Providing information to help Medicare beneficiaries choose a health plan

Many Medicare beneficiaries have limited knowledge of the Medicare program and related health insurance options. This is due in part to the complexity of the Medicare program and supplemental health insurance market. A recent congressional mandate through the Balanced Budget Act of 1997 called for broad dissemination of information to educate beneficiaries about their health plan options and to encourage informed health plan decision-making. In response, the Health Care Financing Administration (HCFA) launched the National Medicare Education Program (NMEP) to support the educational objectives of the BBA. This paper provides an overview of the components of the NMEP information campaign. We also review lessons learned from our experience in designing and testing a prototype consumer handbook that explains the different health plan options to Medicare beneficiaries. Through our discussion of the handbook, we highlight several ways to communicate information effectively about a complex publicly funded program to an older adult population.     

Variables Affecting Readiness to Benefit From Career Interventions

This article identifies and briefly describes the broad range of variables that may influence clients’ readiness to benefit from career interventions. The article also discusses consequences of low readiness for effective use of career interventions and addresses implications for practice as well as for future research. Variables contributing to low readiness for effective use of career interventions include personal characteristics and circumstances; knowledge of self, options, and decision making; and prior experience with career interventions. Consequences of low readiness for using career interventions include premature disengagement, negative perception of skills and interests, selective acquisition of incomplete information, premature choice foreclosure, protracted exploration, dependent decision‐making style, and poor evaluation of options.     

Psychological mechanisms of investors in Chinese Stock Markets

The study investigated the psychological mechanisms of risky investment behaviors in Chinese Stock Markets. A 42-item questionnaire was developed and distributed to 1547 individual investors recruited by stratified random sampling from Nan Fang Bond Company. A speculative orientation and a low level of risk perception among Chinese investors were revealed. The results also showed that investors were deficient in investment knowledge and skills. Structural equation modeling was used to generate a risk perception-mediated model for investment behaviors. We found that information from organizational/institutional level can precipitate low risk perception and policy-oriented speculation of investors, which could be accounted for by the collectivistic culture in China and may not be beneficial to risk management in Chinese Stock Markets. Suggestions were made regarding the further development of stock markets in China.     

LEARNING ABOUT EDUCATION

Limited human capital investment is a common characteristic of low‐income countries despite the fact that estimated returns to educational investment in low‐income countries are generally higher than those in high‐income countries. Empirical evidence suggests that income and credit constraints can only account for a part of this underinvestment. Recent experimental evidence shows that families' misperceptions about the returns to education play a role in their low‐investment levels. This paper builds a heterogeneous‐agent model of human capital and growth that incorporates an adaptive learning mechanism to capture the way agents form perceptions about returns to education. We find natural conditions guaranteeing existence of stable equilibria. Along transition paths, agents' misperceptions about returns to education depress realized returns, which serves to reenforce and perpetuate low human‐capital investment. If human capital investments have both private and public returns, we find multiple stable equilibria, including those which are characterized by low investment and low returns. (JEL D83, O10, I25)     

Promoting financial literacy among the elderly: Consequences on confidence

Financial literacy is a crucial skill for personal wealth management and economic well-being. Hence, it is important to evaluate the impact of interventions aimed at increasing financial knowledge and confidence in the most vulnerable groups of the society. We conduct an impact evaluation of a two-hour lecture targeting the elderly population. We find that the intervention does not have a significant impact on knowledge but has a significant effect on confidence and (partly) on overconfidence.     

Employees'' understanding of employer-sponsored retirement plans, a knowledge gap perspective

The retirement benefit community is currently undergoing a paradigm shift as many organizations cast aside traditional defined benefit plans in favor of defined contribution plans. In other words, instead of employers providing defined benefit plans that are risk free to employees, many organizations have decided to offer defined contribution plans in which employees are responsible for both contributing to the plan and making the investment decisions required therein.As employees are required to make decisions that will ultimately determine their financial security during retirement, it is crucial that employers develop materials that will equip all employees with knowledge about retirement-related issues. Therefore, this study examined the range of knowledge about retirement-related issues that exists among various employee groups within a particular organization. Results showed that education serves as a strong predictor in determining employees' knowledge about retirement-related concepts. Based on the study's findings, implications for future research regarding the development of materials designed to educate employees about employer-sponsored retirement plans are discussed.     

