes

Kenneth Whaley
Clemson University
Patrick Bayer
Duke University
Peter Blair
Harvard University


Despite the tremendous amount of money spent on education in the US, it remains
an open question whether the level of education spending is adequate, too little or too
much? To answer this question, we estimate how much parents value school expenditure
and their willingness to finance it through higher taxes. We accomplish this
by exploiting plausibly exogenous variation in school expenditures and local taxes
arising from School Finance Reforms. We find that school expenditures are positively
capitalized into house prices (e = 0.86), i.e. households value more spending on
schools. Taxes, conversely, are negatively capitalized into house prices (e = -0.17).
At the efficient level of education expenditure, a 1% increase in taxes to fund schools
would yield no change in house prices. We find evidence that education is efficiently
funded. According to our estimates, a 1% increase in taxes to fund education increases
house prices by an economically small and statistically insignificant 0.06%. This provides
empirical support for a core prediction of the Tiebout (1956) hypothesis that
decentralized jurisdictions can efficiently provide local public goods like education.
Decomposing this result by geography, we find no gains in rural areas ( small gains in suburban areas (0.02%) and the largest gains in urban areas (0.19%).
While these estimates are all statistically insignificant, the point estimate for urban
districts is an order of magnitude larger than those for rural and suburban areas, suggesting
that if education is under-funded anywhere, that it is under-funded in urban
school districts

Higher Education and Racial/Ethnic Differences in Intergenerational Mobility

Andria Smythe
Howard University


In this study, I investigate the system of higher education as a source of decreasing relative racial mobility and increasing racial inequality in the United States. I argue that the system of higher education has become more stratified over time and its role as a source of income/wealth mobility is becoming increasingly divergent along racial lines. Using a large sample from the NLSY 1979 and 1997 surveys, I study the impact of college participation on racial differences in intergenerational mobilities across the last three decades. The key research question is: are mobility differences between minorities and whites greater among college graduates than among high school graduates and are these differences increasing over time? This is one of a few studies that explicitly model the role of college as a source of rising racial income inequality. As the federal government debates the new Higher Education Act, research such as this is timely to ensure that the effects of colleges in the racial component of widening inequality and declining mobility are factored into policy decisions. Results are forthcoming.

Wealth Stratification and Portfolio Choice

Karl Boulware
Wesleyan University
Kenneth N. Kuttner
Williams College


This paper spotlights the widening racial wealth gap over the past decade as a function of existing wealth disparities and differences in asset allocation. Using the Survey of Consumer Finances we construct a new measure of wealth stratification that shows increasing wealth disparity for Blacks from 2007 to 2016, and a similar but less pronounced trend for Hispanics. We also analyze the influence of race/ethnicity on asset allocation and find evidence that Blacks and Hispanics tend to hold a smaller share of their assets in equity relative to Whites. We conclude not only that race/ethnic wealth stratification in the U.S. has increased over the past decade, but also that this increase can be attributed to the share of wealth invested in publicly traded equity by household race/ethnicity.
Jevay Grooms
Howard University
Marcus Casey
Brookings Institution
E.J. Ume
Miami University
Omari Swinton
Howard University
Jamein Cunningham
University of Memphis
JEL Classifications
  • I1 - Health
  • I2 - Education and Research Institutions