Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.
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Daily Policy Digest
Provided courtesy of: http://www.ncpa.org/
Daily Policy Digest
- Unemployment among Young Adults: Exploring Employer-Led Solutions
- 04 Aug 2015 07:00:58 CDT -
A dramatic deterioration in employment outcomes among younger workers during and since the Great Recession creates new urgency about developing more effective bridges into full-time employment, especially for those with less than a bachelor's degree.
Improving the employment status of young adults and helping employers meet workforce needs are complementary goals. Designing strategies to achieve them requires insight into the supply and demand sides of the labor market: both the characteristics of young people and their typical routes into employment as well as the demand for entry-level workers and the market forces that shape employer decisions about hiring and investing in skill development. A quantitative and qualitative inquiry focused on the metropolitan areas of Chicago, Ill. and Louisville, Ky. led to the following insights:
- Diversity. An increasingly diverse younger generation will make up a growing share of the workforce. Improving the educational and employment outcomes of blacks and Hispanics is critical to maintaining a skilled and ompetitive labor force.
- Opportunities Identified. Industries such as manufacturing, transportation, logistics, and health care hold more promise for better career opportunities for young adults with less than a bachelor's degree.
- Skills Needed. Firms appreciate the flexibility, energy, and tech-savviness of younger workers, they identify academic and soft skills, dependability, and ability to fit into the workplace culture as both fundamental requirements and pervasive weaknesses among younger workers.
- Strategy Assessment. Employers expressed dissatisfaction with their strategies for recruiting, assessing, and hiring entry-level workers. Upon determining that existing approaches to human resources threatened their competitiveness, they took concrete steps to improve their strategy.
- Stakeholder Cooperation. To improve outcomes both for young adults and businesses, a broad group of stakeholders -- employers, educational institutions, government, and philanthropy -- need to support and make changes on both the supply and demand sides of the labor market.
Source: Martha Ross et al, "Unemployment Among Young Adults: Exploring Employer-Led Solutions," The Brookings Institution, July 21, 2015.
For more on Economic Issues:
- Are There â€śMissingâ€ť Cancer Drugs?
- 04 Aug 2015 07:00:57 CDT -
Policymakers have long worried that firms focus too much on short-term outcomes. This syndrome could be especially acute in sectors where the principal output is research that unfolds over a long time span. A pharmaceutical company researching new cures will be tempted to shift resources to drugs that can be developed sooner.
In "Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials," authors Eric Budish, Benjamin Roin, and Heidi Williams note that drugs to treat late-stage cancer are far more plentiful than drugs that treat early-stage cancer. They hypothesize that this discrepancy exists at least in part because pharmaceutical companies can bring late-stage cancer drugs to market more quickly.
The study authors link this to several factors:
- Evidence can surface quickly in a clinical trial with late-stage cancer patients who have poor survival prospects without the drug, but survival gains might not become apparent for ten years or more in an early-stage cancer study with relatively healthy patients.
- The patent clock starts ticking from the moment a new product is patented (usually soon after it is first developed in the laboratory) rather than the moment it is approved for sale.
The authors find that R&D efforts are heavily slanted toward drugs to treat late-stage cancers, so there is a concern that research for preventative and early-stage cancer drugs is being neglected, at least in the private sector. As a result, survival rates for cancers besides leukemia and lymphoma have only improved in high mortality cases, where it is easier to turn a profit.
Source: "Are There ‘Missing' Cancer Drugs?" The American Economic Association, July 20, 2015.
For more on Health Issues:
- Law Schools Fight Bar Association over How Graduatesâ€™ Jobs Are Counted
- 04 Aug 2015 07:00:56 CDT -
Some law schools have been paying to place graduates at nonprofit and government organizations until they find permanent jobs. The positions help improve schools' standings in the job-placement metrics that figure heavily in a widely watched national ranking, but they may not be as meaningful to students hoping to put their degrees to work.
Now, the American Bar Association's accrediting arm is further tightening the rules on how such jobs are counted. After telling schools this spring they will have to report the fellowships separately from positions found on the open market, it is going further by proposing that these jobs not fully count unless they are expected to last a year and pay an annual salary of at least $40,000. Otherwise, they get tallied in a short-term category.
Sara Randazzo writes that the dispute highlights the growing tension between schools, their students and accreditation authorities amid a sharp decline in legal employment:
- The employment rate is down to 86.7% for class of 2014 graduates, compared with almost 92% for the class of 2007.
- School-funded positions accounted for 3.2% of all full-time, long-term legal jobs for the class of 2014, the ABA said, up from 2.9% the previous year.
- Among the class of 2014 graduates, the ABA reports that nearly 60% found full-time, long-term employment requiring a law license.
The tension over how to define school-funded jobs highlights the tremendous stress on legal education right now, said James Leipold, executive director at NALP. "It's the survival of the fittest, it's a bloody arena," he said. "Law schools are battling for a diminishing number of students."