The Impact of Personal Finance Education Delivered in High School and College Courses

This study investigates the impact of personal finance education delivered in high school and college. Outcomes of interest were investment knowledge and household savings rates measured years after the financial education was delivered. A web-based survey with questions about participation in financial education, financial experiences, income and inheritances, and demographic characteristics was administered to 1,039 alumni from a large midwestern university. Participation in a college level personal finance course was associated with higher levels of investment knowledge. Experience with financial instruments appeared to explain more of the variance in both investment knowledge and savings rates. No significant relationship between taking a high school course and investment knowledge was found. Financial experiences were found to be positively associated with savings rates.

Social externalities,overlap and the poverty trap

Previous studies find that some social groups are stuck in poverty traps because of network effects. However, these studies do not carefully analyze how these groups overcome low human capital investment activities. Unlike previous studies, the model in this paper includes network externalities in both the human capital investment stage and the subsequent career stages. This implies that not only the current network quality, but also the expectations about future network quality affect the current investment decision. Consequently, the coordinated expectation among the group members can play a crucial role in the determination of the final state. We define “overlap” for some initial skill ranges, whereby the economic performance of a group can be improved simply by increasing expectations of a brighter future. We also define “poverty trap” for some ranges, wherein a disadvantaged group is constrained by its history, and we explore the egalitarian policies to mobilize the group out of the trap.     

MORE INFORMATION IS NOT ALWAYS BETTER: THE CASE OF VOLUNTARY PROVISION OF ENVIRONMENTAL QUALITY

We use a new U.S. survey on pro‐environmental behaviors, attitudes, and knowledge and find that individuals engage in activities that they believe are more effective in reducing carbon emissions, regardless of whether or not these beliefs are accurate. We find that low provision of the public good is greater among people who believe they cannot do much for the environment and do not consider themselves environmentalists. A policy implication of our results is that the effect of more accurate information on the provision of the public good is ambiguous. (JEL Q50, Q54, C10)     

The value of being precise

This study investigates how individuals assess imprecise information. We focus on two essential dimensions of decision under uncertainty, outcomes and probabilities, and their respective precision. We believe the precision of information is highly relevant in the investment setting, as reflected in the well-known “home (familiarity) bias”, and the outcome and probability dimensions, separately or jointly, may affect investors’ knowledge of uncertainty and perceived risk of the investment options, and subsequently affect investors’ choices. To test this conjecture, we conducted three experiments. Our results show that 1) participants demonstrate a pattern of preference for precision and aversion of extreme vagueness and associate vagueness with higher perceived risk and lower investment (experiments one and two); 2) participants prefer vague outcome information to vague probability information (experiment two); 3) familiarity indeed positively affects the precision of estimated values, but this association is stronger for the outcome dimension than for probabilities (experiment three). Our results confirm that precision in information, especially in the outcome dimension has an impact on investors’ resource allocation choices.     

BRINGING PERSONALIZED TIES BACK IN: Their Added Value for Biotech Entrepreneurs and Venture Capitalists Interorganizational Networks

Using a unique data set collected in France among biotech entrepreneurs and their venture capital investors (VCs), we measure the added value of personal relationships at the interorganizational level. Our analyses show that when two entrepreneurs share a personal collaboration tie or a personal friendship tie with a VC investor, the probability of having an advice tie and thus exchange tacit knowledge increases significantly. We confirm the importance of this kind of social embeddedness in the biotech industry where personalized ties––as opposed to institutional and contractual relationships––at the interorganizational level had not yet been examined systematically. Our results suggest that strategies of personalization of exchanges are vital for interorganizational learning. These strategies help entrepreneurs to access resources, participate in knowledge building, and co‐orientate activities in this sector.     

The 1999 Small Employer Retirement Survey: building a better mousetrap is not enough

As of 1995, there were 5.3 million small-employer firms (100 or fewer employees) in the United States. These small firms employed 38.0 million individuals, representing 38 percent of all employment. Therefore, low retirement plan coverage among small employers directly affects a sizeable fraction of the national work force. There are a number of reasons why more small employers do not offer retirement plans. Cost and administration-related issues do matter, but for many small employers these take a back seat to other issues. For some, the main driver is the financial reality of running a small business: Their revenue is too uncertain to commit to a plan. For others, the most important reasons for not sponsoring a plan are employee-related, e.g., the workers do not consider retirement savings to be a priority, or the employer's work force has such high turnover that it does not make sense to sponsor a plan. Many nonsponsors are unfamiliar with the different retirement plan types available to them as potential plan sponsors, especially the options created specifically for small employers. For example, most nonsponsors said they have never heard of (36 percent) or are not too familiar with (20 percent) SIMPLE plans for small businesses. Fifteen percent of small employers report that they are very likely to start a plan in the next two years, while 24 percent say this is somewhat likely. Nonsponsors report that the two items most likely to lead to serious consideration of sponsoring a plan are an increase in profits (69 percent) and business tax credits for starting a retirement plan (67 percent). Major drivers of low retirement plan sponsorship among small employers are who they employ and the uncertainty of revenue flows. While issues of administrative cost and burden matter, they are only part of the puzzle. Therefore, the solution is not simply "build it and they will come," by creating simpler and simpler retirement plans geared to small businesses. Rather, it is build it and they will come once the business reaches a certain level of profitability and stability, and once retirement planning and saving are more of a priority for the small employer's workers.     

Becoming a (Pan)ethnic Attorney: How Asian American and Latino Law Students Manage Dual Identities

Managing professional and personal identities often belabor upwardly mobile racialized individuals. I examine in this article how Asian American and Latino law students negotiate (pan)ethnic identities while learning to become lawyers. I contend that managing dual identities creates (pan)ethnic duty among Asian American and Latino law students. I focus on those planning to work in law firms, at least initially. While there are many career options for law students, most, irrespective of race, pursue initial careers at law firms. What leads them there? How do racialization and expectations play a role in this career aspiration? And how do students negotiate the pressure to give back, or manage the internally/externally imposed duty they feel to serve respective communities? I find that Asian American and Latino law students draw on a repertoire of strategies (marginal panethnicity, tempered altruism, and instrumental ethnicity) that encompass different accounts, identities, and roles enabling creativity and elasticity for professional and personal identities. The findings suggest that panethnicity remains salient for upwardly mobile individuals of color, even those who do not ostensibly appear to be concerned with panethnic communities and causes.     

Village Context,Women's Status,and Son Preference Among Rural Chinese Women*

Abstract This study analyzes the variation in one measure of son preference that is of particular relevance in rural China: whether a woman considers it important to have a son, and the reasons why sons are important. To summarize our conclusions, we find that the expectation that a son will provide financial support in old age is strongly associated with the response that a son is important. This expectation is stronger in low income and mountainous villages, but it is weaker among women who earn cash income. The importance of a son is positively associated with ancestor worship and negatively associated with respondents' education, personal autonomy, the extent to which the husband shares housework, and exposure to the world beyond the village. We also find that sex‐specific rates of infant mortality vary systematically with mother's response on the importance of a son, providing a test of the validity of our preference measure.     

Social position and shared knowledge: Actors' perceptions of status,role, and social structure

In this study of a university administration office, we explore the implications of variation among informants in their understandings of the structure of the group. Each office actor completed two similarity judgement tasks (pile sort and triad test) and two advice ranking tasks (personal and work advice) evaluating the other actors. We compare the patterns of judged similarity, the patterns of advice seeking, and the patterns of agreement among the actors on the four tasks. We find there is a consensus about the similarities of actors and that the structural position of actors influences their approach to the consensus. However, we also find that individuals who agree with each other are not necessarily those who are judged similar by other informants.     