Source: Sara Randazzo, "Law Schools Fight Bar Association Over How Graduates' Jobs Are Counted," Wall Street Journal, July 30, 2015.
For more on Education Issues:
- Betting on the Big Returns: How Missouri Teacher Pension Plans Have Shifted to Riskier Assets
- 04 Aug 2015 07:00:55 CDT -
Defined-benefit public employee pensions are increasingly relying on investment returns, rather than employee and employer contributions, to pay for the guaranteed benefits to pensioners. This makes the selection of a plan's investment strategy important. Nationally, public employee pension plans have shifted investments from low-risk, low-return strategies which rely on fixed-income investments to high-risk, high-return strategies which include more equities and alternative investments.
An examination of national trends yields:
- From 1984 to 2013, investment returns accounted for 62 percent of pension plan revenue.
- A Pew Study revealed that public pensions have shifted assets away from fixed-income investments towards riskier investments.
Researchers with the Show-Me Institute found in Missouri that:
- All of the major public pension systems has shifted assets to more risky investments, namely equities.
- From 1992 to 2014, fixed income assets in the largest pension system have dropped from 85 percent to 24 percent.
- Equities have risen from 15 to 48 percent.
Given these shifts, there should be some mechanism to ensure that if returns do not come in as expected and there is a funding shortfall, taxpayers are protected.
Source: Michael Rathbone and James V. Shuls, "Betting on the Big Returns: How Missouri Teacher Pension Plans Have Shifted to Riskier Assets," Show-Me Institute, July 2015.
For more on Tax and Spending Issues:
- Truck Friendly Tolls for 21st Century Interstates
- 04 Aug 2015 07:00:54 CDT -
Of all highway users, the trucking industry has the most at stake in ensuring a solid future for the Interstate highway system. The importance of the Interstates will be even greater in coming decades, since the U.S. Department of Transportation forecasts there will be 40% more trucks on the road by 2045.
A new study by Robert Poole, Jr. at the Reason Foundation examines the value of an interstate highway system to trucking companies, finding:
- Data reveal that only about 6% of the $50 billion a year Highway Trust Fund program is actually spent on "major" highway and bridge projects.
- A diesel tax large enough to fund a new highway system could shift transportation away from trucks, and fuel systems away from diesel resulting in less revenue.
- Evidence exists that electronic toll systems can be made efficiently, using only four percent to 10 percent of revenue for operation.
The study estimates that heavy trucks today pay, via diesel taxes, about 7.2 cents/mile on non-tolled Interstates. That amount is markedly insufficient to pay for reconstruction and widening of the Interstates. On the replacement Interstates, using toll rates from the Interstate 2.0 study and with rebates of current diesel taxes, the toll cost would be 14 cents/mile -- nearly double the diesel tax rate, but sufficient to pay for the reconstruction and widening. That is only half of what trucks are paying today on legacy tolled Interstates -- an average of 27.1 cents/mile in diesel tax plus tolls.
Source: Robert J. Poole, Jr., "Truck Friendly Tolls for 21st Century Interstates," Reason Foundation, July 2015.
For more on Tax and Spending Issues:
- Do Consumer-Directed Health Plans Bend the Cost Curve Over Time?
- 03 Aug 2015 07:00:53 CDT -
Consumer-directed health plans (CDHPs), health plans in which high deductibles are paired with tax-advantaged personal medical accounts, are becoming increasingly common. Enrollment in CDHPs in the employer-sponsored market has grown from 4 percent to 20 percent over the last five years. These accounts are intended to reduce health care spending through greater patient cost sharing.
While the theory and empirical evidence regarding the impact of CDHPs on spending in the short term is clear, the longer-term impacts are less certain. A study by NBER researchers found:
- Total health care spending at companies fell by five percent every year for three years after CDHPs were offered.
- The long term decreases in spending are focused in outpatient care and drugs and there is little impact on inpatient or emergency department spending.
- If these effects are due only to changes in health care spending among those enrolled in CDHPs, they imply effects for those enrolled in CDHPs of an approximately 15 percent reduction in total spending.
- The data suggests that the impact of CDHPs is greater when paired with health savings accounts (versus HRAs) and when employers make smaller account contributions.
These findings do not support either the concern that decreases in spending will be a one-time occurrence or that short-term decreases in spending with a CDHP will result in increases in spending in the long term due to complications of forgone care.
Source: Amelia M. Haviland et al., "Do ‘Consumer-Directed' Health Plans Bend the Cost Curve Over Time?" National Bureau of Economic Research, March 2015.
For more on Health Issues:
Health Policy Digest
Provided courtesy of: http://www.ncpa.org/
Consumer Driven Health Care
- Health Care Reform Tax Will Hurt Franchisees
- 04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...
REAL CLEAR MARKETS
- Saving Jobs from Health Reform's Harmful Regulations
- 04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...
- Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
- 04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...
AMERICAN ENTERPRISE INSTITUTE
- The Case for Competition in Medicare
- 04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...
- Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
- 04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...
NEW ENGLAND JOURNAL OF MEDICINE
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