Numeracy and wealth

Numeracy is defined as the ability to understand and use numerical information. We examined the relationship between numeracy and wealth using a cross-sectional and a longitudinal study. For a sample of approximately 1000 Dutch adults, we found a statistically significant correlation between numeracy and wealth, even after controlling for differences in education, risk preferences, beliefs about future income, financial knowledge, need for cognition or seeking financial advice. Conditional on socio-demographic characteristics, our estimates suggest that on average a one-point increase in the numeracy score (11-point scale) of the respondent is associated with 5 percent more personal wealth. Additionally, we find that numeracy is a key determinant of the wealth accumulation trajectories that people follow over time. Over a 5-year period, while participants with low numeracy decumulate wealth, participants with high numeracy maintain a constant positive level of wealth.     

The Man of Hobbes: Masculinity and Wartime Necessity

Abstract The primary focus of this article is on the wartime (1939–1945) necessity of the British Army intervening into the personal lives of soldiers in order to maximise military effectiveness. Analysis of administrative discourse on masculinity suggests that the Army was only too well aware of the fact that men approximated the exemplary masculinity of the combat soldier to greatly varying degrees and that, in practice the Army worked not only to achieve a division of labour among servicemen which reflected a range of military masculinities, but also to find a means of dealing with the fears and anxieties of all men which often centred on death or marital infidelity. It suggests that the necessity of such state intervention into the private lives of soldiers was contingent on men's emotional investment in the both the gender order and the particular relations of trust which bound them to it.     

Better stuck together or free to go? Of the stability of cooperation when individuals have outside options

How do outside options affect cooperation? We examine the stability of cooperation and the reasons for exit in public projects with stochastic outcomes, imperfect monitoring and an exit option. We find that treatments with high barriers to exit generate higher welfare overall as they foster stability and prevent inefficient separation of pairs. There is excessive exit in treatments with low barriers to exit, driven in part by an overestimate of the likelihood that the peer will leave and a desire not to be left alone in the public project. We contrast long-term “strategic” and short-term “egoistic” drivers of exit and find that short-term cost-benefit considerations play a more important role in treatments with lower barriers to exit.     

What Happens to Defined Contribution Accounts When Labor Markets and Financial Markets Move Together?

The relationship among earnings, savings, and retirement is well known; however, the linkage between labor market outcomes and financial market performance is generally unacknowledged. We examine the implications of the link between labor markets and financial markets for workers who save money in individual retirement accounts. Specifically, differences in labor market outcomes across groups may imply differences in the timing of investments, which may reduce savings over time for these groups compared to their counterparts. Using monthly data from the Current Population Survey (1979–2002), we generate hypothetical investment portfolios using stock and bond indices. We exploit differences across demographic groups in unemployment and wage growth and use these differences to examine each group's investment outcomes. We then disaggregate the total effects into short-term and long-term components. We find some evidence of short-term market timing effects on investment, but we find much larger long-term effects for some groups. Our findings suggest that, for many people, the retirement savings losses associated with the timing of markets are similar to the costs of annuitizing savings upon retirement. The differences are especially pronounced by education and gender.     

Economy and Divorces: Their Impact Over Time on the Self-Employment Rates in Spain

The paper used time-series data and examined the effect of economic and social variables on the male and female self-employment rates in Spain. We also employed cointegration analysis (with and without) structural breaks. We thus find strong evidence that long run relationships exist among the variables. More precisely, we find that the unemployment rates and the ratio of self-employment to employees’ earnings have a positive effect on self-employment, whereas, economic development and divorce rates have a negative effect. Importantly, we find that the economic variables have equal or stronger long run impact on females than males, with both groups reacting to changes in family circumstances. Finally, we show that the short run family circumstances are better predictors of self-employment choices rather than economic factors, with self-employment being a means of adjustment to new personal circumstances and economic needs.